Limitation Periods in Actions Against Police

The Court of Appeal recently upheld a motions court judge's decision granting summary judgment in an action against police based on an expired limitation period .

In Cassidy v. Belleville, 2015 ONCA 794, the plaintiff alleged she was stopped by police in August 2009, who informed her she was driving a stolen vehicle and confiscated the car, forcing her to walk home.  She alleged she was pregnant at the time and the incident caused medical complications. She wrote to a lawyer six days after the incident asking whether she should commence a civil action but did not pursue a lawsuit at that time.  Approximately one month later (September 2009), she made a complaint to the Belleville Police and received a reply in June 2011. The complaint was partially upheld in November 2012.  The plaintiff waited until October 2013 before commencing her action, four years after the incident.  She argued she did not discover her claim until after the complaint was upheld as she was unaware of the standard of care until that time.

The motions judge disagreed, as did the Court of Appeal.  Section 5(2) of the Limitations Act provides a presumption that the limitation period begins to run the date of the incident unless the contrary is proven and there was nothing to rebut the presumption.  Expert evidence was not needed to discover the claim; the plaintiff was aware of the offending conduct, the identity of the offender and the nature of her injuries from the time of the incident.  The results of the complaint investigation may have provided additional information but were not necessary to trigger the limitation period.

Cassidy is of assistance in police actions, but may also extend to other circumstances where plaintiffs have attempted to extend limitation periods by waiting on administrative decisions.

Limitation to Add Defendants Expired

Issues relating to discoverability can be decided on a motion to amend a claim.

In Garic v. Mack Trucks Canada 2014 ONSC 3103 (S.C.J.), the plaintiff was injured in 2006 while operating a dump truck owned by her husband.  One of the axles gave way, causing her to lose control and roll into a ditch.  Her husband was initially named as an FLA claimant.

In 2012, the plaintiff brought a motion seeking to add her (now former) husband and his company as defendants for failing to maintain the vehicle.  She argued the claim was not discoverable until the named defendants gave evidence on discovery that the owner had not followed proper maintenance procedures. 

The Court dismissed the motion to add defendants, holding that:

[19]           The difficulty with the plaintiff's position is that the case law has established that to discover a claim the plaintiff must only have sufficient facts upon which to support an allegation that there is a cause of action, and it is not necessary for the plaintiff to have discovered complete evidentiary support to make the claim winnable (see Wilkinson v Braithwaite [2011] O.J. No. 1714 (S.C.J.) at para. 32).

The Statement of Claim alleged the named defendants were responsible for "service, inspection and maintenance" of the truck, which was expressly denied in the Statement of Defence.  The plaintiff knew her husband was responsible for maintenance of the truck since the business commenced.  Justice Broad held that the essential facts were either actually known to the plaintiff or at least obtainable with due diligence more than two years since the motion was brought.

The Limitation Period to Commence a Claim under OPCF-44R

The decision in Schmitz(Litigation guardian of) v. Lombard General Insurance Co. of Canada, 2014 ONCA 88 (C.A.) is an important decision on when the limitation period begins to run in a claim under form OPCF-44R, for underinsured motorist coverage.

This matter concerned a motor vehicle accident that occurred on July 19, 2006. The plaintiff had a policy of insurance which included a provision for underinsured motorist coverage. The plaintiff commenced a claim against the defendant driver in June 2007 and a claim against his insurer for underinsured motorist coverage in June 2010. The plaintiff’s insurer brought a motion to dismiss the plaintiff’s claim on the basis that it was commenced after the expiry of the 1 year limitation period set out in section 17 of the OPCF-44R. The plaintiff took the position that section 17 did not apply and the 2 year limitation period set out in section 4 the Limitations Act overrode section 17 of the OPCF-44R. The motions judge accepted the plaintiff’s argument and dismissed the insurer’s motion. The plaintiff’s insurer appealed this decision.

 On appeal, the plaintiff’s insurer conceded that the 2 year limitation period in the Limitations Act applied and overrode the 1 year limitation period in the OPCF-44R. Instead, the insurer asserted that the limitation period began to run when the plaintiff knew or ought to have known that their claim exceeded the Defendant’s policy limits, embodied under section 15 of the OPCF-44R. The insurer argued that this section was not overridden by the discoverability provision under section 5 of the Limitations Act.

 
The Ontario Court of Appeal rejected the insurer’s argument. The court concluded that once it was accepted that the 2 year limitation period set out in the Limitations Act applied so did the discoverability provisions in section 17 of the Act. Turning to discoverability, the court held that this loss was only discovered by the plaintiff after a formal request for indemnification was made to the insurer and the insurer failed to indemnify the plaintiff. Given this finding, the court held that the 2 year limitation period did not begin to run until the day after the demand for indemnification was made to the plaintiff’s insurer under the underinsured motorist provision of the policy.

Court of Appeal Rejects Discoverability Argument

A recent example shows that the new summary judgment rule may be used in cases where plaintiffs claim they did not discover they had a claim within the limitation period.

In Yelda v. Vu, [2014] ONSC 2168 (C.A.), the plaintiff was injured in a motor vehicle accident in 2002.  She did not commence an action until 2011.  She alleged that she did not discover her injuries met the threshold for a claim until she had an x-ray of her back in 2009.  A motions judge disagreed, and granted summary judgment dismissing the action.  The plaintiff appealed.

The Court of Appeal dismissed the appeal.  The plaintiff's own evidence was that she had "really bad" back pain "half the time" each month following the accident.  She was never really pain free at any time, and at all times she attributed the pain to the accident.  Apart from occasional visits to hospital emergency departments, the plaintiff took no active steps to investigate the back pain from 2002 to 2009.  The motions judge held that it was implausible that a reasonable person would consistently take over the counter medication, have "really bad" pain, be unable to function a couple of days each month, and would find pain so bad as to need to attend the emergency department, yet fail to do anything to investigate the cause.  The Court of Appeal held there was no error in the motion judge's finding.

Limitations periods for claims of negligent supervision allowing sexual assaults to occur

Choc v. Hudbay Minerals Inc., [2013] O.J. No. 3375 (S.C.J.) is a case that may be of interest to institutional defendants of sexual assault claims.

In this action the plaintiffs, who are indigenous Mayan Q’eqchi’ from Guatemala, brought three related actions against the Canadian mining company, Hudbay Minerals and its subsidiaries.  The plaintiffs allege that security personnel working for Hudbay’s subsidiaries committed a number of abuses including a shooting, a killing and gang rapes during the forced removal of the plaintiffs from areas claimed as ancestral homelands.    

This decision is in respect of motions brought by the defendants, Hudbay Minerals, HMI Nickel and CGN with respect to three related actions by the plaintiffs.  One motion sought the dismissal of one of the actions on the basis that it was statute-barred by the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B [“Limitations Act”].  The action sought to be dismissed was brought by 11 women who asserted they were each gang-raped by mining company security personnel during their forced removal on January 17, 2007.  The action was not commenced until March 28, 2011, more than 4 years later.

The defendants argue that the basic limitation period, of two years after the day on which the claim is discovered, pursuant to section 4 of the Limitations Act, is applicable.  The defendants contend that the plaintiffs’ claim is not based on assault or sexual assault but is framed in negligence based on the alleged failure of Hudbay to supervise employees and agents of its subsidiaries.  They argue there is no issue of discoverability and the plaintiffs knew of the alleged claims as of January 17, 2007.   

The plaintiffs argue that section 10 of the Limitations Act which provides an exception to the two year limitation period for claims based on an assault or sexual assault is applicable.  If the claim falls within the scope of section 10, then the limitation period will not have started running because the plaintiffs will be presumed to have been incapable of commencing the proceeding, unless the contrary is proven. 

The motions judge held that section 10 was applicable in the circumstances of the case as the claim is based on alleged sexual assaults.  Although the claim was based in negligence for the defendants’ failure to properly supervise and train their personnel, ultimately, without the sexual assault there would not have been a claim.  The sexual assault was “the main ingredient of the cause of action of negligence”.  As such the claim properly fell within the scope of s. 10 of the Limitations Act.

Counsel should be aware that even if a claim is framed in negligence, the standard two year limitation period may not apply.  Rather, the offence giving rise to the action may put the claim into one of the exceptions.

The Limitation Period in False Arrest/Imprisonment Cases

A recent decision looks at when the limitation period begins to run in a false arrest/false imprisonment case, as well as the impact of a peace bond on a negligent investigation claim.

In E.B.F. (Litigation guardian of) v. Ontario, 2013 ONSC 2581 (S.C.J.), the plaintiff sued the Crown for false arrest, false imprisonment, breach of Charter rights and negligent investigation arising out of charges laid against him by the O.P.P in 2008.  The plaintiff's daughter alleged he had sexually assaulted her.  The charges were ultimately withdrawn in 2009 after the plaintiff agreed to enter into a peace bond.  The claim was issued in 2011.  The Crown brought a motion to strike the claim.  There were two issues for the Court to consider:

1.  Whether the limitation period began when the plaintiff was arrested or when the peace bond was entered into; and
2.  Whether the peace bond represented the charges being terminated in the plaintiff's favour, a precondition to being able to pursue a negligent investigation claim.

Justice Chiappetta held there was no reasonable cause of action against the Crown.  A claim for false arrest, false imprisonment or breach of Charter rights crystallizes on the date of arrest.  Although the plaintiff alleged he was unable to determine the arrest was wrongful until after receiving legal advice and the results of a private investigation, there was no persuasive evidence that the plaintiff suffered from any mental or psychiatric disorder that would have impacted his ability to understand the arrest, the charges and his belief of innocence.

The plaintiff argued that since the only conditions imposed by the peace bond were to keep the peace and be of good behaviour (as every other citizen is required to do), the proceedings terminated in his favour.  Justice Chiappetta held that the agreement to withdraw the charges in return for a peace bond represented a negotiated compromise, and was not a termination of proceedings in the plaintiff's favour.

Since the plaintiff's claim was issued beyond the limitation period and he failed to show the proceedings were terminated in his favour, the claim was dismissed.

Motion to Add Party Must be Served but not Heard Before Limitation Period Expires

When a plaintiff seeks to add a party defendant, must the motion be heard prior to the expiry of the limitation period?

According to Justice Edwards in Computer Enhancement Corporation v. J.C. Options, 2013 ONSC 4548 (S.C.J.), the motion must be served, but not necessarily heard, prior to the expiry of the limitation period.  Justice Edward held that the suggestion that a motion to add a party must be served, argued and a court order obtained prior to the expiry of the limitation period was "lacking in common sense".  There are lengthy delays in obtaining motion dates and the moving party is therefore "very much in the hands of the court" as to whether the motion can be argued and disposed of within the limitation period.

In making his decision, Justice Edwards followed the Divisional Court in Philippine v. Portugal, 2010 ONSC 956 (Div. Ct.), where the plaintiff was permitted to add a claim for conspiracy, and declined to follow Marks v. Ottawa, 2013 ONSC 1089 (S.C.J.) where the Court refused to permit the addition of a party where the motion had not been heard prior to the expiry of the limitation period.

Limitation Periods in Insurance Contracts

Can a one year limitation period in an insurance contract override the two year limitation period?

 The Ontario Court of Appeal says it can. In Boyce v.The Co-Operators General Insurance Company, 2013 ONCA 298, the Boyces owned and operated a boutique insured by the Co-Operators. A foul odour was discovered on October 30, 2010 and the Co-Operators took an off coverage position on the basis the smell was caused by a skunk.

The Boyces claimed that the business had been vandalized, a peril covered by the policy, and they filed a proof of loss claim in December 2010 and commenced an action in February 2012, more than one year, but less than two years after the incident. The Co-Operators moved for summary judgment, claiming that the action was time barred by a one year limitation period set out in the insurance contract.

The motion judge held that the one year limitation period in the contract did not override the statutory two year limitation period set out in s. 4 of the Limitations Act, 2002. The Co-Operators appealed.

A term in a contract purporting to vary an otherwise applicable limitation period under the Limitations Act has to comply with s. 22 of the Limitations Act. That section allows parties to vary or exclude, by agreement, the otherwise applicable statutory limitation period. The Co-Operators relied on s. 22(5) which applies only to business agreements.

The Court of Appeal stated at paragraph 20:

A court faced with a contractual term that purports to shorten a statutory limitation period must consider whether that provision in ‘clear language’ describes a limitation period, identifies the scope of the application of that limitation period, and excludes the operation of other limitation periods. A term in a contract which meets those requirements will be sufficient for s. 22 purposes, assuming, of course, it meets any of the other requirements specifically identified in s. 22.

In order for s. 22(5) to apply the contract must be a “business agreement” defined by the Limitations Act as “an agreement made by parties none of whom is a consumer”. The Court of Appeal found that the Boyces contracted with the Co-Operatos for insurance covering various risks related to the operations of their business and the contract was not for personal, family or household purposes. As such the contract was a “business agreement”. The appeal was allowed. 

Limitation Periods in Claims for Contribution and Indemnity

The Court of Appeal recently commented on limitation periods in claims for contribution and indemnify, clarifying that s. 18 of the Limitations Act imposes a two year limitation regardless if the claim is based in contract or tort.

In Canaccord Capital Corp. v. Roscoe, [2013] ONCA 378 (C.A.), the defendant was an investment advisor employed by the plaintiff, an investment dealer.  The employment agreement provided that the defendant would indemnify the company for any claim arising out of his acts or omissions in the course of his employment.  In 2008, two clients sued Canaccord and Roscoe for losses they sustained in an investment for which Roscoe was their advisor.  Canaccord filed a joint defence and did not crossclaim against Roscoe for indemnity.  The claim was settled in 2009 without Roscoe's involvement.  Canaccord issued a claim for indemnity in 2011, more than three years after the initial claim.  Roscoe brought a summary judgment motion on the basis that the limitation period had expired.  The motions judge held that that s. 18 of the Limitations Act does not apply to indemnity claims arising out of contract.  She held that the claim was not one for contribution and indemnity, but rather one of a breach of the employment contract.  She held the limitation began to run from the settlement date.

Roscoe appealed and the Court of Appeal allowed the appeal.  Section 18 refers to "wrongdoers", not just "tortfeasors" and so is broad enough to include claims arising out of contract.  The limitation began to run when Canaccord was served with the claim, and accordingly, the action was out of time.

Limitation Periods in Duty to Defend or Indemnify Cases

When does the limitation period begin to run in duty to defend or duty to indemnify cases?

In Georgian Downs Ltd. v. State Farm Fire and Casualty Co., 2013 ONSC 2110 (S.C.J.), the applicant sought an Order compelling State Farm to pay its defence costs.  Georgian was a defendant in a slip and fall action, and State Farm insured Georgian's winter maintenance contractor.  Georgian was added as an additional insured to the contractor's policy.  The underlying claim was ultimately settled on the basis of the contractor's admission of liability.

One of the issues was when the limitation period began to run.  Although counsel exchanged correspondence back and forth about defence costs, there was no clear and unequivocal denial of Georgian's request for defence costs.

Justice Mulligan held that "when there is an absence of a clear and unequivocal denial of a duty to defend or a duty to indemnify, a limitation period commences on the day of judgment or settlement."  Using such an interpretation promotes certainly, since it fixes a readily ascertainable date, rather than being dependent on subjective questions of discoverability.

Presumably, if the facts were different and State Farm had clearly denied the request to pay defence costs, the limitation period would have commenced at that time.

Motion to Add Municipal Defendant Dismissed

A motion to add a municipality as a defendant was recently dismissed.

In Temporin v. DiVincenzo, 2012 ONSC 5213 (S.C.J.), the plaintiff was injured in a 2007 motor vehicle accident. Although the City of Burlington had been named as a third party, the plaintiff did not move to add it as a defendant until 2012. The plaintiff ordered the police report in 2007, but did not receive officer's notes as counsel had inadvertently neglected to send payment.  The notes were ultimately received in 2010 when a follow up request was made.  They referred to road conditions consisting of "fierce" black ice. The plaintiff argued that the two year limitation period for adding the municipality began in 2010.

Parayeski J. dismissed the motion. The failure to follow up for police notes until 2010 did not give rise to a discoverability issue. The plaintiff had not exercised reasonable diligence and even though there was no prejudice to the municipality, this did not justify it being added as a defendant post-limitation.

This decision is a good example of the maxim that limitation periods are not enacted to be ignored.  The burden is on plaintiffs to act diligently to identify defendants within the appropriate limitation period.

Election of Arbitration or Court Proceeding

Gordyukova v. Certas Direct Insurance Company, 2012 ONCA 563 (C.A.)

The subject of this appeal is s. 281.1(1) of the Insurance Act, which provides that an insured shall commence a court proceeding or arbitration within two years of the insurer's refusal to pay benefits.

The plaintiff was in a motor vehicle accident in 2001.  She applied for accident benefits and a dispute arose over certain medical benefits.  After mediation failed, she issued a Statement of Claim in 2002. In 2005, the insurer advised her she had exhausted her non-catastrophic limits for medical and rehabilitation benefits.  Her application for a catastrophic designation was rejected so she commenced an arbitration at FSCO in 2008.  Certas brought a motion to stay the arbitration on the grounds that the CAT dispute should be added to the court action. The arbitrator ruled the plaintiff could not proceed with both the court action and the arbitration, but could proceed with arbitration if she discontinued the court action.  The arbitrator ruled he was not ruling on the limitation issue.  The plaintiff gave notice of her intention to discontinue the court action and proceed with arbitration, and the insurer brought a motion seeking a ruling on the limitation issue.  The arbitrator ruled the plaintiff could add all of the matters pending before the Superior Court to the arbitration.

Certas appealed, arguing that the plaintiff could not re-elect the method of proceeding eight years after the court action was commenced. The matter was appealed to the Director 's Delegate then the Divisional Court.

The Court of Appeal held that the arbitration should be stayed.  Section 281.1(1) of the Insurance Act requires an election between a court action and an arbitration. It provides that a proceeding shall be brought within two years. The insured has the choice of forum, but cannot switch forums after the expiry of the limitation period.  Since the court proceeding included a claim for "continued accident benefits", it would necessarily include a determination of the CAT issue.