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Simon Shields, Lawyer

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Simon Shields, LLB

Equity - Laches

Limitations - Discoverability - Plaintiff's Failure to Review Accounts

Van Allen v Vos (Ont CA, 2014)

In this case the Court of Appeal make the following useful comments on the issue of limitations discoverability where a plaintiff had failed for years to review partnership accounts which misallocated expenses to his detriment:
[34] That the respondent did not know and could not have reasonably known of the misallocation is fatal to the appellant’s first three arguments. On the issue of the limitation period, the appellant submits, as he did at trial, that the respondent would have discovered the error had he retained his accountant to review the documentation supporting the financial statements. The observation, even if true, is immaterial. It is reasonable discoverability – rather than the mere possibility of discovery – that triggers a limitation period: Lawless v. Anderson, 2011 ONCA 102 (CanLII), 2011 ONCA 102, at para. 22. To preclude the respondent from recovery because of his failure to review the underlying financial statements would, in the circumstances of this case, hold him to an unreasonably high standard.
Additionally, on a similar laches argument made by the defendant the court commented:
[35] The same is true for the appellant’s laches and estoppel arguments. The doctrine of laches provides a defence to an equitable claim where the plaintiff’s delay in bringing a claim constitutes acquiescence or results in circumstances that make prosecution of the action unreasonable: M. (K.) v. M. (H.), 1992 CanLII 31 (SCC), [1992] 3 S.C.R. 6, at pp. 77-78. However, a plaintiff cannot acquiesce without knowledge of the facts giving rise to her claim: ibid., at p. 78. The respondent here lacked this requisite knowledge.

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