Addendum: The decision discussed in this post was reversed by the Court of Appeal on May 2, 2008. The Court of Appeal noted that the plaintiff’s solicitor had always intended to sue the municipality having jurisdiction over the road in question and that municipality knew at an early stage that it was the intended defendant.
Lloyd v. Clark is a recent decision that adds to the evolving jurisprudence interpreting the still relatively new Limitations Act, 2002. In particular, the decision of Mr. Justice Guy DiTomaso addresses the issues of discoverability and “misnomer”. It also suggests (although perhaps inadvertently), that the concept of “special circumstances” has survived in the present version of the Act.
The action arose out of an accident that took place in January, 2004, just a short time after the Limitations Act, 2002 came into force. The plaintiff commenced suit two years later, but named the wrong municipality as a defendant. In February, 2006, counsel for the plaintiff was advised by an adjuster that the road in question was under the jurisdiction of the Regional Municipality of Durham. The statement of claim had named as defendants the towns of Ajax and Whitby. Counsel for the plaintiff moved, several months later, for an order substituting Durham as a defendant. By that time, the two-year limitation period in the Limitations Act, 2002 had expired.
Misnomer
The plaintiff argued that the naming of Ajax and Whitby had been only a “misnomer”. This term has taken on increased importance under the Limitations Act, 2002, because of s. 21 of that Act, which provides as follows:
21(1) 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.
(2) Subsection (1) does not prevent the correction of a misnaming or misdescription of a party.The plaintiff argued that Whitby and Ajax had been “misnamed” or “misdescribed” and that Durham’s officials must have known, when they received the statement of claim and saw where the accident had occurred, that Durham had jurisdiction over that road.
Justice DiTomaso applied a well-estabished test in misnomer cases (often referred to in the cases as “the litigating finger” test, although that phrase was not used here):
The test applicable to cases of misnomer is “would [sic; the actual quotation should read, “what”] a reasonable man reading the document would understand it to mean” and that is the test which ought to be applied as a general rule in cases of misnomer…the test must be “how would a reasonable person receiving the document take it? If, in all the circumstances of the case and looking at the document as a whole, he would say to himself “of course it must mean me, but they have got my name wrong”, then there is a case of mere misnomer”.
[The passages quoted above by Justice DiTomaso have been taken from Davis v. Elsby Bros. Ltd., a 1960 decision of the House of Lords. The reasons of Lord Justice Devlin in Davis went on to say, in a passage not quoted in Lloyd:
If, on the other hand, he would say:
‘I cannot tell from the document itself whether they mean me or not and I shall have to make inquiries’, then it seems to me that one is getting beyond the realm of misnomer.
Applying the Davis v. Elsby test, DiTomaso J. rejected the “misnomer” argument, saying that the plaintiff had “made a deliberate choice to name certain entities regarding the issue of road jurisdiction. In fact, they chose every conceivable road authority as a defendant except the right one.”
In our view, this part of the decision is very much in keeping with the authorities on the subject.
Special Circumstances
A number of practitioners and commentators have expressed the view that s. 21 of the Limitations Act, 2002 has done away with the power that formerly existed, to extend limitation periods based on “special circumstances”. This is because of the mandatory language of subsection 21(1), which prohibits a claim being pursued against a party by adding that party to an existing proceeding, once the limitation period has expired. An exception is made in the case of misnomer but, as outlined above, the exception was held not to apply here.
If “special circumstances” is still a viable principle, s. 21(1) is not as conclusive as it might seem on its face. So far as we are aware, no Ontario case has yet considered the question of whether courts can still extend limitation periods based on special circumstances.
In Lloyd, it seems to have been conceded by counsel for the Regional Municipality of Durham that the principle of “special circumstances” power does still exist. Thus, Justice DiTomaso did not address this question in his reasons, evidently assuming that he did still possess the power to extend the limitation period. His analysis appears under the heading, “SUBSTITUTING A DEFENDANT AFTER THE EXPIRY OF THE LIMITATION PERIOD“. On the facts of the case, he found that no special circumstances were present.
However, His Honour did not refer at all, in this part of his reasons, to s. 21(1) of the Act. Instead, he applied the factors established by the pre-1994 jurisprudence: special circumstances and absence of non-compensable prejudice.
It seems to us that this part of the decision must be read with caution (although Justice DiTomaso was certainly aware of s. 21(1), having quoted it earlier in his reasons). In our view, the old caselaw must now be read in the context of the new legislation since, at least arguably, s. 21(1) has legislatively done away with “special circumstances”. The failure to try to reconcile the pre-1994 cases with the new statute probably makes this part of the Lloyd case unreliable.
Discoverability
The discoverability principle that had stemmed from the common law has now been codified in ss. 4 and 5 of the Act. Once again, the old cases must be read with caution.
In Lloyd, the plaintiff argued that it was not until September, 2004 that he first learned that he had suffered an injury that met the “threshold” in the Insurance Act, entitling him to sue for damages.
(The threshold quoted in the decision was s. 266 of the Act. However, that was not the threshold that was in effect at the time of this accident. The applicable threshold for an accident that happened on January 27, 2004, appears in s. 267.5 of the Act. However, for purposes of the analysis undertaken by Justice DiTomaso, the difference is not important because what he focused on was one category of “protected defendant” which is the same under the present threshold as it was under the OMPP threshold: “any person present at the incident”.)
The plaintiff argued that Durham was a “protected defendant” because it was a “person present at the incident”. If Durham was a “protected defendant”, then the plaintiff would have to meet a statutory threshold in order to have the right to sue and many cases have held that the threshold might not be discoverable until sometime after the accident.
Justice DiTomaso emphatically rejected the submission that Durham was a protected defendant: “A municipality is not to be considered ‘any person present at the incident’ simply because a loss or damage has occurred directly or indirectly from the use or operation of an automobile on one of its roadways.”
His Honour did not expressly apply the statutory criteria for discoverability that now appear in s. 5 of the Act, but once he had found that no issue existed as to when the plaintiff knew or should have known, that he had a threshold injury, there was evidently little left of the plaintiff’s discoverability argument.
However, it is noteworthy, that the third “discoverability” criterion in subsection 5(1) explicitly deals with identification of the tortfeasor, yet this part of the statute was not discussed in the reasons. The relevant paragraph in subsection 5(1) reads:
A claim is discovered on the earlier of
(a) the day on which the person with the claim first knew,
…
(iii) that the act or omission was that of the person against whom the claim is made.
It was perhaps arguable here, that it was only some time after the accident that the plaintiff’s learned that the alleged “act or omission” was that of Durham, not Ajax or Whitby. But either no such argument was advanced or it was not addressed in the reasons.Clause 5(1)(b) of the Act does, though, introduce an objective element: when should a reasonable person with the abilities and in the circumstances of the person with the claim first have known of the criteria listed in clause 5(1)(a)? This might have undermined an argument based on s. 5(1)(a)(iii). There is also a presumption, in subsection 5(2), that “A person with a claim shall be presumed to have known of the matters referred to in clause (1) (a) on the day the act or omission on which the claim is based took place, unless the contrary is proved.” Justice DiTomaso did specifically refer to this presumption and noted that the plaintiff had not adduced evidence to displace it.
Conclusion
This decision reinforces caselaw that is already fairly well-established, on the misnomer issue. However, on both the “special circumstances” and “discoverability” issues, the case is not very helpful. Further guidance will have to come from a future decision.