Legal Blog

Discoverability

The Limitations Act, 2002 incorporated the common law discoverability principle. Time does not run until the claimant knows or ought to know that there is an injury. That knowledge is invariably a determination of fact. One such determination occurred in Isailovic v. Vojvodic (2011) ONSC 5854 (S.C.J.).

 History

 The plaintiff had a property dispute with a now disbarred lawyer, Henry J. Gertner. The plaintiff hired a lawyer, the defendant Vojvodic, to assist him in that dispute. Ultimately, the defendant emailed Gertner’s lawyer on January 6, 2006 stating, “My client is financially exhausted and his livelihood is at stake. He is in a desperate position because of your clients. His business is under severe constraints because he does not have money to pay for the materials and subcontractors let alone his legal expenses. Because of that he is prepared to settle under very unfavourable terms for him. Yet, I see that you are not able to settle under your own terms stated in your letter of two days ago. Please contact me only when you have in your possession a bank draft payable to me in trust. Meanwhile please confirm that you will accept the service of claim on behalf of your (sic) Henry Gertner and Terrance Gertner.”

 On January 9, 2006, Gertner’s lawyers made a settlement offer. The defendant recommended that the plaintiff reject it; in response, the plaintiff fired her. One day later, he retained a new lawyer (the “replacement lawyer”) and, 6 days later, the replacement lawyer effected the settlement on the terms set out in the offer, the same offer that the defendant advised the plaintiff not to accept.

 Three days before effecting the settlement, the plaintiff emailed the defendant confirming her firing and informing her that she was incompetent – just in case she had any doubts in that regard. The plaintiff refused to pay the defendant’s fees and, in hindsight, the defendant made a bad decision; in April 2006,  she sued the plaintiff in Small Claims Court for her fees.

 Notwithstanding the plaintiff’s protestations to the contrary, it was obvious that the defendant forwarded the January 6, 2006 email to him. Why was it obvious? Because the plaintiff sent the email message to the replacement lawyer on April 28, 2006, presumably in response to the defendant’s Small Claims Court action, with a note that indicated that the two of them had already discussed this email.

 One year later, as part of the discovery process, the defendant provided the replacement lawyer with most of her file and, by June 17, 2008, all of her file. On April 17, 2009, the defendant discontinued her Small Claims Court action.

 In the meantime, perhaps after an epiphany, the plaintiff attempted to set aside the settlement with Gertner. On January 18, 2008, a Superior Court judge refused to set it aside. The plaintiff appealed the decision and, on December 18, 2008, the Court of Appeal affirmed it.

 On December 17, 2010, two years less a day after the Court of Appeal released its decision, the plaintiff commenced his action against the defendant referencing  various aspects of her negligence and, in particular, keying on her January 6, 2006 email. He alleged that the email gave away the farm; it made him look weak.

 Strike

 The defendant moved to strike the plaintiff’s action, claiming that it was statute barred.

 The plaintiff argued that he did not “appreciate the significance of the January 6, 2006 email” until preparing for the Small Claims Court trial in 2009.

 After finding the facts that he found, the judge’s decision was almost anti-climactic.

 He noted that the provision of a lawyer’s file is not necessary or sufficient to satisfy discoverability. The key is to determine when the necessary information comes to the plaintiff’s attention. In this case, the plaintiff had sufficient knowledge of the defendant’s acts by the end of April 2006 (i.e. just after the defendant had commenced her action and after the plaintiff drew the January 2006 email to the attention of the replacement lawyer).

 The plaintiff had also argued that time should run from the date that the Court of Appeal dismissed his appeal against Gertner. The judge properly made short shrift of that argument. A limitation period starts to run when the cause of action arises. A claimant cannot wait to see how subsequent events affect the damages that may be suffered. The failure of the appeal to reverse the damages did not revive a dead cause of action.

 The judge dismissed the action and assessed costs of $8,000, yet another court loss for the plaintiff.