{"id":815,"date":"2018-07-05T09:24:08","date_gmt":"2018-07-05T13:24:08","guid":{"rendered":"http:\/\/limitations.ca\/?p=815"},"modified":"2018-07-05T09:24:08","modified_gmt":"2018-07-05T13:24:08","slug":"ontario-the-evidentiary-threshold-for-adding-a-defendant-after-the-limitation-periods-presumptive-expiry","status":"publish","type":"post","link":"http:\/\/limitations.ca\/?p=815","title":{"rendered":"Ontario: the evidentiary threshold for adding a defendant after the limitation period’s presumptive expiry"},"content":{"rendered":"

The Court of Appeal’s decision in Mancinelli v. Royal Bank of Canada <\/em><\/a>is now a leading decision on the addition of a defendant to proceeding after the presumptive expiry of the limitation period.\u00a0 The Court set out the test, and held that it applies equally to limitations periods that are not subject to the discovery provisions in the Limitation Act<\/a>:<\/p>\n

\n

[<\/a>23]\u00a0\u00a0 \u00a0\u00a0\u00a0When a person opposes a plaintiff\u2019s motion to add it as a defendant on the basis of the apparent expiry of a limitation period, the motion judge is entitled to assess the record to determine whether, as a question of fact, there is a reasonable explanation on proper evidence as to why the plaintiff could not have discovered its claim through the exercise of reasonable diligence. If the plaintiff does not raise any credibility issue or issue of fact about when its claim was discovered that would merit consideration on a summary judgment motion or a trial and there is no reasonable explanation on the evidence as to why the plaintiff could not have discovered the claim by exercising reasonable diligence, the motion judge may deny the plaintiff\u2019s motion:\u00a0Arcari v. Dawson<\/em>,\u00a02016 ONCA 715<\/span>\u00a0(CanLII)<\/a>,\u00a0134 O.R. (3d) 36<\/span>, at para. 10<\/span>.\u00a0<\/span><\/span><\/p>\n

[<\/a>24]\u00a0\u00a0 \u00a0\u00a0\u00a0However, the evidentiary threshold that must be met by a plaintiff on such a motion is low:\u00a0Pepper v. Zellers Inc.<\/em>\u00a0(2006),\u00a02006 CanLII 42355 (ON CA)<\/a>,\u00a083 O.R. (3d) 648 (C.A.)<\/span>, at para. 14<\/span>;\u00a0Burtch v. Barnes Estate<\/em>\u00a0<\/i>(2006),\u00a02006 CanLII 12955 (ON CA)<\/a>,\u00a080 O.R. (3d) 365<\/span>, at paras. 26-27<\/span>. The plaintiff\u2019s explanation should be given a \u201cgenerous reading\u201d:\u00a0Wakelin v. Gourley<\/em>\u00a0(2005),\u00a02005 CanLII 23123 (ON SC)<\/a>,\u00a076 O.R. (3d) 272<\/span>, at para.15<\/span>, aff\u2019d\u00a02006 CarswellOnt 286 (Div. Ct.)<\/span><\/span>.\u00a0<\/span><\/span>Wh<\/span><\/span>ether the plaintiff and its counsel acted with reasonable diligence must be considered in context:\u00a0Fanshawe College of Applied Arts and Technology v. Sony Optiarc Inc.<\/em>,\u00a02014 ONSC 2856<\/span>, at para. 45<\/span>\u00a0(<\/span><\/span>the \u201cFanshawe Pleadings Motion\u201d.)<\/p>\n

[<\/a>25]\u00a0\u00a0 \u00a0\u00a0\u00a0While\u00a0Arcari<\/em>,\u00a0Pepper<\/em>\u00a0and\u00a0Wakelin<\/em>\u00a0dealt with motions to add defendants that were opposed based on the apparent expiry of the limitation period under the Act, the same approach, and the same low threshold, is warranted where the motion is opposed or also opposed based on the apparent expiry of any statutory limitation period subject to the discoverability principle: see, for example, Fanshawe Pleadings Motion.<\/p>\n

[…]<\/p>\n

[<\/a>30]\u00a0\u00a0 \u00a0\u00a0\u00a0A plaintiff\u2019s failure to take reasonable steps to investigate a claim is not a stand-alone or independent ground to find a claim out of time. Instead, the reasonable steps a plaintiff ought to take is a relevant consideration in deciding when a claim is discoverable under s. 5(1)(b):\u00a0Galota v. Festival Hall Developments Ltd.<\/em>,\u00a02016 ONCA 585 (CanLII)<\/span><\/a><\/span>, 133 O.R. (3d) (C.A.), at para. 23;\u00a0Fennel v. Deol<\/em>,\u00a02016 ONCA 249<\/span>\u00a0(CanLII)<\/a>,\u00a0265 A.C.W.S. (3d) 1029<\/span>, at paras. 18<\/span>, 24.<\/p>\n

[<\/a>31]\u00a0\u00a0 \u00a0\u00a0\u00a0Where the issue on a motion to add a defendant is due diligence, the motion judge will not be in a position to dismiss the plaintiff\u2019s motion in the absence of evidence that the plaintiff could have obtained the requisite information with due diligence, and by when the plaintiff could have obtained such information, such that there is no issue of credibility or fact warranting a trial or summary judgment motion:\u00a0Wong v. Adler<\/em>\u00a0(2004),\u00a02004 CanLII 8228 (ON SC)<\/a>,\u00a070 O.R. (3d) 460 (Ont Master)<\/span>, at para. 45<\/span>;\u00a0Pepper<\/em>, at para. 18.<\/p>\n<\/blockquote>\n

The Court overturned the motion judge’s decision (which I noted for its summary of the relevant principles<\/a>) for applying too high a standard to high an evidentiary threshold.<\/p>\n

[<\/a>26]\u00a0\u00a0 \u00a0\u00a0\u00a0In the context of a motion to add defendants in a class action alleging a secret conspiracy brought before any statements of defence had been filed or any discoveries had taken place, the motion judge required the appellants to meet too high an evidentiary threshold.<\/p>\n

[<\/a>27]\u00a0\u00a0 \u00a0\u00a0\u00a0Giving the requisite generous, contextual reading to the appellants\u2019 explanation, the appellants provided a reasonable explanation why they could not have identified the respondents as co-conspirators before July 20, 2014. I note that in the Fanshawe Pleadings Motion, the motion judge permitted plaintiffs alleging a price-fixing conspiracy to amend their statement of claim to add defendants on evidence as to due diligence that essentially consisted of reviewing publically available documents, albeit a more detailed list of those documents was provided.<\/p>\n

[<\/a>28]\u00a0\u00a0 \u00a0\u00a0\u00a0In the face of the appellant\u2019s evidence of their search for other potential defendants, the respondents led no evidence of further reasonable steps that the appellants could have taken to ascertain their identities before July 20, 2014. Rather, the motion judge suggested that the appellants should have taken further steps to investigate whether the respondents were co-conspirators. At least some of the steps he suggested go beyond those a reasonable plaintiff would have taken in the circumstances, indicating that he held the appellants to too high an evidentiary standard. By way of example, it is not apparent how a plaintiff alleging a conspiracy that the defendants took active steps to conceal and that was conducted through secret \u201cchats\u201d could have possibly obtained the suggested\u00a0Anton Pillar<\/em>\u00a0and\u00a0Norwich<\/em>\u00a0orders. The evidentiary foundation required to obtain such orders is high.<\/p>\n

[<\/a>29]\u00a0\u00a0 \u00a0\u00a0\u00a0Further, a representative plaintiff is not akin to the investigative arm of a regulator. Regulators often have investigative powers that civil plaintiffs do not. There was no evidence that any of the sophisticated regulators investigating the alleged conspiracy had identified any of the respondents as co-conspirators before the UBS proffer.<\/p>\n<\/blockquote>\n

The decision is also noteworthy for what is arguably the addition of a new consideration to the test.\u00a0 The Court criticized the motion judge for having failed to determine with sufficient precision when the plaintiffs ought to have discovered their claim.\u00a0 Prior to this decision, I think it was generally understood that when a proposed defendant argues that leave is inappropriate based on evidence that the plaintiff could through reasonable diligence have discovered the claim within two years of the motion, it wasn’t necessary for the proposed defendant to provide an exact date on which discovery ought to have occurred.\u00a0 Going forward, should the court neglect to make a finding in regards of the date when discovery ought to have occurred, there may be ground for appeal:<\/p>\n

[<\/a>32]\u00a0\u00a0 \u00a0\u00a0\u00a0As the respondents appropriately conceded, there was no evidentiary foundation for the motion judge\u2019s finding that the respondents\u2019 identities as co-conspirators could have been established with reasonable diligence. The fact that UBS \u2013 one of the co-conspirators and a participant in the \u201ccollusive chats\u201d \u2013 was able to identify other participants in the secret chats is no indication that the appellants, who were not co-conspirators, could have done so.<\/p>\n

[<\/a>33]\u00a0\u00a0 \u00a0\u00a0\u00a0Nor did the motion judge determine with sufficient precision by when the appellants ought to have discovered that they had a claim. As noted above, the appellants claim would be statute barred only if the s. 5(1)(b) date were before July 20, 2014. The motion judge found the identity of BMO and TD could have been established \u201cbefore the expiry of the limitation period\u201d. It is not clear what the motion judge meant by \u201cthe expiry of the limitation period\u201d. The respondents submitted that the limitation period expired on December 31, 2015 (two years after the end of the alleged conspiracy period). If the motion judge\u2019s intended finding were that the appellants could have established the identities of BMO and TD by December 31, 2015, then the appellants\u2019 claim against them would not have been statute-barred.<\/p>\n<\/blockquote>\n","protected":false},"excerpt":{"rendered":"

The Court of Appeal’s decision in Mancinelli v. Royal Bank of Canada is now a leading decision on the addition of a defendant to proceeding after the presumptive expiry of the limitation period.\u00a0 The Court set out the test, and held that it applies equally to limitations periods that are not subject to the discovery … Continue reading Ontario: the evidentiary threshold for adding a defendant after the limitation period’s presumptive expiry<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[124,190,450,43],"class_list":["post-815","post","type-post","status-publish","format-standard","hentry","category-ontario","tag-adding-a-party","tag-civil-procedure","tag-evidentiary-burdens","tag-ontario-court-of-appeal"],"_links":{"self":[{"href":"http:\/\/limitations.ca\/index.php?rest_route=\/wp\/v2\/posts\/815","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/limitations.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/limitations.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/limitations.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/limitations.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=815"}],"version-history":[{"count":1,"href":"http:\/\/limitations.ca\/index.php?rest_route=\/wp\/v2\/posts\/815\/revisions"}],"predecessor-version":[{"id":816,"href":"http:\/\/limitations.ca\/index.php?rest_route=\/wp\/v2\/posts\/815\/revisions\/816"}],"wp:attachment":[{"href":"http:\/\/limitations.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=815"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/limitations.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=815"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/limitations.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=815"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}