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Limitations Act - Discoverability - Generally [s.5]

. LV Windows v. 7194145 Canada Ltd.

In LV Windows v. 7194145 Canada Ltd. (Ont CA, 2020) the Divisional Court addressed whether Limitations Act s.5(1)(a)(i, ii and iii) limitation period had expired on the cases facts:
[22] In Sampson v. Empire (Binbrook Estates Ltd.), 2016 ONSC 5730, at paras. 37-44, Glithero J. noted the following:
[37] The first factor relating to the discovery of a claim commences on the day on which the person with the claim first knew that the “injury, loss or damage had occurred”. Once a plaintiff knows that some damage has occurred then the claim has been discovered and it is not required that the plaintiff know the extent of the damage or the exact type of damage: Peixeiro v. Haberman, 1997 CanLII 325 (SCC), [1997] 3 S.C.R. 549 at para. 18.

[38] It is sufficient if the plaintiff knows “enough facts on which to base an allegation of negligence”, or I would add breach of contract, and the plaintiff is not required to know all the facts supporting the claim in order for it to be discovered: Lawless v. Anderson, 2011 ONCA 102 at para. 23. That case also stands for the proposition that the plaintiff need not know the precise cause of the damage. Rather, additional information supporting the claim may be useful in assessing whether or not to proceed, but is not necessary in order to “discover” the claim: see also Howden Power North America Inc. v. A. Swent & Sons Ltd., 2009 CanLII 72090 at paras. 50-51.



[41] As to ss. (iii), the statute does not require certainty of the defendant’s responsibility for the act or omission giving rise to the claim, and rather it is sufficient if there be shown prima facie grounds to infer the act or omission to be that of the other party: Gaudet v. Levy (1984), 1984 CanLII 2047 (ON SC), 47 O.R. (2d) 577 (H.C.); Kowal v. Shyiak, 2012 ONCA 512 at para. 18.
Application of the Law to the Facts

[23] The main thrust of the deputy judge’s decision is that “the full extent of the defendant’s damages were not known until well after and may not be fully known at this point”. To the extent that the deputy judge concluded that the limitation period commenced only when the full extent of the damages was known, then she erred in law in so finding. That conclusion runs contrary to s. 5(1)(a)(i) and (ii) of the Limitations Act. The respondent knew that he had suffered an injury to his mouth and specifically his teeth, on February 24, 2015. He was referred to his dentist to ascertain the extent of the damage to his teeth. On February 25, 2015, his dentist advised him of the need for the extraction of two of his teeth. The respondent knew on February 24, 2015 that some damage had occurred. To that extent, the claim was discovered on February 24, 2015 rather than on March 3, 2015, the date when Mr. Shevchenko’s teeth were extracted. As indicated in Peixeiro v. Haberman, 1997 CanLII 325 (SCC), [1997] 3 S.C.R. 549, at para. 18, it was not required that the respondent know the full extent of the damage or the exact type of damage for the limitation “clock” to begin to run.

[24] I therefore conclude that the learned deputy judge erred in law when she found that the limitation period only commenced to run when the defendant found out the full extent of the damage caused by the appellant.
. Pioneer Corp. v. Godfrey

In Pioneer Corp. v. Godfrey (SCC, 2019) the Supreme Court of Canada discusses discoverability in limitations law generally:
(1) Discoverability

(a) Limitation Periods Run From the Accrual or Knowledge of the Cause of Action

[31] This Court has recognized that limitation periods may be subject to a rule of discoverability, such that a cause of action will not accrue for the purposes of the running of a limitation period until “the material facts on which [the cause of action] is based have been discovered or ought to have been discovered by the plaintiff by the exercise of reasonable diligence” (Central Trust Co. v. Rafuse, 1986 CanLII 29 (SCC), [1986] 2 S.C.R. 147, at p. 224; Ryan, at paras. 2 and 22).

[32] This discoverability rule does not apply automatically to every limitation period. While a “rule”, it is not a universally applicable rule of limitations, but a rule of construction to aid in the interpretation of statutory limitation periods (Peixeiro v. Haberman, 1997 CanLII 325 (SCC), [1997] 3 S.C.R. 549, at para. 37). It can therefore be displaced by clear legislative language (Ermineskin Indian Band and Nation v. Canada, 2006 FCA 415, [2007] 3 F.C.R. 245, at para. 333, aff’d 2009 SCC 9, [2009] 1 S.C.R. 222). In this regard, many provincial legislatures have chosen to enact statutory limitation periods that codify, limit or oust entirely discoverability’s application, particularly in connection with ultimate limitation periods (see e.g. Limitations Act, 2002, S.O. 2002, c. 24, Sch. B, ss. 4-5 and 15; Limitations Act, R.S.A. 2000, c. L-12, s. 3(1), Limitation Act, S.B.C. 2012, c. 13, ss. 6-8 and 21; The Limitations Act, S.S. 2004, c. L-16.1, ss. 5-7, Limitation of Actions Act, S.N.B. 2009, c. L-8.5, s. 5, Limitation of Actions Act, S.N.S. 2014 c. 35, s. 8; see also Bowes v. Edmonton (City), 2007 ABCA 347, 425 A.R. 123, at paras. 146-58).

[33] Further, absent legislative intervention, the discoverability rule applies only where the limitation period in question runs from the accrual of the cause of action, or from some other event that occurs when the plaintiff has knowledge of the injury sustained:
In my opinion, the judge-made discoverability rule is nothing more than a rule of construction. Whenever a statute requires an action to be commenced within a specified time from the happening of a specific event, the statutory language must be construed. When time runs from “the accrual of the cause of action” or from some other event which can be construed as occurring only when the injured party has knowledge of the injury sustained, the judge-made discoverability rule applies. But, when time runs from an event which clearly occurs without regard to the injured party’s knowledge, the judge-made discoverability rule may not extend the period the legislature has prescribed. [Emphasis added.]

(Fehr v. Jacob (1993), 1993 CanLII 4407 (MB CA), 14 C.C.L.T. (2d) 200 (Man. C.A.), at para. 22, cited in Peixeiro, at para. 37.)
[34] Two points flow from this statement. First, where the running of a limitation period is contingent upon the accrual of a cause of action or some other event that can occur only when the plaintiff has knowledge of his or her injury, the discoverability principle applies in order to ensure that the plaintiff had knowledge of the existence of his or her legal rights before such rights expire (Peixeiro, at para. 39).

[35] Secondly (and conversely), where a statutory limitation period runs from an event unrelated to the accrual of the cause of action or which does not require the plaintiff’s knowledge of his or her injury, the rule of discoverability will not apply. In Ryan, for example, this Court held that discoverability did not apply to s. 5 of the Survival of Actions Act, R.S.N.L. 1990, c. S-32, which stated that an action against a deceased could not be brought after one year from the date of death. As the Court explained (para. 24):
The law does not permit resort to the judge-made discoverability rule when the limitation period is explicitly linked by the governing legislation to a fixed event unrelated to the injured party’s knowledge or the basis of the cause of action. [Emphasis added; citation omitted.]
By tying, then, the limitation period to an event unrelated to the cause of action, and which did not necessitate the plaintiff’s knowledge of an injury, the legislature had clearly displaced the discoverability rule (Ryan, at para. 27).

[36] In determining whether a limitation period runs from the accrual of a cause of action or knowledge of the injury, such that discoverability applies, substance, not form, is to prevail: even where the statute does not explicitly state that the limitation period runs from “the accrual of the cause of action”, discoverability will apply if it is evident that the operation of a limitation period is, in substance, conditioned upon accrual of a cause of action or knowledge of an injury. Indeed, clear statutory text is necessary to oust its application. In Peixeiro, for example, this Court applied the discoverability rule to s. 206(1) of the Highway Traffic Act, R.S.O. 1990, c. H.8, which stated that an action must be commenced within two years of the time when “damages were sustained” (para. 2). The use of the phrase “damages were sustained” rather than “when the cause of action arose” was a “distinction without a difference”, as it was unlikely that the legislature intended that the limitation period should run without the plaintiff’s knowledge (para. 38).

[37] It is therefore clear that the “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)” (G. Mew, D. Rolph and D. Zacks, The Law of Limitations (3rd ed. 2016), at p. 103, emphasis added). And, while my colleague Côté J. claims to disagree with my analysis, I am fortified by the endorsement in her reasons of this formulation of discoverability (paras. 140 and 149).

[38] The issue raised by this appeal is what constitutes sufficiently clear legislative expression in this regard, such that discoverability will apply. In my 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. As this Court stated in M. (K.) v. M. (H.), 1992 CanLII 31 (SCC), [1992] 3 S.C.R. 6, the accrual of a cause of action is a “gradatio[n]” (p. 34). Where all the elements of a cause of action occur simultaneously, the cause of action accrues contemporaneously with the occurrence of each element (M. (K.), at p. 34). Where, however, the occurrence of each element is separated in time, the accrual of the cause of action is a continuing (but not continual) process. That is, the cause of action will continue to accrue as each element of the cause of action occurs.

[39] This was what the Court in Ryan was referring to when it said that discoverability does not apply where the limitation period “is explicitly linked by the governing legislation to a fixed event unrelated to the injured party’s knowledge or the basis of the cause of action” (para. 24, emphasis added). In Ryan, discoverability did not apply because the action was “complete in all its elements” before the operation of the event triggering the limitation period (para. 18). The limitation period was not dependent upon the accrual of the cause of action and thus the limitation period would begin to run independent of the accrual of the cause of action (see Ryan, at paras. 16, 18, 20, 29 and 32). Citing the trial judge with approval, the Court added this:
The fact of death is of no relevance to the cause of action in question. It is not an element of the cause of action and is not required to complete the cause of action. Whatever the nature of the cause of action, it is existing and complete before the Survival of Actions Act operates, in the case of a death, to maintain it and provide a limited time window within which it must be pursued. The fact of the death is irrelevant to the cause of action and serves only to provide a time from which the time within which to bring the action is to be calculated. [Emphasis added; para. 32.]
[40] Had, however, the event triggering the limitation period been an element of the cause of action, or had it been required to occur before the cause of action could accrue, discoverability could apply (Ryan, at paras. 29-30, citing Burt v. LeLacheur, 2000 NSCA 90, 189 D.L.R. (4th) 193). I do not see my colleague Côté J. as disagreeing on this point: she is quite right when she says that “the words ‘basis of the cause of action’ in para. 24 of Ryan should be understood as essentially synonymous with the ‘arising or accrual of the cause of action’” (para. 148). As this Court held in Peixeiro, where the limitation period is based on an event that can be construed as synonymous with the accrual of the cause of action, discoverability will apply (para. 38).

[41] From all this, it is evident that discoverability continues to apply where the legislature has shown its intent that a limitation period shall run from “when the cause of action arose (or other wording to that effect)” or where the event triggering the limitation period requires the plaintiff’s knowledge of his or her injury (Mew et al., at p. 103). 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. This is not, as my colleague suggests, a modified test for discoverability (para. 154), but rather is the product of this Court’s application of Fehr in Peixeiro (regarding when discoverability does apply) and Ryan (regarding when discoverability does not apply).


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