FCA interprets “otherwise than in a province” for the purposes of determining whether the Federal limitation period applies

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​In Canada (Attorney General) v. Liang, 2018 FCA 39, the Federal Court of Appeal clarified how to ascertain whether a claim arose “otherwise than in a province” for the purposes of determining whether the Federal limitation period applied. The issue was whether the limitation period of six years as set out in s. 39(2) of the Federal Courts Act, RSC 1985, c F-7 or the limitation period of two years as set out in s. 6(1) of British Columbia’s Limitation Act, SBC 2012, c 13 applied to the claim at issue.

Subsection 39(2) of the Federal Courts Act states as follows:

A proceeding in the Federal Court of Appeal or the Federal Court in respect of a cause of action arising otherwise than in a province shall be taken within six years after the cause of action arose. [emphasis added]

To determine which limitation period applied, the Federal Court of Appeal found that it must first determine whether the claim arose “otherwise than in a province”, as the language of s 39(2) indicates. The Federal Court of Appeal held that the Federal Court had relied upon incorrect bases in finding that the cause of action arose “otherwise than in a province” and was therefore subject to the six-year federal limitation period. It rejected the Federal Court’s finding that “otherwise than in a province” can be determined purposively based upon the fact that the claimant’s loss of rights which were guaranteed by federal legislation derived directly from Parliament’s enactment of unconstitutional legislation.Rather, the Federal Court of Appeal instructed that a cause of action arises in a province when all of the elements of the cause of action occur in that province. Neither the Federal Court nor the Federal Court of Appeal had heard argument based on this construction of the origin of a cause of action. The Federal Court of Appeal therefore returned the matter to the Federal Court to properly assess where the cause of action arose based on where the elements of the cause of action had occurred.