Ontario: evidentiary considerations in a motion to add after the limitation period’s presumptive expiry

Ali v. City of Toronto is a good example of an issue with the law of adding a party to a proceeding after the presumptive expiry of the limitation period.

The Court held that there are circumstances where a plaintiff has a positive obligation to make inquiries or risk the court finding that the failure to do shows a lack of due diligence:

[22]              More recent case law has clarified that the principles in Madrid do not release plaintiffs or their counsel from their obligations to make any inquiries at all (Cote v. Ivanhoe Cambridge I Inc., 2018 ONSC 5588 at para. 33). There are circumstances where a plaintiff is expected to make inquiries or risk that the court may find that their failure to do so constitutes a lack of due diligence causing their motion to fail (Cote at paras 33 and 35Laurent-Hippolyte v. Blasse, 2018 ONSC 940 at paras. 26-27).  In recent cases, the courts have consistently held that requiring plaintiffs injured in slip and falls and other accidents involving snow and ice to inquire into the possible existence of winter maintenance contractors does not constitute a “pro forma” letter as described in MadridFurther, a plaintiff’s failure to make these inquiries has been consistently found to constitute a lack of reasonable diligence ultimately leading to the denial of leave to amend.

This reasoning is not uncommon, as the citations indicate, but I think it’s fundamentally flawed.  Essentially, the reasoning is this: a reasonable person would have asked a question the plaintiff did not, and therefore a reasonable person would have discovered the claim earlier than the plaintiff.

The problem is that it’s not the question which matters, but the answer—specifically, whether the answer would have provided the plaintiff with knowledge of the discovery matters.  Had the reasonable person asked the question on some earlier date would it have resulted in discovery of the claim? Without evidence of the date and content of the answer had the question been asked, the court can’t make the findings necessary to determine discovery, and whether asking the question would have resulted in discovery is purely speculative.  And so the court risks finding a proceeding statute-barred for want of due diligence per se, not because a reasonable person would have asked the question and, having done so, discovered the claim earlier than the plaintiff discovered it.

The court made this point explicitly in Ledoux v. Lee:

40.            Uber also argued that Mr. Ledoux’s lawyer should have served Co-operators with a formal notice of his claim against Mr. Lee after getting the police report. Mr. Giugaru contended that this is a standard practice because it allows a plaintiff to claim pre-judgement interest from the date of the notice.  Had Mr. Ledoux’s counsel put Co-Operators on formal notice of a potential claim, he argued, the insurer might have advised the plaintiff of the coverage issue and disclosed Mr. Lee’s activity as an Uber driver.

41.            This argument is speculative.  I could not conclude, on the evidence before me, that it is standard practice for plaintiff’s counsel in MVA claims to formally notify the defendant motorist’s insurer of a potential claim. Even if I had been able to, I could not infer that a formal notice letter to Co-Operators would have yielded information about its position on coverage.  Mr. Ledoux’s lawyers were in communication with Co-Operators from September 2017 forward, providing it with a copy of the police report and Mr. Ledoux’s hospital record.  There is no evidence that, in the course of this correspondence, the adjuster ever so much as hinted that it might deny coverage or disclosed that Mr. Lee was participating in the gig economy, even though it notified the insured of its denial of coverage on this basis two weeks after the accident.

The interesting complication is that when moving to add a party after the presumptive expiry of the limitation period, the plaintiff needs to show enough due diligence to found a prima facie discovery argument.  The courts consistently find that this can require sending letters of enquiry, a point the court made explicitly:

[30]              I also reject the Plaintiff’s argument that there is no guarantee that she would have received a response from the City had she made these inquires. The relevant issue is the absence of evidence demonstrating effort and diligence on the part of the Plaintiff, not speculation as to the likelihood of a response. As the courts have held in previous cases, had the Plaintiff asked and not received a response, the efforts would have been evidence of diligence.

I think the plaintiff’s argument was correct for the purposes of a s. 5 analysis: absent any evidence as to the response to the inquiry, whether it would have resulted in discovery is speculative. But in the context of a motion where the plaintiff had an obligation to show evidence of due diligence, the failure to make the inquiry was fatal.  From a limitations perspective, the plaintiff probably would have been better suing the City in a new action where its evidentiary argument might have prevailed.

The takeaway is twofold: first, personal injury lawyers should always send pro forma letters of this kind to avoid these arguments; and second, this is an area of limitations law that could use a little rationalising. It’s probably my least favourite corner of the limitations scheme, but plainly I’m due to give it more consideration.