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Limitations - Discoverability - Proceeding As An Appropriate Remedy

Presley v. Van Dusen (Ont CA, 2019)

In this case the court focussed on s.5(1)(a)(iv) of the Limitations Act, which makes when the plaintiff first knew that "having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it" part of the discoverability test:
(2) Was it appropriate for the appellants to delay bringing an action against the respondent Van Dusen?

[17] Subsection 5(1)(a)(iv) serves to deter needless litigation: 407 ETR Concession Co. v. Day, 2016 ONCA 709 (CanLII), 133 O.R. (3d) 762, at para. 48, leave to appeal refused, [2016] S.C.C.A. No. 509. If a legal proceeding is inappropriate, the start date for the commencement of the limitation period is postponed beyond the date on which the constitutive elements of the claim are discovered: Presidential MSH Corp. v. Marr, Foster & Co. LLP, 2017 ONCA 325 (CanLII), 135 O.R. (3d) 321, at paras. 17-18.

[18] In Presidential MSH, which I note, in fairness to the trial judge, was decided after the trial in this case, Pardu J.A. reviewed the jurisprudence and distilled and extracted two guiding principles on the effect of assistance by a defendant to eliminate the loss.

[19] First, at para. 20:
[A] legal proceeding against an expert professional may not be appropriate if the claim arose out of the professional’s alleged wrongdoing but may be resolved by the professional himself or herself without recourse to the courts, rendering the proceeding unnecessary.
[20] Second, at para. 26:
Resort to legal action may be “inappropriate” in cases where the plaintiff is relying on the superior knowledge and expertise of the defendant, which often, although not exclusively, occurs in a professional relationship. Conversely, the mere existence of such a relationship may not be enough to render legal proceedings inappropriate, particularly where the defendant, to the knowledge of the plaintiff, is not engaged in good faith efforts to right the wrong it caused. The defendant’s ameliorative efforts and the plaintiff’s reasonable reliance on such efforts to remedy its loss are what may render the proceeding premature.
[21] These principles are applicable to the facts of this case. Van Dusen is licenced to install septic systems. The appellants contracted with him because of his special training and expertise. While the respondents argue he may not qualify as “an expert professional”, there can be no question he did have expertise upon which the appellants reasonably relied.

[22] Moreover, reliance on superior knowledge and expertise sufficient to delay commencing proceedings is not restricted to strictly professional relationships: Presidential, at para. 26. I acknowledge that the previous cases where this court has made a finding that it was reasonable for the plaintiff to rely on the defendant’s superior knowledge and expertise have concerned defendants belonging to traditional expert professions. For instance, Brown v. Baum, 2016 ONCA 325 (CanLII), 397 D.L.R. (4th) 161, involved a physician, Chelli-Greco v. Rizk, 2016 ONCA 489 (CanLII), involved a dentist, and Presidential MSH involved an accountant. However, recent Superior Court decisions have applied the superior knowledge and expertise prong of Presidential MSH to persons who are members of non-traditional professions or who are not professionals at all. For instance, in YESCO Franchising LLC v. 2261116 Ontario Inc., 2017 ONSC 4273 (CanLII), the court found that s. 5(1)(a)(iv) applied in a franchisor-franchisee relationship where the franchisees relied on the franchisor’s superior knowledge and expertise, even though the franchisor was not a member of an expert profession. Similarly, in Barrs v. Trapeze Capital Corp., 2017 ONSC 5466 (CanLII), aff’d 2019 ONSC 67 (Div. Ct.) (CanLII), the Superior Court and the Divisional Court found that s. 5(1)(a)(iv) applied to investors who relied on the superior knowledge and expertise of their investment portfolio managers.

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