Legal Blog

Discovery

The Limitations Act, 2002, which has a basic two-year limitation period, builds the discovery principle into its provisions. This is no surprise because the common law, outstanding for years before the Act’s enactment, recognised the discovery principle. In essence, subject to the 15-year ultimate limitation period, the law does not want an injured party to lose a right of action before even being aware of that right. Conversely, the Real Property Limitations Act (RPLA), which has a basic 10-year limitation period, has no discovery principle built into its provisions. Does the discovery principle apply to the RPLA limitation period regardless? The Court of Appeal answered this question in Browne v. Meunier 2023 ONCA 223.

Derelict

In 2017, purchasers bought a cottage abutting a river. Their immediate neighbours bought their property in 2015. When the purchasers bought their cottage, they believed that their property included a derelict boathouse, situate in the river, which they planned to demolish. After closing, they found that their neighbours’ predecessor in title built that boathouse in 1969 and that the purchasers did not own the boathouse.

The purchasers were not pleased. The boathouse was an eyesore, was situated directly in front of their property, and eliminated their ability to build another boathouse. They could not house a boat near shore because the river was too shallow near its bank to allow a boat to pass through it. Accordingly, without a boathouse in the area of the derelict boathouse, they could not house a boat and could not access the river. In 2020, they brought an action against their neighbours, claiming that the boathouse interfered with their riparian rights to the river.

Riparian

In Ontario, landowners do not own abutting water and waterways. However, they do have riparian rights to use the water. One of these riparian rights is the right to access the abutting water. The trial judge found that the purchasers had riparian rights to access the river from their property, the boathouse significantly restricted that access, and that restriction was a violation of the purchasers’ riparian rights.

However, the judge also held that the RPLA applied and that, under s. 4 and s. 15 of the RPLA, the cause of action to enforce their riparian rights expired in 1979 (i.e., 10 years after the neighbours’ processor in title built the boathouse). The trial judge held that the discovery principle did not apply to the RPLA because:

• Unlike the Limitations Act, the RPLA makes no reference to the discovery principle in s. 4 (the general limitations section), and
• 28 specifically provides for discoverability in cases of concealed fraud so that had the legislature intended discoverability to apply to s. 4, it would have used the same explicit language.

The purchasers appealed.

Principle

s. 4 of the RPLA states that no persons may bring an action to recover any land but within 10 years of the time at which the right to bring an action first accrued to either the persons making the claim or the persons through whom they are making the claim.

s. 15 of the RPLA provides that the right of action expires after the 10-year period.

The Court noted that the Supreme Court of Canada (Pioneer Corp v. Godfrey 2019 SCC 42) had stated that the applicability of the discovery principle to a statutory limitation provision is a matter of statutory interpretation. A court was to ascertain how the legislature intended to change the law through the statutory text it enacted (i.e., the discoverability rule may apply even when it is not expressly referenced in the provision.)

Substance is to prevail over form so that, regardless of a statute not explicitly referencing it, discovery will apply if it is evident that the operation of a limitation period is, in substance, conditional upon the accrual of a cause of action or knowledge of an injury. The Supreme Court provided an interpretive presumption that “a statutory limitation period premised on the accrual of an action begins to run when the facts establishing the cause of action were known or ought to have been known by a reasonably diligent person.”

The trial judge had relied upon the explicit language in s. 28 and the expressio unius interpretive principle (i.e., the expression of one thing is the exclusion of the other, a common law principle for construing legislation by which a syntactical presumption may be made that an express reference to one matter excludes others matters).

The Court held that the use of this principle was overcome by the competing Pioneer principle presuming the applicability of the discoverability rule. It followed the Pioneer presumption and held that the trigger for bringing an action is the accrual of the action and not some external event and that the running of the limitation period for the action would be tolled until the material facts constituting the infringement were discovered or were discoverable by a reasonably diligent person in the circumstances of the rights holder.

Application of Principle

But did the discoverability principle assist the purchasers in this case? They argued that they did not know of the problem when they purchased the cottage and that they commenced their action a couple of years after the time when they did know. But s. 4 does not refer just to the rights of the persons bringing the action. It also refers to their predecessors. Therefore, when did the purchasers’ predecessors know of their right of action? If, because of their knowledge, the limitation period had expired, it could not be revived merely because of a subsequent transfer of title.

The Court held that, based on the evidence, it would have been obvious to the purchasers’ predecessors that their riparian rights were infringed immediately upon the 1969 construction of the boathouse. The shallow depth of the water was obvious, and it was obvious that the boathouse impaired the predecessors’ access to the river. The presence of the boathouse would also have impaired the construction of a similar boathouse and this would have substantially impaired their ability to access the deep channel in the river.

Upshot

The Court therefore dismissed the appeal, but for reasons that differed from the trial judge’s.

The purchasers won the battle in establishing that the discoverability principle applied to the RPLA (for which we thank them), but lost the war because the discoverability principle did not assist them.

 

Image courtesy of skyrider74.

Written by Jonathan Speigel, the founding partner of Speigel Nichols Fox LLP, leads the litigation and construction practices.