
Legal Blog
Limitations
Because cases dealing with the effect of the new Limitations Act, 2002 are just percolating through the system, we expect that we will be reporting on a few of them over the next year or two. The latest case, York Condominium Corporation No. 283 v. Jay-M Holdings Inc. [2007] O.J. No. 240, deals with the 15-year ultimate limitation period.
Allegations
In June 2005, a condo sued its developer regarding fire-related construction deficiencies that were discovered in May 2004. The condo joined the City, alleging that it negligently exercised its building inspection duties in 1978. The City brought a motion to strike the statement of claim; it argued that, under the Act, there was a 15-year absolute limitation period and that, accordingly, the condo’s cause of action died in 1993.
Section 15(1) of the Act states that a cause of action expires after 15 years, regardless of the discoverability principle. Section 24(5) of the Act, a transition provision, states that if a claim is not discovered by January 1, 2004, then, for purposes of the 15-year rule, the Act applies as if the claim was discovered on January 1, 2004.
The motions judge felt that section 24(5) was ambiguous, would lead to absurd results if applied as the condo claimed it should be, and contradicted section 15(1). Accordingly, he allowed the City’s motion and struck the condo’s claim.
When we read the decision of the motions judge, we admit to being perplexed. We felt that the interpretation that the judge used was forced and that his “absurdity” example was wrong. It seems that the condo was also perplexed because it appealed the decision to the Ontario Court of Appeal.
Redemption
We will spare you the detailed statutory analysis. In essence, the Court held that:
1. The provisions of the Act should be interpreted liberally in favour of the individual whose right to sue for compensation is in question.
2. Simply because counsel for the City put forward two conflicting interpretations of section 24(5) did not mean that the section was ambiguous.
3. Although section 15(1) modified the common law discoverability rule, section 24(5) operated to mitigate the effect of the new legislation on pre-existing, but undiscovered, causes of action.
4. Section 24(5) and section 15(1) were not disharmonious; the latter was the general provision and the former applied only to the transition period.
5. The example that the motions judge used to demonstrate the validity of his interpretation was flawed.
6. The condo’s claim was not discovered until 2004. Accordingly, it was deemed to have been discovered for purposes of the 15-year rule, on January 1, 2004. Therefore, the condo commenced its action within the regular two-year limitation period and the cause of action did not expire under the 15-year limitation period.
The Court allowed the appeal and allowed the action to continue.