{"id":856,"date":"2018-10-30T08:56:09","date_gmt":"2018-10-30T12:56:09","guid":{"rendered":"http:\/\/limitations.ca\/?p=856"},"modified":"2018-10-30T08:58:57","modified_gmt":"2018-10-30T12:58:57","slug":"ontario-court-of-appeal-affirms-that-discovery-of-a-cause-of-action-isnt-discovery-of-a-claim","status":"publish","type":"post","link":"http:\/\/limitations.ca\/?p=856","title":{"rendered":"Ontario: Court of Appeal affirms that discovery of a cause of action isn’t discovery of a claim"},"content":{"rendered":"

The Court of Appeal decision in Gillham v. Lake of Bays (Township) <\/em><\/a>is noteworthy for\u00a0two\u00a0 reasons.<\/p>\n

First, it uses the concept of the “claim” (which is the language of the Limitations Act) rather than the concept of the “cause of action” (which is not the language of the Limitations Act) for its limitations analysis.\u00a0 See for example para. 20:<\/p>\n

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[20]\u00a0\u00a0 \u00a0\u00a0\u00a0The overarching question in the discoverability analysis under s. 5 of the Act is whether the claimant knew or reasonably should have known, exercising reasonable diligence, the material facts stipulated under s. 5(1)(a) that give rise to a claim:\u00a0Ferrara v. Lorenzetti, Wolfe Barristers and Solicitors<\/em>,\u00a02012 ONCA 851\u00a0(CanLII)<\/a>,\u00a0113 O.R. (3d) 401, at para. 32. Section 1 of the Act defines a claim as \u201ca claim to remedy an injury, loss or damage that occurred as a result of an act or omission\u201d. Section 2(1) provides that the Act \u201capplies to claims pursued in court proceedings\u201d (with certain enumerated exceptions that do not apply here).<\/p>\n<\/blockquote>\n

(A slight quibble: the s. 5(1)(a) matters do not give rise to a claim.\u00a0 Only two facts\u2014an act or omission resulting in injury, loss, or damage\u2014give rise to a claim pursuant to its definition in s. 1.\u00a0 Knowledge of the s. 5(1)(a) matter results in discovery of the claim.)<\/p>\n

It even puts “cause of action” in quotation marks–presumably to distinguish it from a claim–in the context of stating that knowledge of the material facts of a cause of action is not discovery of a claim:<\/p>\n

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[33]\u00a0\u00a0 \u00a0\u00a0\u00a0The motion judge erred in failing to undertake an analysis of the criterion under s. 5(1)(a)(iv) of the Act. That the appellants might have a \u201ccause of action\u201d against the defendants, as the motion judge found, is not the end of the analysis under s. 5(1) of the Act. As this court said in\u00a0Kudwah v. Centennial Apartments<\/em>,\u00a02012 ONCA 777\u00a0(CanLII)<\/a>,\u00a0223 A.C.W.S. (3d) 225, at para. 2:<\/p>\n

It is important when considering a limitation period claim to appreciate that the terms of the 2002\u00a0Act<\/em>\u00a0must govern. A court considering the limitation claim must address the specific requirements of s. 5 of the\u00a0Act<\/em>, particularly on the facts of this case, the requirement of s. 5(1)(a)(iv).<\/p>\n<\/blockquote>\n

 <\/p>\n

Second, it acknowledges the accrual of a claim as the starting point of the limitations analysis, and that discovery of the claim requires knowledge that a proceeding is an appropriate remedy for the loss:<\/p>\n

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[34]\u00a0\u00a0 \u00a0\u00a0\u00a0Therefore, the motion judge had to consider whether the appellants had a claim as defined under the Act. In considering whether the appellants knew or should have known that they had a claim, the motion judge had to go on to consider whether, having regard to the nature of the injury, loss or damage, the appellants knew or should have known that a proceeding would be an appropriate means to seek to remedy it. This omission by the motion judge is an error of law:\u00a0Har Jo Management Services Canada Ltd. v. York (Regional Municipality)<\/em>,\u00a02018 ONCA 469\u00a0(CanLII)<\/a>, at paras. 21 and 35.<\/p>\n

[35]\u00a0\u00a0 \u00a0\u00a0\u00a0Section 5(1)(a)(iv) represents a legislative addition to the other factors under the discoverability analysis. As Laskin J.A. explained in\u00a0407 ETR Concession Company Limited v. Day<\/em>,\u00a02016 ONCA 709\u00a0(CanLII)<\/a>,\u00a0133 O.R. (3d) 762, leave to appeal to SCC refused, [2016] S.C.C.A. No. 509, at paras. 33-34:<\/p>\n

The appropriateness of bringing an action was not an element of the former limitations statute or the common law discoverability rule. This added element can have the effect \u2013 as it does in this case \u2013 of postponing the start date of the two-year limitation period beyond the date when a plaintiff knows it has incurred a loss because of the defendant\u2019s actions.<\/p>\n

Also, when an action is \u201cappropriate\u201d depends on the specific factual or statutory setting of each individual case: see\u00a0Brown v. Baum<\/em>,\u00a02016 ONCA 325\u00a0(CanLII)<\/a>,\u00a0397 D.L.R. (4th<\/sup>) 161, at para. 21. Case law applying\u00a0s. 5(1)<\/a>(a)(iv) of the\u00a0Limitations Act<\/em>, 2002<\/a>\u00a0is of limited assistance because each case will turn on its own facts.<\/p>\n<\/blockquote>\n

This is a very welcome statement from the Court of Appeal.\u00a0 It’s a step away from the misapplication of common law discovery principles to limitations analyses that has caused a great deal of confusion and uncertainty<\/a>.<\/p>\n

Lastly, the decision finds that it was appropriate for the plaintiffs to “wait and see” in the context of a construction dispute before commencing a proceeding.\u00a0 I often see it argued that Presidential<\/em> <\/a>stands for the principle that there are only two circumstances in which a proceeding will be an inappropriate remedy\u2014where the defendant undertakes good faith ameliorative efforts or there is an alternative dispute resolution process. This is a misapprehension of the law, as this decision demonstrates.\u00a0 Here’s the key analysis:<\/p>\n

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[37]\u00a0\u00a0 \u00a0\u00a0\u00a0Here, the motion judge failed to consider \u201cthe specific factual or statutory setting\u201d of the case before him and determine whether it was reasonable for the appellants not to immediately commence litigation but to \u201cwait and see\u201d if the 1 \u00bc inch sinking of the deck pier observed in 2009 would worsen over time or if the issue would resolve once the stone retaining wall had settled, as had been suggested to the appellants by Mr.\u00a0MacKay. Neither Royal Homes nor Mr.\u00a0MacKay believed the problem was serious, or due to the manner of construction. This evidence does not support the conclusion that the appellants knew or ought to have known in 2009 that their loss was not trivial and initiating legal proceedings was the appropriate means to remedy their loss.<\/p>\n<\/blockquote>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

The Court of Appeal decision in Gillham v. Lake of Bays (Township) is noteworthy for\u00a0two\u00a0 reasons. First, it uses the concept of the “claim” (which is the language of the Limitations Act) rather than the concept of the “cause of action” (which is not the language of the Limitations Act) for its limitations analysis.\u00a0 See … Continue reading Ontario: Court of Appeal affirms that discovery of a cause of action isn’t discovery of a claim<\/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":[202,389,466,144,9,284,23,43,335],"class_list":["post-856","post","type-post","status-publish","format-standard","hentry","category-ontario","tag-claim","tag-cause-of-action","tag-claims-not-causes-of-action","tag-discoverability-principles","tag-discovery","tag-limitations-analyses","tag-ontario-act-s-5","tag-ontario-court-of-appeal","tag-really-terrific-limitations-analyses"],"_links":{"self":[{"href":"http:\/\/limitations.ca\/index.php?rest_route=\/wp\/v2\/posts\/856","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=856"}],"version-history":[{"count":3,"href":"http:\/\/limitations.ca\/index.php?rest_route=\/wp\/v2\/posts\/856\/revisions"}],"predecessor-version":[{"id":863,"href":"http:\/\/limitations.ca\/index.php?rest_route=\/wp\/v2\/posts\/856\/revisions\/863"}],"wp:attachment":[{"href":"http:\/\/limitations.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=856"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/limitations.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=856"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/limitations.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=856"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}