Ontario: the Trustee Act limitation period trumps s. 18 of the Limitations Act

The Court of Appeal has held that when one joint tortfeasor has died and the other makes a crossclaim for indemnity against her estate, s. 38(3) of the Trustee Act limits the claim, not the Limitations Act’s s. 18 contribution and indemnity provision.

Justice Strathy’s decision in Levesque v. Crampton Estate is well-reasoned, and I think, correct.

Unfortunately, it missed an opportunity to resolve a limitations issue of more widespread application: whether the s. 5 discovery provisions apply to s. 18.    In Miaskowski v. Persaud, the court concluded that s. 18 is a self-contained deeming provision that imposes an absolute two-year limitation period for claims for contribution and indemnity.  The court’s analysis turns on the word “deemed” in s. 18, which, “as a declarative legal concept is a firmer or more certain assertion of the discovery of a claim than the rebuttable presumption of discovery contemplated by section 5”.

The problem with this analysis is that it fails to consider that s. 18 was expressly enacted “For the purposes of subsection 5(2) and section 15”, that is, to inform and dictate the meaning to be given to the concepts referred to in those sections when applying them.

This is the point made in detail by Justice Leach in Demide v. Attorney General of Canada et al.  Justice Leach systematically analysed the flaws in Miaskowski’s reasoning.   She concluded that the purpose of s. 18 is to provide when time begins to run for the basic and ultimate limitation periods in claims for contribution and indemnity.  It deems the day of service of the statement of claim giving rise to the claim for contribution and indemnity to be the commencement of the ultimate limitation period and the presumptive commencement of the basic limitation period.

The language Justice Strathy uses could support either construction.  He writes  that s. 18 “provides that a claim for contribution and indemnity is ‘discovered’ and, therefore, the limitation period begin to run, on the day on which the wrongdoer seeking indemnity is served with the plaintiff’s claim.”  Does this mean the limitation period begins to run presumptively, or begins to run in all circumstances?

Paragraph 17 tends to suggest that it runs in all circumstances:

[17]      Thus, the general two-year limitation period runs from the date that the party claiming contribution and indemnity is served with the claim in respect of which contribution is sought.

My hope is that when the Court of Appeal directly considers the matter, Justice Leach’s analysis will prevail.  Miaskowksi is at odds with a common sense reading of the Limitations Act as a whole, and introduces unnecessary and unhelpful complexity into the limitations scheme.