Giroux v. Pollesel
111 O.R. (3d) 149
2012 ONSC 2203
Ontario Superior Court of Justice,
Divisional Court,
Smith C.J., Gauthier R.S.J. and Matlow J.
May 30, 2012
Limitations -- Family Law Act claims -- Discoverability -- Plaintiff bringing action for damages for personal injuries within two-year limitation period -- Plaintiff moving successfully more than six years after accident to add family members as plaintiffs and to amend statement of claim to add claims for damages for them under s. 6(1) of Family Law Act -- Defendant's appeal dismissed -- Limitation period that applied to plaintiff's claim not applying to claims of derivative claimants -- Each derivative claimant entitled to have limitation period applicable to his or her claim determined separately by application of discoverability principle set out in Limitations Act, 2002 -- Family Law Act, R.S.O. 1990, c. F.3, s. 6(1) -- Limitations Act, 2002, S.O. 2002, c. 24, Sch. B.
The plaintiff commenced an action for damages for injuries arising out of a motor vehicle accident just before the expiry of the two-year limitation period. She was able to work for some time after the accident, but her physical condition deteriorated and her employment was ultimately terminated. More than six years after the accident, she brought a motion to add four family members as plaintiffs and to deliver an amended statement of claim adding derivative claims for damages for them pursuant to s. 6(1) of the Family Law Act. The motion was granted. The defendant appealed.
Held, the appeal should be dismissed.
As long as the plaintiff's action was commenced within the applicable limitation period, the claims of the family members were not statute-barred by the expiry of that limitation period. Each derivative claimant was entitled to have [page150] the limitation period applicable to his or her claim determined separately by the application of the discoverability principle set out in ss. 4, 5(1) and (2) of the Limitations Act, 2002.
APPEAL from an order adding the plaintiffs and the amending statement of claim to assert Family Law Act claims.
Cases referred to Camarata v. Morgan (2009), 94 O.R. (3d) 496, [2009] O.J. No. 621, 2009 ONCA 38, 78 M.V.R. (5th) 165, 69 C.P.C. (6th) 31, 246 O.A.C. 235; Chedour v. Newmarket (Town) (1988), 1988 4800 (ON SC), 63 O.R. (2d) 680, [1988] O.J. No. 74, 27 O.A.C. 179, 25 C.P.C. (2d) 126, 8 A.C.W.S. (3d) 179 (Div. Ct.); Lidder v. Amyotte, [2006] O.J. No. 5247, 2006 43493, 154 A.C.W.S. (3d) 713 (S.C.J.); Macksoud (Litigation Guardian of) v. Carroll (2011), 104 O.R. (3d) 700, [2011] O.J. No. 623, 2011 ONCA 108, 278 O.A.C. 38, 11 C.P.C. (7th) 190; Smith Estate v. College of Physicians and Surgeons of Ontario (1998), 1998 1523 (ON CA), 41 O.R. (3d) 481, [1998] O.J. No. 4367, 167 D.L.R. (4th) 78, 115 O.A.C. 146, 28 C.P.C. (4th) 389, 26 E.T.R. (2d) 103, 83 A.C.W.S. (3d) 495 (C.A.), consd Other cases referred to Giroux v. Pollesel (2011), 106 O.R. (3d) 391, [2011] O.J. No. 1627, 2011 ONSC 2259 (S.C.J.) Statutes referred to Business Corporations Act, R.S.O. 1990, c. B.16, s. 246(1) Family Law Act, R.S.O. 1990, c. F.3, ss. 6(1), 61 [as am.], (1) [as am.] Family Law Reform Act, R.S.O. 1980, c. 152 Limitations Act, 2002, S.O. 2002, c. 24, Sch. B, ss. 4, 5 [as am.], (1), (2) Trustee Act, R.S.O. 1990, c. T.23 [as am.] Rules and regulations referred to Rules of Civil Procedure, R.R.O. 1990, Reg. 194
James C. Simmons, Q.C., for plaintiff/respondent. Christopher I.R. Morrison, for defendant/appellant.
The judgment of the court was delivered by
MATLOW J.: -- This Appeal
[1] This appeal is from the order of a motion judge dated April 1, 2011 [(2011), 2011 ONSC 2259, 106 O.R. (3d) 391, [2011] O.J. No. 1627 (S.C.J.)].
[2] By the order in appeal, the plaintiff, the principal claimant, who was injured in a motor vehicle accident, was granted leave, more than six years after the accident, to add certain members of her family as plaintiffs and to deliver an amended statement of claim adding derivative claims for damages for them pursuant to s. 6(1) of the Family Law Act, R.S.O. 1990, c. F.3 (the "FLA").
[3] This appeal is dismissed. [page151] Facts
[4] On November 24, 2004, the plaintiff was driving her car and was stopping at a red light when her car was struck from the rear by a car driven by the defendant.
[5] On November 16, 2006, eight days before the expiry of the applicable limitation period, she commenced this action seeking damages for injuries she alleges she suffered as a result of the accident. They include pain in her right shoulder, neck and back, numbness in her legs and headaches.
[6] Despite her injuries, she was able to maintain employment with accommodation for the first three and one-half years after the accident.
[7] In June 2008, she underwent surgery on her right shoulder. In July 2009, she underwent a second surgery. Because of increasing pain and a diminishing level of activity after the second surgery, she was unable to return to her work and, in June 2010, her employment was terminated.
[8] Subsequently, on April 1, 2011, on motion made by the plaintiff, leave was granted to her by the order in appeal to add four named family members as plaintiffs "to permit them to advance their respective claims pursuant to the FLA".
[9] Evidence to support the required extension of the basic two-year limitation period was described by the motion judge in para. 29 of decision, as "indicating that the plaintiff's family members did not know and could not know of their Family Law Act claims until after the second surgery in July 2009". He further added:
It was not until this surgery that Joanne Giroux became unemployable. It was not until after this surgery that the plaintiff ceased to be able to provide care, guidance, and companionship to her family members, and began relying on them to provide care and perform housekeeping tasks. As such, they did not discover that they had a claim under s. 61 of the Family Law Act until July 2009.
[10] On this evidence, the motion judge granted the order sought and directed that any limitations defence that might be raised by the defendant be determined by the trial judge. Principal Issue
[11] The principal issue in this appeal is whether the derivative claims of the family members were statute-barred because the limitation periods applicable to each of the derivative claims had to be the same as the limitation period applicable to the plaintiff's principal claim, which had expired many years before, or whether each derivative claimant was entitled to have the limitation period applicable to his or her claim determined [page152] separately by the application of the discoverability principle set out in ss. 4, 5(1) and (2) of the Limitations Act, 2002, S.O. 2002, c. 24, Sch. B (the "LA2002").
[12] It is the position of the defendant that the limitation periods applicable to each of the derivative claims had to be the same as the plaintiff's because of the reliance of the derivative claims on the plaintiff's principal claim.
[13] It is the position of the plaintiff that the law does not require that the limitation periods be the same. The only relationship between the limitation periods applicable to each of the derivative claims and the limitation period applicable to the plaintiff's principal claim was that each derivative claim had to be added, as in this case, before the plaintiff's principal claim would have become statute-barred. Relevant Statutory Provisions
[14] Section 61 of the FLA reads, in part, as follows:
Right of dependants to sue in tort
61(1) If a person is injured or killed by the fault or neglect of another under circumstances where the person is entitled to recover damages, or would have been entitled if not killed, the spouse, as defined in Part III (Support Obligations), children, grandchildren, parents, grandparents, brothers and sisters of the person are entitled to recover their pecuniary loss resulting from the injury or death from the person from the person injured or killed is entitled to recover or would have been entitled if not killed, and to maintain an action for the purpose in a court of competent jurisdiction.
Damages in case of injury
(2) The damages recoverable in a claim under subsection (1) may include, (a) actual expenses reasonably incurred for the benefit of the person injured or killed; (b) actual funeral expenses reasonably incurred; (c) a reasonable allowance for travel expenses actually incurred in visiting the person during his or her treatment or recovery; (d) where, as a result of the injury, the claimant provides nursing, housekeeping or other services for the person, a reasonable allowance for loss of income or the value of the services; and (e) an amount to compensate for the loss of guidance, care and companionship that the claimant might reasonably have expected to receive from the person if the injury or death had not occurred.
[15] Section 4 of the LA2002 reads as follows:
Basic limitation period
- Unless this Act provides otherwise, a proceeding shall not be commenced in respect of a claim after the second anniversary of the day on which the claim was discovered. [page153]
[16] Section 5(1) of the LA2002 reads as follows:
Discovery
5(1) A claim is discovered on the earlier of, (a) the day on which the person with the claim first knew,
(i) that the injury, loss or damage had occurred,
(ii) that the injury, loss or damage was caused by or contributed to by an act or omission,
(iii) that the act or omission was that of the person against whom the claim is made, and
(iv) that, having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it; and (b) the day on which a reasonable person with the abilities and in the circumstances of the person with the claim first ought to have known of the matters referred to in clause (a).
[17] Section 5(2) of the LA2002 reads as follows:
Presumption
5(2) A person with a claim shall be presumed to have known of the matters referred to in clause (1)(a) on the day the act or omission on which the claim is based took place, unless the contrary is proved. Motion Judge's Reasons
[18] The motion judge applied the plain language of s. 6(1) of the FLA, which allows derivative claimants to sue in tort only if the principal claimant "is entitled to recover damages".
[19] He recognized that, because each derivative claim was dependent in this way on the plaintiff's principal claim, it could not succeed if the principal claim had become statute- barred and the plaintiff had thereby lost her right to establish the necessary prerequisite of "entitled to recover damages".
[20] However, in this case the plaintiff had commenced her action for her principal claim before the expiry of the applicable limitation period and it was still open to her to establish, at trial, her own entitlement to damages.
[21] Having made this finding, the motion judge went on to decide that each derivative claimant was entitled to be added as a plaintiff and to have his or her respective claim determined at trial on its merits.
[22] As well, after concluding that all of the derivative claimants had satisfied the burden of providing "an evidentiary basis that is sufficient to raise the issue of the delayed discoverability [page154] of the family law claims", he directed that any limitations issue be left to be determined by the trial judge.
[23] This analysis is succinctly set out in paras. 17-19, inclusive, of the motion judge's decision, which read as follows:
To the extent that Family Law Act claims are derivative in nature, they are based on the entitlement of the principal plaintiff to maintain an action in respect of injuries sustained. Once the threshold of entitlement is met, the Family Law Act claim can proceed, whether or not the principal plaintiff has pursued a claim. Though, practically speaking, Family Law Act claims are generally pursued as part of the principal tort action, there is no statutory requirement that this be done.
Further, it is well-established that if the principal action is statute-barred because of the expiry of a limitation period, the associated Family Law Act claims are also statute-barred given that they are derivative claims: see Camarata v. Morgan (2009), 2009 ONCA 38, 94 O.R. (3d) 496 (C.A.); Smith Estate v. College of Physicians & Surgeons (Ontario), 41 O.R. (3d) (C.A.); Von Cramm Estate v. Riverside Hospital of Ottawa (1986), 1986 2584 (ON CA), 56 O.R. (2d) 700 (C.A.); Macksoud v. Carroll, 2011 ONCA 108.
This type of situation is distinguishable from the present one. Here, the principal action was brought within the two year period set out in the Limitations Act, 2002. The principal plaintiff has met the statutory requirement in order to be entitled to recover damages. Section 61 of the Family Law Act is triggered and family members have a cause of action, derivative of the principal plaintiff's entitlement. Despite this, the question remains whether the Family Law Act claimants can, in these circumstances, rely on the discoverability provisions of the Limitations Act, 2002, to now advance claims. My Analysis
[24] My analysis of the issues in this appeal rests largely on the relevant statutory provisions.
[25] The Concise Oxford Dictionary defines "derivative" as an adjective that describes "something derived from another source".
[26] The most common, or perhaps only, example of a true derivative action can be found in statutory sources such as s. 246(1) of the Business Corporations Act, R.S.O. 1990, c. B.16, which is headed "Derivative actions". These actions may be brought, with leave, by certain persons on behalf of and in the name of a corporation "for the purpose of prosecuting, defending or discontinuing the action on behalf of the body corporate". Persons bringing such actions have no greater rights than the corporation would have had if it had brought a similar action by itself.
[27] Although it is customary to describe actions brought by family members pursuant to s. 61(1) as "derivative" actions"derivative" is not found anywhere in the FLA. As well, derivative claimants bring such an action for their own benefit and not for the benefit of the principal claimant. However, because [page155] such actions are dependent on a successful outcome to the claim made by the principal claimant, the actions are related and that may be why such actions are, perhaps incorrectly, referred to as "derivative".
[28] There are no rights or obligations that are inherent in derivative actions. Rather, the specific rights and obligations for each type must be those conferred by the legislation by which it was created and other statutes that may also apply to it.
[29] Of special significance to this case, there is nothing in the language used in the FLA or the LA2002 that states, explicitly or by implication, that the limitation period applicable to each derivative claim must be the same as the limitation period applicable to the principal claim. If it had been the intention of the legislature to impose this requirement, one would expect to find some expression of that intention somewhere in the legislation. It is a requirement that rests entirely on judicial pronouncements which we are bound to respect.
[30] The FLA provides that persons who fall within the class of family members described in s. 61(1) "are entitled to recover their pecuniary loss resulting from the injury or death from the person from whom the person injured or killed is entitled to recover . . . and to maintain an action for the purpose in a court of competent jurisdiction" (emphasis added).
[31] This entitlement exists only "If a person is injured or killed by the fault or neglect of another under circumstances where the person is entitled to recover damages, or would have been entitled if not killed" (emphasis added). It is this prerequisite that renders the family members' claims dependent on the principal claimant's entitlement. If it turns out that the principal claimant is not entitled to recover damages, the family members are not entitled to recover or even maintain an action.
[32] I observe, tangentially, that if there is no right to "maintain an action" until entitlement is established by the person injured or representing the person killed, the cause of action may not accrue until then and the applicable limitation period cannot start running until then.
[33] In practice, however, it is sufficient if the principal claimant commences his or her action before the expiration of the applicable limitation period and then establishes entitlement at trial. It seems that derivative claimants need not wait until the principal claimant's entitlement is established at trial before commencing their own actions. Indeed, if a derivative claimant were to do so, the action might become statute-barred even before the principal claimant's trial is held. [page156]
[34] As well, if the principal claimant delays the commencement of his or her action and the action becomes statute-barred, the opportunity for the principal claimant to prove entitlement to recover damages is lost forever. And, if the principal claimant no longer has an opportunity to establish entitlement, the derivative claim, on the present state of the law, also becomes statute-barred through no fault of the derivative claimant. It is only in this limited way that the limitation period applicable to the principal claim controls the derivative claims. The derivative claims, which have their own applicable limitation periods, may not, technically, be statute-barred but cannot succeed if the principal claimant's claim becomes statute-barred before he or she can establish his or her own entitlement.
[35] Under the predecessor legislation, the Family Law Reform Act, R.S.O. 1980, c. 152 (the "FLRA"), which was enacted in 1978, the principal plaintiff was required to name in the statement of claim all family members who were entitled to maintain a derivative action and, by doing so, those persons automatically became parties to the action. The principal plaintiff was also required to file, with the statement of claim, an affidavit stating that, to the best of his or her knowledge, information and belief, the persons named were the only persons who were entitled or claim to be entitled to damages.
[36] These provisions were not carried forward into the FLA, which replaced the FLRA in 1986, and family members who now wish to assert a derivative claim may do so by being added to the principal plaintiff's action as plaintiffs or by commencing separate actions. In this case, it was the principal plaintiff who sought and obtained an order adding the derivative claimants as plaintiffs in the action rather than the derivative claimants themselves.
[37] The LA2002 is relatively new legislation that came into force in 2002. One of its purposes was to update the law of limitations in Ontario by replacing the various limitation periods in numerous statutes by a uniform limitation period applicable to all proceedings except those expressly excluded by the Act. This proceeding is not of a type that was excluded. The uniform limitation period established was a two-year "basic limitation period" that could be extended in accordance with the provisions of the Act relating to discoverability.
[38] Sections 4 and 5 of the LA2002 contain the codification of the principle of discoverability and, by providing a formula for determining when a claim is discovered and a limitation starts running, on a case-by-case basis, they reflect the intention of the legislature that limitation periods be applied in accordance with [page157] the circumstances of each claim. With only few exceptions, there are no longer fixed limitation periods in Ontario that cannot be extended, case by case, to achieve a just result.
[39] It would, therefore, be inconsistent with the language of the LA2002 to impose, on each derivative FLA claimant, the same limitation period that is applicable to the related principal claim and it would be unjust to deprive a derivative claimant of his or her right to have the running of the basic limitation delayed in proper circumstances as the LA2002 provides.
[40] As well, if the limitation period applicable to a principal claim had to be applied blindly to each derivative claim, without exception, it would follow that, if the principal claimant were to be entitled to have the running of his or her limitation delayed on the basis of discoverability, the derivative claimants would also become entitled to the same delay without any apparent reason or justification in principle. The application of the presumption against absurdity on the part of the legislature would, hopefully, lead to the conclusion that the legislation should not be interpreted or applied to produce such a result.
[41] I conclude, therefore, that there is nothing in the FLA or the LA2002, or in principle, that requires that the limitation period applicable to each derivative claim be the same as the limitation period that was applicable to the principal plaintiff's claim. Nor, as I will try to explain below, is there any binding judicial pronouncement that requires that result. Each derivative claimant in this case was entitled to maintain a separate action, subject to the Rules [Rules of Civil Procedure, R.R.O. 1990, Reg. 194] that apply to multiple proceedings, and was entitled to rely fully on the discoverability provisions of the LA2002 to seek a delay in the running of his or her applicable limitation period. The fact that the derivative claimants have apparently sought to assert their respective claims in the same action as the plaintiff should not affect any of their rights
[42] I therefore see no error on the part of the motion judge in making the order in appeal even on the basis of the somewhat meagre evidence tendered in support. Nor do I see any error on his part in directing that the determination of any limitations defence that might be raised be left to the trial judge.
[43] Although some of the views that I have expressed in these reasons may not have been judicially considered before, they take into account the changes in the law that have taken place as a result of the enactment of the FLA and the LA2002. As well, the outcome of this appeal is consistent with all of the judicial authorities that have come to our attention by which we are bound. [page158] Judicial Authorities
[44] I need turn to only a few of the cases cited by counsel for the defendant in support of this appeal. It is my view that all of them fully support the basic principles described by the motion judge in paras. 17, 18 and 19 of his decision, set out in para. 23, above, and applied by him. Those principles establish only that if a principal claimant's claim becomes statute-barred, the related derivative claims are also statute- barred.
[45] The cases cited deal mainly with which limitation periods apply and when they start to run in certain given situations. They do not support the proposition that there is any principle of law that requires that derivative claims be limited in any way if the principal claimant, as in this case, commences an action to pursue his or her claim before the applicable limitation expires. That is what this case is about.
[46] I will, therefore, refer only to some of the cases on which counsel for the defendant relies. The leading case is Smith Estate v. College of Physicians and Surgeons of Ontario (1998), 1998 1523 (ON CA), 41 O.R. (3d) 481, [1998] O.J. No. 4367 (C.A.), a decision of the Ontario Court of Appeal. The reasons for judgment of the court, written by Justice Charron, contain a detailed analysis of many of the other authorities relied on by the defendant.
[47] Smith Estate involved an action that included a principal claim for damages for wrongful death made on behalf of the estate of a doctor who had died as a result of suicide following his suspension by his licensing authority and derivative claims made by members of his family. The issue that has some relevance to this appeal is summarized, in para. 42 of the reasons, as follows:
Dr. Smith's right of action arose on December 2, 1992 at the time that he was suspended by the College. The limitation period which applied to any right of action which he may have had was six years. By reason of his death on December 21, 1992, this limitation period was truncated to two years from his death. The action, which included both the principal action and the FLA claims, was not commenced until April 28, 1995, more than two years after his death. The principal action was therefore statute-barred at that time. In accordance with Murphy v Welsh and decisions of this court on this issue, the FLA claims brought by either the widow of the deceased or his children are also statute-barred, regardless of the provisions of s. 47 of the Limitations Act or s. 2(8) of the FLA.
[48] In para. 12 of her reasons, Justice Charron set out, as follows, a concession that had been made by counsel for the plaintiffs and how it narrowed the issue before the court:
It is conceded in the factum that, on a plain reading of s. 61(1) of the FLA, if the statutory limitation period has expired for the principal right of action [page159] and no principal action has been commenced, the derivative claims also expire notwithstanding the provisions of s. 2(8) of the FLA and notwithstanding s. 47 of the Limitations Act. Counsel then went on to argue that the applicable limitation period pursuant to the Trustee Act, R.S.O. 1990, c. T.23 had not expired but that argument was rejected.
[49] Justice Charron continued, at para. 13 of her reasons, with a discussion of what she referred to as the "first question", namely"In any given case, if the principal cause of action is statute-barred, are the FLA claims also barred?", and answered it as follows [at para. 17]:
It is my view that the authorities relied upon by the defendants are authoritative on the first question and that it must be answered affirmatively. Despite the attractiveness of the analysis contained in Toner, the motions judge was bound to follow earlier decisions of this court as well as the Supreme Court of Canada decision in Murphy v Welsh and to conclude the FLA claims are barred by the expiration of the limitation period governing the principal action. For reasons that follow, I do not think that these authorities can be distinguished on the basis that they were decided under the FLRA. Nor do I think that it matters on this issue that the FLA claims are founded on the wrongful death of a family member as opposed to injury.
[50] She continued further, at para. 38, as follows:
For these reasons, I conclude that the motions judge erred in finding that the FLA claims stood "on their own merits" for the purpose of determining the limitation period. He was bound by established authority to conclude that they followed the principal action. No basis for departing from established authority has been advanced on this appeal. The issue then becomes what limitation period governs the principal action in this case.
[51] Smith Estate was followed by another judgment of the Ontario Court of Appeal in Camarata v. Morgan (2009), 94 O.R. (3d) 496, [2009] O.J. No. 621, 2009 ONCA 38, on which the defendant also relies.
[52] The primary issue in Camarata was the determination of the correct applicable limitation period for a claim made by the estate of a person killed in a motor vehicle accident. The court determined what the period was and, in consequence, held that the principal claim was statute-barred. It then went on, in para. 9, to address the derivative claims under s. 61(1) of the FLA as follows:
The claims brought by the dependants of the deceased under s. 61 of the Family Law Act, R.S.O. 1990, c. F.3 are in no better position than the claim brought by the estate. Claims under s. 61 of the Family Law Act are derivative. The limitation period governing the principal action, that is the claim brought by the trustee, also governs the claims made under s. 61: Smith Estate v College of Physicians and Surgeons (Ontario) (1998) 1998 1523 (ON CA), 41 O.R. (3d) 481 (Ont. C.A.) [page160]
[53] Macksoud (Litigation Guardian of) v. Carroll (2011), 104 O.R. (3d) 700, [2011] O.J. No. 623, 2011 ONCA 108 is another judgment of the Ontario Court of Appeal cited by counsel for the defendant. It addressed issues similar to those that had been considered in Smith Estate and in Camarata relating to the limitation period applicable to the primary claim.
[54] Two cases cited by counsel for the plaintiff tend to support the order in appeal but on grounds somewhat different from those argued in this appeal. They are Chedour v. Newmarket (Town) (1988), 1988 4800 (ON SC), 63 O.R. (2d) 680, [1988] O.J. No. 74 (Div. Ct.) and Lidder v. Amyotte, [2006] O.J. No. 5247, 2006 43493 (S.C.J.). Conclusion
[55] I am satisfied that the motion judge applied the law correctly in accordance with the applicable statutory provisions and the applicable judicial authorities. As well, I am satisfied that his direction that the issue of discoverability should be left to the trial judge was supported by the evidence and did not reflect any palpable and overriding error. It follows that the order in appeal, in all respects, meets the applicable standards of review and should be upheld. Costs
[56] At the conclusion of the hearing of this appeal, counsel for both parties agreed that costs should follow the event of this appeal. Counsel may now make written submissions with respect to quantum by exchanging them and filing three copies at the office of this court at Sudbury within one month of the date of the release of these reasons, failing which we will fix the quantum in our discretion.
Appeal dismissed.