“Suspicions” not good enough to trigger discoverability under s. 5(1)(a)(iv)

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In Nelson v. Lavoie, 2018 ONSC 4489, the defendants brought a summary judgment application on the basis that the plaintiff’s claim was statute barred under the Limitations Act, 2002. The plaintiff, an employee of Hydro One, consulted with the defendants, two financial advisors, in order to transfer her Hydro One pension into an Individual Pension Plan (“IPP”). In 2009, the plaintiff consulted with a bookkeeper and an accountant who told her that the IPP may not be complaint with the Income Tax Act. The plaintiff retained legal counsel who requested confirmation from the defendants that the IPP was complaint. The defendants subsequently affirmed that the IPP was complaint in two formal letters to counsel. In 2010, the plaintiff requested a review of the IPP by the Canada Revenue Agency (“CRA”). The CRA confirmed in September 2011 that the IPP was non-compliant. The Statement of Claim was issued on June 20, 2012.

The defendants brought a summary judgment motion and argued that the claim is statute barred because the plaintiff knew, or ought to have known by August 2009 that she had a cause of action (i.e. when she became suspicious about the compliance of the IPP). The plaintiff opposed the motion on the basis that her claim did not materialize until the CRA issued the final report, confirming non-compliance.

The summary judgment motion was dismissed. Del Frate J. held that the plaintiff did not have a cause of action until 2011, when the CRA confirmed the IPP was non-complaint. In assessing the application of s. 5 of the Limitations Act, Del Frate J. noted that although the plaintiff had suspicions about the IPP in 2009, the defendants reassurances prevented her from discovering that damage had occurred as per s. 5(1)(a)(i) of the Limitations Act. Del Frate J. also held that since the CRA had not issued a final determination as to the validity of the IPP, it would not have been the appropriate time to seek a remedy in 2009, based on s. 5(1)(a)(iv) of the Limitations Act. The damages (arrears and penalties) were not known until the CRA confirmed non-compliance.