Court of Appeal for Ontario
Date: September 30, 2019
Docket: C64740
Judges: Feldman, Roberts and Fairburn JJ.A.
Between
Lilydale Cooperative Limited Plaintiff
and
Meyn Canada Inc., Mey-Can Equipment Ltd., Meyn Food Equipment Inc., EMK NV and Elboma Moortgat Konstruktie NV Defendants (Appellants)
and
Allied Boiler Services Inc. and Weishaupt Corporation Third Parties (Respondent)
Counsel
Sandra L. Secord, for the appellants
Kammy K. Digambar and Alicia Piotrowski, for the respondent
Heard: March 7, 2019
On Appeal
On appeal from the judgment of Justice Peter J. Cavanagh of the Superior Court of Justice, dated November 22, 2017, with reasons reported at 2017 ONSC 6983.
Feldman J.A.
[1] Introduction
[1] This is an appeal from a summary judgment dismissing the appellants' third party claim against the respondent as statute barred. The motion judge relied on issue estoppel or abuse of process to prevent the appellants from "relitigating" the limitation issue, based on the summary judgment that had dismissed as statute barred another third party claim by the appellants seven years earlier.
[2] I would dismiss the appeal based on discoverability. The motion judge erred in applying the doctrine of issue estoppel or abuse of process, but the third party claim is nonetheless out of time and should be dismissed. It was not "legally appropriate" for the appellants to wait for a jurisdictional dispute to be resolved before commencing its third party claim.
Facts
[3] The plaintiff's action arises from a fire at its poultry processing plant on January 29, 2004. The plant was owned and operated by the plaintiff, Lilydale Cooperative Limited, now Sofina Foods Inc. ("Lilydale").
[4] There are two groups of defendants to the main action: Meyn Canada Inc., Mey-Can Equipment Ltd., and Meyn Food Equipment Inc. (collectively, "Meyn"); and EMK NV and Elboma Moortgat Konstruktie NV (collectively, "EMK").
[5] At all relevant times, Meyn was a supplier of food processing equipment. Meyn designed a fryer and oven system which it sold to Lilydale in 1994. EMK supplied a component, a thermal boiler, for the fryer and oven system that was supplied by Meyn to Lilydale.
[6] On December 22, 2004, Lilydale commenced an action in Alberta against Meyn and EMK for damages arising from the fire, alleging that the parts each company had supplied were defective. Lilydale claimed breach of contract against Meyn, and negligence against both Meyn and EMK.
[7] Because of a limitation issue in the Alberta action, Lilydale commenced the Ontario action against Meyn and EMK on January 19, 2006, making essentially the same claims as in the Alberta action.
[8] Lilydale served Meyn with the statement of claim in both the Alberta and the Ontario actions on March 10, 2006. In a letter on the same date, Lilydale stated that it would proceed only in one of the two provinces. On April 4, 2006, Lilydale also served EMK with the statement of claim in both actions.
[9] On November 14, 2006, Meyn moved to stay Lilydale's action in Ontario on the basis that Alberta was the most convenient forum, or alternatively because the Ontario action was an abuse of process. According to counsel for Meyn, the three parties to the two actions (Lilydale, Meyn and EMK) had an understanding that Lilydale's claims against EMK and Meyn would be held in abeyance until the forum issue was determined. Pending the resolution of the forum issue, neither Meyn nor EMK pleaded in the Ontario action.
[10] There is no evidence indicating that Weishaupt Corporation, the respondent in this appeal, was made aware of this understanding, or of the status of the Ontario action during this time.
[11] Meyn's motion was dismissed by Day J. on February 13, 2007: Lilydale Co-operative Ltd. v. Meyn Canada Inc., 84 O.R. (3d) 621 (S.C.) and the appeal was dismissed by this court on February 14, 2008: Lilydale Co-operative Ltd. v. Meyn Canada Inc., 2008 ONCA 126, 50 C.P.C. (6th) 1. On March 6, 2008, Meyn informed the other parties that it would not pursue a further appeal. As a result, the Alberta action was discontinued.
[12] On May 22, 2008, Meyn served its statement of defence and cross claim against EMK in the Ontario action.
[13] On November 14, 2008, just over two years and eight months after the Ontario claim was served on it, Meyn issued third party claims in the Ontario action against Weishaupt and Allied Boiler Services Inc., claiming against Weishaupt for breach of contract, and against Allied for breach of contract and in tort.
[14] On November 27, 2008, EMK also issued third party claims against Weishaupt and Allied in tort.
[15] In July 2010, Allied sought an order striking out both Meyn's and EMK's third party claims against it on the grounds that they were statute barred. Weishaupt did not bring a similar motion to strike at that time.
[16] On July 21, 2010, the Allied motion judge granted Allied's motion and dismissed both third party claims against Allied: Lilydale Co-operative Limited v. Meyn Canada Inc., 2010 ONSC 4114. Meyn took no position on this motion and did not attend.
[17] The grounds for the motion were based on s. 18(1) of the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B, which provides:
18 (1) For the purposes of subsection 5 (2) and section 15, in the case of a claim by one alleged wrongdoer against another for contribution and indemnity, the day on which the first alleged wrongdoer was served with the claim in respect of which contribution and indemnity is sought shall be deemed to be the day the act or omission on which that alleged wrongdoer's claim is based took place.
(2) Subsection (1) applies whether the right to contribution and indemnity arises in respect of a tort or otherwise.
[18] In dismissing the third party claims against Allied, the Allied motion judge made two findings: 1) under s. 18(1) the discoverability principles in s. 5 of the Limitations Act do not apply; and 2) even had she accepted that s. 5 applied to claims under s. 18(1), she would have found that EMK failed to issue its third party claim against Allied within two years from the discovery of its claim.
[19] In 2013, EMK and Meyn brought a "special case" motion to determine whether Alberta law, including its limitation provisions, applied to Lilydale's claims. On October 30, 2013, Pollak J. determined that Alberta law applies to Lilydale's tort claims and Ontario law applies to its contract claims: Lilydale Cooperative Ltd. v. Meyn Canada Inc., 2013 ONSC 5313. As a result, the parties agreed that Lilydale's tort claims against Meyn and EMK were statute barred by Alberta's ultimate ten year limitation period, but the contract claim against Meyn in Ontario continued. That decision was upheld by this court on April 22, 2015: Lilydale Cooperative Limited v. Meyn Canada Inc., 2015 ONCA 281, 335 O.A.C. 7.
[20] The motion to dismiss Meyn's third party claim that is the subject of this appeal, was brought by Weishaupt in July 2017 on the same ground that Allied had raised in its 2010 motion, that the claim is statute barred.
[21] On November 22, 2017, the motion judge granted summary judgment, dismissing Meyn's third party claim against Weishaupt on the basis of issue estoppel. He held that Meyn was precluded by the doctrine of issue estoppel, or in the alternative, abuse of process, from "relitigating" the same question that had been decided seven years earlier in the Allied motion in which Meyn's third party claim against Allied was dismissed, i.e. whether s.18 of the Limitations Act, was subject to the discoverability criteria in s. 5. Because he relied on issue estoppel and abuse of process, the motion judge did not address and apply the discoverability criteria under s. 5 of the Limitations Act to Meyn's claim against Weishaupt.
Issues
Did the motion judge err by applying the doctrine of issue estoppel?
Did the motion judge err by applying the doctrine of abuse of process?
If yes, is Meyn's third party claim against Weishaupt statute barred?
Analysis
(1) Did the motion judge err by applying the doctrine of issue estoppel?
[22] Issue estoppel is a branch of res judicata (the other branch being cause of action estoppel) which precludes the relitigation of issues previously decided in court in another proceeding: Toronto (City) v. C.U.P.E., Local 79, 2003 SCC 63, [2003] 3 S.C.R. 77, at para. 23. There are three preconditions to invoking the doctrine of issue estoppel:
The issue must be the same as the one decided in the prior decision;
the prior judicial decision must have been final; and
the parties to both proceedings must be the same, or their privies: C.U.P.E. at para. 23, quoting from Danyluk v. Ainsworth Technologies Inc., 2001 SCC 44, [2001] 2 S.C.R. 460, at para. 25.
[23] In C.U.P.E., an employee of the City of Toronto who worked as a playground supervisor was convicted of sexual assault of a boy under his supervision. When the employee grieved his dismissal by the City, the arbitrator determined that he was not bound by the findings of the criminal trial judge that formed the basis for the conviction and ordered the employee re-instated on the basis that he had not committed the sexual assault.
[24] One of the issues on the appeal was whether the doctrine of issue estoppel applied to preclude the arbitrator from making a different finding than the one made at the criminal trial. The stumbling block for applying issue estoppel was the third requirement: that the parties to both proceedings must be the same, or their privies, as the Crown and the City are not the same party nor is the City a privy of the Crown.
[25] In that context, the Supreme Court considered, and rejected dispensing with the third requirement of issue estoppel, known as "mutuality", as has been done in some other jurisdictions, in order to be able to apply the doctrine. Arbour J. examined the rationales for and the consequences of abandoning the mutuality requirement in the United States. She concluded at para. 29:
What emerges from the American experience with the abandonment of mutuality is a twofold concern: (1) the application of the estoppel must be sufficiently principled and predictable to promote efficiency; and (2) it must contain sufficient flexibility to prevent unfairness. In my view, this is what the doctrine of abuse of process offers, particularly, as here, where the issue involves a conviction in a criminal court for a serious crime.
[26] Arbour J. observed that because the primary concern in that case was with the integrity of the criminal process rather than the traditional issue estoppel concerns such as costs and multiple vexatious proceedings, she was satisfied that issue estoppel did not apply. She stated at para. 32: "[f]or these reasons, I see no need to reverse or relax the long-standing application of the mutuality requirement in this case and I would conclude that issue estoppel has no application."
[27] On the motion under appeal, Weishaupt submitted that Meyn was precluded from relitigating the legal issue respecting whether the doctrine of discoverability applies to s. 18 of the Limitations Act because that issue was decided in the Allied motion. Meyn responded that issue estoppel could not apply because it failed on the third requirement, mutuality. Because Weishaupt was not a party to the Allied motion, the requirement that the same parties or their privies must be parties to both proceedings was not met. Meyn made the further point that by waiting to bring its motion to strike, Weishaupt took the risk that subsequent judicial decisions could change the interpretation and application of s. 18 of the Limitations Act.
[28] The motion judge based his conclusion that issue estoppel did apply on the fact that Weishaupt was a party to Meyn's third party action against Allied and Weishaupt, even though it was not a party to the Allied motion to strike the claims against Allied. He found that because Weishaupt was a party to the proceeding in which the Allied motion was brought, Weishaupt "would be affected by [the Allied motion judge's] decision", and therefore issue estoppel applied.
[29] The motion judge quoted no authority for this conclusion and, with respect, it does not accord with the law on issue estoppel. Rather it assumes the result – if issue estoppel applied, then Weishaupt would be affected by the prior decision, but not if it did not apply.
[30] Issue estoppel requires mutuality of parties in the proceeding that resulted in the binding decision. Weishaupt was not a party to the Allied motion. While in this case it is in Weishaupt's interest to apply issue estoppel, it would be different had Allied lost its motion to strike. In that case, Meyn could not seek to rely on that outcome to bind Weishaupt, when Weishaupt had no right to participate and no ability to appeal. Issue estoppel is intended to dictate a fair outcome – that the same parties are precluded from relitigating the same issue. To bind Weishaupt to a decision that it had no right to participate in would be unfair and contrary to the principles underlying res judicata and issue estoppel. That is why mutuality remains one of the requirements for applying the doctrine.
[31] It is also unfair to Meyn to bind it to a decision from another motion that it chose not to dispute, brought by another party. While the record does not disclose the reason for Meyn's strategic decision not to oppose the Allied motion, it was entitled to make that decision for reasons that applied to Allied but may not have applied to Weishaupt. To effectively penalize Meyn for that choice may have the effect of encouraging unnecessary litigation, especially in complex multi-party actions. Meyn's decision not to try to hold Allied as a third party cannot prevent Meyn from taking a different position with Weishaupt, if Weishaupt seeks the same relief. It is not bound by issue estoppel because Weishaupt was not a party to the earlier proceeding.
[32] The motion judge listed the following four requirements of issue estoppel that he found were met in this case at para. 39 of his reasons:
a. The question that was decided by [the Allied motion judge] that is said to create the estoppel, that the discoverability principles in s. 5 of the Limitations Act do not apply to claims subject to section 18 of the Limitations Act and each of EMK and Meyn had two years from the date of service of Lilydale's Statement of Claim in which to issue its Third Party Claim, is the same question that is before me.
b. The decision of [the Allied motion judge] is final.
c. Both Weishaupt and Meyn are parties on the motion before me in which issue estoppel is raised, and both were parties to Meyn's third party action in which the decision of [the Allied motion judge] was made.
d. The question decided by [the Allied motion judge] on the application of the discoverability principles in s. 5 of the Limitations Act to a claim for contribution and indemnity that is subject to s. 18 was fundamental to the substantive decision to dismiss Meyn's Third Party Claim against Allied.
[33] However, his statement at c) is incorrect: the decision made by the Allied motion judge was not made in Meyn's third party action against Weishaupt. It was made in Meyn's third party claim against Allied. While both claims are made in the same pleading, they are separate, independent, stand-alone claims. The fact that they are made in the same pleading does not make Weishaupt, a non-party to the Allied motion, a party for the purpose of issue estoppel. To do so would undermine the purpose of the doctrine and the fairness of its application.
(2) Did the motion judge err by applying the doctrine of abuse of process?
[34] The doctrine of abuse of process is a flexible doctrine unencumbered by the specific requirements of issue estoppel, and can be applied where the requirements of issue estoppel may not be met to prevent what is essentially the relitigation of an issue that has already been determined: C.U.P.E. at paras. 35-37.
[35] The motion judge stated that if the lack of mutuality had prevented him from deciding the motion on the basis of issue estoppel, then in the alternative, he would have found that Meyn was precluded by the doctrine of abuse of process from relitigating the question decided in the Allied motion. Referring to C.U.P.E., he stated at para. 41 of his reasons that the rationales for applying both doctrines are based on the principles of judicial economy, consistency, finality and the integrity of the administration of justice.
[36] While the application of the doctrine of abuse of process involves the exercise of discretion by a motion judge, in my view, the motion judge erred in the exercise of his discretion by applying the doctrine of abuse of process to these facts. He should have rejected the application of the doctrine for two reasons: 1) by the time the motion was argued, the law with respect to s. 5 and s. 18 of the Limitations Act had changed since the Allied motion in 2010; and 2) it is unfair to Meyn to essentially penalize it for not participating in the Allied motion.
[37] First, on the Allied motion, the Allied motion judge decided that the two year limitation period in s. 18 of the Limitations Act was not subject to the discoverability criteria in s. 5. Since her decision, this court has determined in Mega International Commercial Bank (Canada) v. Yung, 2018 ONCA 429, 425 D.L.R. (4th) 439, that properly interpreted, s. 18 is subject to discoverability under s. 5. While the question of the proper interpretation of s. 18 and whether it is subject to discoverability under s. 5 was the subject of conflicting decisions prior to the 2018 decision in Mega, that law has now been settled in a manner that is inconsistent with the Allied motion judge's decision.
[38] In Minott v. O'Shanter Development Co., 42 O.R. (3d) 321 (C.A.), Laskin J.A. commented on the role of a change in the law when a judge is deciding whether to apply the doctrine of issue estoppel. He stated at para. 51:
If the decision of a court on a point of law in an earlier proceeding is shown to be wrong by a later judicial decision, issue estoppel will not prevent relitigating that issue in subsequent proceedings. It would be unfair to do otherwise.
[39] The same discretionary fairness factors apply to a judge's decision whether to apply the doctrine of abuse of process: C.U.P.E. at para. 53. Because the law with respect to s. 18 and s. 5 of the Limitations Act was unsettled when the Allied motion was heard, Meyn was entitled to argue that discoverability principles should be applied. Its argument was that it did not discover that a third party claim in the Ontario action was the appropriate means to seek a remedy, until after the issue of where Lilydale's action would proceed, i.e. the forum issue, had been finally determined.
[40] I would add that even if the motion judge did not err in his exercise of discretion, it would be an error for this court to uphold his decision now that this court has held in Mega that the correct interpretation of s. 18 includes the principles of discoverability, contrary to the decision on the Allied motion in 2010.
[41] Second, in C.U.P.E., the Supreme Court could not apply the doctrine of issue estoppel because the parties to the criminal proceeding and to the arbitration were not the same. The accused/employee was the same but the Crown and the City were separate parties. The court therefore considered whether it could and should apply the doctrine of abuse of process to prevent the factual finding of the criminal conviction from being undermined by the opposite finding of the arbitrator on the same facts.
[42] The court explained that abuse of process focuses on the integrity of the adjudicative process rather than on the interests of the parties to the attempted relitigation of an issue. For example, in the C.U.P.E. case itself, the court found that the relitigation of the issue whether the employee sexually assaulted the child amounted to a blatant abuse of process. It undermined the integrity of the criminal process.
[43] However, the court pointed out circumstances where it would be unfair to apply abuse of process or issue estoppel even if the requirements were met. One example it gave was where the stakes in the original proceeding were minor but in the subsequent proceeding they were very significant. In that case it would be unfair to favour the goal of finality where the incentive to defend the original proceeding was low. That example appears to apply squarely in this case, where Meyn was apparently not concerned about maintaining Allied in the litigation and chose not to respond to the Allied motion, but certainly wants to keep Weishaupt in as a third party.
[44] The motion judge favoured the goal of finality in this case. He stated at para. 42 of his reasons: "[i]f parties were permitted to relitigate questions that were finally decided because of new views they may later take of the law that applies in a given case, whether based upon new judicial decisions or other considerations, litigation would have no end" [citation omitted]. However, he did not consider the unfairness discussed by the Supreme Court in C.U.P.E. when a party chooses for its own reasons not to respond to one party's motion, but has reasons to respond to another's.
[45] There was no abusive conduct by Meyn. It chose to respond to the motion by Weishaupt as it was entitled to do, and make the legal and factual arguments that it believed applied in the context of its claim against Weishaupt.
(3) Is Meyn's third-party claim against Weishaupt statute barred?
[46] As discussed above, the motion under appeal was heard and decided before this court's decision in Mega. Because the motion judge decided the motion based on issue estoppel or abuse of process, he concluded that he did not need to decide the legal issue whether discoverability principles apply under s. 18. He therefore never considered when Meyn discovered its third party claim, applying the criteria in s. 5 of the Limitations Act.
[47] While Meyn's position on the appeal was that the court should dismiss the summary judgment motion and send the limitation issue on to be heard as part of the trial, it was acknowledged in oral argument that it had put its best foot forward on the motion as required. The respondent submitted that this court should decide the limitation issue.
[48] Meyn's argument rests on the fourth criterion that governs the discovery date for a claim under s. 5(1)(a) of the Limitations Act, which reads: "that, having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it".
[49] Meyn's position is that it was not legally appropriate under s. 5(1)(a)(iv) of the Limitations Act to bring the third party proceedings until the forum issue was finally decided in February 2008 and that the two years ran from that time. Its submission is based on what occurred in the main action where Lilydale took the position by letter dated March 10, 2006 that it would only be proceeding in one jurisdiction, Alberta or Ontario. Meyn did not defend or take any steps in the Ontario action. In its submissions on this appeal, Meyn explained that the reason for this was because it believed that doing so had the potential to undermine its position in support of the stay of the Ontario action.
[50] Meyn's argument regarding discoverability has two prongs. First, it could not deliver any third party claim in the Ontario action to ensure that it did not attorn and thereby jeopardize the forum argument. Second, if it had been successful in establishing that Alberta was the correct forum, then the Ontario action would have been discontinued and there would have been no need for any third party proceedings. Therefore, the principle applies from 407 ETR Concession Co. v. Day, 2016 ONCA 709, 133 O.R. (3d) 762, and Presidential MSH Corp. v. Marr, Foster & Co. LLP, 2017 ONCA 325, 135 O.R. (3d) 321, that it would not be legally appropriate to commence a legal proceeding while another resolution process that may resolve the matter is ongoing.
[51] Dealing first with the issue of how this court should proceed, I am satisfied based on the record and the submissions, that the record for the summary judgment motion was complete and that there is no genuine factual issue that requires a trial. Therefore, while it would have been better for this court to be reviewing a finding by the motion judge on the issue of discoverability, this court is in as good a position as the motion judge to determine that issue based on the record.
(a) Does the risk of attornment and prejudice to the forum motion postpone the commencement of the limitation period?
[52] Attornment to a court's jurisdiction by a defendant signifies acquiescence to the jurisdiction of the court. When a party takes steps beyond merely contesting the jurisdiction of a court, that party may be found to have voluntarily engaged the jurisdiction of the court and therefore attorned to it: Wolfe v. Pickar, 2011 ONCA 347, 332 D.L.R. (4th) 157, at para. 44. See also Kunuthur v. Govindareddigari, 2018 ONCA 730, 427 D.L.R. (4th) 120, at para. 18, leave to appeal refused, [2018] S.C.C.A. No. 449. Meyn submits that filing pleadings in Ontario, including by serving the third party claim, could have prejudiced the position it was taking on the forum motion, that Alberta was the more appropriate forum.
[53] In support of its assertion of potential prejudice, Meyn cites four cases where the issue was whether steps taken amounted to attornment: Stoymenoff v. Airtours PLC, 2001, 17 C.P.C. (5th) 387 (Ont. S.C.), at paras. 35, 38-9; Atlas Copco Inc. v. Hillier, aff'd 2009 ONCA 687, at paras. 17-18; Stanley v. Stanley, [2003] O.T.C. 307 (S.C.); and Carolina Foods Inc. v. 838116 Ontario Inc., 2015 ONSC 1342. In my view, these cases do not assist Meyn. None of these cases involved the impact of attornment on a limitation period.
[54] This court held in Federation Insurance Co. of Canada v. Markel Insurance Co. of Canada, 2012 ONCA 218, 109 O.R. (3d) 652, that in s. 5(1)(a)(iv), the word "appropriate" means "legally appropriate", and that tactical choices that arise during litigation do not delay the commencement of the limitation period. Sharpe J.A. stated at para. 34, in the context of pre-claim negotiations:
To give "appropriate" an evaluative gloss, allowing a party to delay the commencement of proceedings for some tactical or other reason beyond two years from the date the claim is fully ripened … would, in my opinion, inject an unacceptable element of uncertainty into the law of limitation of actions.
[55] While a finding that serving a third party claim amounted to attornment could be prejudicial, or even fatal to a party's forum challenge, the strategic decision of how to deal with this risk of prejudice is the type of tactical consideration that does not affect the "legally appropriate" calculus in s. 5(1)(a)(iv) of the Limitations Act. The issue of whether serving a third party claim solely to protect a limitation period will amount to voluntary attornment is for the forum judge to decide. It does not affect the discoverability of the third party claim and therefore the commencement of the limitation period.
[56] I also note that a party such as Meyn, facing the expiry of a limitation period, had a number of procedural avenues to take to avoid that consequence rather than allow a limitation period to expire or be found to have expired on the application of discoverability principles.
[57] First, Meyn could have alerted Weishaupt that the third party claim was coming and sought its agreement under s. 22(3) of the Limitations Act to a stand-still pending the determination of the forum issue. I can see no reason for the third party not to agree. However, if there were one, then judicial authorization on the attornment issue could be sought. That is what occurred in Joyce v. MtGox Inc., 2016 ONSC 581, where Perell J., on a case management conference in advance of the expiry of the limitation period, involving a party in Meyn's position, ruled that issuing the third party claim would not amount to attornment.
[58] Second, Meyn could have served the third party claim, with an express reservation of its rights, and then argued at its forum motion that it did so only to preserve the limitation period and therefore has not attorned to Ontario's jurisdiction. Meyn brought a forum non conveniens motion. It was understood by all the existing parties that Meyn was not acknowledging the convenience of Ontario as the forum for the action by bringing the motion. While that motion was outstanding, it would be anomalous indeed if Meyn's service of a third party claim to preserve a limitation period in Ontario would be found to amount to such an acknowledgement.
[59] To conclude, while risk of attornment was a potentially legitimate concern for Meyn, that concern related to its position on the forum issue and did not affect the discoverability of its third party claim and the need to take the steps necessary to preserve the claim within the limitation period.
(b) Was it legally inappropriate to bring third party proceedings before the forum issue had been determined?
[60] In Presidential, this court, following 407 ETR, explained that a proceeding could be legally inappropriate and therefore not discoverable within the meaning of s. 5(1)(a)(iv) of the Limitations Act, where the party with the claim is pursuing another resolution process that would eliminate the loss and thereby avoid needless litigation.
[61] Meyn submits that this principle applies to the facts of this case. Meyn was pursuing a challenge to Ontario as the convenient forum, which, if successful, would have ended the Ontario action and obviated the need to commence a third party claim against Weishaupt. I would reject Meyn's submission. A forum challenge does not resolve the dispute between the parties but merely moves the dispute to a court in another jurisdiction. It is not an alternative process, but rather, it is the same process but in a different jurisdiction.
[62] This is consistent with recent decisions of this court where the "alternative process" argument from 407 ETR and Presidential was raised and rejected in the context of multiple court or alternative dispute resolution proceedings. For example, in Ridel v. Goldberg, 2019 ONCA 636, 71 C.B.R. (6th) 1, van Rensburg J.A. held that the determination of an appeal, which had the potential to eliminate a new claim against a different defendant, did not postpone the commencement of the limitation period with respect to that new claim. She stated at para. 77:
While not determinative, this court's decision in Tapak v. Non-Marine Underwriters, Lloyd's of London, 2018 ONCA 168, 76 C.C.L.I. (5th) 197, leave to appeal refused, [2018] S.C.C.A. No. 157, is instructive. In that case, the appellants relied on s. 5(1)(a)(iv) to argue that an appeal against other parties, if successful, might have eliminated their losses and that they therefore did not know that their action for contribution and indemnity was "an appropriate means" to seek to remedy their losses until the appeal was dismissed. At para. 13, the court rejected this argument, stating:
[Section] 5(1)(a)(iv) is not intended to be used to parse claims as between different defendants and thus permit one defendant to be pursued before turning to another defendant. Rather, it is intended to address the situation where there may be an avenue of relief outside of a court proceeding that a party can use to remedy their 'injury, loss or damage'….
See also Gravelle (CodePro Manufacturing) v. Denis Grigoras Law Office, 2018 ONCA 396, at para. 6.
[63] The forum challenge is conceptually similar to settlement discussions, which may resolve the entire claim so that no court proceeding need be commenced, but nonetheless do not postpone the running of the limitation period: see Presley v. Van Dusen, 2019 ONCA 66, 432 D.L.R. (4th) 712, at para. 25; and Markel at para. 34.
[64] As in Ridel, Tapak v. Non-Marine Underwriters, Lloyd's of London, 2018 ONCA 168, 76 C.C.L.I. (5th) 197, leave to appeal refused, [2018] S.C.C.A. No. 157, and Gravelle, in this case, there was no alternative resolution process to which Weishaupt was a party that could have resolved the issue between it and Meyn. Rather, Meyn was attempting to have the whole Ontario action dismissed, obviating the need for the third party claim.
[65] To allow parties to wait, at their discretion, for other court or arbitral proceedings to conclude, where the result could obviate the need to bring a claim that they know exists, is inconsistent with the purpose of the Limitations Act for two reasons. First, this approach could extend the limitation period well beyond the two year original threshold in an uncertain and unpredictable manner. Second, there were no significant savings to be achieved by not commencing the third party claim until the forum challenge was complete. Procedurally, a stand-still or tolling agreement could be sought until the forum issue had been finalized by the court so that the third party would not be required to plead in response. However, it would be on notice that if the Ontario action proceeds, it is a named party, required to preserve its documents, and respond to the action as advised.
[66] In my view, these factors drive the conclusion that the day Meyn was served with the statement of claim by Lilydale, it knew that a third party claim against Weishaupt was the appropriate means to seek a remedy from Weishaupt. It was therefore not "legally appropriate" for Meyn to wait until the forum issue had been decided before the commencing third party claim.
Result
[67] In the result, while the doctrines of issue estoppel and abuse of process are not applicable in this case, I would dismiss the appeal on the basis that under s. 18 of the Limitations Act, applying the discoverability criteria under s. 5, Meyn discovered its third party claim against Weishaupt when it was served with the statement of claim by Lilydale in March 2006. Its third party claim brought in November 2008 was therefore statute barred. I would award costs to Weishaupt in the agreed amounts of $15,000 inclusive of disbursements and HST for the appeal and $23,000 inclusive for the motion.
Released: September 30, 2019
"K. Feldman J.A."
"I agree. L.B. Roberts J.A."
"I agree. Fairburn J.A."
