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Limitations Act - Discoverability - Appropriate Means IV

. Fresco v. Canadian Imperial Bank of Commerce

In Fresco v. Canadian Imperial Bank of Commerce (Ont CA, 2022) the Court of Appeal considered the 'appropriate means' element of the discoverability test in a class action over overtime wages:
[95] The motion judge discussed the test set by s. 5: “[L]imitation periods begin to run as soon as the claimant reasonably discovers that she has sustained a loss, that the loss was caused by the defendant and that taking legal action was appropriate.”[74] The motion judge noted that: “Every time a class member received their bi-weekly pay, they would have known if they had been paid for overtime, and if not, that this loss was caused by their defendant employer.”[75] Accordingly, the first two branches of the test were met.

[96] The discoverability issue rested, for the motion judge, on the third branch: whether class members knew taking legal action was appropriate. This turns on the interpretation of ss. 5(1)(a)(iv) and 5(1)(b).

[97] The motion judge found that the “appropriate means” requirement applied so that the limitations period would “not begin to run if taking legal action was not reasonably appropriate given the plaintiff’s circumstances.”[76] He gave two main reasons for concluding that the “appropriate means” test was not met. First, “some (and perhaps many) of the class members feared reprisal and were afraid that they might lose their job if they sued the bank for unpaid overtime”.[77] Second, “some (and perhaps many) of the class members reasonably relied on the bank’s repeated misrepresentations throughout the 16-year class period that the bank’s overtime policies complied with federal labour law.”[78]

[98] The motion judge found that these reasons combined to require individual assessments of when discoverability was met for an individual claimant, consistent with the general rule that “the viability of a limitations defence is best determined on an individual basis with individual assessments – hence its usual relegation to the individual hearings phase.”[79] The motion judge concluded:
The defendant bank has not established on the evidence that the limitation period that applies to every class member’s claim (outside the limitation periods noted in its Schedule) can be determined in common on a class-wide basis and that individual discoverability is not needed. In my view, the evidence strongly suggests that individual discovery will be needed in at least some cases to fairly determine whether the class member delayed in taking legal action because they were in reasonable fear of losing their job; because they reasonably relied on the bank’s misrepresentations about the legality of its overtime policy; or because they were otherwise impeded by the bank’s systemic policies and practices.[80]
[99] We are not persuaded that the first factor, that “some (and perhaps many) of the class members feared reprisal and were afraid that they might lose their job if they sued the bank for unpaid overtime” is a valid basis on which the limitations period can be suspended. However, there is merit in the second factor of reasonable reliance on misrepresentation. The applicable law is set out in this court’s decision in Presley v. Van Dusen.[81] Sharpe J.A. discussed the governing principles, and then referred to one of the “guiding principles” expressed by Pardu J.A. in Presidential MSH Corp. v. Marr Foster & Co. LLP: “Resort to legal action may be ‘inappropriate’ in cases where the plaintiff is relying on the superior knowledge and expertise of the defendant, which often, although not exclusively, occurs in a professional relationship.”[82]

[100] Sharpe J.A. added:
Moreover, reliance on superior knowledge and expertise sufficient to delay commencing proceedings is not restricted to strictly professional relationships. I acknowledge that the previous cases where this court has made a finding that it was reasonable for the plaintiff to rely on the defendant’s superior knowledge and expertise have concerned defendants belonging to traditional expert professions.... However, recent Superior Court decisions have applied the superior knowledge and expertise prong of Presidential MSH to persons who are members of non-traditional professions or who are not professionals at all.[83]
He pointed to a case involving a franchisor-franchisee relationship, and another involving portfolio managers and investors. The categories are not closed.[84]

[101] On the facts of this case, it is quite plausible, as the motion judge found, that some class members reasonably relied on the Bank’s misrepresentations that its overtime policies complied with federal labour law. The influence of this factor on individual class members is really a matter best left to individual assessment, as this court noted in the earlier certification decision.


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