What’s Trending

Back to What's Trending

SCC Clarifies the “New” Standard for the Commencement of the Limitations Period

Crumbling alarm clock on white table in office

In its recent decision Grant Thornton LLP v New Brunswick, 2021 SCC 31, the Supreme Court of Canada clarified the standard to be applied when determining when a Plaintiff is deemed to have discovered their claim and therefore to have also triggered the commencement of the limitations period.

The SCC found that a Plaintiff must have a plausible inference of liability on the part of the Defendant from the material facts that are actually or constructively known. This “new” standard set out by Canada’s highest court is a reaffirmation of the discoverability principle set out in the common law and codified in several statutes in Ontario including the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B. This new wording is a clarification of more ambiguous language previously used and does not represent a significant departure from the preceding common law, as set out below.

The impact for potential litigants is that if they have suffered damages and are aware of a party whom they can infer is plausibly liable for said damages, then they must assume that the limitations period has commenced and should take appropriate and timely action to understand their legal rights and remedies before the applicable limitations period expires.

Grant Thornton LLP v New Brunswick

In this civil negligence case, Grant Thornton LLP argued that the wording of the New Brunswick Limitation of Actions Act ousts or at least limits the common law discoverability rule and requires that a Plaintiff have a lower degree of knowledge than the common law rule requires. The SCC disagreed and found that the legislature chose to codify the common law discoverability rule in the limitations act based on the plain reading of the clause, the reading of the French version of the clause and the reading of the Hansard Debates preceding the enactment of the New Brunswick Limitation of Actions Act.

The motion Judge in this case held that a Plaintiff needs to know only enough facts to have prima facie grounds to infer the existence of a potential claim. The Court of Appeal on the other hand, held that discovery of a claim requires actual or constructive knowledge of facts that confer a legally enforceable right to a judicial remedy, which includes knowledge of every constituent element of the cause of action being pled. Thus, on the New Brunswick Court of Appeal’s interpretation, in addition to knowledge of a loss and causation, a claim in negligence would include knowledge of a duty of care as well as knowledge of a breach of the standard of care. This is a significantly higher standard than that used by the motion Judge and set out in the preceding common law.

The SCC found that a claim is discovered when a Plaintiff has knowledge, actual or constructive, of the material facts upon which a plausible inference of liability on the defendant’s part can be drawn. This approach, according to the SCC, remained faithful to the common law rule of discoverability set out in the Rafuse case as well as to the plain meaning of the Limitation of Actions Act.

According to the SCC, the governing standard requires that the Plaintiff be able to draw a plausible inference of liability on the part of the Defendant from the material facts that are actually or constructively known.

This begs the questions, why did the SCC change the wording of the standard which governs the commencement of the limitations period, and, how is this different from the previous governing standard, if at all?

Thankfully, these are not rhetorical questions. Referencing the Law of Evidence in Canada by Sopinka, Lederman & Bryant, the SCC noted that some cases equate prima facie proof to a situation where the evidence gives rise to a permissible fact inference, while others equate prima facie proof to a case where the evidence gives rise to a compelled fact determination, absent evidence to the contrary.

This “new” standard, that the Plaintiff must be able to draw a plausible inference of liability from the material facts that are actually or constructively known, is explicitly intended to refer to evidence which gives rise to a permissible factual inference.

According to the SCC, the issue with the Court of Appeal’s approach is that in order to be deemed to have discovered a claim, the Plaintiff needs knowledge of facts that confer a legally enforceable right to a judicial remedy. This means that the Plaintiff must know the constituent elements of a claim, which the SCC found to have brought the needle too close to requiring the Plaintiff to be “absolutely certain” of their claim prior to the commencement of the limitations period.

The problem with this approach, is that it would essentially defeat the purpose of having a limitations period at all as there can always be doubts raised about the certainty of a claim. The SCC highlighted that this is particularly true in a negligence claim, as was advanced in this case, given that identifying whether a Defendant breached the standard of care is usually only knowable after the documentary production that occurs in the examination for discovery process.

In essence, the SCC has not changed the discoverability principle but has instead used more specific and nuanced language to enshrine this principle and to better describe the standard to be met.

Following the release of the Grant Thornton decision, the Ontario Court of Appeal has applied this new “plausible inference of liability” standard in Gordon Dunk Farms Limited v HFH Inc. 2021 ONCA 681, 2021 CarswellOnt 13796 asserting that this “new” standard was a reaffirmation of the existing jurisprudence in Ontario and confirming its applicability to the commencement of limitation periods in Ontario.

Just heard about Pallett Valo being chosen as One of Ontario's Top Three Regional Firms. Congratulations – well deserved.
Peter Campbell, BDO Canada LLP