In Dass v. Kay, 2021 ONCA 565 (“Dass”), the Court of Appeal for Ontario confirmed the proper interpretation of section 5(1)(a)(iv) of the Limitations Act, 2002, SO 2002, c 24, Sch B (the “Act”), which deals with knowledge that a proceeding is an appropriate means to seek to remedy a person’s injury, loss, or damage. The decision is significant because the Court of Appeal refused to expand “the class of matters under s. 5(1)(a)(iv) to include any situation where plaintiffs know they have been wronged or suffered damage at the hands of the defendants, but doubt they will be able to marshal the evidence to prove the claim and are unsure whether the scale of the eventual commercial loss will make an action remunerative.”
Factual and Procedural Background
In early 2015, the respondents, Mark Kay (“Kay”) and CFO Capital (“CFO”), were instructed by their client, Jaswant Dass (“Jaswant”), to obtain financing for the purchase of a commercial property in Toronto. Jaswant is the brother of the appellant, Paul Dass (“Paul”). The loan application submitted to Roynat Capital (“Roynat”) by the respondents listed Paul and his company as guarantors and went on to state that the company would be the tenant of the commercial property. Paul, however, knew nothing about Jaswant’s application and never agreed to be a guarantor or enter into a lease on behalf of his company. The application submitted by Jaswant was unsuccessful.
Incidentally, Paul was engaged in his own discussions with Roynat to obtain financing for the purchase of a commercial property in Mississauga. On July 24, 2015, Roynat brought Jaswant’s application to Paul’s attention. Paul informed Roynat that he was not involved with Jaswant’s application and that he never agreed to provide a guarantee on the loan. Roynat later denied Paul’s application.
On August 21, 2015, Paul sent an e-mail to his lawyer, with a copy to a representative of CFO and others, complaining that his application was denied because of “improper action by the broker and Jaswant Dass” that hurt his reputation with Roynat. Paul indicated that he could lose millions of dollars in business and sought an opinion from his lawyer as to whether he could seek criminal charges against Jaswant and CFO.
In January 2018, when Paul approached Roynat again for financing, he was allegedly advised that he had been blacklisted because of Jaswant’s application provided by CFO in 2015.
By statement of claim issued on April 27, 2018, Paul and two of his companies commenced an action against Kay and CFO seeking damages for “the unauthorized use of personal information by the defendants in a loan application put forward, seemingly, on behalf of the individual plaintiff and his corporate interests.”
The respondents brought a motion for summary judgment in which the Ontario Superior Court of Justice dismissed the claim as having been commenced outside the two-year limitation period. The motion judge held that the appellants had knowledge of all the material facts required to commence their claim by August 21, 2015 (i.e., the date of Paul’s e-mail to his lawyer).
Section 4 of the 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 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).
(2) A person with a claim shall be presumed to have known of the matters referred to in clause (1) (a) on the day the act or omission on which the claim is based took place, unless the contrary is proved.
The central issue on appeal was the court’s application of section 5(1)(a)(iv) of the Act. The appellants maintained that it was not until 2018 when they discovered that the respondents’ conduct had caused a loss that was worth pursuing by way of legal action.
The Court of Appeal referenced the decision in Sosnowski v. MacEwen Petroleum Inc., 2019 ONCA 1005 as summarizing the three principles that are brought to bear in the interpretation of section 5(1)(a)(iv) of the Act:
 First, the determination of whether a proceeding is an appropriate means to seek to remedy an injury, loss, or damage depends on the factual and statutory context of each case: Sosnowski, at para. 16.
 Second, this court has recognized two non-exclusive factors that can operate to delay the date on which a claimant would know that a proceeding would be an appropriate means to remedy a loss: (i) when the plaintiff relied on the defendant’s superior knowledge and expertise, particularly where the defendant has taken steps to ameliorate the plaintiff’s loss; and (ii) “where an alternative dispute resolution process offers an adequate remedy, and it has not been completed”: Sosnowski, at para. 17.
 Third, “appropriate” means that it is legally appropriate to bring a proceeding, rather than practically advantageous. This third principle excludes from consideration many practical and tactical reasons a claimant might have for not commencing a proceeding at an earlier time when it was legally appropriate to do so, such as the belief that the claim might be difficult to prove. Put differently, “[a]ppropriate does not include an evaluation of whether a civil proceeding will succeed”: Sosnowski, at paras. 18-19.
Having regard to the standard of review, the Court of Appeal cited Longo v. MacLaren Art Centre, 2014 ONCA 526 for the proposition that “[t]he determination of whether a limitation period has expired is a question of mixed fact and law and the motion judge’s conclusion is entitled to deference in the absence of a palpable and overriding error in her assessment of the evidence.”
The Court of Appeal held that the e-mail of August 21, 2015 “speaks for itself” and the motion judge did not err in concluding that the claim was discovered on that date. Paul suspected in August 2015 that the respondents’ conduct led to his inability to obtain financing. This was denied by Roynat, which created an evidentiary problem. It was not until 2018 when Paul was apparently told by Roynat that he had been blacklisted in 2015 because of Jaswant’s application.
Yet, section 5(1)(a)(iv) of the Act does not operate to delay the date on which a claimant would know that a proceeding would be an appropriate means to remedy a loss in cases where a claimant doubts that he or she will be able to marshal the evidence required to successfully prosecute a claim. Further, “the limitation period does not commence only when one can ascertain what damages one would be entitled to as a remedy, such that one would be better able to assess whether litigation would be an attractive option.” Accordingly, the Court of Appeal dismissed the appeal as statute-barred under the Act.
Dass provides a helpful summary of the key principles in the appropriate means analysis in section 5(1)(a)(iv) of the Act. The decision is a warning for plaintiffs not to adopt a “wait and see” approach to asserting a claim when they know they have been wronged or suffered damage as a result of the defendants. While there may be a reluctance for plaintiffs to pursue a claim, and its associated costs, in cases where there are legitimate concerns about gathering the evidence that is necessary to succeed at trial, the Court of Appeal has confirmed that such concerns will not operate to delay the start of the two-year limitation period.