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Limitations - Discoverability - Investigative Diligence

Galota v. Festival Hall Developments Limited (Ont CA, 2016)

In this case the Court of Appeal considers principles applicable to determining whether a plaintiff exercised investigative diligence in light of the s.5(1)(b) rule that the limitation starts to toll "the day on which a reasonable person with the abilities and in the circumstances of the person with the claim first ought to have known" that they had a claim and that an action was the appropriate means to pursue it:
[15] Three points about these provisions are relevant to the submissions on appeal:

• Section 5(1)(b) codifies the common law rule of discoverability. If s. 5(1)(b) applies, the two year limitation period will run from a date later than the date the plaintiff was injured.

• Under s. 5(1)(b), a plaintiff “first ought to have known” of the claim when the plaintiff has enough evidence or information to support an allegation of negligence, including facts about an act or omission that may give rise to a cause of action against a possible tortfeasor: Zapfe v. Barns (2003), 2003 CanLII 52159 (ON CA), 66 O.R. (3d) 397 (C.A.), at paras. 32-33; Burtch v. Barnes Estate (2006), 2006 CanLII 12955 (ON CA), 80 O.R. (3d) 365, at para. 24. The plaintiff cannot delay the start of the limitation period until he or she knows with certainty that a defendant’s act or omission caused the injury or damage: Longo v. MacLaren Art Centre Inc., 2014 ONCA 526 (CanLII), 323 O.A.C. 246, at para. 44.

• The rebuttable presumption in s. 5(2) means that a plaintiff has the onus of showing that the rule of discoverability in s. 5(1)(b) applies: Fennell v. Deol, 2016 ONCA 249 (CanLII), at para. 26.

.....

[20] Festival Hall accepts that the motion judge correctly stated the test for determining when Ms. Galota’s claim against Festival Hall was discoverable under s. 5(1)(b). It challenges his application of the test. Its simple submission is that the motion judge erred by finding Ms. Galota showed “no want of diligence” because she did nothing to investigate a claim against Festival Hall for at least three and half years after she was injured.

[21] Festival Hall points out that in several cases this court has held that a plaintiff relying on s. 5(1)(b) has a positive duty to exercise reasonable diligence in investigating a claim of negligence against a defendant. That duty cannot be met, Festival Hall contends, when a plaintiff takes no steps at all. Had Ms. Galota acted with reasonable diligence she would have discovered her claim against Festival Hall well before November 2009. See, for example: Zapfe; Soper v. Southcott, 1998 CanLII 5359 (ON CA), [1998] O.J. No. 2799 (C.A.); and Pepper v. Zellers Inc. (c.o.b. Zellers Pharmacy), 2006 CanLII 42355 (ON CA), [2006] O.J. No. 5042 (C.A.).

[22] The motion judge accepted that as Ms. Galota was relying on s. 5(1)(b), she was obliged to “investigate on a reasonable basis” a claim against Festival Hall. He said at para. 17 of his reasons:
I agree with the plaintiff that it would be inappropriate to name landlords as defendants in every case of an occupier’s liability claim against a tenant. On the other hand, to satisfy the third branch of the test under s. 5(1)(a), for the purposes of s. 5(1)(b) of the Limitations Act, the plaintiff must investigate on a reasonable basis with a view to determining the proper defendants to the claim. In this case, this would mean identifying the condition of the elevated dance floor as a basis for alleged liability and the persons apparently responsible for it. This requires a plaintiff to make reasonable investigation of her claim. It does not, however, require a pre-discovery discovery of an adverse party.
[23] But the important point, implicit in this paragraph and expressly made by my colleague van Rensburg J.A. in Fennell, is that a plaintiff’s failure to take reasonable steps to investigate a claim is not a stand-alone or independent ground to find a claim out of time. Instead, the reasonable steps a plaintiff ought to take is a relevant consideration in deciding when a claim is discoverable under s. 5(1)(b). Justice van Rensburg made this point at paras. 18 and 24 of her reasons in Fennell:
[18] While due diligence is a factor that informs the analysis of when a claim ought to have reasonably been discovered, lack of due diligence is not a separate and independent reason for dismissing a plaintiff’s claim as statute-barred.



[24] Due diligence is part of the evaluation of s. 5(1)(b). In deciding when a person in the plaintiff’s circumstances and with his abilities ought reasonably to have discovered the elements of the claim, it is relevant to consider what reasonable steps the plaintiff ought to have taken. Again, whether a party acts with due diligence is a relevant consideration, but it is not a separate basis for determining whether a limitation period has expired.

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