Court of Appeal warns that pending “forum issues” will not delay the commencement of a limitation period in Ontario

In Lilydale Cooperative Limited v Meyn Canada Inc, 2019 ONCA 761, the Court of Appeal for Ontario concluded that it is not appropriate for a party to wait for a forum dispute to be decided prior to commencing a claim in Ontario. A forum dispute does not toll the limitation period under the Limitations. Act, 2002. This decision is consistent with recent Court of Appeal cases, which have held that settlement discussions and appeals do not postpone the commencement of limitation periods.

In 2004, the plaintiff commenced an action against two defendants in Alberta. Because of a limitation issue in the Alberta action, the plaintiff also commenced an action in Ontario against the same defendants in early 2006, making the same claims as in the Alberta action.

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Supreme Court of Canada determines that limitation period contained in s. 36(4)(a)(i) of the Competition Act is subject to discoverability

In Pioneer Corp. v. Godfrey, 2019 SCC 42, an 8-1 majority of the Supreme Court of Canada determined that the discoverability rule applies to the limitation period in s. 36(4)(a)(i) of the Competition Act, such that it begins to run only when the material facts on which the plaintiff’s claim is based were discovered or ought to have been discovered by him or her by the exercise of reasonable diligence. 

In Godfrey, the plaintiff commenced the main action on September 27, 2010. The proposed class action was brought on behalf of all B.C. residents who purchased Optical Disc Drives or Optical Disc Drive Products between January 1, 2004 and January 1, 2010.

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Court of Appeal addresses two issues: the interpretation of s. 12 of the Limitations Act in the context of a bankrupt company, and whether an appeal of an underlying judgment tolls the limitation period

In Ridel v Goldberg, 2019 ONCA 636, the Court of Appeal for Ontario considered whether a judgment creditor was statute-barred from pursuing a claim for contribution and indemnity against the principal of a judgment debtor company. On April 17, 2013, the appellants received a favourable judgment against a registered investment dealer company for negligence, breach of contract and breach of fiduciary duty (the “2013 Judgment”), which was upheld on appeal a year later. On October 25, 2016, following the bankruptcy of the company, the judgment creditor received authorization from the trustee-in-bankruptcy pursuant to section 38 of the Bankruptcy and Insolvency Act to pursue the claim for contribution and indemnity against the principal of the company, Goldberg.

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Emails can satisfy the acknowledgement requirement and Forbearance can postpone discoverability of a claim

In University Plumbing v Solstice Two Limited, 2019 ONSC 4276, the Superior Court addressed two questions: (i) whether an email can satisfy the acknowledgement requirement under s. 13(1) of the Limitations Act; and (ii) whether a promise to forbear commencing an action affects discoverability of a claim under s. 5(1)(a)(iv) of the Act. The answer to both questions is yes.

The plaintiff contractor alleged that the defendant project owner owed it money and was in breach of trust under the Construction Lien Act. The plaintiff commenced the action in 2015. The defendant argued that the cause of action accrued on August 30, 2012, the date the invoice was issued and that the action was statute-barred.

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Commencing a claim in the wrong forum does not suspend the running of a limitation period

In Benuik v Leamington, 2019 ONSC 1830, the court addressed the issue of whether the law permits the postponing or suspending of a limitation period simply because a plaintiff brought its claim in the wrong forum. The answer is “no”.

In Benuik, the plaintiffs brought an action before the Ontario Municipal Board (OMB) against the defendant municipality in 2009 based on an expert report suggesting that damage to the plaintiffs’ home was caused by, or was related to, vibrations from heavy traffic. In 2010, the defendant responded to the plaintiffs’ statement of claim, pleading that the plaintiffs were in the wrong forum.

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Not applying the objective test under s. 5(1)(b) of the Limitations Act, 2002 amounts to a reviewable error, Court of Appeal finds

In Service Mold + Aerospace Inc. v. Khalaf, 2019 ONCA 369, the Court of Appeal concluded that the motions judge erred in principle because she did not apply the modified objective test contained in s. 5(1)(b) of the Limitations Act, 2002 in applying the test for discoverability. Instead, her analysis was a purely subjective inquiry, which amounted to a legal error.

This decision serves as a reminder that both aspects of section 5 must be considered in order to determine discoverability: the subjective test under s. 5(1)(a) – when did the plaintiff have knowledge of the claim? And the modified objective test under s.

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Court of Appeal continues to discourage motions to strike brought under r. 21.01(1)(a) on a limitation issue, except in narrow circumstances

In Clark v. Ontario (Attorney General), 2019 ONCA 311, the defendant attempted to bring a motion under rule 21.01(1)(a) on a limitation issue before it had filed its defence. The motion judge dismissed the motion to strike on the basis that the claim was time-barred, which was upheld on appeal. The Court of Appeal for Ontario reiterated its position that commencing a motion under r. 21.01(1)(a) on limitations matters is discouraged, except for very limited situations where pleadings are closed and the facts are not in dispute. Because the basic limitation period is premised on the discoverability rule, the application of which raises mixed questions of fact and law, there are very few circumstances in which a limitation issue under the Limitations Act, 2002, can properly be determined under r.

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