Discoverability Rule Can be Invoked When Identity of Tortfeasor Unknown

Roseanna Ansell-Vaughan
 

IRBs Deductible From Tort Damages Even if Caregiver Benefits Elected

Jeffrey S. Shinehoft
 

Disclosure of Litigation Agreements Must be “Immediate”

John Aikins
 

Nothin’ plus Nothin’ means Somethin’: Waterloo Region District School Board v. Truax Engineering Ltd.

David Cheifetz
 

Message From The Chair 

Aleksandra Zivanovic
 

Editors:
Hans Goddard
 

Roseanna Ansell-Vaughan*

In Safai v. Bruce N. Huntley Contracting Limited 2010 ONCA 545, the Ontario Court of Appeal considered whether the limitation period could be extended in cases where the tortfeasor was unknown to the plaintiff on the date of the loss.

The plaintiff slipped and fell on ice in a parking lot on February 17, 2000 and claimed to have suffered injuries that included a broken ankle. She discovered the correct identity of the owner of the parking lot in May 2000 and the company responsible for the winter maintenance of the parking lot in October 2000. On February 23, 2006 the plaintiff and members of her family commenced an action against the parking lot owner. On September 27, 2006 they commenced a separate action against the winter maintenance contractor.

The defendants moved for summary judgment, arguing that the applicable six-year limitation period had expired for both actions. Although the parties agreed that the applicable limitation period was six years, as set out in the Limitations Act, R.S.O. 1990, the plaintiffs raised the discoverability rule. They argued that there were genuine issues for trial as to when they knew or ought to have known the identities of the owner and contractor. The plaintiffs argued that, so long as they were reasonably diligent in determining the identity of the tortfeasors, the limitation period did not start to run until their identities became known.

The Motion Judge dismissed both actions. The Judge held that the discoverability rule had no application to either case, since it was clear that all the elements of the plaintiffs’ cause of action were known within six years of the date of the loss and that the only cause of the delay in issuing the claim within the prescribed period was the inadvertence of the plaintiffs’ lawyer.

The plaintiffs appealed to the Court of Appeal, maintaining that the discoverability rule served to extend the limitation periods. The plaintiffs further argued that the names of the owner and contractor were essential elements of the cause of action such that the limitation period did not start to run until the appellants knew these names, or could discover them by the exercise of reasonable diligence.

The Court dismissed the appeal against the owner, but allowed the appeal against the contractor.

The Court recognized that the discoverability rule is properly applied to cases where the issue is the discovery of the extent of an injury or the delayed effect of a party’s negligence. The Court went on to state that the issue in this case concerns the discovery of a tortfeasor, which, as Borins J.A. stated in Aguonie v. Galion Solid Waste Material Inc. 1998 CanLII 954 (ON C.A.), “involves more than the identity of one who may be liable. It involves the discovery of his or her acts or omissions, which constitute liability.”

The Court held that on the day of the accident the main plaintiff knew that she had an injury, knew that she likely had a claim for her injury against the owner of the property, and was in a position to ascertain the name of the registered owner of the property. In these circumstances there was no reasonable basis to invoke the discoverability rule to delay the commencement of the limitation period. The Court added that the plaintiffs’ argument that the limitation period ought not to commence on the date of an accident, but on the date that a routine search revealed the owner’s name, was contrary to both common sense and the intended purposes of the discoverability rule.

With respect to the contractor, however, the Court held that the discoverability rule did apply. On the date of the accident the plaintiffs did not know that the owner contracted winter maintenance out to a third party. Unlike finding the identity of the owner, there was no simple procedure, such as a search of a public register, to ascertain that the winter maintenance responsibilities were contracted out. In these circumstances, the Court held, there is a genuine issue for trial concerning the running of the limitation period and the application of the discoverability rule. Accordingly, the action as against the contractor was allowed to proceed.

In the context of occupiers’ liability cases, the application of the discoverability rule will therefore likely depend on whether or not it is immediately clear to a plaintiff that anyone other than a property owner may have played a role in causing the injuries at issue. Where a plaintiff is advised of another party’s involvement, the limitation period will likely commence on the date that the plaintiff obtains that knowledge.

*Roseanna Ansell-Vaughan is an associate at Dutton Brock LLP. Her defence-oriented practice includes a wide variety of general insurance liability issues, including occupier's liability, professional responsibility matters, motor vehicle accidents, products liability, property loss, false arrest/false imprisonment, construction negligence, and insurance coverage issues.
 

Jeffrey S. Shinehoft*

In the recent case of Sutherland v. Gurmeet Singh., 2011 ONSC 391, accident benefits for income loss were held to be deductible from tort damages in a manner that was not previously thought allowable.

The Insurance Act allows defendants in motor vehicle actions to deduct certain “collateral benefits” from the plaintiff’s economic loss damages. The purpose of these deductions is to prevent “double recovery”. The relevant provision states:

267.8 (1) In an action for loss or damage from bodily injury or death arising directly or indirectly from the use or operation of an automobile, the damages to which a plaintiff is entitled for income loss and loss of earning capacity shall be reduced by the following amounts:

1. All payments in respect of the incident that the plaintiff has received or that were available before the trial of the action for statutory accident benefits in respect of the income loss and loss of earning capacity.
    
2. All payments in respect of the incident that the plaintiff has received or that were available before the trial of the action for income loss or loss of earning capacity under the laws of any jurisdiction or under an income continuation benefit plan.
    
3. All payments in respect of the incident that the plaintiff has received before the trial of the action under a sick leave plan arising by reason of the plaintiff’s occupation or employment.

The defendant in Sutherland sought to deduct the plaintiff’s entitlement to income replacement benefits (IRBs) under the Statutory Accident Benefit Schedule (SABS) from his tort damages, even though the plaintiff had elected to receive caregiver benefits, as he was entitled to do under s. 36 of the SABS.

The defendant argued that since the plaintiff could have chosen to receive income loss benefits, those benefits were deductible. The plaintiff, on the other hand, argued that if his SABS election was made in good faith, the defendant could not deduct benefits that had not been received. Historically, defendants only received a deduction for a benefit not received under the SABS if there was bad faith on the part of the plaintiff.

Whitaker J. decided the case based on the meaning of the word “available” in part 1 of s. 267.8(1) of the Insurance Act. Giving it its “usual plain language meaning,” he decided that income benefits were available to the plaintiff, even though he elected to receive caregiver benefits. The court thereby effectively broadened the scope of deductibility from what was previously considered allowable.

Furthermore, Whitaker J. states that income loss benefits that were available are “deductible from the damages to which he (the plaintiff) is otherwise entitled.” He does not specify that they are only deductible from income loss tort damages. This appears to run afoul of the principle articulated by the Ontario Court of Appeal in Bannon v. Hagerman Estate., 1998 O.J. No. 1673 that deductions should only be permitted against a common type of damages. In other words, apples should only be deducted from apples.

The decision, while protecting against double recovery by the plaintiff, also appears to open the door to a double deduction by the defendant. Even though the defendant can deduct from tort damages an available benefit he didn’t receive, can he also, if applicable, deduct the benefit he did receive?

Finally, Whitaker J. is not specific about how much of the income loss benefits were deductible in this case. Is it an amount equal to what the plaintiff received in caregiver benefits? Is it the plaintiff’s entitlement to 104 of income benefits under the SABS? Can it be beyond that?

From a plaintiff’s perspective, this decision must now be carefully considered when electing a weekly benefit under the SABS. However, the issue is not settled as the decision is being appealed. 

*Jeffrey Shinehoft is an associate with Howie, Sacks & Henry LLP

John Aikins*

The City of Brampton has learned a hard lesson that Ontario Courts will not abide delayed disclosure of litigation agreements. As a result of its failure to make immediate disclosure of its Mary Carter agreement in Aecon Buildings v. Stephenson Engineering Limited, 2010 ONCA 898, the City saw its action dismissed.

The first Ontario decision to explicitly deal with Mary Carter agreements was Pettey v. Avis Car Inc. (1993), 13 O.R. (3d) 725. With respect to disclosure, Ferrier J. stated:

“The agreement must be disclosed to the parties and to the Court as soon as the agreement is made. The non-contracting defendants must be advised immediately because the agreement may well have an impact on the strategy and line of cross-examination to be pursued and evidence to be led by them…. In short, procedural fairness requires immediate disclosure. Most importantly, the Court must be informed immediately so that it can properly fulfill its role in controlling its process in the interests of fairness and justice to all parties.”

Years later, in Laudon v. Roberts (2009) 66 C.C.L.T. 207, the Ontario Court of Appeal, in the course of determining that a plaintiff was obliged to deduct from a jury’s damage award the payment received pursuant to a Mary Carter agreement, noted:

“The existence of a Mary Carter agreement significantly alters the relationship among the parties to the litigation. Usually the position of the parties will have changed from those set out in their pleadings. It is for this reason that the existence of such an agreement is to be disclosed, as soon as it is concluded, to the Court and to the other parties to the litigation.”

The Court quoted from the Pettey decision to set out the reasons for disclosure.

The question remained, however, what was meant by “immediate disclosure” or how Mary Carter agreements were to be disclosed to the Court. In Aecon we finally learn the answer to the first question, although not the second.

The facts in Aecon are somewhat unusual. Aecon was the construction manager for the building of the Brampton Performing Arts Centre. There were delay claims made by Aecon. Before commencing an action, however, Aecon reached a verbal agreement with the City of Brampton capping Brampton’s exposure to amounts Brampton could recover from third parties. An action was then commenced by Aecon, the verbal agreement was reduced to writing and signed, and Brampton issued third party proceedings. The third parties then issued fourth party proceedings.

A motion was brought by the fourth parties to dismiss the proceeding on the basis that the litigation was champertous. The motion court had no hesitation in rejecting that argument. The motion also sought a dismissal on the basis of abuse of process. The court agreed that the agreement was not disclosed “immediately,” but found that there was no resulting prejudice, and the motion was dismissed.

The decision was appealed to the Court of Appeal. With respect to disclosure, the Court stated:

“In this case, the agreement was not voluntarily produced immediately upon its completion. It was only produced several months after its existence was discovered by the appellant and it was specifically requested.

Other parties to the litigation are not required to make inquiries to seek out such agreements. The obligation is that of the parties who enter such agreements to immediately disclose the fact.”

The Court had earlier stated:

“The agreement was, however, disclosed to the appellant before it was required to deliver its pleading. The motion judge found on that basis that there was no prejudice caused to anyone from the delay in disclosing the agreement. We agree that there was no prejudice. However, in our view the matter does not end there.”

The obligation to disclose such agreements was stated by the Court as follows:

“While it is open to parties to enter into such agreements, the obligation upon entering such an agreement is to immediately [the Court’s emphasis] inform all other parties to the litigation as well as to the court.”

The court stated that immediate disclosure is not optional and any failure of compliance amounts to abuse of process and must result in consequences of the most serious nature for the defaulting party:

“Where, as here, the failure amounts to abuse of process, the only remedy to redress the wrong is to stay the Third Party proceedings and of course, by necessary implication, the Fourth Party proceedings commenced at the instance of the Third Party. Only by imposing consequences of the most serious nature on the defaulting party is the court able to enforce and control its own process and ensure that justice is done between and among the parties. To permit the litigation to proceed without disclosure of agreements such as the one in issue renders the process a sham and mounts to a failure of justice.”

The third and fourth party proceedings were therefore stayed.

Although the Court appears to be clear in its ruling that “any failure” with respect to immediate disclosure amounts to an abuse of process, the Court’s ruling is somewhat ambiguous. If “any failure” means even a day of delay and if “any failure” is abuse of process, why did the Court say: “Where, as here, the failure amounts to…”? This would suggest that not “any failure” qualifies as an abuse of process.

It is also surprising that the Court chose to impose the harshest possible “penalty”: ending the entire proceeding. How does dismissing an action, in the absence of prejudice to the other side, results in “justice between the parties”? With the benefit of submissions from counsel, the Court could have chosen a less severe penalty, such as:

1. An order for immediate payment of costs to all parties on a full indemnity basis by the “defaulting” parties;
2. Determine whether there should be a finding of civil contempt made against any of the parties to the agreement; or
3. An order that the defaulting party post security for costs to ensure compliance with the Rules in the future.

The Court could also have sent the matter back to the motion judge to determine whether fault lay at the hands of counsel rather than the client. It is not often that the court saddles a litigant with an error made by counsel.

It is interesting to note that in Hamilton v. Svedas Koyanagi Architects Inc., 2010 ONCA 887, which was decided only two days before Aecon, the Court of Appeal refused reinstate an action brought by another municipality, this time the City of Hamilton. However, in refusing to set aside a Registrar’s Order dismissing the action, the Court did consider what it called one of “the two key principles of the civil justice system and the Rules of Civil Procedure”:

“The first, reflected in Rule 1.04 (1), is that civil actions should be decided on their merits. As the motion judge said at para. 31 of his reasons: “the court’s bias is in favour of deciding matters on their merits rather than terminating rights on procedural grounds.”

Why did this principle not merit discussion in Aecon?

The Court of Appeal also made the following comment about public interest in promoting settlements in M., (J.) v. Bradley (2004), 71 O.R. (3d) 171:

“Finally, there is an additional, and powerful, reason to support the implementation of the Agreements in this case: the overriding public interest in encouraging the pre-trial settlement of civil cases. This laudatory objective has long been recognized by Canadian courts as fundamental to the proper administration of civil justice… Furthermore, the promotion of settlement is especially salutary in complex, costly, multi-party litigation…”

Again, how can this statement be reconciled with the result in Aecon? Does the Court really encourage the use of settlement agreements when the penalty for failing to immediately disclose it, even in the absence of prejudice, is a dismissal of the claim?

The question also remains: how does one disclose to the court the existence of an agreement, especially when it is reached shortly after the proceeding is commenced? Does one bring a motion? Does one amend the pleadings? Does one mail it to the court office? Or does one simply advise the Court any time there is any communication with the Court with respect to any issue in the litigation? And what kinds of “litigation agreements” are caught by this ruling? If two defendants agree that they will not crossclaim against each other, would it have to be disclosed?

Despite the uncertainties that remain, there is no doubt that Aecon’s “immediate disclosure” requirement must be seriously considered whenever counsel enter into a litigation agreement.

*John Aikins is a partner at Forbes Chochla LLP

David Cheifetz*

A sues B. B commences a claim for contribution against C within the limitation period applicable to contribution claims. The limitation period for an action by A against C has expired. C files a defence that asserts that the contribution claim against C cannot succeed, as a matter of substantive law, because C was no longer even potentially liable to A¹ due to the limitation period expiry. C moves to dismiss the contribution claim. 

Will C’s motion succeed? Is it a prerequisite to a successful contribution claim, in Ontario, as an aspect of the law establishing the substantive requirements for the cause of action for contribution that, when the contribution claim is commenced, the contribution defendant still be a person who, if sued by the plaintiff, could be held liable to the plaintiff for the damages in respect of which contribution is claimed? If it is not a general requirement, does it make a difference that C’s defence is that C is no longer even potentially liable to A because A’s limitation period for suing C has expired? 

Between 1948 and December 31, 2003 the answer, in Ontario, was an unequivocal “no” for those cases to which section 8 of the Negligence Act² applied.³ If s. 8 applied, and C could take advantage of it,⁴ it was not a defence to a claim for contribution against C that the limitation period for A’s claim against C had expired. 

Ontario jurisprudence had not determined what the answer would be if the Negligence Act did not apply to the contribution claim and the Highway Traffic Act did not apply to the action.⁵ The courts held that it was not necessary to do so.⁶ The result is that there was never a definite (non-obiter) answer in Ontario to what the result would have been, absent the statutory provisions.⁷ 

However, s. 8 was repealed by the Limitations Act, 2002. On its face, the Limitations Act, 2002 does not contain a section that reproduces the relevant portions of s. 8 of the Negligence Act. Does this mean that the issue of the effect of the expiration of the limitation period for an action by A against C is again a live issue, at least for contribution claims to which the Negligence Act applies?⁸

As a result of the Ontario Court of Appeal’s decision in Waterloo Region District School Board v. Truax Engineering Ltd.,⁹ the current answer in Ontario is still “no”, certainly for contribution claims to which the Negligence Act applies and probably for all other contribution claims as well. Both the motion judge and the Court of Appeal concluded, for somewhat different reasons, that the repeal of section 8 did not make a difference. The law remains as it was. The fact that C is no longer potentially liable to A because of an expired limitation period still does not provide C with a defence. Even though the contribution claim in Truax is a Negligence Act contribution claim, the case is likely a precedent for all contribution claims because the Court of Appeal’s decision is based on an interpretation of the Limitations Act, 2002, s. 18, not the Negligence Act.¹⁰

Truax arose out of problem in the construction of a building. The building owner WR¹¹ sued a contractor CRD¹² and an engineer, Truax..¹³ However, the limitation period for WR’s claim against Truax had expired.¹⁴ In due course, CRD commenced a claim for contribution against Truax.¹⁵ The contribution claim was commenced within 2 years of service of the statement of claim on CRD.¹⁶ Truax moved to have both the damages action and the contribution claim dismissed.¹⁷ Truax’s argument was that because the plaintiffs’ cause of action against it had prescribed, it had a complete defence to the contribution claim by CRD. Truax’s arguments included the fact that s. 8 had been repealed. The motion judge disagreed, as did the Court of Appeal. The Court of Appeal stated: 

The issue on this appeal is whether, under s. 18 of the new Limitations Act, 2002, S.O. 2002, c. 24, Sch. B, a person who has been sued for damages by a plaintiff and who wishes to bring a cross-claim against a concurrent tortfeasor for contribution and indemnity, may bring the claim at a time when the plaintiff’s claim against the concurrent tortfeasor is statute barred.¹⁸ 

Applied to the facts of the case, the issue was whether s. 18 of the Limitations Act, 2002 permitted CRD to claim contribution from Truax where WR’s cause of action against Truax had prescribed and the damages claimed by WR from CRD were the same damages that WR could not now successfully claim from Truax.

The court held that CRD could claim contribution from Truax, notwithstanding that WR’s cause of action against Truax was out of time. Feldman J.A. wrote, speaking for a unanimous five-judge Court: “I agree with the conclusion reached by the motion judge that s. 18 of the new Limitations Act, 2002 effectively replaces s. 8 of the Negligence Act with a new two-year limitation period, but with the same legal effect.”¹⁹

The explanation for the Court of Appeal’s conclusion is contained in paragraphs 19-29 of the reasons. 

[19] The reason the appellant seeks to go behind s. 8 of the Negligence Act, is because he argues that when s. 8 was repealed by the new Limitations Act, 2002 in 2004, and replaced by s. 18 of that Act, s. 18 only replaced the first and second components of s. 8: a new limitation period and a new commencement date, but does not re-enact the third component: allowing the claim for contribution to be brought after the expiry of the limitation period that applied to the action that could have been brought by the plaintiff directly against the party from whom contribution is claimed.

[20] In my view, it is not necessary to resolve the question raised by the appellant as to whether, at the time it was passed, s. 8 was necessary in order to allow claims for contribution and indemnity to be brought against a concurrent tortfeasor after the expiry of the limitation period that governed the plaintiff’s claim against the concurrent tortfeasor. Certainly the Magee case had been decided on that basis. It appears that the intent of the legislature was to accept that the Magee and Cohen cases had caused significant problems in the law of contribution and indemnity and, as between the importance of enforcing limitation periods and the unfairness of precluding claims for contribution through no fault of an affected defendant, the legislature preferred to correct the latter.

[21 It is not necessary to resolve the question because, as a matter of statutory interpretation, it is clear that even without the specific language contained in the repealed s. 8 (italicized in para. 15, supra), s. 18 of the Limitations Act, 2002 was intended to and does have the same effect.

[22] Section 18 provides:
s. 18 For the purposes of subsection 5(2) and section 15, in the case of a claim by one alleged wrongdoer against another for contribution and indemnity, the day on which the first alleged wrongdoer was served with the claim in respect of which contribution and indemnity is sought shall be deemed to be the day the act or omission on which that alleged wrongdoer’s claim is based took place. 

[23] Section 5(2) sets the date when a claim is presumed to be discovered, and s. 15 provides the ultimate limitation period under the Act. Section 4 provides the basic two-year limitation period for all claims unless otherwise provided in the Act. 

[24] Reading the relevant sections together, a claim for contribution and indemnity, whether in tort or otherwise, now has a two-year limitation period that is presumed to run from the date when the person who seeks contribution and indemnity is served with the plaintiff’s claim that gives rise to its claim over. This is the only limitation period in the Act that applies to claims for contribution and indemnity. The previous limitation period provision that applied where the plaintiff’s limitation period against other concurrent tortfeasors had expired, s. 8 of the Negligence Act, is repealed by the Limitations Act, 2002.

[25] There is nothing in the new Act itself, or in the working papers and recommendations that accompanied the drafting of the new Act, to suggest that there was any intention to change the effect of s. 8 of the Negligence Act, other than as specifically done with a new limitation period of two years and a new commencement date based on the overriding conceptual basis of the new Act: the discoverability of a claim.

[26] If the court were to conclude that, despite the clear wording of s. 18, there is a further limitation period that applies to claims for contribution and indemnity against a concurrent tortfeasor in negligence, and that such claims must also be brought before the expiry of the limitation period applicable to the plaintiff’s claim against that tortfeasor, the effect of a universal limitation period for contribution and indemnity claims in s. 18 would be abrogated and the clarity and efficacy of the section undermined.²⁰ … 

[27] In my view, to the extent that the legislature intended to change the law that has been in place since 1948 regarding the requirements for bringing a claim for contribution and indemnity, it did so specifically by changing the limitation period (from one year to two years) and the commencement date from which it runs (from the date of the plaintiff’s judgment against a particular tortfeasor to the date when the plaintiff’s claim was served on a particular tortfeasor). The new limitation period under s. 18 applies, as did the former one under s. 8, both to claims that are tried and to those that are settled (ss. 1 and 2 of the Negligence Act).²¹ 

The question, posed as it is in Truax in terms of the effect of the Limitations Act, 2002, would be meaningless if there was already an answer to the “potential liability” question – whether C’s potential for liability to A must still exist as of the time that the contribution claim was commenced – as a matter of substantive law, and that answer was “no”, unless the point of the question was to ask whether the Limitations Act, 2002 altered the substantive law of contribution by adding an additional requirement where the plaintiff’s cause of action against a potential contribution defendant has prescribed. 

In a 1985 report, The Ontario Law Commission (the “OLRC”) called the issue of whether C could be held liable to B to pay contribution for A’s damages even though C could not longer be held liable to A “a difficult question”.²² It acknowledged wrote that “powerful arguments can be made on both sides of the issue, and no result may be completely satisfactory.”²³ However, the OLRC opted for the view that the expiration of the limitation period for A’s action against C should not be a defence against B’s contribution claim.²⁴

The doctrinal reason why the OLRC stated that “no result may be completely satisfactory” is that the underlying premise for the existence of the right of contribution is restitution.²⁵ Where C could still be held liable to A for the damages claimed by A from B, then B, by paying A, is providing a benefit to C. The payment to A eliminates some potential for liability that C might otherwise have to A. However, C seems to derive no legal benefit from B’s payment to A where C can no longer be held liable to A for the damages for which B has paid A. As C cannot be held liable to A because of the expired limitation period, the payment does not reduce any liability to A that C might potentially have.²⁶ Nonetheless, as indicated, the OLRC preferred the conclusion that it was sufficient that potential liability once existed. In substance, the OLRC’s rationale was that B’s contribution claim should not be defeated by the conduct of A for which B was not responsible, where the only other logical alternative was to reduce A’s recovery from B in the amount of contribution that B could not recover from C because A had not sued C in time. The alternative view would require a change to the long-established principle of joint and several liability to the injured person on the part of two or more concurrent or joint tortfeasors. The OLRC was not prepared to recommend that the injured person’s recovery be reduced.²⁷ 

The law in the other provinces or territories where the issue has been considered and there is no applicable statute is also that the expiration of A’s limitation period for an action against C does not provide C a defence to B’s contribution claim.²⁸ It is also the law in many, if not all, common law jurisdictions where the question has been determined by case law or statute.²⁹ 

I agree with the Court of Appeal’s conclusion in Truax that the mere fact that WR’s cause of action against Truax had prescribed did not provide Truax a defence to CRD’s contribution claim.³⁰ However, it is fortunate that appeals are from results and not reasons.³¹ There are more than a few criticisms I could make about the content and adequacy of the court’s analysis. I will restrict myself to a few. 

The first is that, given that the Court was entirely right in its conclusion that there is nothing in the Limitations Act, 2002 that deals with the issue, it should also have concluded that the Limitations Act, 2002 did not provide the answer. That the absence might or might not be consistent with a conclusion made by reference to principles other than those embodied in the legislation, whatever they might be, is a different question. The Court’s analysis, in my view, is an argument based on nothing. As Billy Preston put it more than 40 years ago: “Nothin’ from nothin’ leaves nothin’.”³² If it is thought that this analogy is not apt, because the repeal of s. 8, without a re-enactment of that provision, in any form, in any other statute, means the situation is more like “somethin’ from somethin’ leaving nothin’,” then consider this. The explicit justification in the Court of Appeal’s analysis is not any particular piece of evidence. Rather, it is the apparent absence of anything that the Court thought might be contrary to its analysis.³³

We are told that the Court looked at some material from which it concluded that there was “nothing” contrary to the view that the legislature did not intend the repeal of s. 8 to alter existing law. However, we are not told what that material was.³⁴ Instead, we are told that “[T]here is nothing in the new Act itself, or in the working papers and recommendations that accompanied the drafting of the new Act, to suggest that there was any intention to change the effect of s. 8 of the Negligence Act, other than as specifically done with a new limitation period of two years and a new commencement date based on the overriding conceptual basis of the new Act: the discoverability of a claim.”³⁵ Feldman J.A. added: “In my view, to the extent that the legislature intended to change the law that has been in place since 1948 regarding the requirements for bringing a claim for contribution and indemnity, it did so specifically by changing the limitation period (from one year to two years) and the commencement date from which it runs (from the date of the plaintiff’s judgment against a particular tortfeasor to the date when the plaintiff’s claim was served on a particular tortfeasor).”³⁶ 

This statement presumes a proper understanding of the effect of s. 8 of the Negligence Act. As I have stated elsewhere, there is nothing in the publicly available material that I could find showing that the drafters of the Limitations Act, 2002 adequately understood either contribution law or the meaning and effect of s. 8. More specifically, the material suggests that those responsible may have believed that s. 8 did nothing more than establish the limitation period for contribution claims under the Negligence Act and allow the contribution claim to be asserted, in some instances, by a subsequent action rather than as a proceeding concurrent with the plaintiff’s action.³⁷ The publicly available material of which I am aware suggests, at least to me, that not only was the full effect of s. 8 not considered, but that it may not have been understood.³⁸

There may have been some basis for jurisprudential uncertainty as to the source and basic duration of contribution claim limitation period in the Negligence Act, and the effect of s. 8 in 1991.³⁹ There should not have been by 2010. In Superior Propane Inc. v. Tebby Energy Systems, ⁴⁰ Austin J. held that the limitation period was 6 years under what was then s. 45(1)(g) of the old Limitations Act.⁴¹ In addition, in Placzek, albeit in an obiter footnote, the Court of Appeal, without referring Tebby, stated that the limitation period was 6 years under s. 45(1)(g).⁴² Placzek is specifically cited in Truax.⁴³ 

I would have thought that, if a panel of the Court of Appeal was going to opine on the effect of the repeal of a section of a statute, where it, apparently, did not have any admissible (or otherwise) legislative or even quasi-legislative material on legislative intent, the panel would have referred to the provisions of what is the now the Legislation Act, 2006, s. 56.⁴⁴ Sections 56(1) and 56(2) provide:

56. (1) The repeal, revocation or amendment of an Act or regulation does not imply anything about the previous state of the law or that the Act or regulation was previously in force. 

(2) The amendment of an Act or regulation does not imply that the previous state of the law was different. 

To me, the Truax panel’s assertion that something can be inferred about the state of the law before the enactment of s. 8 in 1948 from the mere fact of the enactment and the absence of anything else,⁴⁵ and that something can be inferred about the state of the law from the fact of its repeal, seems contrary to the express statement in s. 56(1) and prior decisions.⁴⁶ Perhaps there is case law that supports the panel’s assertion. If so, Truax does not cite it. Absent case law, or any material other than the text of the Limitations Act, 2002 from which one might infer, if the material allows it, something about the Legislature’s intent, it seems to me that the Court of Appeal Truax presumed that the legislature did not intend to change “the s. 8 regime” in enacting the Limitations Act, 2002, and repealing s. 8, other than in relation to the commencement and duration of the contribution limitation period. 

If the Court of Appeal meant to analogize the situation to that which exists where the legislature re-enacts a statutory provision with identical or legally equivalent wording, it should have set out the grounds. In the case of a re-enactment, there is no presumption that the legislature intended to continue that law as it was under the old enactment. 

Although by sec. 20 of the Interpretation Act, R.S.O. (1914), the legislature is not to be presumed by reason merely of having re-enacted a statutory provision without changing its language to have adopted a previous judicial construction of that language, nevertheless, the history of the legislation, when read in light of the course of judicial decision and opinion touching the effect of it, may, independently of the intrinsic weight of such decisions and opinions, afford convincing evidence of the intention of the legislature.⁴⁷ 

The assertion in the first two sentences of paragraph 26 of the Truax reasons repeats the too-common mistake of conflating the separate issues of the duration of the contribution limitation period with the issue of whether still existing potential liability on the part of C towards A is a prerequisite for contribution. The Court of Appeal stated:

If the court were to conclude that, despite the clear wording of s. 18, there is a further limitation period that applies to claims for contribution and indemnity against a concurrent tortfeasor in negligence, and that such claims must also be brought before the expiry of the limitation period applicable to the plaintiff’s claim against that tortfeasor, the effect of a universal limitation period for contribution and indemnity claims in s. 18 would be abrogated and the clarity and efficacy of the section undermined.⁴⁸ 

Truax is correct in asserting that the potential-liability issue involves a “further limitation period”, but, if this is so, it is because of the substantive requirements of the cause of action for contribution – substantive, here, meaning all of the prerequisites other than the fact that the limitation period – and not because of any issue relating to the commencement or duration of the contribution action limitation period. What Truax called the “further limitation period” issue arises only because of the possibility that still-existing potential for liability on the part of C towards A is a prerequisite for a valid contribution cause of action. One way that the potential for still-existing liability might cease to exist is because of the expiration of a limitation period governing A’s cause of action against C. There are other ways. One example is a release given by A to C, whether as a part of a settlement or otherwise.⁴⁹ Another is the equitable defence of delay (laches).⁵⁰ On orthodox principles of stare decisis, Truax does not decide if C’s defence to A’s claim based on A’s delay in asserting the action – laches, in a situation where action is nonetheless commenced within the applicable limitation period – is also a defence to the contribution claim.⁵¹

The question of the substantive requirements for the contribution cause of action, whether under the Negligence Act, or the now developing common law (which applies to cases where contribution statutes do not apply),⁵² is not one that should be decided by the implication from the wording of a statute which does not deal with the substantive requirements for the cause of action.⁵³ It should be decided by reference to the statutory or other basis for the existence of the cause of action for contribution. From that perspective, it is difficult, at least for me, to see how limitation period provisions in a statute are relevant, except to the extent that they might prevent an otherwise valid cause of action from being enforced. But, I fail to see how a limitation period provision, and even more so the absence of anything specific in a limitations of action statute, can determine what the requirements are for a successful cause of action, apart from the time within which the action must be commenced to be successful assuming all of the other requirements can be satisfied. 

So, even if the existence of a still-existing potential liability requirement (at least where C’s defence is based on the expiration of A’s limitation period for suing C) would produce a result in which “the effect of a universal limitation period for contribution and indemnity claims in s. 18 [of the Limitations Act, 2002] would be abrogated and the clarity and efficacy of the section undermined,” it would be a consequence whose significance would be considered, if necessary, at only after the court had decided, without regard to the limitations of action legislation, what the substantive law requirements are for the cause of action for contribution under the Negligence Act, or otherwise. Then, and only then, would the court need to look at the limitations of action legislation to see if it mandates that B cannot successfully sue C for contribution if A’s cause of action against C prescribed before B commenced the contribution claim.

In a comment likely made to provide support for the conclusion that Truax could be held liable to pay contribution to CRD for some amount of WR’s damages even though Truax could no longer be held liable to WR, the Court of Appeal added that this sort of situation was now less likely to occur in Ontario because of the presumptive commencement⁵⁴ of the contribution claim limitation period on the date that the contribution claimant is served with the court document containing the A’s claim in respect of which B seeks contribution from C. The Court’s point is that the presumptive two-year limitation period usually means that the contribution claim will be asserted by the appropriate procedure in the plaintiff’s action, seemingly implying that this will reduce the prospects that the plaintiff’s limitation period for a claim against somebody who the plaintiff did not sue will have expired before a defendant who is sued has the opportunity to commence the contribution claim against that person.⁵⁵ 

Truax states: 

Therefore, to the extent that a claim for contribution and indemnity may be brought beyond the limitation period that applied to the plaintiff’s potential claim against a particular tortfeasor, the extension is minimized by the operation of s. 18 and any negative consequences to the tortfeasor by being brought into an action after he or she could have been sued by the plaintiff are minimized as well.⁵⁶ 

That may be an accurate statement, but it is irrelevant to the issue of what the requirements are for a valid cause of action for contribution, other than enforceability assuming all other requirements are met. Paragraph 29 again conflates the issues of the duration of the contribution limitation period with the effect of the expiration of A’s limitation period for suing C on B’s contribution claim against C. The fact is that by the time A serves B with the statement of claim, it may well be that the limitation period governing the action A could have brought against C has expired. That is exactly what happened in Truax. In addition, we should not presume that B will be aware of all of A’s prior problems that may also be causes of the damage and damages for which A sues B. 

I mentioned earlier that there are cases from other Canadian jurisdictions that are contrary to the result in Truax.⁵⁷ Truax intimates that such cases exist, but does not mention them.⁵⁸ One is a Supreme Court of Canada decision: County of Parkland No. 31 (County) v. Stetar.⁵⁹ However, the proper view of these other-jurisdiction cases, including Stetar, is that they turn on the particular wording of the statute involved. Other than the wording of the applicable statute, Stetar is equivalent to Truax. In both cases, C was sued by A and the action against C was dismissed because the limitation period had expired. However, unlike Truax, in Stetar, under the applicable (Alberta) contribution statute, B was entitled to contribution from C only if C was a person who would have been liable to A. B’s problem was, of course, that C had been sued by A and the action had been dismissed. That meant that C, literally, could not be a person who, if sued by A, could be held liable to A. The Supreme Court therefore held that C was not a person from whom B could obtain contribution under the applicable legislation.⁶⁰ 

In Stetar, the Supreme Court did not discuss why it would not have been sufficient that C was a person who, if sued in time, would have been held liable to A. Rather, the Court simply agreed with the English law, as it then was–later cases changed the law–that if C was sued by A and the action was dismissed because of a limitation period defence, C was not a person from whom B could obtain contribution under a statute that states that a prerequisite for contribution eligibility is that the contribution defendant be a person “who is, or would if sued have been liable, in respect of the” damages for which contribution is claimed.⁶¹ Unfortunately for Truax, s. 1 of Ontario’s Negligence Act does not use this wording or anything analogous.⁶² 

Some people might see it as somewhat ironic (for lack of a better word) that Truax did have recent enough Ontario Court of Appeal authority, albeit obiter authority, on the meaning of s. 1 of the Negligence Act expressly supporting its position. There are explicit Court of Appeal statements asserting the proposition that the fact that Truax was not liable to WR because WR’s limitation period had expired before WR sued Truax gave Truax a complete defence to the CRD contribution claim. Unfortunately for Truax, by the time the Truax appeal was argued, the best of those authorities was the entirely discredited analysis of s. 1 in Martin v. Listowel Memorial Hospital.⁶³ In obiter, which is no longer good law,⁶⁴ where the Court of Appeal discussed the question of whether any portion of the fault (not the liability) for the plaintiff’s damages could be allocated to a non-party for the purposes of determining the amount of contribution payable, the Court stated that no part of the fault could be assigned to a party who could not be held liable to the plaintiff because of “a legal defence such as a limitation defence”.⁶⁵ That was exactly Truax’s position. Truax was a party to whom CRD wanted a portion of the fault for WR’s damages attributed, so that CRD could obtain a contribution judgment against Truax for some portion of the damages, if any, for which it was held liable to WR (and collect contribution once CRD had paid more than its share). Nonetheless, the Truax reasons do not refer to this dictum in Martin. Perhaps one of the reasons for that silence is the Court of Appeal’s very recent, long overdue, and complete rejection of the Martin contribution dicta in Taylor v. Canada (Health).⁶⁶ 

While I much prefer the panel’s conclusion that the expiration of A’s limitation period for suing C did not provide C a defence to B’s contribution claim, and while the panel may well have been right, in the abstract, about what the Legislature thought it was doing, it is wrong to say that s. 18 of the Limitations Act, 2002 says anything whatsoever about the topic. Even if the panel is right about what the legislature wanted to do in enacting s. 18, the fact is that it did not do that. In my view there is no ambiguity. English is a flexible language, but it is not that flexible. In situations that do not invoke questions as to the constitutionality of the legislation (or portion of the legislation) under consideration, and absent evidence that the mistake is nothing more than a clerical error, generally apparent on the face of the enactment itself, Canadian (hence, Ontario) judges do not have the power to declare that unambiguous statutory text, as enacted, means something that it does not. 

The correction must be left to the legislature. That is the legislature’s job.⁶⁷ This is not a new principle. The Ontario Court of Appeal stated in Beattie v. National Frontier: “Legislation is presumed to be accurate and well drafted consequent to the presumption that the legislature does not make mistakes. Thus, if the words of an Act are clear, they must be followed even though they lead to a manifest absurdity.”⁶⁸ The court added in the next paragraph: “While in some cases the court will come to the rescue of the legislature by correcting its drafting error, these cases involve minor and obvious errors that can easily be corrected, unlike this case in which the correction of the error as proposed by the insurer would involve a substantial exercise in impermissible judicial redrafting.”⁶⁹ In the next paragraph, the court quoted from a Supreme Court of Canada decision in which that Court reminded the profession that: “[I]t is a basic principle of statutory interpretation that the court should not accept an interpretation which requires the insertion of extra wording where there is another acceptable interpretation which does not require any additional wording.”⁷⁰ 

The Truax decision does not involve a minor and obvious drafting error. There was no evidence of any clerical error in relation to the drafting of s. 18 of the Limitations Act, 2002. Truax does not assert there was. The issue as set out in Truax is not one that is apparent on the face of the section. It would not have been an issue at all if, for example, it was a matter of substantive contribution law that B could recover contribution from C only if C was still potentially liable to A at the time the contribution claim was commenced. The position that s. 18 says absolutely nothing relevant to the Truax issue, because it was never intended to say anything about that issue, is an acceptable interpretation of s. 18. The panel therefore did exactly what they did not have the power to do: they redrafted s. 18 to say something that it does not.

Beattie also provides an explanation for why “courts do not have jurisdiction to fill in gaps” in legislation in non-constitutional cases. The court wrote:

In writing about gaps and oversights in legislation, in Ruth Sullivan, Sullivan and Driedger on the Construction of Statutes, 4th ed. (Markham: Butterworths, 2002) at 134, Professor Sullivan states:

In a perfect world the legislature would create flawless legislation. Each statute would be drafted so that the effects of interpreting and applying it to an unfolding reality would match the goals sought by the legislature. In an imperfect world there is often a divergence between the purpose of legislation on the one hand and the effects of applying it on the other. The language of particular provisions may turn out to be over or under inclusive: there may be a lacuna in the legislative scheme.

The court added:

In addition, it is helpful to consider Professor Sullivan’s analysis of why courts do not have jurisdiction to fill legislative gaps. This is what she writes at p. 136:

While courts are willing to correct drafting errors, they are reluctant to fill gaps in legislation. This reluctance is grounded in two factors. First, unlike mistakes, which are always inadvertent, a gap in legislation may be deliberate. Gaps may result from faulty drafting but equally they may result from factual misconceptions, poor planning or even a considered policy choice. For this reason, gaps are taken to embody the actual intentions of the legislature, which courts are bound to respect. It is up to the legislature rather than the courts to effect any desired change. Second, whether inadvertent or not, gaps result from provisions or schemes that are under inclusive, and correcting under inclusiveness would require courts to legislate.

Applying the presumption that the legislature does not make mistakes, if it had intended to completely exclude the insurer from its statutory obligation to pay SABS to injured persons convicted of a criminal offence, it would have inserted the necessary language to make that clear. That the legislature failed to do so as a result of a likely oversight does not permit the court to remedy the oversight by redrafting the regulation.⁷¹ 

The last paragraph of the quotation from Beattie is easily modified to apply to the Truax issue. Applying the presumption that the legislature does not make mistakes, if it had intended to provide, in the Limitations Act, 2002, that the expiration of A’s limitation period for an action against C did not provide C with a defence to a contribution claim by B, in respect of the damages claimed by A from B, it would have inserted the necessary language to make that clear. That the legislature failed to do so as a result of a likely oversight does not permit the court to remedy the oversight by redrafting the legislation. 

In summary, the effect of Truax is that it is not a substantive prerequisite for contribution liability in Ontario that the injured person’s limitation period for an action against the contribution defendant not have expired prior to the commencement of the contribution claim. This is certainly the law for contribution claims to which the Negligence Act applies and more likely than not all claims for contribution, given that Truax is based on an interpretation of the Limitations Act, 2002, s. 18, which applies to all contribution claims. I would like to believe that litigants will not be put to the expense of having to get an Ontario Court of Appeal (or higher) decision confirming that. However, where there is enough money at stake, I would not be surprised to hear, or read, that some contribution-claim defendant has sought a specific ruling, even if only for whatever leverage that might provide in settlement discussions. 

Truax deals only with the case where the contribution defendant’s defence is based on the proposition that the contribution defendant is no longer potentially liable to the injured person because of the expiration of a limitation period. It does not deal with any other ground upon which the contribution defendant C might argue it is no longer even potentially liable to the injured person. However, as a matter of principle, this should not matter. It is either a substantive requirement of the contribution cause of action that C still be potentially liable to A at the time the contribution claim is commenced, by B against C, for the damages A claims from B, or it is not. If it is not, then, as a general rule, absent statute or other principle established by case law, the particular reason why C, who was once potentially liable to A, but is no longer liable, is not relevant.⁷² Nonetheless, Truax’s failure to deal with consequences to B’s contribution claim of A’s rights against C having becoming unenforceable against C as of the commencement of the contribution claim in, the context of the substantive requirements for a contribution cause of action, means that the question of the effect of other defences C might have to an action by A, where C alleged that the effect of the defence is that it is no longer potentially liable to A even if C once was, has been left open. That issue should not have been left open.⁷³ 

The problem in Truax–whether C should still be liable to pay contribution to B even when C is no longer liable to A due to expiry of the limitation period—is not a new one. The OLRC called it a “difficult question”.⁷⁴ The question has been considered in some depth by some cases in many jurisdictions. It was not decided in Ontario outside of the context of s. 8 of the Negligence Act while that section was still in force.⁷⁵ It was not decided in HSBC, but was left open.⁷⁶ It was not an issue in Dominion Chain because C was never liable to A for the damages claimed by A from B and, in any event, was not discussed by the Supreme Court of Canada.⁷⁷ However, it was examined in depth by the OLRC.⁷⁸ The OLRC’s recommendation was the result that the Court of Appeal arrived at in Truax. If anything would have seemed to buttress the court’s conclusion, support from the OLRC would. However, the OLRC Report is not mentioned. It is, I think, a safe assumption that the Truax panel was aware of the OLRC Report and knew of its recommendation(s).⁷⁹ Regardless of anything else, then, one wonders why the Truax panel did not think it worth mentioning, if only because the OLRC’s conclusion is the same as the panel’s. 

The better approach would have been for the Court of Appeal to decide the issue as a question of the substantive law of contribution and buttress that conclusion by stating that there is nothing in the Limitations Act, 2002 that requires a different answer on the question of the enforceability of B’s contribution right where A’s cause of action against C is prescribed by the lapse of a limitation period. Ironically, had the Truax panel taken that path, they could have still used, exactly as written, their summary of their rationale: “If the court were to conclude that, despite the clear wording of s. 18, there is a further limitation period that applies to claims for contribution and indemnity against a concurrent tortfeasor in negligence, and that such claims must also be brought before the expiry of the limitation period applicable to the plaintiff’s claim against that tortfeasor, the effect of a universal limitation period for contribution and indemnity claims in s. 18 would be abrogated and the clarity and efficacy of the section undermined.”⁸⁰

*David Cheifetz, Smockum Zarnett Percival LLP

______________

¹ The presumption here is that if A had sued C in time then A would have succeeded. Contribution is not available for a person who was never liable to the plaintiff for the damages sought from the defendant claiming contribution: Giffels v. Eastern Construction, [1978] 2 S.C.R. 1346, 1978 CanLII 39. See, also, Ontario Law Reform Commission, Report on Contribution among Wrongdoers and Contributory Negligence (Toronto, Ministry of Attorney General, 1988) at 144-60 (“OLRC Report”) and D. Cheifetz, Apportionment of Fault in Tort, (Markham, Canada Law Book, 1981) at 37-41 (“Apportionment”)
² Now R.S.0. 1990, c. N.1. Section 8 was enacted in 1948. It was initially section 9. I will refer to the section as section 8 for the balance of this note. People who know what “section 8” means in the United States military context, possibly because they have read Joseph Heller’s Catch 22, might agree that the latter number was apt. Section 8 was repealed effective January 1, 2004, by the Limitations Act, 2002, S.O. 2002, Sch. B., s. 25.
³ See, for example, Waterloo Region District School Board v. Truax Engineering Ltd, 2010 ONCA 838 at paras. 11-16, affirming 2009 CanLII 60412 (Ont. S.C.J.) (“Truax”) and HSBC Securities (Canada) Inc. v. Davies, Ward & Beck (2005), 74 O.R. (3d) 295, 2005 CanLII 1626 (C.A.) (“HSBC”). The case law is exhaustively reviewed in the OLRC Report, above note 1, in Cheifetz, Apportionment, above note 1, and D. Cheifetz, “Contribution Claims, Limitation Periods, and the Negligence Act, s. 9” (1977), 1 Adv. Q. 146 (“Contribution Claims”).
⁴ B could not if A’s action against B had been commenced outside of the statutory limitation period applicable to A’s action against B, even if this was as a result of a valid agreement between A and B to extend the limitation period: see HSBC, above note 3.
⁵ The now-repealed provisions of the Highway Traffic Act, R.S.O. 1990, s. 206(3) had the same effect as s. 8 of the Negligence Act on contribution claims in actions to which the former statute applied. Section 206(3) was also repealed by the Limitations Act, 2002, s. 25.
⁶ HSBC, above note 3 at para. 84-88 (para. 88: “To the extent that Ontario courts have specifically considered this issue, as opposed to considering the effect of an expired limitation period between the defendant and the other joint tortfeasor, they did so under s. 8.”). See, also, the cases referred to in the OLRC Report, above note 1; in Cheifetz, Apportionment, above note 1, c. 9; Cheifetz, “Contribution Claims”, above note 1; and D. Cheifetz, Annotation, “Annotation to Paquette v. Batchelor” (1989), 13 C.C.L.T. 239. One case is enough for present purposes: Paquette v. Batchelor (1980), 28 O.R. (2d) 590, 13 C.C.L.T. 237.
⁷ There were some Ontario dicta, though, at least suggesting that the expired limitation period might have been a defence absent the provisions of s. 8, in cases to which the Negligence Act, s. 8 applied, and the contribution claim did not comply with s. 8: see HSBC, above note 3, and D. Cheifetz, “For Whom The Bell Tolled: An Examination of the Consequences of HSBC Securities v. Davies Ward Beck and the Repeal of the Negligence Act, s. 8 (2007), 33 Adv. Q. 46 at pp. 122-132 (“For Whom”). In Truax, the Court of Appeal did not decide the question of what the law had been before the enactment of s. 8. Rather, the court asserted that the Ontario Legislature’s enactment of s. 8 in 1948 meant that the Legislature thought there was a problem as a result of some prior Ontario decisions: Truax, above note 3 at paras. 11-16. There is no doubt that s. 8 was formally enacted by the Legislature as a response to a decision which seemed to assert, as a general principle, that the expiration of A’s limitation period for suing C provided C with a defence to B’s timely commenced claim for contribution.
⁸ The Negligence Act applies only to actions for damages which are caused by two ore more tortfeasors. It does not require that the plaintiff sue more than one of the two or more tortfeasors; simply that the damages claimed by the plaintiff have been caused by two or more tortfeasors: the Negligence Act, s. 1. See, generally, Cheifetz, Apportionment, above note 1, c. 2.
⁹ Above, note 3. Unless otherwise indicated, all references to Truax are to the Court of Appeal’s decision.
¹⁰ The crux of the motion judge’s analysis is at 2009 CanLII 60412, paras 25-26. The motion judge stated that there was nothing in the Limitations Act 2002 indicating that the Legislature intended to abolish s. 8 of the Negligence Act without replacing it with an equivalent regime (para. 26); that the contrary argument “makes little sense from a policy perspective and there is nothing in the new Limitations Act to suggest such a policy” (para. 26); and that “the equities clearly favour[ed]” CRD (the contribution claimant) over Truax because, “[o]therwise, the risk is that Truax will be unjustly enriched at the Respondents’ expense solely because of the Plaintiff’s failure to sue Truax in a timely way” (para. 25). By equities, the motion judge likely also meant the fact that, in at least some cases, and clearly in this case, WR’s cause of action against Truax had prescribed long before CRD ever had the opportunity to claim contribution from Truax.
¹¹ The Waterloo Region District School Board.
¹² CRD Construction.
¹³ Truax Engineering Ltd.
¹⁴ The incident occurred in 2002. The action was commenced in 2008. The facts are recited sufficiently in the Court of Appeal reasons, 2010 ONCA 838 at para. 5.
¹⁵ By a cross-claim, as required under the Ontario rules since Truax was a co-defendant, but nothing turns on that procedure.
¹⁶ 2009 CanLII 60412 at para. 5
¹⁷ The damages action against Truax was dismissed on consent, the plaintiff conceding that it was prescribed: 2009 CanLII 60412 at paras. 6-7
¹⁸ Above, note 3, para. 6.
¹⁹ Above, note 3, para. 4. The panel was Feldman, Simmons, Cronk, LaForme and Epstein JJ.A. The reasons do not set out what the issue was that caused the Court of Appeal to assign five judges to the panel rather than three. The practice is that the Court of Appeal panel has five judges only where it is being asked to overrule one of its prior decisions. The Truax reasons do not mention what case that was. I could speculate but I will not, for reasons that include brevity.
²⁰ The omitted part is a quotation from a Corp. v. Rexx Management Corp., [2010] 1 S.C.R. 649, 2010 SCC 19 offered to support the assertions in the preceding portion of para. 27.
²¹ Above, note 3, paras. 19-27.
²² OLRC Report, above note 1 at 157.
²³ Given the cursory analysis in Truax, it appears that the Truax panel did not think the question all that difficult to resolve. Alternatively, the panel thought that the question was difficult, and chose to elide the difficulties by asserting that the repeal of s. 8 of the Negligence Act did not make a difference because s. 18 of the Limitations Act, 2002, even though it does not contain provisions remotely similar to s. 8, is to be interpreted to have the same effect as s. 8: “It is not necessary to resolve the question because, as a matter of statutory interpretation, it is clear that even without the specific language contained in the repealed s. 8 …., s. 18 of the Limitations Act, 2002 was intended to and does have the same effect.” (Truax, above note 3 at para. 21).
²⁴ OLRC Report, above note 1 at 157-58: “a person should remain liable to pay contribution notwithstanding that the injured person’s rights against him have become unenforceable as the result of the expiry of a statutory limitation period or, indeed, the existence of an equitable defence based on delay”.
²⁵ See Placzek v Green, 2009 ONCA 83 at paras. 34-38., 307 D.L.R. (4th ) 441.
²⁶ There is a strong argument that C nevertheless derives a benefit that the law should recognize: see Charles Mitchell, The Law of Contribution and Reimbursement (London, Oxford University Press, 2003). That argument is outside the scope of this note.
²⁷ In PDC 3 Limited Partnership v. Bregman + Hamann Architects, (2001), 52 O.R. (3d) 533, 2001 CanLII 24169 (C.A.) reversing (2000), 49 O.R. (3d) 722, 2000 CanLII 22399 (S.C.J.) a panel of the Court of Appeal (the reason are attributed to Feldman J.A.) reversed a motion decision hold that A’s recovery from B would be reduced by the amount of contribution B could not recover from C on account of a contract between A and C. The Court of Appeal did not hold that the motion decision was wrong in principle. It simply held that that decision should not be made on a preliminary motion but should be made on a full record (after trial): see 52 O.R. (3d) 533 at paras. 11-13.
²⁸ See, for example, OLRC Report, above note 1 at 146-60, Klar, Tort Law (4th) (Toronto, Carswell, 2010) at 552-59. The Truax reasons intimate such other authorities exist or might exist. However, the Court of Appeal chose to not review them: see 2010 ONCA 838 at paras. 17-18. The leading Canadian example is MacKenzie v. Vance (1977), 74 D.L.R. (3d) 383 (N.S.C.A.) discussed in HSBC, above note 4, at paras. 82-84. HSBC is mentioned in Truax, at para. 17. Cronk J.A. was on both the HSBC and Truax panels. However, there is Canadian case law to the contrary under differently worded statutory provisions: see Cheifetz; “For Whom”, above note 7, at 122-132. The cases are listed and discussed In the footnotes to that article at the referenced pages.
²⁹ See Mitchell, The Law of Contribution and Reimbursement, above note 26.
³⁰ That should not surprise some people reading this note. it is the position I have consistently taken since at least 1977: see my published material listed above in note 1, 3 and 7.
³¹ For those obsessed with current authorities: Fettes v. Culligan Canada Ltd., 2010 SKCA 151 at para. 33 (“an appeal is from the result, not the reasons”) and Delgamuuk v. British Columbia [1933] 5 W.W.R. 97 as 23 (same phrase). It appears from the Supreme Court of Canada website that Truax did not file for leave to appeal. Perhaps Truax resigned itself to the conclusion that there would be no purpose in seeking leave. That makes the Court of Appeal’s decision final. Mr. Justice Robert H. Jackson, while a judge on the United States Supreme Court, wrote in Brown v. Allen, 344 U.S. 443 (1953): “We are not final because we are infallible, we are infallible because we are final."
³² www.lyricsmode.com/lyrics/b/billy_preston/nothing_from_nothing.html, accessed March 4, 2011.
³³ While I much prefer the panel’s conclusion that the expiration of WR’s limitation period for suing C did not provide C a defence to B’s contribution claim, and while the panel may well have been right, in the abstract, about what the Legislature thought it was doing, it is, in my view, wrong to say that s. 18 of the Limitations Act, 2002 says anything whatsoever about the topic, for the reasons outlined later in this note.
³⁴ Of course, one could go to the Court of Appeal, review what was filed, and see for one’s self. Or, one could ask one of the parties’ lawyers. I did none of these. I should not have had to. I did check Carswell’s “Litigator” service to see if it had the copies of the material filed at first instance or on appeal. It does not. From prior experience – the research I did in order to write the “For Whom” case comment (above note 7) on HSBC (above, note 3) – I suspect the reason that the Court of Appeal said there is nothing is that there is absolutely nothing publicly available that provides any insight as to what the drafters of the Limitation Act, 2002, thought about this aspect of contribution law; or, for that matter, any other issue of contribution law relevant to the disposition of the issue in Truax as stated by the court. My suspicion is that if such material existed, in would have surfaced in HSBC, given the huge amount claimed in that action. In any event, if such material exists, I have yet to see it.
³⁵ Above, note 3, para. 25.
³⁶ Ibid., para. 27. The mistake as to the duration of the Negligence Act contribution claim limitation period prior to Jan 1, 2004 is egregious and remarkable, given the five-judge panel. The quoted statement, unless it is simply a typographical error or merely a momentary “blip”, suggests the panel misunderstood at least one aspect of s. 8 jurisprudence. The Negligence Act contribution limitation period was never just 1 year. It was a minimum of one year. However, the default Negligence Act contribution claim limitation period was 6 years under s. 45(1)(g) of the old Limitations Act, R.S.O. 1990. c. L-15 and its predecessors: Superior Propane Inc. v. Tebby Energy Systems, (1992), 9O.R. (3d) 769, 1991 CarswellOnt 469 (Ont. Court of Justice, Gen. Div.). Placzek v. Green, (2009) ONCA 83 at para. 43 footnote 8, states: “In my opinion, unless the injured party’s limitation period against the concurrent tortfeasors had expired (in which case s. 8 of the Negligence Act would have governed), the applicable limitation period was likely the six-year limitation period applicable to actions on the case under s. 45(1)(g) of the Limitations Act, R.S.O. 1990, c. L.15. See e.g. Peel (Regional Municipality) v. Canada, [1987] 3 F.C. 103. … I cannot rule out entirely the possibility that the relevant limitation period was the six-year limitation period applicable to actions on a contract or for a debt under s. 45(1)(g) of the Limitations Act, but I think it is more likely that the limitation period for actions on the case applied: see Cheifetz at p. 77-79; and Baker [v. Gray Coach Lines, [1949] 2 D.L.R. 238].” The Placzek reasons are attributed to Simmons J.A. Simmons J.A. was on the Truax panel. Given that what the Limitations Act, 2002 did was reduce the default contribution limitation period from 6 years to 2 years, it is safer to conclude that the “one year to two years” statement was simply a “blip”.
³⁷ See Cheifetz, “For Whom”, above note 7, at 122-132.
³⁸ The only relevant “working paper” of which I am aware is the 1991 report from a committee appointed by the Ministry of the Attorney General: The Limitations Act Consultation Group, Recommendations for a New Limitations Act: Report of the Limitations Act Consultation Group (Toronto, Ministry of the Attorney General, 1991), Recommendation 18. I discussed that Recommendation, and set out its text, in D. Cheifetz, “For Whom”, above note 7, at 52, footnote 15, and at 147-50. I repeat part of what I said in “For Whom” at 147, summarizing Recommendation 18’s discussion of s. 8: “The text of the commentary on the recommendation suggests that the group’s collective belief was that the significant aspect of the section was that it set the commencement and duration of the contribution limitation period and nothing more. Remarkably, the report does not mention at all, that s. 8, where it applied, prevented the contribution defendant from defeating the contribution claim on the basis that the contribution defendant was no longer liable to the injured person because the limitation period for the injured person’s action against the contribution defendant had expired”. The text of the report implies that the Consultation Group thought that s. 8 was somehow inconsistent with “discoverability-based” limitations of action legislation because it allowed the contribution claim to be commenced after the contribution claimant was held liable to the injured person, or settled with the injured person. There were some things that were clear enough by 1991, even in Ontario contribution jurisprudence. Section 8 did not establish the limitation period for either the commencement or the duration of Negligence Act contribution claims. The section was a saving provision for the contribution claimant. Where it applied, s. 8 extended the limitation period otherwise applicable to the contribution claim by one year from either the date of the injured person’s judgment against the contribution claimant, or the date of the settlement between the injured person and the contribution claimant. Even if there was any doubt about that issue, HSBC, above note 3, settled it.
³⁹ I have used this date because it is the date of the only publicly available “working paper” that I know of: see note 38.
⁴⁰ (1992), 9O.R. (3d) 769, 1991 CarswellOnt 469 (Ont. Court of Justice, Gen. Div.) Tebby is cited in Cheifetz, For Whom, above note 7, at 194, footnote 145. More importantly, though, Tebby was referred to in Lloyd's Underwriters v. Dominion of Canada General Insurance Co. (2008), 89 OR. (3d) 509 at para. 9, 2008 CanLII 8782 (S.C.J.) and in Zurich Indemnity Co. of Canada v. Matthews, 254 D.LR. (4th) 97, 2005 CanLII 14130 (Ont. C.A.). The panel in the last case was Feldman, Simmons and Gillese JJ.A. While neither of Lloyd’s Underwriters nor Zurich Indemnity mentions that Tebby held that the duration of the Negligence Act contribution claim limitation period was six years under the old Limitations Act, and both cases involve limitation period issues for causes of action other than contribution, both reasons show that the judges involved realized that it was that statute which established the default limitation period, not the Negligence Act.
⁴¹ The Limitations Act, R.S.O. 1980, c. 240 (R.S.O. 1990, c. L. 15).
⁴² Above. note 36 at para. 43, footnote 8. Simmons J.A., sat on both Placzek and Truax. The members of the unanimous panel in Placzek were Laskin, Simmons and Juriansz JJ.A.
⁴³ Above, note 3 at para. 18. It was one of the cases that CRD relied on.
⁴⁴ S.O. 2006, c. 21, Sch. F. The relevant provision, at January 1, 2004, would have been the Interpretation Act, R.S.O. 1990, c. I.11, ss. 17 and 18.
⁴⁵ The explanatory footnote in the enacting legislation for the 1948 amendment is not evidence of what the law actually was in 1948 before the enactment of s. 8. See the sections of the Interpretation Act referred to in note 44, above, and below, note 46.
⁴⁶ Section 18 of the Interpretation Act, above note 44, was: “The amendment of an Act shall be deemed not to be or to involve a declaration that the law under the Act was or was considered by the Legislature to have been different from the law as it has become under the Act as so amended.” That seems to prevent an inference from the fact of the 1948 amendment, itself. This is no doubt why the court, in Truax, above note 7 at para. 14, referred to the “explanatory footnote to the enactment of s. 8.” In Caressant Care Nursing Home of Canada Ltd. v. London and District Service Workers' Union, Local 220, 2005 CanLII 13791 (ON S.C.D.C.), the Divisional Court stated at para. 66: “The mere fact that a statutory amendment follows a judicial or quasi-judicial interpretation of that statute is not sufficient, in and of itself, to require a retrospective interpretation of the amendment. On the contrary, s. 17 of the Interpretation Act states, ‘The repeal or amendment of an Act shall be deemed not to be or to involve any declaration as to the previous state of the law.’”
⁴⁷ Orpen v. Roberts, [1925] S.C.R. 364 at 374, 1925 CanLII 2, quoted in Cowper v. Studer, [1951] S.C.R. 450 at 454, 1951 CanLII 34. The present statutory equivalent is the Legislation Act, 2006, s. 57: “The repeal or revocation of an Act or regulation does not imply the revival of an Act or regulation that is not in force or another thing that is not in existence at the time the repeal or revocation takes effect.” The provision of the interpretation Act in force on January 1, 2004 was s. 17: “The repeal or amendment of an Act shall be deemed not to be or to involve any declaration as to the previous state of the law.”
⁴⁸ Above, note 3 para 26.
⁴⁹ However, it is has been held that the fact that A released C under a settlement, so that C is no longer liable to A when B commences a contribution claim against C, does not provide C with a defence to B’s contribution claim. C’s defence is that the amount of C’s payment to A represents a fair estimate of C’s “share” of the damages caused by both B and C. See Nesbitt v Beattie, [1955] O.R. 111 (C.A.). Ontario’s Negligence Act, s. 2, specifically provides a right to contribution after settlement. Where the relevant apportionment statute does not contain a specific provision allowing for contribution after settlement, the courts have held it exists as a matter of common law: see Cheifetz, Apportionment, above note 1, c. 3, and Klar, Tort Law, above note 17 at 552-53.
⁵⁰ For a discussion of this defence, see K.K. v. K.W.G. (2008), 90 O.R. (3d) 481 at paras. 41-42, 2008 ONCA 489.
⁵¹ As stated, above note 24, the OLRC Report recommended that this not provide C a defence, as a matter of principle.
⁵² D. Cheifetz, “Allocating Financial Responsibility Among Solvent Concurrent Wrongdoers” (2004), 28 Adv. Q. 1 at 344-46, 348-49
⁵³ “Substantive” meaning the requirements for an enforceable remedy other than that the remedy’s own limitation period has not expired before the action asserting it is commenced.
⁵⁴ I am assuming presumptive commencement but this question may remain open, subject to one’s interpretation of Placzek, above, note 36.
⁵⁵ Above, note 3 at paras. 28-29.
⁵⁶ Above, note 3, para. 29.
⁵⁷ Above, note 17.
⁵⁸ Above note 3, paras. 17-18
⁵⁹ [1975] 2 S.C.R. 884, 50 D.L.R. (3d) 376, 1974 CanLII 198.
⁶⁰ Ibid., [1975] 2 S.C.R. 884 at 896-899.
⁶¹ Ibid., at 896.
⁶² The Negligence Act, s. 1, above note 2, provides: “Where damages have been caused or contributed to by the fault or neglect of two or more persons, the court shall determine the degree in which each of such persons is at fault or negligent, and, where two or more persons are found at fault or negligent, they are jointly and severally liable to the person suffering loss or damage for such fault or negligence, but as between themselves, in the absence of any contract express or implied, each is liable to make contribution and indemnify each other in the degree in which they are respectively found to be at fault or negligent.” While s. 2 of the Negligence Act does use the “who is, or would if sued have been, liable” phrasing, that section applies only to contribution claims after settlement. Truax was not a claim for contribution after settlement. If that phrasing had appeared in s. 1, the Court of Appeal would have had to decide whether to apply Stetar, or to follow the English cases, decided after those referred to in Stetar, which held that it is sufficient that C be a person who, if sued in time, would have been held liable to A. Those cases are referred to in the material listed in note 28, above, including, most recently, Klar, Tort Law, above note 28, at 552-59.
⁶³ (2000), 51 O.R. (3d) 384, 2000 CanLII 16947 (C.A.). In that sense, it was perhaps even more unfortunate for Truax that Feldman J.A., who was on the Truax panel, had also been on the Martin panel. As indicated, there are other, older, ONCA dicta: see Cheifetz, “For Whom”, above note 7, at 122-132.
⁶⁴ This portion of Martin was finally overruled, completely, by the Court of Appeal in Taylor v. Canada (Health), 2009 ONCA 487 at paras. 23-29.
⁶⁵ Ibid, at paras. 36 and 46.
⁶⁶ Above, note 64. For those who think it might be relevant: none of the judges on the Truax panel sat on the Taylor panel.
⁶⁷ See Beattie v. National Frontier Insurance Co. (2003), 68 O.R. (3d) 60 at, inter alia, paras. 16-17, 2003 CanLII 2715 (C.A.) and Wewaykum Indian Band v. Canada, [2002] 4 S.C.R. 245, 2002 SCC 79 at para. 69.
⁶⁸ Ibid. at para. 15. The panel was Moldaver, Borins and MacPherson JJ.A.
⁶⁹ Ibid. at para. 16.
⁷⁰ Ibid. at para. 17, quoting from Friesen v. Canada, [1995] 3 S.C.R. 103 at para. 27, 1995 CanLII 62.
⁷¹ Ibid. at paras. 18-19.
⁷² As a general rule because there might be cases where the conduct of the contribution defendant is involved in the reason why C is no longer liable in such a way as to make the lack of liability relevant. This seems to approach an idea analogous to estoppel.
⁷³ I had shown, as early as 1977 (Cheifetz, “Contribution Claims”, above note 3) and again in 1981 (Cheifetz, Apportionment, above note 1) that the better answer was one based on principle. The OLRC made the same point in 1985: see OLRC Report, above notes 11 and 12. I repeated the point in Cheifetz, “For Whom” above note 7, at 51 note 12, some 26 years later. Given that I had to repeat the point in “For Whom”, in 2007, I am not surprised that I have to repeat it again. What I am surprised about, this time, is that in the face of the OLRC’s recommendation – it would be astonishing, to me, if the panel was not aware of the OLRC Report and its recommendations – a five-judge panel of Court of Appeal would clearly chose to not decide the issue, as a matter of first principles, without explaining why it chose not to and without referring to the OLRC Report.
⁷⁴ OLRC Report, above note 1, at p. 157.
⁷⁵ And in effect the equivalent provisions of the Highway Traffic Act: see note 5 above.
⁷⁶ Above note 3.
⁷⁷ Dominion Chain Co. Ltd. v. Eastern Construction Co. Ltd. (1976), 12 O.R. (2d) 201, 68 D.L.R. (3d) (ONCA) aff’d (sub. nom. Giffels Associates Ltd. V. Eastern Construction Co.) aff’d [1978] 2 S.C.R. 1346, 1978 CanLII 39 because, on the findings of the Court of Appeal, Eastern was never liable to Dominion Chain for the damages for which Giffels was held liable to Dominion Chain: see [1978] 2 S.C.R. 1346 at p. 1354. See, also, HSBC, above note 3, at para. 48. Giffels is discussed in paras. 40-48). Nonetheless, it may well be that the better interpretation of dicta in the Ontario Court of Appeal’s reasons in Dominion Chain is that a still-existing potential for liability is required.
⁷⁸ OLRC Report, above note 1.
⁷⁹ The OLRC Report was referred to by the Court of Appeal in Placzek, above note 39, at para. 38.
⁸⁰ The Limitations Act, 2002, s. 18, states: 18. (1) For the purposes of subsection 5 (2) and section 15, in the case of a claim by one alleged wrongdoer against another for contribution and indemnity, the day on which the first alleged wrongdoer was served with the claim in respect of which contribution and indemnity is sought shall be deemed to be the day the act or omission on which that alleged wrongdoer’s claim is based took place. (2) Subsection (1) applies whether the right to contribution and indemnity arises in respect of a tort or otherwise.
⁸¹ Truax, above note 3 at para. 26.

Aleksandra Zivanovic

Greetings,

The Insurance Law Section has a number of events to announce for its remaining term.

First, the Insurance Law Section cordially invites you to its sixth annual award dinners to honour our recipients. Congratulations to our Award for Excellence recipients: Paul A. Lee Q.C.; Paul Lee, Barristers & Solicitors; and James C. Simmons, Q.C., Weaver Simmons LLP. Mr. Lee will be honoured at an award dinner and ceremony on Wednesday, April 28, 2011 at The Boiler House in the Distillery District in Toronto. Mr. Simmons will be honoured at an award dinner and ceremony in early May, 2011 in Sudbury. To purchase tickets or for more information, visit the OBA website at: www.oba.org or call 416-869-1047 ext. 306.

On March 31, 2011 our Section is completing its Essential Trial Series, Parts II and III entitled: Effective Objections and Cross-Examinations, presented by John McLeish, McLeish Orlando LLP and Geoff Adair, Adair Morse LLP. It will be chaired by our Executive member Patrick Brown, McLeish Orlando LLP. This event has been approved for one hour of CPD. We hope that many of you have already registered. It is expected to be a fun and highly informative evening.

Our last event will be the End of Term Dinner, held in conjunction with our Civil Litigation Section. It is scheduled to take place on May 24, 2011. Our guest speaker will be Distinguished Research Professor Allan C. Hutchinson of Osgoode Hall Law School, York University. He is a legal theorist with an international reputation for his original and provocative writings. He was elected to the Royal Society of Canada in 2004 and named a Distinguished Research Professor by York University in 2006. His research interest are law and politics, legal theory, the legal profession, constitutional law, torts, jurisprudence, civil procedure, and racism and law. We are very pleased to have Professor Hutchinson join us for this evening.

As a final note, to take advantage of our electronic networking age, our Executive will soon be setting up a group on the Linkedin website. We hope that this step will further our objective of connecting and integrating our members throughout the Province. Look out for our invitation to join our group.

And don’t forget, the OBA’s LinkedIn and Facebook pages are up and running. Check them out and join today!

I would like to thank all the contributors and, of course, Hans Goddard and Robert McGlashan for their hard work in running our newsletter. Happy reading!

Aleksandra Zivanovic