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Two years is two years under new act

|Written By Julius Melnitzer

“Joseph v. Paramount Canada’s Wonderland is a clear pronouncement that two years is two years under Ontario’s new Limitations Act,” says Todd McCarthy of Flaherty Dow Elliott & McCarthy, counsel for the defendant Paramount.

‘Depending on your perspective, a strict limitation regime can be draconian,’ says Greg Richards. ‘But from the perspective of defendants who can get on with their personal or commercial life, it makes total sense.’

Indeed, by severely restricting the applicability of the common law doctrine of special circumstances to the Limitations Act, 2002, the June 2008 decision of the Ontario Court of Appeal comes down squarely in favour of certainty as a guiding principle behind the statute.

“Depending on your perspective, a strict limitation regime can be draconian,” says Greg Richards of Toronto’s WeirFoulds LLP. “But from the perspective of defendants who can get on with their personal or commercial life, it makes total sense.”

Innez Joseph was injured at the defendant’s amusement park on Sept. 5, 2004, at which point the two-year limitation prescribed by the new legislation began running. Joseph notified Paramount of the claim on Sept. 24. The defendant obtained a written statement from her as well as substantial medical documentation long before the limitation expired.

Joseph’s lawyer diarized the claim and left instructions for his assistant to have the claim issued before Sept. 5, 2006. The lawyer believed that the claim had been issued in time, but the assistant, believing that the former six-year limitation period applied, did not issue it before leaving on vacation during the week of Sept. 4, 2006.

The lawyer learned of the error, and on Oct. 31, 2006, forwarded a draft claim to the defendant and issued it the same day. A few days later, he advised Paramount that the claim had not been issued in time through inadvertence. Paramount received a copy of the issued claim on Nov. 28, 2006 and was formally served on Jan. 30, 2007.

Paramount moved under rule 21.01 of the Rules of Civil Procedure to determine whether the action was statute barred. Despite the fact that this was not a case of simply adding a cause of action or a new party to a claim that had been filed in a timely manner, Superior Court Justice Gerald Day ruled that he had a discretion to extend the time under the doctrine of special circumstances.

Such circumstances existed here, he ruled, because the plaintiff’s lawyer had acted inadvertently and there was no prejudice to the defendant.

But Justice Kathryn Feldman, writing for a unanimous bench composed also of Justices Janet MacFarland and David Watt, ruled that Day had erred.

The special circumstances doctrine could be found in Canadian jurisprudence since 1972, when the Supreme Court of Canada approved it in Basarsky v. Quinlan.

“This common law doctrine gradually came to be applied to motions brought under rule 26 and rule 5 of the Rules of Civil Procedure to amend pleadings or add parties after the expiry of a limitation period,” Feldman noted.

But Feldman concluded that, as a matter of statutory interpretation, the new Limitations Act did not embrace the common law doctrine.

“Because s. 4 of the new act mandates a two-year limitation period ‘unless this act provides otherwise,’ the court must look in the act for the authority to derogate from the application of the two-year limitation period,” Feldman wrote.

“These opening words compel the conclusion that the new act is intended to be comprehensive.”

Still, while there was no specific provision in the legislation referring to the doctrine of special circumstances, s. 20 did preserve the extension, suspension, or variation of a limitation period “by or under another act.” The issue here, then, was whether the common law doctrine in conjunction with the Rules of Civil Procedure met this criterion.

“Turning to the interpretation of s. 20 in the context of the common law doctrine of special circumstances, the requirement in s. 20 that the extension must be ‘by or under another act’ clearly precludes any extension that may be granted at common law as opposed to statute,” Feldman concluded.

But because the Rules of Civil Procedure are authorized by the Courts of Justice Act, they were arguably made “under” another statute.

“However, it is only the interpretation of the rules by application of the common law that has incorporated the doctrine of special circumstances to extend limitation periods by adding parties or claims after the expiry of a limitation period,” Feldman wrote. “The rules themselves do not do this.”

“In my view, it would be extending the meaning of ‘under another act’ too far to interpret it as including the application of common law principles used to apply the rules, even though the rules themselves are made by regulation ‘under another act.’”

The Limitations Act’s specific prohibition in s. 21 against adding parties after a limitation period’s expiry reinforced this conclusion.

“Section 20 would conflict with s. 21 if it were interpreted to extend to the incorporation of the common law special circumstances doctrine, thereby allowing the possible addition of parties after the expiry of the limitation period where special circumstances exist, in conflict with s. 21,” Feldman wrote.

A contrary interpretation would also defeat the purpose of the legislation.

“Instead, we would continue with the procedure that developed under the former act where courts were asked to consider in detail the actions of solicitors who missed limitation periods by neglecting to add parties or claims, and to assess in each case whether there should be relief,” Feldman wrote.

“Because an extension is a matter of discretion, there was always uncertainty and the perception of a degree of unfairness in the application of limitation periods.”

The upshot is that lawyers who mess up, even innocently, will not be able to get off the hook.

“As a practitioner, you really have to watch out and be more vigilant than ever, if for no other reason than that two years is quite a change from six years,” Richard says. “But certainty is important, and when everyone gets used to the new regime, we should have fewer regrettable cases.”

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