Restoule v. Canada (Attorney General) is a wonderful decision for anyone who, like me, has the misfortune of being steeped (too long) in limitations law. It considers whether the Former Act applied to a claim for the breach of a treaty. In so doing, it engages with some of the more anachronistic aspects of the former scheme, including esoterica like forms of action, and the distinction between a simple contract and a specialty.
The decision is thorough and well-reasoned, which makes it unfortunate that it’s likely to have a rather narrow impact on the limitations scheme (to put it generously). It’s entirely possible that this is the last time these provisions of the Former Act will ever be litigated (except perhaps in the Court of Appeal), and so it’s something of a historical limitations moment.
Ontario argued that a breach of treaty claim is an action upon a speciality (s. 45(1)(b)), an action for simple contract (s. 45(1)(g)), or an action on account (s. 46), and subject to the limitation periods applicable to those forms of action.
The plaintiffs argued that no limitation in the Former Act applied to the claims. The court agreed.
First, a preliminary word about a distinction that appears to have been missed (but was ultimately of no consequence). Consider this paragraph:
 Although modern limitation statutes (i.e. the Limitations Act, 2002) have moved away from the strict classification of causes of action for the determination of limitation periods, the 1990 Act represents a more traditional regime where different limitation periods are assigned to specific, some say “ancient” causes of action. This means that whether and when a limitation period applies varies depending on the cause of action. If there is no applicable statutory limitation period applicable to a cause of action, a proceeding may be commenced at any time.
Different limitation periods didn’t apply to causes of action under the Former Act, but to the common law forms of action. These are different things.
Forms of action determined the procedure for making a claim, not, like a cause of action, the substantive right that entitled a party to relief. For example, s. 45(1)(e) of the Former Act prescribed a six-year limitation period commencing when the cause of action arose for “an action for an escape” (an action brought by a judgment creditor against a sheriff for the escape of a judgement debtor in his custody). The “action for an escape”, just like “an action upon a bond, or other specialty”, refers to the form of action; the cause of action would be advanced through the form of action.
Accordingly, the limitations analysis under the Former Act always began by “classifying the action”–determining which form of action included the cause of action being advanced. You needed to know the form of action to know the applicable limitation period. Mostly this required nothing more than knowing that s. 45(1)(g) applied to any cause of action sounding in tort or contract and was therefore subject to a six-year limitation period. It’s only when you delved into the more obscure forms of action that things got tricky. It could be an absurdly confusing scheme, but because limitation periods were so long it generally wasn’t an issue.
You can forgive the Court for misapprehending this distinction (though perhaps not Ontario). The forerunner of the Former Act was enacted in 1910 and by that time the forms of action were already long abolished and irrelevant except in the context of limitations law (the United Kingdom had abolished the forms of action by 1873).
Now, for the court’s reasoning.
The court rejected the specialty argument. A “specialty” is a quirky and anachronistic category of contract that has, as far as I know, ceased to have any relevance since the coming into force of the Limitations Act. The court found that the Treaties in question had none of the elements of a specialty, or indeed, a simple contract, in a well-reasoned, thorough (and, from my perspective, entirely correct) analysis. You’ll find it at paras. 122-174
The court also rejected the “action of account” analysis. What intrigues me about this aspect of the decision is that no party appears to have engaged seriously with what this form of action is for. As it happens, I was reviewing its history recently for a paper I’m writing and so I have on hand this passage from The Law Reform Commission’s 1967 report on the limitation of actions:
The actions of account expressly referred to in section 46 probably are only those which would have been brought at common law and do not include equitable actions of account. Section 46 was originally enacted to remove the exception of merchants’ accounts contained in section 3 of The Limitation Act, 1623. Section 3 provided, inter alia, that all common law actions of account, except merchants’ accounts, must be brought within six years after the cause of action arose. When section 46 first became law, it clearly only referred to merchants’ accounts. Owing to minor changes in punctuation and wording, the section now is ungrammatical and appears on the surface to apply to all actions of account, although it is unlikely that the changes were intended to produce the latter result
Given this history, it seems that Ontario’s s. 46 argument ought to have been a non-starter, unless you characterise Ontario as a merchant for the purpose of a treaty. In any event, the court found that the plaintiffs were not seeking an accounting.