Simon's Megalomaniacal Legal Resources

Limitations - 'Special Circumstances'

. Strathan Corporation v. Khan

In Strathan Corporation v. Khan (Ont CA, 2019) the Court of Appeal the court confirmed to abolition of the doctrine of "special circumstances" in limitations law:

[8] In our view, the motion judge made no error of law in reaching his decision. In fact, we agree with it. As this court held in Joseph v. Paramount Canada’s Wonderland, 2008 ONCA 469 (CanLII), 90 O.R. (3d) 401, the Limitations Act, 2002 abolished the common law “special circumstances” exception, which permitted the court to extend or suspend the running of a limitation period based on special circumstances. The assertion of a new cause of action in the Second Strathan Action is clearly statute barred.

. Canadian Imperial Bank of Commerce v. Green

In Canadian Imperial Bank of Commerce v. Green (SCC, 2015) the Supreme Court of Canada considered the doctrine of special circumstances in limitations law:

[108] Moreover, van Rensburg J. found that the facts of the case before her did not allow for the doctrine of special circumstances to be applied. She wrote the following, at para. 68: “. . . I do not believe that the doctrine of special circumstances has any actual or potential application to the operation of the limitation period under s. 138.14 of the OSA or is relevant to the relief sought by the plaintiffs in this case.” It is worth noting that s. 21(1) of the Limitations Act, 2002 provides that, “[i]f a limitation period in respect of a claim against a person has expired, the claim shall not be pursued by adding the person as a party to any existing proceeding.” Some judges have said that s. 21(1) has abolished the doctrine of special circumstances for limitation periods to which the Limitations Act, 2002 applies. See Joseph v. Paramount Canada’s Wonderland, 2008 ONCA 469, 90 O.R. (3d) 401. If that is true, it would be another reason why the nunc pro tunc order should not be granted in respect of the defendants who were added after the expiry of the limitation period. I note, however, that the case law is contradictory as regards the scope of s. 21(1) of the Limitations Act, 2002. See, e.g., Bikur Cholim Jewish Volunteer Services v. Langston, 2009 ONCA 196, 94 O.R. (3d) 401; Dugal v. Manulife Financial Corp., 2011 ONSC 1764.

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(3) Doctrine of Special Circumstances

[112] Although pinpointing the origin of an equitable doctrine is generally an exercise fraught with peril, it can be said with a limited degree of certainty that the doctrine of special circumstances originated in Lord Esher M.R.’s ruling in Weldon v. Neal (1887), 19 Q.B.D. 394 (C.A.). In that case, Lord Esher stated that an amendment adding a cause of action to a statement of claim after the expiry of the limitation period for that cause of action will generally be unfair and prejudice a defendant. He therefore held that a court should allow such an amendment only in “very peculiar circumstances”: p. 395. It is this narrow exception which has evolved into what is now known as the doctrine of special circumstances.

[113] In essence, the doctrine allows a court to temper the potentially harsh and unfair effects of limitation periods by allowing a plaintiff to add a cause of action or a party to the statement of claim after the expiry of the relevant limitation period. I hasten to add that, as the Court recognized in Basarsky v. Quinlan, 1971 CanLII 5 (SCC), [1972] S.C.R. 380, and as the word “special” — or “peculiar” — suggests, the circumstances warranting such an amendment will not often occur.

[114] As an offspring of equity, the doctrine of special circumstances is naturally concerned with fairness to the parties. Indeed, this concern was at the forefront of Lord Esher’s mind in Weldon. Unsurprisingly, no exhaustive list of the circumstances that qualify as “special” has been proposed by the courts, and I believe it would be risky and unwise to do so. I note however that, concerned with not prejudicing a defendant, this Court has paid particular attention to whether the facts relevant to the extinguished action were pleaded in the original statement of claim and whether the defendant was aware of them during discovery: Basarsky; see also Dugal, at paras. 60-68. The factors enumerated by the Ontario Court of Appeal in Frohlick v. Pinkerton Canada Ltd., 2008 ONCA 3 (CanLII), 88 O.R. (3d) 401, at para. 23, which were reiterated by van Rensburg J. in IMAX, are also helpful guides:

As such, “special circumstances” include factors such as: the relationship between the proposed claim and the existing action; the true nature of all of the claims; the progress of the action; and the knowledge of the parties . . . [IMAX, at para. 71]