In Fryday v. Pilot Insurance, 2021 ONSC 8150 (“Fryday”), the Ontario Superior Court of Justice summarily dismissed an action, which was commenced approximately 19½ years after an alleged improvident settlement of a statutory accident benefits claim and 18 years after the plaintiff was no longer a minor, as statute-barred. The decision is noteworthy as a reminder that circumstantial evidence can be used to assess a plaintiff’s level of knowledge about a potential claim and that “a limitation period does not automatically extend until a professional opinion is obtained.”
The plaintiff, Brock Fryday, was seriously injured in an accident in 1982. He was 14 years old at the time of the incident. The defendant, Nigel Gilby, was the lawyer retained to represent Mr. Fryday. Mr. Gilby provided Mr. Fryday with advice about the settlement of an accident benefits claim and a tort claim. Both matters were ultimately settled in 1999. Mr. Fryday, who was 17 years old at the time of the settlement, and his litigation guardian and mother, executed all settlement documents. The settlement agreements were later approved by the court.
In September 2017, Mr. Fryday sought advice from another lawyer, James Leone. Mr. Leone made inquiries of the accident benefits claim and advised Mr. Fryday that he had a claim in negligence against Mr. Gilby on the basis that the accident benefits settlement was improvident.
By statement of claim issued on December 17, 2018, Mr. Fryday commenced an action against Mr. Gilby and his law firm seeking damages for apparently giving up access to various statutory accident benefits. Mr. Gilby and his firm brought a motion for summary judgment to dismiss the action as statute-barred under the Limitations Act, 2002, SO 2002, c 24, Sch B (the “Limitations Act”).
Circumstantial Evidence and Plausible Inferences of Liability
Section 4 of the Limitations Act states that “[u]nless this Act provides otherwise, a proceeding shall not be commenced in respect of a claim after the second anniversary of the day on which the claim was discovered.”
Section 5 of the Limitations Act sets out the scheme for determining when a claim is discovered. It provides, in relevant part, as follows:
5 (1) A claim is discovered on the earlier of,
(a) the day on which the person with the claim first knew,
(i) that the injury, loss or damage had occurred,
(ii) that the injury, loss or damage was caused by or contributed to by an act or omission,
(iii) that the act or omission was that of the person against whom the claim is made, and
(iv) that, having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it; and
(b) the day on which a reasonable person with the abilities and in the circumstances of the person with the claim first ought to have known of the matters referred to in clause (a).
Faced with a motion for summary judgment, Mr. Fryday was required to “put his best foot forward” and prove that his claim was not time-barred. The evidence before the court was that Mr. Fryday never considered whether he had been properly advised by Mr. Gilby until he received advice from Mr. Leone in September 2017. As Justice Sproat recognized, a limitation period is not suspended until an individual obtains legal advice.
In Grant Thornton LLP v. New Brunswick, 2021 SCC 31, the Supreme Court of Canada held that “[i]n assessing the plaintiff’s state of knowledge, both direct and circumstantial evidence can be used.” Indeed, “the governing standard requires the plaintiff to be able to draw a plausible inference of liability on the part of the defendant from the material facts that are actually or constructively known.”
According to Justice Sproat: “If there was any significant shortfall between Fryday’s income and accident benefits for goods and services I infer and find that he would have been aware of it. Certainly, a reasonable person would have been aware of it. Neither Fryday nor a reasonable person would need a lawyer to tell him that his income was inadequate to meet his needs.” Justice Sproat determined that “a plausible inference of liability” could have been made within five years of the 1999 accident benefits settlement. As such, the court granted summary judgment and dismissed the action as statute-barred under both section 5(1)(a) and section 5(1)(b) of the Limitations Act.
Litigants in Ontario should be aware of the decision in Fryday which demonstrates the court’s willingness to use circumstantial evidence and common sense to draw a plausible inference of liability on the part of a defendant thereby starting the limitations clock. A plaintiff who is faced with an obvious limitations issue, as in Fryday, must be prepared to tender evidence that would be relevant to the court’s section 5(1) analysis or risk that his or her action will be summarily dismissed. A limitation period is not automatically suspended until a legal opinion is obtained.