Month: April 2016

Ontario: modified objective discovery

Justice Parfett’s decision in Fernandes v. Goveas is a textbook example of applying the modified objective test in a discovery analysis.

Section 5(1)(b) of the Limitations Act contains the test.  This provision asks when a reasonable person (the objective component) with the abilities and in the circumstances of the claimant (the modifying subjective component) first ought to have known of the discovery criteria in section 5(1)(a).

The facts in Fernandes were unusually sordid.  The plaintiff sued her sister for unpaid wages and damages for wrongful dismissal, leading Justice Parfett to observe “This case is a lesson in why family should not always be treated ‘like family’.  The Plaintiff in this case was misled, overworked and underpaid by her family.”

This is how Justice Parfett applied the test:

[16]           A reasonable person is defined at s. 5(1)(b) of the Limitations Act as someone ‘with the abilities and in the circumstances of the person with the claim’.  In this case, that means someone who

  •                  Was not born in Canada;
  •                  Spoke only minimal English;
  •                  Was living exclusively in the home of her employers and had little social interaction outside the family;
  •                  Trusted her employers implicitly given they were family;
  •                  Had a moderate education;
  •                  Was diagnosed as autistic and noted as having problems with speech and social interactions.

[…]

[21]           In my view […The Plaintiff’s] language, psychological and social limitations created a situation where the Plaintiff was unable to exercise due diligence in order to discover the state of her financial affairs until after she left the Defendant’s employ.

 

Ontario: the limitation of claims for attorney compensation

In Armitage v. The Salvation Army, Justice Ray held (incorrectly) that the limitation period for claiming compensation as a property attorney commences on the death of the person who granted the power of attorney.

[10] The principal issue is the limitation period applicable to the applicant’s claim for attorney compensation. The applicant’s position is that any claim must be commenced within two years of the death of the individual who granted the power of attorney, unless otherwise waived by those who are interested parties. She contends that the Substitute Decisions Act creates the right to compensation, is silent on any limitation period, and uses the permissive “may” in reference to when the claim could be made. The respondent agrees that the right to compensation was created by the statute but that the language of the statute in using “may” gives the attorney an option to claim compensation “each year”, which if not taken up by the commencement of proceedings within the following two years is to be treated as abandoned. He argues that a claimant must commence proceedings every three years in order avoid the limitation period. In other words, one is to infer from the statute that the end of each year triggers the beginning of the two year limitation period.

Justice Ray disagreed.

[15] I do not take the language of the Act or of the continuing powers of attorney to require the attorney to take their compensation annually such that it should be taken to trigger a limitation period if the compensation is not taken. […] [The death of the person who granted the power of attorney] terminated the continuing power of attorney. I conclude that it is at that point that the limitation period commenced. It was the triggering event. The applicant had two years within his date of death to commence proceedings, if that was to become necessary, to make her claim for compensation as an attorney.

As my colleague Matthew Furrow obliged to me to recognise, this decision is wrong.  While there may be sound policy reasons for limiting a claim for attorney’s compensation after the death of the grantor, no limitation period applies to such an application.  The application is not a “claim” within the meaning of the Limitations Act because it doesn’t seek to remedy loss resulting from an act or omission.  If it’s not a “claim”, the basic and ultimate limitation periods can’t apply.  In fairness to Justice Ray, neither party raised this point.

Ontario: the Court of Appeal on due diligence and discoverability

In Fennell v. Deol, the Court of Appeal clarified the role due diligence plays in the discovery analysis.  It’s a fact that informs the analysis, but not a separate and independent reason for dismissing a plaintiff’s claim as statute-barred.

Fennell was in a motor vehicle accident with the defendants.  He claimed against the defendant Shergill, and subsequently amended the statement of claim to add the defendant Deol.  Shergill served a statement of defence and crossclaim against Deol.  Deol moved for summary judgment to dismiss the claim on the basis of an expired limitation period.

Fennell argued that he discovered his claim when he received a medical report and learned that he met the Insurance Act threshold.  Justice Akhtar noted that Fennell’s discovery testimony indicated awareness of the seriousness of his injuries before receiving the report.  For Fennell to rely on discoverability to delay the commencement of the limitation period, Justice Akhtar held that he had to show due diligence in discovering his claim.  Fennell did not show sufficient due diligence, and had he acted diligently, he would have discovered his claim when he commenced his action against Shergill.  Justice Akhtar dismissed Fennell’s claim.

The Court of Appeal allowed Fennell’s appeal.  Justice Akhtar made a counting error (which is very easy for lawyers to do when it comes to limitations, and here I speak from ample experience).  If Fennell ought to have discovered his claim against Deol when he sued Shergill, the claim against Deol was in fact timely.

What makes Justice van Rensburg’s decision interesting is her discussion of Justice Akhtar’s error in focussing primarily on whether Fennell exercised due diligence, and in concluding that Fennel bore the onus to show due diligence to rebut the presumption that the limitation period ran from the date of the accident  (the statutory presumption in s. 5(2) of the Limitations Act).  To overcome the presumption, Fennell needed to prove only that he couldn’t reasonably have discovered that he met the statutory threshold on the date of the accident (s. 5(1)(b)), not that he exercised due diligence.

The fact that it wasn’t possible for Fennell to discover that he met the threshold on the date of the accident was enough to rebut the presumption.

Due diligence is the core of an analysis when determining whether to add a defendant to an action after the expiry of the presumptive limitation period (and then the threshold is low), but it is neither a standalone duty nor determinative of the section 5 discovery analysis:

[18]      While due diligence is a factor that informs the analysis of when a claim ought to have reasonably been discovered, lack of due diligence is not a separate and independent reason for dismissing a plaintiff’s claim as statute-barred.

[…]

[23]      Due diligence is not referred to in the Limitations Act, 2002. It is, however, a principle that underlies and informs limitation periods, through s. 5(1)(b). As Hourigan J.A. noted in Longo v. MacLaren Art Centre Inc., 2014 ONCA 526 (CanLII), 323 O.A.C. 246, at para. 42, a plaintiff is required to act with due diligence in determining if he has a claim, and a limitation period is not tolled while a plaintiff sits idle and takes no steps to investigate the matters referred to in s. 5(1)(a).

[24]      Due diligence is part of the evaluation of s. 5(1)(b). In deciding when a person in the plaintiff’s circumstances and with his abilities ought reasonably to have discovered the elements of the claim, it is relevant to consider what reasonable steps the plaintiff ought to have taken. Again, whether a party acts with due diligence is a relevant consideration, but it is not a separate basis for determining whether a limitation period has expired.

Ontario: Amendments to the Limitations Act

Bill 132, which abolishes the limitation period for sexual assault, received royal assent on March 8.  These are the amendments it made to the Limitations Act:

SCHEDULE 2
LIMITATIONS ACT, 2002

  1. Subsection 7 (4) [incapable persons] of the Limitations Act, 2002 is repealed.
  2. Section 10 [assaults and sexual assaults] of the Act is repealed.
  3. Subsection 15 (5) [ultimate limitation period] of the Act is amended by striking out “Subject to section 10” at the beginning.
  4. (1)  Clause 16 (1) (h) [no limitation period for proceedings arising from sexual assault in certain circumstances] of the Act is repealed and the following substituted:

(h)  a proceeding based on a sexual assault;

(h.1) a proceeding based on any other misconduct of a sexual nature if, at the time of the misconduct, the person with the claim was a minor or any of the following applied with respect to the relationship between the person with the claim and the person who committed the misconduct:

(i)  the other person had charge of the person with the claim,

(ii)  the other person was in a position of trust or authority in relation to the person with the claim,

(iii)  the person with the claim was financially, emotionally, physically or otherwise dependent on the other person;

(h.2) a proceeding based on an assault if, at the time of the assault, the person with the claim was a minor or any of the following applied with respect to the relationship between the person with the claim and the person who committed the assault:

(i)  they had an intimate relationship,

(ii)  the person with the claim was financially, emotionally, physically or otherwise dependent on the other person;

   (2)  Section 16 of the Act is amended by adding the following subsections:

Same

(1.1)  Clauses (1) (h), (h.1) and (h.2) apply to a proceeding whenever the act on which the claim is based occurred and regardless of the expiry of any previously applicable limitation period, subject to subsection (1.2).

Same

(1.2)  Subsection (1.1) applies to a proceeding that was commenced before the day subsection 4 (2) of Schedule 2 to theSexual Violence and Harassment Action Plan Act (Supporting Survivors and Challenging Sexual Violence and Harassment), 2016 came into force, unless the proceeding,

(a)  was dismissed by a court and no further appeal is available; or

(b)  was settled by the parties and the settlement is legally binding.

Same

(1.3)  For greater certainty, clauses (1) (h), (h.1) and (h.2) are not limited in any way with respect to the claims that may be made in the proceeding in relation to the applicable act, which may include claims for negligence, for breach of fiduciary or any other duty or for vicarious liability.

  1. (1)  Subsection 24 (2) [transition provisions] of the Act is amended by adding “Subject to subsection (2.1)” at the beginning.

   (2)  Section 24 of the Act is amended by adding the following subsection:

Exception

(2.1)  This section does not apply to a claim in respect of which clause 16 (1) (h), (h.1) or (h.2) applies.

   (3)  Subsection 24 (7) of the Act is repealed.

Commencement

  1. This Schedule comes into force on the day the Sexual Violence and Harassment Action Plan Act (Supporting Survivors and Challenging Sexual Violence and Harassment), 2016 receives Royal Assent.

 

We previously wrote about some of the potential issues arising from these amendments.

Ontario: don’t skip the argument

Hawthorne v. Markham Stouffville Hospital is a reminder from the Court of Appeal that a successful discovery argument requires both evidence and an explanation of the evidence’s connection to discovery of the claim.  It seems that filing documents and saying nothing about them won’t carry the day.

Hawthorne was a medical malpractice action.  The respondents moved to dismiss the appellant’s claim as barred by the expiry of the limitation period.  Their position was that the appellant ought to have discovered her claim when she obtained medical records from the respondent.

The motion judge granted summary judgment on the basis that the appellant did not rebut the Limitations Act‘s section 5(2) presumption that she discovered her claim on the date of the act or omission giving rise to it.  The appellant adduced no evidence relating to discoverability to rebut the statutory presumption.

On appeal, the appellant argued that the motion judge erred by failing to give effect to evidence that was available in the motion record, but not referred to in argument.

The Court of Appeal said no:

[8]         We do not give effect to this argument. The failure of the appellants to respond to the summary judgment motion with evidence to rebut the presumption in s. 5(2) of the Limitations Act, 2002 is fatal. Pleadings are not evidence. The appellants could not rest on the pleading of a timely discovery date in their third action, when confronted by a motion for summary dismissal based on the limitations argument.

[9]         The two receipts that were in the record (as part of the respondents’ materials), even if drawn to the attention of the motion judge, without any further evidence or explanation, could not have affected the result. Even if it might be reasonable to conclude that the appellants received medical records on the dates shown in the receipts for payment, this was not sufficient to overcome the statutory presumption. The receipts alone do not advance the appellants’ discoverability argument, in the absence of any explanation by Ms. Hawthorne linking what was in the records to the discovery of her claim.