Month: August 2018

Federal: The limitation of actions under s. 31 of the Expropriation Act

In Canada v. Milne, the Federal Court of Appeal held that no limitation period applies to an action under s. 31(1)(a)(i) of the Expropriation Act:

[3]  The central issue before the motion judge was the proper interpretation of subparagraph 31(1)(a)(i) of the Expropriation Act – whether it provides that there is no limitation period, and thus ousts the operation of subsection 39(1) of the Federal Courts Act, or merely establishes a point in time after which an action may be commenced, subject to the limitation period determined in accordance with subsection 39(1) (in this case the limitation period prescribed by the Ontario Act). Paragraph 31(1)(a) of the Expropriation Act reads as follows (underlining added):

31 (1) Subject to section 30, 31 (1) Sous réserve de l’article 30:
(a) a person entitled to compensation in respect of an expropriated interest or right may, a) une personne qui a droit à une indemnité pour un droit ou intérêt exproprié peut:
(i) at any time after the registration of the notice of confirmation, if no offer under section 16 has been accepted by him, and (i) après l’enregistrement de l’avis de confirmation, si elle n’a accepté aucune offre faite en vertu de l’article 16,
(ii) within one year after the acceptance of the offer, in any other case, (ii) dans un délai d’un an à compter de l’acceptation de l’offre, dans tout autre cas,
commence proceedings in the Court by statement of claim for the recovery of the amount of the compensation to which he is then entitled; or engager des procédures devant le tribunal par voie d’exposé de la demande pour le recouvrement du montant de l’indemnité à laquelle elle a alors droit;

[4]  The motion judge applied the “modern approach” to statutory interpretation endorsed by the Supreme Court in Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27 at para. 21, 1998 CanLII 837 (SCC), 1998 CanLII 837. He read the words used in subparagraph 31(1)(a)(i) – “at any time after” – in their statutory context and in light of the object and purpose of expropriation legislation.

[5]  Applying this approach, he found the words to be clear and unambiguous. He noted the Supreme Court’s holding in Toronto Area Transit Operating Authority v. Dell Holdings Ltd., [1997] 1 S.C.R. 32 at 46, 1997 CanLII 400 (SCC), 1997 CanLII 400, that expropriation legislation (there the Ontario statute) “should be read in a broad and purposive manner in order to comply with the aim of the Act to fully compensate a land owner whose property has been taken,” and observed that if accepted, the Crown’s position could deprive a land owner of compensation. He interpreted the provision as expressly stating that no limitation period applies, so that subsection 39(1) of the Federal Courts Act does not incorporate Ontario limitations legislation by reference. He also took into account the decision of the Alberta Court of Appeal in Calgary (City) v. Lafarge Canada Inc., 1995 ABCA 313 (CanLII) at para. 15, 169 A.R. 363, in which the Court gave the same meaning to the phrase “at any time” as it appeared in Alberta expropriation legislation. He therefore determined that the action was not statute-barred.

[6]  In addition, the motion judge considered whether there is a discrepancy between the English text of subparagraph 31(1)(a)(i), which uses the phrase “at any time after,” and the French text, which uses “après.” Relying on dictionary definitions, he concluded that there is no discrepancy: both texts convey the meaning of “whatever time.” He therefore found it unnecessary to apply the rules, set out in R. v. Daoust, 2004 SCC 6 (CanLII) at paras. 26-31, [2004] 1 S.C.R. 217, that govern the interpretation of bilingual legislation where the two versions are discordant.

[7]  The Crown now appeals to this Court, submitting that the motion judge erred in interpreting subparagraph 31(1)(a)(i) as providing that there is no limitation period, and in failing to interpret it as merely establishing the point after which an action for compensation may be commenced, subject to the limitation period incorporated by subsection 39(1) of the Federal Courts Act. The issue of statutory interpretation raised by the appeal is an issue of law, subject to the correctness standard of appellate review.

[8]  In my view the conclusion of the motion judge was correct, substantially for the reasons that he gave. I will briefly address only one element of his reasons, as well as one aspect of the Crown’s submissions in this Court that represents a change in position from that argued before the motion judge.

Ontario: reviewing laches and acquiescence

The Superior Court decision in Tsui-Wong v. Xiao contains a good summary of the principles of laches and acquiescence:

The Test for the Doctrine of Laches

[222]      I adopt the comments of Penny, J. in Indcondo v. Sloan, 2014 ONSC 4018 (CanLII), 121 O.R. (3d) 160, at paras. 157-159 as a succinct and current formulation for the defence of laches:

Laches is an equitable doctrine, akin to estoppel, founded on the principle that one is obliged to assert legal rights in a timely way or risk losing them. Laches is a form of equitable limitation period. Two factors dominate the consideration of this doctrine:

(1)     delay and its circumstances; and

(2)     prejudice resulting from that delay.

In Lindsay Petroleum Co. v. Hurd (1874), L.R. 5 P.C. 221 (Ontario P.C.), at 239 -240 the principle was stated as follows:

…[it] is not an arbitrary or technical doctrine… Two circumstances, always important in such cases, are, the length of the delay and the nature of the acts done during the interval, which might affect either party and cause a balance of justice or injustice in taking the one course or the other, so far as relates to the remedy.

[223]      The Supreme Court of Canada discussed these critical factors in M. (K.) v. M. (H.), 1992 CanLII 31 (SCC), [1992] 3 S.C.R. 6 (S.C.C.), at pp. 77-78:

What is immediately obvious from all of the authorities is that mere delay is insufficient to trigger laches… Rather, the doctrine considers whether the delay of the plaintiff constitutes acquiescence or results in circumstances that make the prosecution of the action unreasonable. Ultimately, laches must be resolved as a matter of justice as between the parties, as is the case with any equitable doctrine.

[224]      The doctrine of laches can be used to defend a claim under the Fraudulent Conveyances Act, R.S.O. 1990, c. F. 29.[5]

[225]      As confirmed in M.(K.), laches must be resolved as a matter of justice between the parties, as in any equitable doctrine.

Acquiescence

[226]      The Defendants argue first, that the Plaintiff has acquiesced to the claim being dismissed.

[227]      There is a lengthy consideration by Spence, J. in 392278 Ont. Ltd. v. Miletich Estate (2001), 38 R.P.R. (3d) 239, at para. 71, as to the meaning of laches, and acquiescence). The case law confirms that acquiescence must be equivalent of waiver, and is more than simply the passage of time: in that case 43 years.

[228]      Spence, J. cited with approval a decision of the British Columbia Court of Appeal in Irvine v. Irvine, [1977] 3 W.W.R. 37 (B.C.C.A), at para. 13,adopting Halsbury’s formulation :

The nature of laches. The legislature, in enacting a statute of limitation, specifies fixed periods after which claims are barred; equity does not fix a specific limit, but considers the circumstances of each case: Smith v. Clay (1767), 3 Bro. C.C. 639, 27 E.R. 419. In determining whether there has been such delay as to amount to laches the chief points to be considered are (1) acquiescence on the plaintiff’s part, and (2) any change of position that has occurred on the defendant’s part. Acquiescence in this sense does not mean standing by while the violation of a right is in progress, but assent after the violation has been completed and the plaintiff has become aware of it. It is unjust to give the plaintiff a remedy where he has by his conduct done that which might fairly be regarded as equivalent to a waiver of it; or where by his conduct and neglect he has, though not waiving the remedy, put the other party in a position in which it would not be reasonable to place him if the remedy were afterwards to be asserted. In such cases lapse of time and delay are most material. Upon these conditions rests the doctrine of laches: Lindsay Petroleum Co. v. Hurd (1874), L.R. 5 P.C. 221 at 239, per Lord Selborne.

[229]      The Court in 392278 Ont. Ltd. concluded that the defendant remained in residence throughout the 43-year period. There was no evidence that she passed up opportunities or changed her position over the years. The delay was long, but did not constitute acquiescence. There was no evidence that the plaintiff had waived her rights.

[230]      The trial judge’s findings were upheld by the Court of Appeal in 392278 Ont. Ltd. v. Miletich Estate, [2002] O.J. No. 3795.

[231]      I find that the Defendants cannot rely upon the Plaintiff’s acquiescence. Admittedly, there is a significant delay of nine years of inactivity. Had the Plaintiff searched in 2005, she would have found out that June was residing in Ontario. Even after locating the Defendants, and in particular June, the Plaintiff did not commence the second Fraudulent Conveyance Action for almost two years after she located June.

[232]      The Plaintiff testified that she was always hopeful that Daniel would surface, and that she could pursue her judgment against him. The Plaintiff was litigation weary and for a period of time was ill and preoccupied by her children pursuing their studies. I accept that the Plaintiff always intended to pursue the Defendants once she was able to locate them, and once she determined that there may be assets to realize upon.

Ontario: the limitation of claims arising from solicitor’s undertakings

Lofranco v. Azevedo considers the limitation period applicable to claims arising from solicitor’s undertakings.

The plaintiff’s new personal injury lawyer undertook to protect the former lawyer’s reasonable account.  The limitation period for the claim to remedy the breach of the undertaking (that is, the failure to pay out the reasonable account) would commence only when the undertaking was revoked:

[40]           In my view, it is not open to the Estate to argue that the limitation period runs against the applicant.  Given my finding that there was a valid undertaking given on behalf of Mr. Pereira, as recently discussed by Quigley J. in Cozzi, at para. 62, the limitation period stops running once the undertaking is given, unless the undertaking is revoked:

63     First, Mr. Cozzi tries to counter that proposition by noting that Kilian D.J. correctly adopted the law that a personal undertaking from a solicitor is not discharged by notification. I agree. Moreover, I agree with the appellant on the general proposition that a solicitor’s undertaking and a client’s undertaking will continue to be enforceable without the interference of a limitation period: Sokoloff v. Mahoney. The Deputy Judge specifically recognized this in para. 17 when he quoted from para. 15 of Sokoloff as follows:

15 There is also clear case law that a solicitor’s undertaking as well as a client’s undertaking is enforceable, can be relied upon, and stops the clock running for the purpose of a limitation defence unless revoked. In Tembec Industries Inc. v. Lumberman’s Underwriting Alliance, (2001) 2001 CanLII 28252 (ON SC), 52 O.R. (3d) 334, [2001] O.J. No. 72 at paras 21-22, Ground J. held that an undertaking to pay a specified amount in damages gives rise to promissory estoppel where the recipient of the undertaking relied on it. Such reliance is expressly contemplated by a solicitor who gives an undertaking, as Wilton-Siegel J. held in Bogoroch & Associates v. Sternberg, [2005] O.J. No. 2522 at para 38.

The former lawyer also had “a charging lien” under the Solicitor’s Act to which no limitation period applied:

[42]           Another basis on which I would find that the limitation period does not run against the applicant is the nature of its interest in the funds held by the Azevedo Firm.  In Thomas Gold Pettinghill LLP, at paras. 88 and 89. Perell J. explained that, besides charging orders that can be made under the Solicitor’s Act, the Court has inherent jurisdiction “to charge assets recovered or preserved through the instrumentality of a lawyer for a client”.

[43]           Perell J. also noted, at para. 101, that, in circumstances where the Court is satisfied that the preconditions are met for a charging lien, the limitation periods in the Limitations Act, 2002, do not apply:

For present purposes, the three points to note from Justice Henry’s decision in Re Tots and Teens Sault Ste. Marie about a charging lien made under the court’s inherent jurisdiction are: first, the charging lien creates the proprietary interest of a secured creditor; second, subject to being declared, the charging lien is an inchoate interest that pre-dates the court’s declaration; and third, the charging lien is intrinsically declaratory in nature. The last point supports Cassel Brock’s argument that a charging lien comes within s. 16 (1) (a) of the Limitations Act, 2002 and is not subject to any limitation period.

[44]           I am satisfied that the applicant is entitled to a charging lien.  In Thomas Gold Pettinghill LLP, at para. 88, Perell J. explained that the preconditions for a charging lien are that “(a) the fund, or property, is in existence at the time the order is granted; (b) the property was recovered or preserved through the instrumentality of the lawyer; and (c) there must be some evidence that the client cannot or will not pay the lawyer’s fees”.

[45]           In this case:

(a)   the funds held in trust by the Azevedo constitute the fund;

(b)   the Lofranco Firm did some work on Mr. Pereira’s file.  While there is a dispute about the extent of the work done, there is no dispute that the firm was involved in moving the matter forward; and

(c)   It is evident from the position taken by the Estate on this application that it will not agree to pay the fees claimed by the Lofranco Firm.

[46]           Looking at the matter from a different perspective, both the Solicitor’s Act and the common law provide special protection to lawyers in recovering their fees in circumstances in which a plaintiff is successful, either through a settlement or by obtaining judgment. The undertaking Mr. Azevedo gave on Mr. Pereira’s behalf and the fact that Mr. Pereira consented to the money being held in trust by the Azevedo Firm once settlement was reached, in my view, constitute an acknowledgement by Mr. Pereira that he understood the Lofranco Firm’s proprietary interest in the funds. However, as discussed below, given that the undertaking was subject to the fees being reasonable and Mr. Pereira’s ability to assess the account, the issue remains whether the applicant is entitled to payment of its full account or whether the Estate is entitled to assess the account.

I’m not familiar with the jurisprudence cited for this conclusion.  A charging lien may well be declaratory, but surely here it would result in the consequential relief of the former lawyer being entitled to the disputed funds?

A declaration that results in consequential relief doesn’t fall within s. 16(1)(a).

 

Ontario: summary judgment on a partial limitations defence denied

In Lyall v. Whitehead the court denied summary judgment on a limitations defence because it would only partially dispose of the action. The limitations defence was not readily bifurcated from the merits.  This gave rise to the potential for duplicative results and credibility issues:

[13]           In an attempt to persuade me that partial summary judgment is appropriate the defendant relies upon the decision of Justice Myers in Mason v. Perras Mogenais, 2018 ONSC 1477 (CanLII) (“Mason”). Justice Myers held that discrete issues, like limitation periods, which do not overlap with the merits that are left for trial, are suitable for partial summary judgment motions. I do not read Mason to stand for the proposition that partial summary judgment motions are appropriate in each and every case that involves a limitation period issue. In Mason, partial summary judgment was granted in circumstances where the case was brought to an early end, in totality, against one of the defendants. In my view, that situation is more akin to a summary judgment motion than a partial summary judgment motion since the action was brought to an end against that defendant. That is certainly not the case here. As discussed below, the clear potential for duplicative results and major credibility issues in this case are outside the realm of what Justice Myers considered appropriate in Mason.

[14]           I agree with the plaintiffs that, whether the action succeeds or not, the dominant narrative of the broader underlying claim concerns the defendant’s conduct as Estate trustee and whether he breached his fiduciary duties to the plaintiffs. Even if the partial summary judgment motion was successful, the matter would move on to trial with several other significant issues and claims in play which raises the legitimate specter of inconsistent decisions. The facts underpinning the allegations the defendant seeks to dismiss are too deeply intertwined with the facts underpinning the remaining causes of action. It is not appropriate to grant summary judgment in this type of situation.

[15]           This case falls entirely within the ambit of cases discussed in Baywood and Butera. In this regard I am mindful of the reasoning in Butera, which makes it clear that a motion for partial summary judgment should be considered a rare procedure that is reserved for an issue or issues that may be readily bifurcated from those in the main action and may be dealt with expeditiously and in a cost effective matter. As stated in Butera, such an approach is entirely consistent with the objectives set out by the Supreme Court in Hryniak v. Mauldin, 2014 SCC 7 (CanLII). I entirely agree, and in any event, the decision is binding upon me.

[…]

[19]           In my view, this is exact type of case warned against by the Court of Appeal in Baywood. In this case, credibility is extremely important. As stated in Baywood, voluminous affidavit evidence can obscure the affiant’s authentic voice. That has happened here. I received the evidence in a decontextualized manner and to make any findings on credibility in this fashion would result in fundamental unfairness in a way it will not likely occur at trial where the trial judge will see all of the evidence. Put another way, I cannot make credibility findings on the issues before me without also impacting the trial judge’s ability to independently assess the facts at trial. The trial judge’s credibility findings will be based on a set of facts broader than mine, but will also inherently include those that the defendant has put before me. They are not readily bifurcated from the broader underlying claim.

Ontario: the Court of Appeal on failing the litigation finger test

The Court of Appeal’s decision Bertolli v. Toronto (City) is an example of a plaintiff failing to satisfy the litigation finger test in a misnomer matter.  The court found that the correct defendant would not have known on reading the statement of claim that it was defendant the plaintiff intended to name.

[5]         The appeal is dismissed. The delivery and content of the Notice of Claim were facts extraneous to the original accident, and not a record made by a participant or observer at the time of the accident who was in some way connected to the substituted defendants. Moreover, even when read in combination, the Notice of Claim and Statement of Claim were not capable of supporting an inference that the substituted defendants were the intended defendants. Absent reference to the pothole in the Notice of Claim and absent particulars of the precise location of the accident alleged in the Statement of Claim, the reasonable reader could not know, without further inquiry, that the documents referred to the same accident. Put simply, the Master’s inference that the substituted defendants would know they were the intended defendants was not available on any reasonable view of the evidence. The Master’s order was properly set aside.

I also note the court’s use of the language “substitute”.  This, as the court held in Ormerod that a misnomer does not involve a substitution:

[27] In this case, after finding that Dr. Ferner was a misnomer for Dr. Graham, the motion judge applied [at para. 18] the standard that despite the inordinate delay, he should allow the correction of the misnomer unless “the defendant to be substituted did not have timely notice of the claim and will be unduly prejudiced in preparing a defence to the claim”. The motion judge’s reference to “the defendant to be substituted” is unfortunate because in the case of a misnomer, the amendment is made under rule 5.04(2) “to correct the name of a party incorrectly named”. The correction of a misnomer does not involve the substitution of one defendant for another. However, his reasons, read as a whole, make clear that he viewed the remedy as the correction of the misnaming or the misdescription of the emergency doctor rather than the substitution of Dr. Graham as a defendant for Dr. Ferner. The appeal was argued on that basis.

I confess that this always seemed an especially pedantic point, even for me (and also, apparently, for the court itself, which ignored it in Bertolli), but the point is nevertheless valid.

 

Ontario: simple contracts haven’t been material to the limitations scheme for…nearly 15 years

It’s time for some limitations pedantry!

In Corona Steel Industry Private Ltd. V. Integrity Worldwide Inc., the court held that “an action for recognition and enforcement of a foreign judgment is treated as an action upon a simple contract for purposes of determining the limitation period.”

This was so until 2004 when the current Limitations Act came into force. The Limitations Act does not distinguish between categories of contracts, or causes of action.  The Limitations Act asks when the plaintiff discovered a “claim” (as defined by s. 1).  The Court of Appeal made the point explicit in addressed the issue squarely in Independence Plaza.

I think perhaps counsel had relied on a previous version of the Law of Limitations, or some obsolete jurisprudence.