Law Times

Law Times • may 4, 2009 FOCUS PAGE 11 Limitations Act transition provisions still have problems M BY JULIUS MELNITZER For Law Times into force in January 2004, problems with its transition pro- visions continue to serve up a steady diet for the courts. "The transition provisions ore than five years after Ontario's new Limitations Act came have certainly had a long tail," says Michael Smith, a partner with Borden Ladner Gervais LLP's Toronto office. dence on the subject comes in the Court of Appeal's January decision in Placzek v. Green. "Placzek clarifies some of the confusion surrounding the point at which a cause of action for contribution and indemnity crystallizes under the new act," Smith says. Albert Green was in a collision The latest appellate jurispru- terclaim to pay their fair share of Mrs. Placzek's damages be- fore Mr. Green's obligations to Mrs. Placzek under s. 1 of the Negligence Act crystallized in some fashion," she wrote. But that did not occur until after the new act came into force, meaning that the transition pro- visions did not apply. Green's counterclaims were not for damages arising out of a tort, but claims for restitution based on unjust enrichment. "As such, although Mr. Green's claims may be related to the tortious acts that un- derlie the accident, they are not founded on those acts," Simmons concluded. "Rather, they are founded on the acts or omissions giving rise to the claims for restitution." As well, the words "acts or with Carmen and Edward Plac- zek before the new act came into force. The Placzeks sued Green after the act came into force. More than two years after Green delivered his statement of defence, he sought to add coun- terclaims for contribution and indemnity against two new par- ties, General Motors of Canada Ltd. and one of its dealerships. At that point, Green maintained that he only became aware of his counterclaims at discovery and that therefore the two-year limitation under the new act had not expired. On appeal, however, Green changed his position. He did not challenge the motion judge's conclusion that the limi- tation period had expired under the new act, but now main- tained that he had discovered his counterclaim on the date of the accident, thereby invoking the transition provisions rather than the new act proper. Section 24(2) of the act stipu- omissions" in the transition pro- visions referred to acts or omis- sions of a defendant. "[Therefore] in the context of a contribution and indem- nity claim, this must mean the defendant's failure to discharge his or her fair share of an injured party's claim before the contribu- tion and indemnity claimant's li- ability to the injured party for a disproportionate share of the in- jured party's damage has crystal- lized," Simmons wrote. tribution or indemnity is pre- mised on the unjust enrichment of the tortfeasors involved when one of them bear a dispropor- tionate share of the victim's dam- ages, it followed that the events relevant to that claim were the failure by the others to pay their fair share in a timely manner. Earlier jurisprudence sup- Also, because a claim for con- ported this interpretation. "[Before the new act], the weight of authority in Ontario indicated that a cause of action for contribution and indemnity under s. 1 of the Negligence Act did not accrue, and the limitation period did not begin to run, until the injured party obtained judgment against the person claiming contribution or 'The transition provisions have certainly had a long tail,' says Michael Smith. indemnity," Simmons wrote. Since the Placzeks did not commence their action against Green until 2005, the events giving rise to the counterclaim did not arise before the new act came into force. It followed that the limitation period under the new act governed and Green's claims against the proposed de- fendants could not proceed. "The decision means that because contribution is not an independent cause of action for damages, the other pieces of the puzzle have to fall into place before that claim can be pursued," says Paulette Pom- mels, Smith's partner who was counsel to General Motors of Canada in Placzek. "So al- though this case confirms prin- ciples that we already knew, it does so within the context of the new Limitations Act and brings the analysis up to date." Todd McCarthy, a partner with Flaherty Dow Elliott & McCarthy's Whitby office, who represented Green, says the case emphasizes the strict interpreta- tion judges are giving to the time limits in the new act. "Defence counsel will have LT to be very careful to bring their third-party actions within two years of service of the statement of claim," he says. • Structured settlement consultants • Corporate guarantee • Brochure and printouts lates that the transition provi- sions apply if the claim is based on events that took place before Jan. 1, 2004, and no proceedings were commenced before then. But Justice Janet Simmons, writing for a unanimous court composed also of justices John Laskin and Russell Juriansz, ruled that the transition pro- visions did not apply. In this case, no proceed- ing had been commenced before Jan. 1, 2004. Accord- ingly, Simmons identified the "critical issue" in determining whether the transition section applied as "identifying the 'acts or omissions' on which Mr. Green's proposed counter- claims are based and the date on which they occurred." The heart of Green's argu- ment was the implicit assertion that the torts committed by the proposed defendants by counter- claim were the events on which his counterclaims were based. Simmons rejected that assertion. "In my opinion, the acts or omissions on which Mr. Green's proposed counterclaims are based are the failure of the proposed defendants by coun- VANCOUVER 1-800-465-7878 McKellar_LT_May4_09.indd 1 • Legal department • Largest brokerage department • Largest client services department • Offices coast to coast • Four times larger than our largest competitor • Experts in accident benefits and future care valuations • Consultants available 24-7 on request • Largest number of CSSCs in Canada • Canada's oldest structured settlement company Substance unseen. The McKellar Structured Settlement™ www.mckellar.com EDMONTON 780-420-0897 McKELLAR STRUCTURED SETTLEMENTS INC. GUELPH 1-800-265-8381 www.lawtimesnews.com HALIFAX 1-800-565-0695 USA 1-800-265-2789 4/29/09 2:43:32 PM

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