Limitations Act, 2002 Has Removed Court’s Discretion to Add Parties Outside of Limitation Period, Based on “Special Circumstances”

Posted on September 25, 2007 by Stephen Cavanagh

Update: This decision was reversed by the Court of Appeal on December 3, 2008.

Our thanks to Debra Rolph of LawPRO, who has notified us of a recent decision that did not find its way into CanLII (the Canadian Legal Information Institute). The case is St. Jean v. Cheung and is a follow-up to an earlier decision by the same judge (Mr. Justice John C. Murray) in the same lawsuit. In the previous ruling, Justice Murray held that an action on behalf of a mentally incompetent plaintiff was prescribed because the plaintiff’s litigation guardian had “discovered” the claim more than two years before the action had been commenced. At the end of that decision, Justice Murray said:

Since the plaintiffs did not argue the issues of prejudice and special circumstances, I do not have any basis to exercise discretion to add the New Defendants after the expiration of the limitation period. Given the seriousness and the importance of this decision for the plaintiffs and for the New Defendants, I am prepared to entertain further submissions from the plaintiff on whether the Court’s discretion to add the New Defendants as parties to the first action should be exercised.

The plaintiffs took up Justice Murray’s invitation and moved to add defendants on the basis of “special circumstances”. His Honour dismissed the motion. In the course of so doing, he held that s. 21(1) of the Limitations Act, 2002 has done away with the former discretion to add parties outside a limitation period, where “special circumstances” have been shown.

Unfortunately, because the decision is not yet available online, we are unable to provide a link to it. However, it has been reported on Westlaw’s eCarswell, as St. Jean (Litigation Guardian of) v. Cheung, 2007 WL 2748324 (Ont. S.C.J.), 2007 CarswellOnt 5891. The ruling was released on August 10, 2007.

The plaintiffs had commenced an action against a doctor and a hospital. They brought a second action (this one) against Dr. Cheung and other named and unnamed doctors, as well as North York General Hospital. In his previous decision, Justice Murray held that the second action was prescribed. In this motion, counsel for the plaintiffs sought to add the defendants in the second action as defendants in the first action. Justice Murray dismissed the motion. Continue reading →

Posted in Limitation Periods | Comments Off on Limitations Act, 2002 Has Removed Court’s Discretion to Add Parties Outside of Limitation Period, Based on “Special Circumstances”

Trustee Act Limitation Bars FLA Claim

Posted on September 24, 2007 by Stephen Cavanagh

In Godoy v. 475920 Ontario Ltd., Mr. Justice Thomas R. Lederer considered whether the limitation period in s. 38(3) of the Trustee Act trumps the one in s. 61(4) of the Family Law Act. He held that it does. In doing so, he reiterated a number of the conclusions that he had come to in the recent decision of Kramarz v. KMS Cardiology Centres.

Here, the mother of the plaintiffs had been sexually assaulted and murdered. The plaintiffs sued the individual who had committed the crime and several other parties. Their action was based on s. 61(1) of the Family Law Act.

The case proceeded to trial in January, 2007 but the trial was adjourned. Two weeks later, counsel for the defendants raised, for the first time, his intention to seek an amendment of the statement of defence, to plead the Trustee Act limitation period. In today’s ruling, Justice Lederer allowed the amendment and dismissed the action as statute-barred.

(Both the FLA and the Trustee Act contain two-year limitation periods, but the provision under the Trustee Act runs from the date of death and is not subject to the principle of discoverability. Thus, it can potentially expire before the plaintiff even knows that he or she has a cause of action. The same is not true of the limitation period under the FLA.)

In Godoy, His Honour discussed in greater detail (than he had done in Kramarz) the derivative nature of claims under the Family Law Act. Counsel for the plaintiffs argued that the claims of FLA claimants are not barred by the Trustee Act where no claim has been made under that Act on behalf of the deceased’s estate. Here, the estate of the deceased had not sued, so it was argued that only the limitation period under the FLA applied. Since that limitation runs from the date on which the cause of action arose and can be postponed by the discoverability principle, the plaintiffs’ action might not have been defeated if the FLA provision applied.

However, Justice Lederer ruled that it makes no difference to the applicability of s. 38(3) of the Trustee Act, whether or not the estate has advanced a claim of its own: “In my mind, the derivative relationship of the claim under the Family Law Act to the right to sue provided to the estate by the Trustee Act does not spring from the fact that an action has been commenced, but from the connection between the rights the two Acts provide.”

Posted in Limitation Periods | Comments Off on Trustee Act Limitation Bars FLA Claim

Court Upholds Insurer’s Denial of Claim Where Premises “Vacant” for More Than 30 Days

Posted on September 20, 2007 by Stephen Cavanagh

In Zimmerman v. Royal & SunAlliance Insurance Company, Mr. Justice Barry Matheson agreed that an insurer was entitled to deny coverage under a homeowner’s policy where the premises had been vacant for about 65 days. The home had been damaged by a leak from a heating system.

The plaintiffs owned two apartments. They had been renting them to university students but by the end of November, 2003, the premises were vacant. The plaintiffs had begun an upgrade of the apartments. They had visited them at least every second day during the period in question. They had not notified their insurer of the change in occupancy. When the claim was submitted, Royal denied coverage.

The exclusion relied upon by the insurer was not set out in the reasons, but typically, it reads something like this: “We do not insure loss or damage occurring after your dwelling has, to your knowledge, been vacant, for more than 30 consecutive days.”

The Royal policy contained a definition of “vacant”, which is set out in Justice Matheson’s decision:

Vacant means the occupant(s) has/have moved out with no intent to return. A newly constructed dwelling is vacant after it is completed and before the occupant(s) move(s) in. Furthermore, the dwelling is also vacant when the occupant(s) move out and before any new occupant(s) move(s) in.

His Honour referred to a 2003 B.C. decision in Price v. Zurich Insurance Co., where the B.C. Court of Appeal had considered the meaning of the identical definition. That court had held that the effect of the exclusion clause is to give the insured a 30-day grace period, even where the premises are vacant within the meaning of the definition.

In holding that the plaintiffs were in breach of their insurance policy, Justice Matheson reasoned that:

The Plaintiffs altered the degree of risk that the Defendant had to deal with. The property was vacant for much of the day and night. The Plaintiffs had a duty to advise the Defendant.

If the Defendant had been notified, the Defendant could have altered the type of coverage, imposed certain terms that would be satisfactory to both. The Defendant was not given that opportunity.

Posted in Insurance News | Comments Off on Court Upholds Insurer’s Denial of Claim Where Premises “Vacant” for More Than 30 Days

No “Risk Premiums” Even With Advent of “Full Indemnity” Costs

Posted on September 19, 2007 by Stephen Cavanagh

In Reaume v. Unifund Assurance, Justice Edward R. Browne was asked to consider the issue of “risk premiums” in an award of costs. Regular readers will recall that the Supreme Court of Canada said, in Ritchie v. Walker, that risk premiums could not be awarded under the regime of costs then existing in Ontario. Subsequently, Rule 57.01(4) of the Rules of Civil Procedure was amended to permit a court to order costs on a “full indemnity” basis. Mr. Justice Denis J. Power held, in Ward v. ManuLife, that risk premiums can now be awarded.

(ManuLife’s appeal of Justice Power’s ruling in Ward was argued over two days in the Court of Appeal a couple of weeks ago. Costs was only one small part of the appeal, but presumably, we will hear from the Court of Appeal on this subject in due course.)

Justice Browne came to a different conclusion than had Power J.; he held that risk premiums are still unavailable, even under the “full indemnity” regime.

The action was one arising out of a motor vehicle accident, in which there had been a fatality and some serious injuries. None of the survivors could remember how the accident had occurred and there were no witnesses. A police officer who had undertaken an accident reconstruction concluded that impact had been in the westbound lane; another officer later expressed an opinion, that the collision had taken place in the eastbound lane. Justice Browne acknowledged that the case was a very risky one for plaintiffs’ counsel, as the plaintiffs were impecunious and the case “was close to proving that a ghost unidentified vehicle driven negligently was not a ghost at all”. He said, the “the risk of proving the case was enormous. The importance of the issue was very close to that of a ‘winner take all’.”

At trial, the jury found that the accident had been caused by an unidentified vehicle, with a small amount of contributory negligence on the part of the plaintiff. The judgment was for $765,000 (although in several places in the reasons, Justice Browne refers to the judgment having been for $675,000). Prior to trial, the plaintiffs had offered to settle for $600,000. Because they had beaten their offer, the plaintiffs sought costs on a full indemnity basis, totalling more than $675,000.

Justice Browne rejected this submission. He felt that it would be unreasonable to award costs in an amount exceeding that of the judgment (although, as noted above, there seems to have been some confusion about just what the amount of the judgment was). Instead, he awarded partial indemnity costs, reduced by 15 percent, to the date of the offer and substantial indemnity costs thereafter.

On the issue of risk premium, His Honour considered himself bound by Ritchie v. Walker, notwithstanding the amendments to Rule 57:

In an overview, the result of a claim against an unsuccessful defendant for a risk premium for financial risk is, in effect, a separate head of damages as opposed to costs which an unsuccessful defendant would reasonably be expected to pay. I agree with and regard Walker v. Ritchie, as binding notwithstanding the recent changes to the Ontario scheme as in the Rules of Practice quoted. In the result, there will be no premium allowed or no special award made.

Unfortunately, no reference was made to Justice Power’s reasons in Ward.

Posted in Costs | Comments Off on No “Risk Premiums” Even With Advent of “Full Indemnity” Costs

Another Ruling Assumes Continued Existence of “Special Circumstances”

Posted on September 14, 2007 by Stephen Cavanagh

In Guay v. BHD Financial Group, Master R. Dash considered whether a limitation period could be extended on account of “special circumstances”. On the facts of the case, the motion to extend the limitation period was dismissed. But the Master seemed to think that the power to extend a limitation period on account of special circumstances has survived the enactment of the Limitations Act, 2002. As has been discussed in various posts on our site, other cases have held that s. 21(1) of the Act has altered the former law.

It does not appear from Master Dash’s reasons, that s. 21 of the Act was cited to the court, so the assumption that the “special circumstances” power still exists might have been part of a ruling made, in part, per incuriam.

The case involved an action arising out of the plaintiff’s fall while on a vacation in the Dominican Republic. The accident happened on February 4, 2004, about a month after the new Limitations Act came into force. The plaintiff sued on May 13, 2005, well within the two-year limitation period. On this motion, she sought to add the tour operator as a defendant. Of course, by now, the limitation period has long since expired.

The Master considered whether the limitation period had been postponed by the “discoverability” principle and held that it had not. The Master then turned to the second issue:

A defendant may still be added if the limitation period has expired if the plaintiff satisfies a two-part test: the plaintiff must establish that there would be no incompensable prejudice to the proposed defendants and that special circumstances exist.

After citing Robertson v. O’Rourke and Wong v. Adler, Master Dash held that special circumstances had not been established here. The motion was dismissed.

However, s. 21(1) of the Limitations Act, 2002 specifically provides for the type of situation that arose in this case:

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.

Other cases have held that this section has changed the law with respect to “special circumstances” (see, for example, our post about Meady v. Greyhound Canada Transportation Corp.). However, a number of other cases have proceeded on the basis that the former power to extend the limitation period continues to exist, unchanged. For the most part though, the judges and masters who have decided those cases do not appear to have had s. 21(1) cited to them. It is curious that this legal lacuna seems to have persisted for more than three years.

Posted in Discoverability, Limitation Periods | Comments Off on Another Ruling Assumes Continued Existence of “Special Circumstances”

Duty to Defend Held to Exist, Despite “Anti-Concurrent Causation” Clause in Policy

Posted on September 11, 2007 by Stephen Cavanagh

Decision of Justice Kershman dated Aug 10, 2007.pdf 

Our office acted for the insured in what is, so far as we can determine, the first decision to consider whether a duty to defend was owed by an insurer whose policy wording included an “anti-concurrent causation” provision.

The ruling was made by Mr. Justice Stanley Kershman in Appin Realty Corporation Limited v. Economical Mutual Insurance Company. The case is not reported, so a PDF of the reasons appears above. A notice of appeal to the Court of Appeal was recently served by Economical Mutual (“EMI”).

Anti-concurrent causation

What the heck is an “anti-concurrent causation clause”, you ask? Well, if you’ve read anything about the litigation surrounding the Hurricane Katrina insurance claims, you might have run across it. However, not much has been heard about it in this country.

Cast your mind back to Derksen v. 539938 Ontario Ltd., a 2001 decision of the Supreme Court of Canada. Several children in a school bus had been injured and one had been killed when a steel base plate flew off a contractor’s truck. The Supreme Court concluded that both an auto policy and a CGL policy had been triggered because the accident had been the result of two concurrent causes: failure to clean up the work site properly when loading the steel plate on the truck and failure to ensure that the truck could be driven safely.

This principle of “concurrent causation” is an unsettling one for insurers. The concern is that a liability coverage could be triggered even though a covered cause operates together (concurrently with) one or more other causes that are not covered.

To combat this situation, the industry has come up with policy wording that is aimed at preventing a recurrence of the Derksen outcome: the “anti-concurrent causation clause”.

In the Appin Realty case, Appin owned an apartment building. It was sued by a former superintendent, who lived in the building. The plaintiff alleged that he became ill as a result of “toxic mould and bacteria” in his rental unit and he sued Appin for damages in the amount of $500,000.

Continue reading →

Posted in CGL, Exclusions, Insurance News | Comments Off on Duty to Defend Held to Exist, Despite “Anti-Concurrent Causation” Clause in Policy

Insurer Hit with $500,000 Punitive Damages Award in Fire Case

Posted on September 7, 2007 by Stephen Cavanagh

It was a good day for Barry Percival, who had cast aside the defence hat that he usually wears and was acting for the plaintiff. In Sagl v. Cosburn, Griffiths & Brandham et al., an action by a policyholder against Chubb Insurance, Mr. Justice Blenus Wright awarded the plaintiff over $5 million, including punitive damages of $500,000. (Thanks to David Fournier of Ecclesiastical Insurance, who passed along this significant decision, which has not yet been reported. A PDF of the reasons appears above.)

The case arose out of a fire at the plaintiff’s Mississauga home on December 16, 1997. Her claim to her insurer, Chubb, was denied. Chubb took the position that the fire had been deliberately set by the plaintiff or by persons acting on her behalf. It also contended that the plaintiff had misrepresented material facts prior to the loss, with the result that the policy was void.

Also named as defendants in the action were the plaintiff’s insurance brokers, but the action was dismissed as against them.

In 37 pages of reasons, Justice Wright methodically rejected each of Chubb’s arguments on motive and opportunity and points of origin. For example, the plaintiff was a collector of expensive art and other objects (she had $2 million coverage for “fine arts” and $1 million for jewellery), yet had allowed her mortgages to go into default. The insurer relied on this in support of the “motive” component of its arson theory. But Wright J. said, “[w]hat Chubb failed to understand was the plaintiff’s obsession with and attachment to her possessions.”

Chubb also alleged that the plaintiff’s policy was void for misrepresentation. Justice Wright was harshly critical of this defence:

Only an insurer knows what it considers a “material fact” in relation to a risk it is assuming. How does an insured know what a “material fact” is unless so advised by the insurer? I am incensed that an insurer can hide behind this express condition without advising an insured of what the insurer considers to be a “material fact”.

The three material facts alleged to have been misrepresented were: (1) that the plaintiff’s husband was a joint owner of the home; (2) that there was a mortgage on the home that was in default; and (3) Chubb’s “VIP coverage” was directed at “wealthy clients” and the plaintiff was not wealthy but in financial distress. Justice Wright disposed of all of these in short order. He concluded:

I agree that an insurer expects an applicant for insurance to act in the utmost good faith in seeking insurance coverage. But, fairness requires that an insurer also act in the utmost good faith. It is my view that an insurer cannot rely on the above express condition unless the applicant for insurance is advised of what the insurer considers to be material facts, and the consequences of concealment and misrepresentation. Chubb failed to act in the utmost good faith toward the plaintiff at the time she requested insurance coverage.

The insurer also argued that the plaintiff had inflated her claim, “to the point of intentionally misrepresenting the value of what was lost and, therefore, the plaintiff’s claims are fraudulent”. Justice Wright went through a number of specific parts of the claim and concluded that “Chubb’s position that the plaintiff’s contents claim is fraudulent is just plain wrong”.

Continue reading →

Posted in Fire Insurance, Insurance News | Comments Off on Insurer Hit with $500,000 Punitive Damages Award in Fire Case

Trustee Act Limitation Period Bars FLA Claim

Posted on September 4, 2007 by Stephen Cavanagh

In Kramarz v. KMS Cardiology & Diagnostic Centres, Mr. Justice Thomas R. Lederer held that a negligence action against a cardiologist was brought out of time. The suit had been commenced under the Family Law Act by members of the deceased’s family. The action was brought some two-and-a-half years after the death.

The defendant contended that the claim was prescribed by the two-year limitation period in s. 38(1) of the Trustee Act.

The main issue in the case was the effect of the transitional provisions of the Limitations Act, 2002.

Justice Lederer thought it evident that the Trustee Act limitation (two years from the date of death) governed the claim:

[7] The law is clear. The derivative nature of actions brought under the Family Law Act determines that the two-year limitation imposed by the Trustee Act applies to such actions (see: Smith Estate v. College of Physicians & Surgeons of Ontario (1998), 41 O.R. (3d) 481 (C.A.); Swain Estate v. Lake of the Woods Hospital (1992), 9 O.R. (3d) 74 (C.A.) leave to appeal to S.C.C. refused at (1993), 19 C.P.C. (3d) 25n and Waschkowski v. Hopkinson Estate (2000), 47 O.R. (3d) 370 (C.A.)).

That limitation period would mean that this action was out of time. (Although it was evidently not argued in this case, the Court of Appeal has held that the discoverability principle does not apply to postpone the commencement of the Trustee Act limitation period.)

The more contentious issue in the case was whether the action was saved from prescription by the Limitations Act, 2002. Justice Lederman ruled that it was not.

The plaintiff argued that, by virtue of the transitional provisions of s. 24 of the Act, there was no limitation period that applied to the claim. Subsection 24(2) says that the transitional section, “applies to claims based on acts or omissions that took place before the effective date and in respect of which no proceedings have been commenced before the effective date.”

The transitional provisions depend on whether or not there was a “former limitation period” that applied. That phrase, “former limitation period”, is defined in subsection 24(1) as, “the limitation period that applied in respect of the claim before the coming into force of this Act.”

In this case, the plaintiffs argued that because the limitation period in s. 38 of the Trustee Act applied before the Limitations Act, 2002 came into force, there is no “former limitation period”. They relied on subsection 24(4) of that Act, which says:

If the former limitation period did not expire before the effective date and if no limitation period under this Act would apply were the claim based on an act or omission that took place on or after the effective date, there is no limitation period.

Justice Lederer rejected this argument. He noted that the Trustee Act limitation period had survived the enactment of the Limitations Act, 2002 (it is included in a Schedule to the Act, listing the limitation periods which continue to apply). He also thought it significant that the plaintiff’s submission would mean that causes of action arising in a certain window of time would have no limitation period, while the same cause of action arising earlier or later would be subject to a limitation period:

Understood in this way, the limitation period in the Trustee Act is not a “former limitation period” because as a result of s. 19(1) of the Limitations Act, 2002 it continues in place. We are not transitioning from one regime to another. The Trustee Act did and does apply. It is not “of…the past”. The rights of the plaintiffs have not and will not change. The idea that for a brief period they have changed so that there is no applicable limitation period is not demonstrated by any policy, intention or words found in or derived from the legislation. Accordingly, the action is out of time.

Posted in Limitation Periods | Comments Off on Trustee Act Limitation Period Bars FLA Claim

Judge Criticizes Inadequacy of Material to Support Costs Claimed on Motion for Settlement Approval

Posted on August 29, 2007 by Stephen Cavanagh

Lau v. Bloomfield is the latest in a series of cases in which judges have taken lawyers to task for inadequate materials filed in support of motions for court approval of settlements. (See our previous discussions of Marcoccia v. Gill and Rivera v. Leblond.) In this case, the plaintiff was catastrophically injured. Her daughter acted as her litigation guardian. Justice Nancy J. Spies heard a motion for court approval of settlement of both the tort and accident benefits claims.

Justice Spies said that, “in order for there to be meaningful court approval, in the motion record counsel must provide a copy of the retainer agreement, the dockets, hourly rates claimed, a list of the lawyers/law clerks who worked on the file, the total number of hours spent by each person on the file and in the case of lawyers, their year of call and in the case of law clerks whether they are a junior or senior clerk”.

Her Honour expanded on the level of detail required in the description of work done by the law firm:

In addition a summary of the nature of the work done by each person must be included. That summary is not to be simply a list of specific matters that were done, as was provided to me by counsel in this case as this obviously does not give the reviewing judge any assistance whatsoever. Particulars must be provided such as the number of hours spent to prepare an examination, the number of days spent at the examinations and whether it was for the purpose of examining a witness or simply accompanying the client. The same applies to court attendances.

To simply state there were motions is meaningless without particulars of the nature of the motion, a summary of the material prepared for the motion and whether it was argued and if so the length of the court attendance. This is also obviously the case for mediations and other hearings and settlement conferences. Counsel may also wish to consider reference to some of the factors set out in Rule 57.

The summary of the nature of the work done is of critical importance and should be carefully prepared. It is totally unacceptable to simply refer to the dockets. The difficulty with dockets is that they can be very cryptic, as most were in this case, and very time consuming for the court to review. The court cannot be expected to try to ascertain the value of the work done by a review of the dockets. That is the job of counsel. The dockets are provided so that if questions arise they can be referred to. They are not a substitute for the summary of work done by each person who worked on the file.

The retainer agreement in this case was the same as the one in Marcoccia v. Gill (since it was the same law firm in both cases). Justice Spies said that she shared the concerns expressed in that case, about the appropriateness of the agreement, which she felt was so ambiguous as to be meaningless.

Her Honour was critical of the fact that the senior lawyer on the file had docketed 0.1 hours for receipt of each of numerous pieces of correspondence, without indicating that she (the lawyer) had reviewed that correspondence. Justice Spies accordingly disregarded those time entries in evaluating the costs.

Her Honour felt that the case had not been complex and the amounts involved were “modest”. She acknowledged that there was some risk of non-payment to the law firm because of what was evidently a significant liability issue.

In the end, after a detailed analysis of the work done, Justice Spies disallowed a portion of the costs claimed in both the tort and AB settlements.

This decision is certainly a cautionary tale for plaintiffs’ counsel. However, in the wake of Marcoccia and other similar cases, a committee has been struck to review the procedures involved in obtaining court approval of settlements. It is likely that, before too much longer, there will be new guidelines to assist both counsel and the court in dealing with such cases. Stay tuned!

Posted in Costs | Comments Off on Judge Criticizes Inadequacy of Material to Support Costs Claimed on Motion for Settlement Approval

Two-Year HTA Limitation Might Not Bar Claim Arising from Faulty Brake Hose

Posted on August 29, 2007 by Stephen Cavanagh

In Giustini v. Poppa, Mr. Justice Thomas Lofchik dismissed a motion for summary judgment by Goodyear Tire and other defendants, who had argued that a claim against them was barred by the two-year limitation period in the Highway Traffic Act.

The action arose out of a 1999 motor vehicle accident in which the brake system failed on a Ford Aerostar. The action was commenced within two years of the accident. But afterwards, counsel for the plaintiffs obtained an expert’s report that indicated that the accident had been caused by an improperly-designed brake hose on the vehicle.

The plaintiffs moved without notice to add as defendants Goodyear Tire and Rubber Company and Dana Corporation, alleging that one of them had designed and manufactured the faulty brake hose. The Highway Traffic Act limitation period had long since lapsed. The new defendants then moved for summary judgment, arguing that the action against them was prescribed.

The defendants relied on Karakas v. General Motors of Canada (upheld by the Court of Appeal). The plaintiffs in that case alleged that a fire that had damaged their home had been caused by defective wiring in an automobile that had been parked in the garage. But they had commenced the action more than two years after the fire. The defendants had argued that the action was barred by the Highway Traffic Act limitation period.

The court in Karakas considered the leading case, the Supreme Court of Canada’s decision in Heredi v. Fensom, and concluded that Heredi mandated a “substantive approach” be taken: claims where the presence of a motor vehicle is a fact ancillary to the essence of the action would not fall within the scope of the HTA limitation period. But the court in Karakas, applying that “substantive approach”, held that “the motor vehicle is not only the dominant but also the only feature in the claim for damages. The very presence of the motor vehicle and the alleged defect in the motor vehicle are central to and the essence of the claim. Applying the Supreme Court of Canada’s substantive approach I conclude that the claim is one for ‘damages occasioned by a motor vehicle’ and it is statute barred.” The Court of Appeal agreed with the reasons of the motions judge.

Given the finding in Karakas, where the vehicle in question was parked in the garage, it was probably reasonable for the defendants in Giustini to expect the same outcome. After all, the vehicle in Karakas was being driven on a highway at the time of the event giving rise to the claim.But Justice Lofchik relied on yet another case, the Court of Appeal’s 2006 decision in Guarantee Co. of North America v. Mercedes-Benz Canada Inc., for the proposition that Karakas might be “at odds” with Heredi. In a brief endorsement, the Court of Appeal in Guarantee said that there was “arguable merit” to the proposition that Karakas and Heredi were at odds with each other but since it had not been asked to overrule Karakas, it had not done so.

Justice Lofchik felt that the door had been left open to argue that the two cases were in conflict. As a result, he held that “it is open to the trial judge to characterize this action as a negligent manufacture case on the facts and to apply the six year limitation period.”

It may only be a matter of time before someone does invite the Court of Appeal to overrule Karakas. But since the limitation period for negligent design and manufacture of an automobile’s components is now the same as the limitation period for negligent operation of that automobile (two years), the number of cases in which the argument could conceivably be made is decreasing daily.

Posted in Limitation Periods | Comments Off on Two-Year HTA Limitation Might Not Bar Claim Arising from Faulty Brake Hose