FCL LLP Partner, Kim Duong, acting for the respondents, successfully appeared before the Ontario Court of Appeal in Dass v. Kay, 2021 ONCA 565, on issues involving the interpretation of the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B. (“Limitations Act”).

The appellants raised two grounds of appeal alleging: (i) the motion judge erred in law by misrepresenting s. 5 of the Limitations Act, 2002, and (ii) the motion judge made palpable and overriding misapprehensions of fact. The arguments between the appellants and respondents centered on the new factor added to the analysis of the discoverability principle, s.5(1)(a)(iv) the appropriateness of a bringing a proceeding.

The appellants, in their arguments, proposed an expansion of the class of matters under s. 5(1)(a)(iv) to include any situation where plaintiffs know they have been wronged or suffered damage at the hands of the defendants, but doubt they will be able to marshal the evidence to prove the claim and are unsure whether the scale of the eventual commercial loss will make an action remunerative.
The case law has recognized two situations delaying the start of the limitation period: (i) where a plaintiff relied on a defendant’s superior knowledge and expertise, especially where the defendant took steps to ameliorate the loss; and (ii) where the parties have engaged an alternative dispute resolution process offering an adequate remedy and it has not been completed. However, the Court of Appeal held that in the case at hand, the appellants did not come within either situation.

The Court of Appeal was clear in stating that appellants were not restricted to the two categories of cases identified to date that delay the start of the limitation period. But if they cannot bring themselves within those two categories, they must propose another set of circumstances in which it could be said, on a principled basis, that a person with a claim could not have known that an action would be an appropriate means to remedy the injury, loss, or damage.

In agreeing with the respondents’ arguments, the Court of Appeal held that “the limitation period does not commence only when one can ascertain what damages would be entitled to as a remedy, such that one would be better able to assess whether litigation would be an attractive option.”

The post Interpreting the Ontario Limitations Act – The Appropriateness of Bringing a Proceeding appeared first on FCL LLP.

A Subrogated Insurer’s Potential Defence against Commencing an Action Out of Time

In cases involving multiple insurers seeking to recover under the same underlying facts, a recent decision of the Ontario Superior Court of Justice provides insight on how such insurers might still advance their claims for recovery, while defending against a limitation claim.

In Kinectrics Inc. v. FCL Fisker Customer & Logistics Ltd., 2020 ONSC 6748, the plaintiff hired one of the defendants, FCL Fisker Customers & Logistics Ltd (“Fisker”), to transport a specialized machine, round trip, from Ontario to Newfoundland. Fisker then subcontracted the work to the other defendant, Anderson Haulage. On September 9, 2016, the machine was damaged due to a spontaneous fire that had erupted during transport. On September 15, 2016, counsel for the plaintiff sent letters to both defendants, putting them on notice of the damage. The cause and origin of the fire was not yet known.

The plaintiff’s loss was covered under two separate policies, from two different insurers. Each insurer brought their own separate subrogated actions based on the same set of facts, except one sought damages for cargo loss and the other for business interruption losses. While the first claim was brought within two years of the fire, on June 15, 2018, the second action was commenced two years after the fire, on December 6, 2018. Importantly, in both actions, the same causes of action were pleaded: bailment, negligence, and breach of contract. One of the defendants, Anderson Haulage, sought to dismiss the second action on a motion for summary judgment, on the basis that the second action was commenced beyond the two-year limitation period.

The court denied granting such an order.

On the issue of whether the second action was time-barred, the court held that this was a genuine issue requiring trial. The second action was distinguishable in that it was not pleading a new cause of action after expiry of the applicable limitation period (which would have been statute-barred), but rather, it was a party seeking an additional form of relief.

Further, though the defendants had been placed on notice as of September 15, 2016, the investigation into the cause and origin of the fire was not completed until December 14, 2016. Per discoverability principles, claims relating to negligence and breach of contract would not have been discovered until this date, thus commencing the limitation period. Even if some of the causes of action pled did not attract a discoverability analysis, these claims did and as such, the entire action could not be barred.

This case will be one to watch to see how the courts ultimately address the limitation and discoverability issue at trial. If the principles in this case are upheld, it may be the case that subrogated insurers, under these unique circumstances, may have a unique avenue for recovery and more latitude in how they advance their claims.

The post A Subrogated Insurer’s Potential Defence against Commencing an Action Out of Time appeared first on FCL LLP.

The Ontario Court of Appeal in Lilydale Cooperative Limited v Meyn Canada Inc, 2019 ONCA 761, confirmed that pending decisions about jurisdictional issues will not extend the limitation period. This case follows along the same vein as other rulings that suggest that appeals, settlement discussions and the resolution of ancillary issues do not defer the start of the limitation period.

In this case, the plaintiff commenced a claim in both Alberta and Ontario against the same defendants, Meyn and EMK. Meyn sought to stay the action in Ontario on the grounds that Alberta was the most convenient forum. Ultimately, Meyn’s motion was dismissed and therefore, the Alberta action was discontinued.

Two years and eight months past the issuance of the original claim in Ontario, Meyn and EMK issued third party claims. One of the third party defendants brought a summary judgment motion to dismiss the action for being statute-barred. Meyn argued that it was not “legally appropriate” to commence a third party claim while another resolution process that may resolve the matter was ongoing. Meyn took the position that the forum issue must have been decided as a prerequisite to bringing any other claim; and the resolution of the forum issue would commence the limitation period.

The Court of Appeal disagreed and affirmed the lower court’s decision to grant the summary judgment motion. It was not “legally appropriate” for Meyn to wait for a jurisdictional dispute to be resolved before commencing its third party claim. While the risk of attornment was a legitimate concern, that concern did not affect discoverability of the third party claim or displace the duty to preserve the claim within limitation period. The court found that withholding the third party claim was a strategic decision, and such tactical choices could not serve to delay the start of the limitation period.

The court advised of other procedural routes that could have preserved the limitation period without prejudice to the forum motion, such as alerting the parties of a potential third party claim and seeking indulgence to a stand-still pending its resolution. Alternatively, the defendants could have issued the third party claim with an express reservation of its rights, and then argued at its forum motion that it did so only to preserve the limitation period and therefore has not attorned to Ontario’s jurisdiction.

It is clear through this ruling and so many others before it, that the Limitations Act, 2002, is a judicial lifeline that demands strict compliance, with little deference to technicalities. As soon as a claim is discovered, the clock begins to run. The seasoned litigator must therefore, preserve the claim under all costs.

The post Forum Disputes Do Not Toll the Limitation Period appeared first on FCL LLP.

In Davidoff v. Sobeys Ontario, 2019 ONCA 684, the Ontario Court of Appeal formalized the requirements for a Notice of Action to bring a claim within the limitation period. The court affirmed that absent compliance with these rules, an action is improperly commenced and the defendant can bring a valid Rule 21 motion to strike the claim.

In this case, the plaintiff commenced an action against the defendant for wrongful dismissal. The parties concurred that the limitation period expired on October 6, 2017. A week prior to the expiry, the plaintiff sent a Notice of Action via mail to the defendant’s Director of Human Resources. The same letter was emailed to the defendant’s lawyer. Neither the email nor the letter were in adherence to Form 14C of the Rules of Civil Procedure R.R.O. 1990, Reg. 194, nor was it signed and sealed by the court Registrar. The defendant brought a Rule 21 motion to strike the claim on the basis that it did not conform to the Rules. The Court of Appeal held that a Notice of Action must be compliant with the Rules, for example, a letter in place of Form 14C as required, was not amenable to the Rules. Thus, the court concluded that the Notice of Action filed by the plaintiffs did not commence the proceeding within the limitation period.
The courts have previously been hesitant to strike an action on a limitation period argument. In deliberating this issue, the court considered that the parties agreed on the date of discoverability; established the limitation period; there were no material facts in dispute and there was no risk of unfairness in striking the claim. Under the circumstances, the court decided this was an appropriate case for the limitation period to be resolved on a Rule 21 motion.

The post Invoking Rule 21 To Resolve A Limitation Issue appeared first on FCL LLP.

FCL LLP Partner, Kim Duong successfully argued a summary judgment motion involving issues of limitation and solicitor-client privilege.

In CFO Capital et al. ats Paul Dass et al., the plaintiffs sought damages for fraud, professional negligence and reputational injury alleged to have been caused by the defendants. In addition to the denial of any and all allegations of wrongdoing, the defendants asserted that the plaintiffs’ claim had breached the two year limitation period.

While the plaintiffs became aware of the material facts required to advance a claim, they waited over two and a half years before commencing the action. The plaintiffs argued that the evidence they had available at that time was insufficient to be successful in an action.  However, the Court in agreeing with the defendants, held that the absolute success of a claim, or the exact amount of damages claimed is not required to trigger the limitation period.

In doing so, the Court referred to the recent Court of Appeal decision, Sosnowski v. MacEwan, which set out three main principles in interpreting when it is “appropriate” to commence an action:

1. To determine if an action is the appropriate means to seek to remedy
   a loss or damage depends on the specific factual and/or statutory
   setting of each case;
2. Two circumstances have been accepted as delaying the date on
   which a claim is discovered under this subsection: when the plaintiff
   relies on the superior knowledge and expertise of the defendant, or
   where an alternative dispute resolution process offers an adequate
   remedy, and it is not complete; and
3. The word “appropriate” means “legally appropriate”. In other words,
   “appropriate” does not include an evaluation of whether a civil
   proceeding will succeed.

Ultimately, the Court was satisfied that there was no genuine issue requiring a trial and granted summary judgment in favor of the defendants.

The plaintiffs have indicated they intend to appeal this decision. Stay tuned for the decision of the Court of Appeal on this matter.

The post Limitation Periods: When is it Appropriate to Commence That Claim? appeared first on FCL LLP.