Judge Says Special Circumstances Power Still Exists

Well, it’s finally happened. In Toneguzzo v. Corner, a Superior Court judge has come out and concluded that the enactment of s. 21(1) of the Limitations Act, 2002 has not done away with the court’s discretionary power to add parties after the expiry of a limitation period in “special circumstances”. According to this decision, the enactment of s. 21(1) doesn’t seem to have altered the law at all.

During the last four years, many limitation periods have been extended on the basis of “special circumstances”, but the judges and masters making those decisions appeared to have been unaware of the enactment of s. 21(1), effective January 1, 2004. That subsection says: “If a limitation period in respect of a claim against a person has expired, the claim shall not be pursued by adding the person as a party to any existing proceeding.”

Over the last year or so, a number of judges have begun to focus on s. 21(1) and, for the most part, have said that the legislation has done away with the former discretionary power to add parties after the limitation period where “special circumstances” are found to exist (see here, here and here, for instance). In one recent decision, the judge said it was “clear” that the “special circumstances” power no longer exists.

Some other judges haven’t been so sure (see Clark v. Reich, referred to in this post). However, so far as we know, no one has yet affirmatively held that the “special circumstances” power definitely has survived the enactment of s. 21(1). Until now.

(We are awaiting the Court of Appeal’s decision in Meady v. Greyhound, which we hope will finally resolve this now very unsettled area of the law.)

Toneguzzo was a decision of Madam Justice L. Templeton. In this MVA action, counsel for the plaintiffs discovered after the limitation period had passed, that the tractor trailer that had collided with the plaintiff’s vehicle was owned by a leasing company, not by the individual who had been named as a defendant in the original statement of claim. Accordingly, six years after the accident, the plaintiffs sought an order allowing them to add the leasing company as a defendant, either on the basis of discoverability or special circumstances.

Justice Templeton began by quoting s. 21(1) and observing, “clearly, the language of s. 21(1) is mandatory”. However, she went on to say that there are exceptions to the prohibition. One of them, she noted, appears in s. 21(2) of the Act (that subsection provides that s. 21(1) “does not prevent the correction of a misnaming or misdescription of a party”). She added that “recent jurisprudence” had created other exceptions, but did not say what those cases were nor what exceptions they had supposedly created.

Her Honour referred to the Court of Appeal’s decision in Frohlick v. Pinkerton Canada Limited as support for the proposition that Rule 26.01 of the Rules of Civil Procedure (which deals with amendments to pleadings) and s. 5.04(2) of the Courts of Justice Act (which allows a court to add a party “at any stage of a proceeding unless prejudice would result that could not be compensated for by costs or an adjournment) permit pleadings amendments that result in the loss of a limitation defence, where special circumstances exist. However, Frohlick involved the addition of a new claim against an existing party rather than the addition of a new party. Thus, s. 21(1) would not have applied in that case (and, undoubtedly for that reason, was not mentioned in the decision).

Justice Templeton attached significance to s. 20 of the Limitations Act, 2002: “It is of note that according to section 20 of the Limitations Act, 2002, the Act does not affect the extension, suspension (my emphasis) or other variation of a  limitation period or other time limit by or under another Act”.

Her Honour held that there was a “presumption of coherence” between Rule 26.01 and s. 5.04(2) of the Courts of Justice Act on the one hand and s. 21(1) of the Limitations Act, 2002 on the other and that it is, indeed, possible to read these statutory provisions in way that is not inconsistent. Her conclusion is set out in the following passage:

[I]n my opinion the enactment of the Limitations Act, 2002 has not removed any previously existing discretion on the part of the court to provide relief from limitation periods.

In my view, the courts retain discretionary jurisdiction to add a new party to an existing claim in special circumstances.

Her Honour then proceeded to find that special circumstances existed in this case and granted the motion. (She did not appear to consider the discoverability argument that had been raised by the plaintiffs.)

We find this decision puzzling. If the “special circumstances” power exists, just as it formerly did, despite the admittedly “mandatory” language of s. 21(1), how has the enactment of that section changed the law? It is to be hoped that all will be made clear by the Court of Appeal’s forthcoming ruling in Meady.

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One Response to Judge Says Special Circumstances Power Still Exists

  1. David Cheifetz says:

    The issue all of the judges seem to be ignoring is straight-forward. According to the S.C.C. in Basarsky v. Quinlan, [1972] S.C.R. 380, 1971 CanLII 5, the Courts had inherent jurisdiction under the old Limitations Act wording, notwithstanding that it explicitly said, “no, nope, no way, never, nada etc” to allow an action to be commenced after the time the limitation period had expired. The new LA2002 either says nothing more or says more. In as much as the legislature is presumed to have enacted the new Act knowing the jurisprudential context, we have to give some meaning to the words of the new Act.

    Section 21(1) isn’t necessary if there’s no inherent jurisdicition because adding a person, too late, to an already existing action isn’t any different in substance than commencing a separate action against that person. So, is it there out of caution or there because the legislature wanted to emphasize “no, nada, no way etc.”

    This is yet another mess of the legislature’s and the court’s making. This time, it’s rather more the court’s than the legislature’s but, then, to be fair to the parliamentarians, so was the mess the first time around.

    Of course, the response is that if the legislature meant to say – “and the courts have no jurisdiction to allow an action to be commenced after the expiration of the limitation period set out in section X” – the legislature didn’t. The legislation takes away an existing right. Such legislation is to be intepreted narrowly, etc. etc.

    And we, as profession, get to make more money at the public expense because somebody, in the legislative counsel’s drafting office, didn’t stop to think about what some lawyers will argue, and what some judges might do.

    DC

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