practicePRO > Information > Limitation Period Cases

Limitation Period Cases

Claims arising out of limitation issues - such as failing to calendar properly, failing to determine or act within a specific limitation deadline - each year account for a significant number of claims reported to LAWPRO. In 1997, for example, 256 of the approximately 2,000 claims reported and 10 per cent of claims costs were attributed to missed limitation period issues.

These statistics, coupled with the fact that several recent Ontario court decisions deal with limitation periods, highlight the need for lawyers to be more vigilant still in ensuring that they pay close attention to the limitation period issues in their legal practice.

The Case:
In March, 1991, podiatrist A committed suicide. His partner, podiatrist B, knew shortly thereafter that the death was a suicide, but waited until July 5, 1994, to commence his action against the estate. In his action, the plaintiff alleged that his deceased partner breached his fiduciary duty to him by committing suicide before the two-year "incontestability" clause in their life insurance policies had expired, and failed to disclose that he was depressed at the time of partnership negotiations.

The Judgment:
The Court of Appeal held that the action fell within s.38(2) of the Trustee Act, because the plaintiff's action was for a "wrong . . . in respect of his . . . property," and that therefore s.38(3) applied. The Court applied the judgment of the Supreme Court of Canada in Smallman v. Moore, [1948] S.C.R. 295, and held that the plaintiff's action against the estate of his deceased partner had not been commenced within two years of his death and therefore was statute barred under s.38(3) of the Trustee Act.
Roth v. Weston Estate, (1998) 36 O.R. (3d) 513 (C.A.)

The Case:
In February, 1994, the plaintiffs commenced action against lawyer John Mills, who had died in May, 1990. The plaintiffs alleged that they were victims of a fraud which involved the purchase of gold delivery contracts for which they had paid substantial amounts of money. They alleged that the funds they paid for the gold delivery contracts were placed in the trust account of John Mills, and that Mills was in breach of his obligations to them, and claimed an accounting, tracing of funds and damages.

The Judgment:
Sharpe, J. relied on Smallman v. Moore and Roth v. Weston in granting Mills' estate partial summary judgment dismissing an action against it. He held that insofar as any breach of trust by Mills was honest, his executors were entitled to rely on s.38(3) of the Trustee Act. If he had committed a fraudulent breach of trust, then under ss.43 and 44 of the Limitations Act, the action against Mills was not subject to any limitation period. However, the executors held only $7,318 in estate assets. The LAWPRO policy did not apply to "fraudulent" or "dishonest" acts. Therefore, to the extent that the plaintiffs' action was not statute barred, it failed to qualify for coverage under the LAWPRO policy and the defendant executors were entitled to rely on the plene administravit defence limiting their liability to the extent of the estate assets held by them - $7,318.
Edwards v. Palmer Mills et al., (1998) 39 O.R. (3d) 10 (Ont. Ct. Gen. Div.)

The Case:
The plaintiffs' husband and father was crushed to death while repairing a water tank truck in October, 1993. The plaintiffs retained counsel, who obtained a report in 1995 which suggested that the manufacturers and suppliers of the truck may have been negligent. These defendants were sued in December, 1995.

The Judgment:
The motions judge dismissed the action as statute barred. The Court of Appeal reversed this ruling. It held that the discoverability principle applies, as a general application, whenever a court must decide "when the cause of action arose" in order to establish when the limitation period begins. It is not the role of a motions judge, on a motion for summary judgment, to assess credibility, weigh the evidence or find facts on the issue of when a plaintiff's action is "discoverable." This, the Court ruled, must be left to the trial judge. This judgment will make it difficult for a defendant to obtain summary judgment dismissing an action against it as statute barred where a "discoverability" issue is in dispute.
Aguonie v. Galion Solid Waste et al., (1998) 38 O.R. (3d) 161 (C.A.) reversing (1997) 33 O.R. (3d) 615.

The Case:
The plaintiff was injured in a motor vehicle accident on July 25, 1990. State Farm paid him statutory accident benefits, according to Ontario Regulation 672, until July 25, 1993. State Farm gave clear, written notice that it was terminating his benefits. On January 9, 1996, the plaintiff applied for mediation, which was unsuccessful in resolving the issue. State Farm argued that the plaintiff's application for arbitration was barred by virtue of s.281(5) of the Insurance Act.

The Judgment:
The Director's Delegate at the Ontario Insurance Commission held that the plaintiff's claim for additional weekly income benefits was out of time and could not proceed to arbitration. The time limit for arbitrating such claims is two years from the insurer's refusal to pay the benefit claimed. There is no "rolling" limitation period, with a fresh cause of action accruing every time the insurer fails to pay a weekly installment of benefits.
The plaintiff's appeal to the Divisional Court was dismissed. The court held that the wording of s.281(5) was precise and unambiguous. The court adopted the reasons of Director's Delegate Draper in concluding the claim was out of time.
Kirkham v. State Farm Mutual Automobile Insurance Co. [1997] O.I.C.D. No. 18; affirmed by the Divisional Court, unreported endorsement, March 31, 1998.


© 2017 Lawyers' Professional Indemnity Company (LAWPRO). All Rights Reserved.

Privacy  |  Legal |  Feedback  |  Accessibility  |  Anti-Spam  |  LawPRO Website