Skip to content

Brought to you by

Dentons logo

Limitations Law Blog

Updates on key developments on laws involving limitation periods in Ontario.

open menu close menu

Limitations Law Blog

  • Home
  • About us

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

By Christina Porretta
September 23, 2019
  • Discoverability
  • Limitation Periods contained in "Other Acts"
Share on Facebook Share on Twitter Share via email Share on LinkedIn

In “>, 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. Thus, according to the plaintiff, the conspiracy ended on January 1, 2010. The claim against the Pioneer Defendants (which was consolidated with the main action) was not commenced until August 16, 2013, more than 3.5 years after the end date of the class period. The Pioneer Defendants argued that the claim against them is statute-barred because it was commenced after the expiry of the two-year limitation period contained in s. 36(4) of the Competition Act.

Brown J., speaking on behalf of the majority, held that the judge-made discoverability rule will apply when the requisite limitation statute indicates that time starts to run from when the cause of action arose (or other wording to that effect). In the majority’s view, where the event triggering the limitation period is an element of the cause of action, the legislature has shown its intention that the limitation period be linked to the cause of action’s accrual, such that discoverability will apply. Conversely, discoverability does not apply where that triggering event does not depend on the plaintiff’s knowledge or is independent of the accrual of the cause of action.

The text of s. 36(4)(a)(i) provides that no action may be brought under s. 36(1)(a) after two years from a day “on which conduct contrary to Part VI” occurred. From this, Brown J. held that it is clear the event triggering this particular limitation period is an element of the underlying cause of action – specifically, conduct contrary to Part VI of the Competition Act. Given anti-competitive conduct is invariably conducted through secrecy and deception, he stated that it would be absurd and would render the cause of action granted by s. 36(1)(a) almost meaningless if discoverability did not apply. Such a result would mean that the plaintiff’s right of action would expire prior to his or her acquiring knowledge of the anti-competitive behavior.

In dissent, Justice Côté held that the wording of the limitation period set out in s. 36(4)(a)(i) provides ample support for the proposition that the two-year period commences independently of when the plaintiff first learns of the wrongdoing. Rather than having the limitation period commence upon the accrual of the cause of action, Parliament decided that it would instead commence on “a day on which the conduct was engaged in” – which contrary to the majority view, is not wording to the same effect as “accrual of the cause of action.” In Justice Côté’s view, there is simply no link between this triggering event and the plaintiff’s state of mind; rather, it is an event which occurs without regard to the insured party’s knowledge.

Accordingly, it is now settled law that discoverability applies to the limitation period contained in s. 36(4)(a)(i) of the Competition Act. By contrast, discoverability does not apply to the limitation period under s. 36(4)(a)(ii) – the disposition of criminal proceedings – because that event is not connected to a plaintiff’s cause of action or knowledge.

Share on Facebook Share on Twitter Share via email Share on LinkedIn
Subscribe and stay updated
Receive our latest blog posts by email.
Stay in Touch
Christina Porretta

About Christina Porretta

All posts

RELATED POSTS

  • Discoverability
  • Successors

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

By Christina Porretta
  • Acknowledgment
  • Discoverability

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

By Christina Porretta
  • Discoverability

No Duty on Insurers to Advise Insured of running Limitation Period

By Christina Porretta

About Dentons

Dentons is the world’s largest law firm, delivering quality and value to clients around the globe. Dentons is a leader on the Acritas Global Elite Brand Index, a BTI Client Service 30 Award winner and recognized by prominent business and legal publications for its innovations in client service, including founding Nextlaw Labs and the Nextlaw Global Referral Network. Dentons’ polycentric approach and world-class talent challenge the status quo to advance client interests in the communities in which we live and work. www.dentons.com.

Dentons digital

Twitter

Categories

  • Acknowledgment
  • Adding a Party
  • Amending Pleadings
  • Attempted Resolution
  • Contribution and Indemnity
  • COVID-19
  • Demand Obligations
  • Discoverability
  • Enforcement of Foreign Judgments
  • Limitation Periods contained in "Other Acts"
  • Limitation Periods in Federal Court
  • Misnomer
  • Motions to Strike
  • Notable cases in other provinces
  • Special Circumstances
  • Statutory Variation of Time Limits
  • Successors
  • Tolling/Varying Agreements
  • Transitional Provisions
  • Ultimate Limitation Periods

Subscribe and stay updated

Receive our latest blog posts by email.

Stay in Touch

Dentons logo

© 2021 Dentons

  • Legal notices
  • Privacy policy
  • Terms of use
  • Cookies on this site