Levesque et al. v. The Estate of Father Crampton et al.

[Indexed as: Levesque v. Crampton Estate]

Ontario Reports

Court of Appeal for Ontario

Strathy C.J.O., Gillese and Pardu JJ.A.

June 5, 2017

136 O.R. (3d) 161 | 2017 ONCA 455

Case Summary

Limitations — Cross-claims — Plaintiff suing estate of deceased priest and Roman Catholic Episcopal Corporation for damages arising from sexual assault by priest — Corporation cross-claiming against estate for contribution and indemnity — Motion judge erring in finding that s. 18 of Limitations Act applied to cross-claim and that two-year limitation period ran from service of plaintiff's claim on corporation — Section 38(3) of Trustee Act applying to cross-claim — Two-year limitation period running from death of priest — Limitations Act, 2002, S.O. 2002, c. 24, Sch. B, s. 18 — Trustee Act, R.S.O. 1990, c. T.23, s. 38(3).

The plaintiffs sued the estate of a deceased priest and the Roman Catholic Episcopal Corporation for damages arising from a sexual assault by the priest. The priest died in 2010, and the action was commenced in 2013. The corporation cross-claimed against the estate in 2014. In 2015, the plaintiffs consented to an order dismissing their claim against the estate because it was barred by the two-year limitation period in s. 38(3) of the Trustee Act, which starts to run from the date of the wrongdoer's death. The estate brought a motion to dismiss the cross-claim, relying on s. 38(3). The motion judge held that s. 18 of the Limitations Act, 2002 applied to the cross-claim, so that the two-year limitation period started to run when the corporation was served with the plaintiffs' claim. The motion was dismissed. The estate appealed.

Held, the appeal should be allowed.

A cross-claim is an "action" for the purposes of s. 38 of the Trustee Act. The Trustee Act applied to the cross-claim. The limitation period in the Limitations Act, 2002 was also plainly applicable to the cross-claim by the combined operation of ss. 4, 5 and 18(1). There was no merit to the estate's submission that s. 18(1) applies to claims against a joint tortfeasor, but not to claims against the joint tortfeasor's estate. By the terms of s. 19(4) of the Limitations Act, 2002, limitations provisions set out in the Schedule prevail over the provisions of the Limitations Act, 2002. As s. 38(3) of the Trustee Act is set out in the Schedule, it prevailed. The legislative history of the Limitations Act, 2002 reflects a concern about the Trustee Act limitation period and no less than five recommendations or legislative initiatives to abolish it. The fact that it was expressly retained in the Schedule reflects a clear policy choice in favour of certainty and finality in estate matters after a fixed period of two years. The cross-claim was statute-barred.

Cases Referred To

Canaccord Capital Corp. v. Roscoe (2013), 115 O.R. (3d) 641, 2013 ONCA 378; Waterloo Region District School Board v. CRD Construction Ltd. (2010), 103 O.R. (3d) 81, 2010 ONCA 838, distd

Other Cases Referred To

Bikur Cholim Jewish Volunteer Services v. Penna Estate (2009), 94 O.R. (3d) 401, 2009 ONCA 196; Giroux Estate v. Trillium Health Centre (2005), 74 O.R. (3d) 341; Independence Plaza 1 Associates, L.L.C. v. Figliolini (2017), 136 O.R. (3d) 202, 2017 ONCA 44; Manitoba Metis Federation Inc. v. Canada (Attorney General), [2013] 1 S.C.R. 623, 2013 SCC 14; R. v. C. (D.), [1987] O.J. No. 666; Waschkowski v. Hopkinson Estate (2000), 47 O.R. (3d) 370

Statutes Referred To

Limitations Act, 2002, S.O. 2002, c. 24, Sch. B, ss. 4, 5, 18(1), 19(1), (4), Schedule

Negligence Act, R.S.O. 1990, c. N.1, ss. 1, 2

Trustee Act, R.S.O. 1990, c. T.23, s. 38(2), (3)

Rules and Regulations Referred To

Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rule 1.03(1)

Authorities Referred To

Ontario Law Reform Commission, Report on Limitation of Actions (Toronto: Department of the Attorney General, 1969)

Discussion Paper on Proposed Limitations Act (Toronto: Ontario Ministry of the Attorney General, 1977)

Consultation Group on the Limitations Act, A Consultation Draft of the General Limitations Act (Toronto: Ministry of the Attorney General, 1991)

Appeal

APPEAL from the order of M.S. James J. (2016), 134 O.R. (3d) 636, 2016 ONSC 6809 (S.C.J.) dismissing a motion to dismiss a cross-claim.

Matthew Sammon, for appellant.

Heather Williams, for respondent.

The judgment of the court was delivered by

Judgment

STRATHY C.J.O.:

[1] Introduction

[1] This appeal requires the court to determine the limitation period applicable to a cross-claim brought by one joint tortfeasor against the estate of the other.

[2] Section 38(3) of the Trustee Act, R.S.O. 1990, c. T.23 contains a two-year limitation period, running from the date of death of the wrongdoer, for an action against an executor or administrator for a wrong committed by the deceased.

[3] Section 18 of the Limitations Act, 2002, S.O. 2002, c. 24, Sch. B addresses the commencement of the limitation period applicable to a claim for contribution and indemnity between joint tortfeasors. It provides that a claim for contribution and indemnity is "discovered" and, therefore, the limitation period begins to run on the day on which the wrongdoer seeking indemnity is served with the plaintiff's claim.

[4] When one joint tortfeasor has died and the other makes a cross-claim for indemnity against his or her estate, which limitation period applies? If, as in this case, the cross-claim is made more than two years after the death of the first tortfeasor, is the second tortfeasor's claim for contribution and indemnity barred by the Trustee Act, even though it is made within two years of being served with the plaintiff's claim? Can the claim for indemnity against the estate be time-barred even before the surviving tortfeasor is sued?

[5] The motion judge found that s. 18 of the Limitations Act, 2002 applied and dismissed a summary judgment motion asserting that the cross-claim was time-barred by virtue of s. 38(3) of the Trustee Act.

[6] For the reasons that follow, I would allow the estate's appeal. The limitation period under s. 38(3) of the Trustee Act applies. The limitation period applicable to the cross-claim expires two years after the date of death of the tortfeasor from whom contribution or indemnity is sought.

A. Facts

[7] The plaintiff Raymond Levesque, Jr., alleges he was sexually assaulted by a priest, Father Dale Crampton ("Father Crampton"), in 1976. Mr. Levesque was 12 years old at the time. Father Crampton pleaded guilty to indecent assault and, on appeal to this court, was sentenced to eight months' imprisonment: R. v. C. (D.), [1987] O.J. No. 666.

[8] Father Crampton died in 2010. In 2013, Mr. Levesque and his family brought this action against Father Crampton's estate and the Roman Catholic Episcopal Corporation of Ottawa ("RCECO"), claiming that RCECO was vicariously liable for the priest's conduct and breached independent duties owed to Mr. Levesque.

[9] In 2014, RCECO issued a statement of defence and cross-claim against Father Crampton's estate, relying on the allegations of wrongdoing against Father Crampton in the statement of claim.

[10] In 2015, the plaintiffs consented to an order dismissing their claim against the estate because it was barred by the two-year limitation period in s. 38(3) of the Trustee Act.

[11] The estate brought a motion to dismiss the cross-claim, relying on s. 38(3) of the Trustee Act. For reasons I will summarize below, the motion judge dismissed the motion. First, however, I will set out the relevant legislation.

B. Legislation

[12] This appeal involves the intersection of three statutes -- the Negligence Act, R.S.O. 1990, c. N.1, the Limitations Act, 2002 and the Trustee Act. A more detailed examination of the statutory provisions and their purposes is a necessary starting place for what follows.

(1) The Negligence Act

[13] Section 1 of the Negligence Act creates joint and several liability and a right of contribution and indemnity between joint tortfeasors. A claim for contribution and indemnity is typically asserted by way of cross-claim. However, the right to contribution and indemnity exists whether or not the plaintiff has sued the other tortfeasor(s). Section 2 contains a mechanism for asserting the right. Section 1 provides:

1. Where damages have been caused or contributed to by the fault or neglect of two or more persons, the court shall determine the degree in which each of such persons is at fault or negligent, and, where two or more persons are found at fault or negligent, they are jointly and severally liable to the person suffering loss or damage for such fault or negligence, but as between themselves, in the absence of any contract express or implied, each is liable to make contribution and indemnify each other in the degree in which they are respectively found to be at fault or negligent.

[14] As Feldman J.A. observed in Waterloo Region District School Board v. CRD Construction Ltd. (2010), 103 O.R. (3d) 81, 2010 ONCA 838, at para. 10, the purpose of contribution and indemnity

. . . is to provide a mechanism to ensure that all those who caused or contributed to the plaintiff's loss or damage should share the financial responsibility for that loss. Therefore, the basis of the claim is that each person who is held liable to the plaintiff for all or part of the loss is also liable to contribute or is entitled to receive contribution proportionally to or from the other tortfeasors.

[15] In this case, RCECO asserted its claim for contribution and indemnity against the estate of Father Crampton by way of cross-claim.

(2) The Limitations Act, 2002

[16] Section 4 of the Limitations Act, 2002 establishes a basic two-year limitation period, running from the day on which the claim is discovered. Section 5 sets out rules for determining when a claim is discovered. Section 18, which is particularly germane to this case, deals with claims for contribution and indemnity:

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.

[17] Thus, the general two-year limitation period runs from the date that the party claiming contribution and indemnity is served with the claim in respect of which contribution is sought.

[18] In Canaccord Capital Corp. v. Roscoe (2013), 115 O.R. (3d) 641, 2013 ONCA 378, at para. 17, Sharpe J.A. observed that "s. 18 was part of a fundamental and comprehensive reform of the law of limitations in Ontario aimed at creating a clear and cohesive scheme for addressing limitation issues, one that balances the plaintiff's right to sue with the defendant's need for certainty and finality".

[19] Section 19(1) of the Limitations Act, 2002 provides that a limitation period set out in or under another Act that applies to a claim to which the Limitations Act, 2002 applies is of no effect unless the provision establishing it is set out in the Schedule to the Limitations Act, 2002. Subsection 19(4) provides that if there is a conflict between a provision in the other statute and the limitation period established by the Limitations Act, 2002, the limitation period established by the other statute prevails.

[20] Section 38(3) of the Trustee Act is set out in the Schedule to the Limitations Act, 2002. It, therefore, prevails over a limitation period set out in the Limitations Act, 2002 in the event of a conflict.

(3) The Trustee Act

[21] Section 38 of the Trustee Act provides:

38(1) Except in cases of libel and slander, the executor or administrator of any deceased person may maintain an action for all torts or injuries to the person or to the property of the deceased in the same manner and with the same rights and remedies as the deceased would, if living, have been entitled to do, and the damages when recovered shall form part of the personal estate of the deceased; but, if death results from such injuries, no damages shall be allowed for the death or for the loss of the expectation of life, but this proviso is not in derogation of any rights conferred by Part V of the Family Law Act.

(2) Except in cases of libel and slander, if a deceased person committed or is by law liable for a wrong to another in respect of his or her person or to another person's property, the person wronged may maintain an action against the executor or administrator of the person who committed or is by law liable for the wrong.

(3) An action under this section shall not be brought after the expiration of two years from the death of the deceased.

[22] Section 38 of the Trustee Act alters the common law. The common law rule was that no action in negligence could be brought on behalf of or against a deceased person: see Waschkowski v. Hopkinson Estate (2000), 47 O.R. (3d) 370, at para. 2. This rule was amended by statute in many jurisdictions, including Ontario, which did so in 1886. Section 38 is the successor to that legislation.

[23] In Waschkowski, the purpose of the legislation was described as follows, at paras. 8-9:

In s. 38(3) of the Trustee Act, the limitation period runs from a death. Unlike cases where the wording of the limitation period permits the time to run, for example, from "when the damage was sustained" (Peixeiro) or when the cause of action arose (Kamloops), there is no temporal elasticity possible when the pivotal event is the date of a death. Regardless of when the injuries occurred or matured into an actionable wrong, s. 38(3) of the Trustee Act prevents their transformation into a legal claim unless that claim is brought within two years of the death of the wrongdoer or the person wronged.

The underlying policy considerations of this clear time limit are not difficult to understand. The draconian legal impact of the common law was that death terminated any possible redress for negligent conduct. On the other hand, there was a benefit to disposing of estate matters with finality. The legislative compromise in s. 38 of the Trustee Act was to open a two-year window, making access to a remedy available for a limited time without creating indefinite fiscal vulnerability for an estate.

C. The Motion Judge's Decision

[24] In the court below, the Crampton estate contended that the cross-claim failed for the same reason the plaintiffs' action against the estate was dismissed -- the operation of s. 38(3) of the Trustee Act. RCECO, on the other hand, argued that the applicable limitation period was s. 18 of the Limitations Act, 2002, which applies to cross-claims. It argued that any other result would lead to an injustice because the right to make a cross-claim could expire even before the defendant had been sued.

[25] The motion judge noted that he was faced with two competing policy objectives, but held that he was bound by the decision of this court in Waterloo. In that case, a five-member panel of this court held that defendants could bring a claim for contribution and indemnity against another defendant in circumstances in which the plaintiff's right of action against that defendant was time-barred.

[26] The motion judge found there was no conflict between the two limitation provisions, but if there was, he preferred the analysis of this court in Waterloo and in Canaccord.

[27] The motion judge concluded that s. 18 of the Limitations Act, 2002 trumped the Trustee Act, and the fact that s. 38(3) of the Trustee Act is included in the Schedule to the Limitations Act, 2002 did not affect this conclusion.

D. Issue

[28] Although the parties express it differently, the issue on this appeal is whether the motion judge correctly found that the respondent's cross-claim against the Crampton estate was not time-barred by s. 38(3) of the Trustee Act.

E. The Parties' Submissions

[29] The appellant's submission is that RCECO's cross-claim is an "action", pursuant to rule 1.03(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, and that it is barred by s. 38(3) of the Trustee Act. Since the provision is mentioned in the Schedule to the Limitations Act, 2002, it prevails over the two-year limitation period in s. 18(1) of the Limitations Act, 2002.

[30] The appellant submits that this is consistent with the policy goal of the legislation and its interpretation. The policy goal of s. 38(3) is finality in respect of claims against estates. The decision in this case would expose executors and administrators to open-ended claims, impeding their ability to wind up an estate, and undermine the purpose of the legislation.

[31] The appellant also submits that as a matter of statutory interpretation, s. 18(1) of the Limitations Act, 2002 is inapplicable because the claim is not by one wrongdoer against another, but rather a claim by one wrongdoer against the estate of the other. The estate is not a "wrongdoer".

[32] The appellant did not pursue its submission that the cross-claim is a derivative claim and is statute-barred because the main claim is time-barred as against the estate. This court rejected a similar proposition in Waterloo.

[33] The respondent, on the other hand, says that the applicable limitation period is found in the Limitations Act, 2002. It says that s. 38(2) of the Trustee Act does not apply, because it contemplates that the "person wronged" -- i.e., the plaintiff -- can bring an action against the estate. It does not address a cross-claim.

F. Analysis

(1) The application of the statutes

[34] I turn to the question of whether only one statutory limitation period applies or whether both apply, creating a conflict. In the latter event, it becomes necessary to resolve the conflict.

a) The Trustee Act

[35] I will first consider whether the Trustee Act applies to the cross-claim against the estate of Father Crampton, as the appellant asserts.

[36] I agree with the appellant's submission that a cross-claim is an "action" and, therefore, falls within s. 38 of the Trustee Act. As the appellant notes, a cross-claim is defined as an "action" by rule 1.03(1) of the Rules of Civil Procedure. Absent the Trustee Act, there would be no mechanism for a claim for contribution and indemnity to be brought against an estate. Treating a cross-claim as an action promotes the purpose of the legislation, namely, to amend the common law rule that a cause of action died with the tortfeasor.

[37] The respondent argues that s. 38(3) of the Trustee Act has no application to a claim for contribution and indemnity against the estate of a deceased person. It relies on the wording of s. 38(2), which provides, in summary, that if a deceased person has committed a wrong to another person, "the person wronged" may maintain an action against the executor or administrator of the deceased person. The respondent says that "the person wronged" refers to the plaintiff in the action, not to one joint tortfeasor who seeks contribution and indemnity from another. Contribution and indemnity, it says, is a right conferred by the Negligence Act, with its own limitation period under s. 18(1) of the Limitations Act, 2002.

[38] In my view, this submission fails for the reason set out earlier. There was no right at common law to sue the estate of a deceased person. That right is conferred by the Trustee Act. A claim for contribution and indemnity against a deceased person can only be made pursuant to the Trustee Act. Since the purpose of s. 38 of the Trustee Act is to enable claims to be brought against estates, it is reasonable to treat a person seeking contribution and indemnity as a "person wronged". The wrong suffered is having been required to pay more than the share of damages proportionate to the person's fault. Thus, I reject the respondent's submission that the Trustee Act limitation period has no application.

b) The Limitations Act, 2002

[39] In my view, the limitation period in the Limitations Act, 2002 is also plainly applicable to the cross-claim, by the combined operation of ss. 4, 5 and 18(1). By virtue of ss. 5 and 18(1), the claim for contribution and indemnity is discovered on the day the first alleged wrongdoer is served with the claim in respect of which contribution and indemnity is sought. Section 4 sets out the basic two-year limitation period from the date of discovery. There is no merit to the appellant's submission that s. 18(1) applies to claims against a joint tortfeasor, but not to claims against the joint tortfeasor's estate. The estate stands in the place of the deceased.

(2) Resolving the conflict -- Does the Trustee Act trump the Limitations Act, 2002?

[40] As both limitation periods apply, it is necessary to resolve the conflict.

[41] Relying on Waterloo and Canaccord, the motion judge found [at para. 14] that s. 18(1) of the Limitations Act, 2002 "trumps other limitation periods that arguably apply".

[42] In my respectful view, the motion judge erred in concluding that this court's decision in Waterloo was dispositive. In Waterloo, a severe storm blew down the walls of a new school gymnasium. The plaintiff sued various parties involved in the construction of the gymnasium, including the architects, construction company and engineering firm. Several of the defendants brought cross-claims seeking indemnification from the engineering firm. The plaintiff's claim against the engineering firm was statute-barred.

[43] This court rejected the argument that because a plaintiff's claim against a defendant is statute-barred, the cross-claims of the other defendants against that defendant are also statute-barred. To that extent, Waterloo supports the motion judge's decision.

[44] But in Waterloo, unlike this case, the limitation period applicable to the cross-claim was the "basic" two-year limitation period, subject to the deemed discovery rule in s. 18 of the Limitations Act, 2002. There was no potential conflict between that limitation period and another one, such as s. 38(3) of the Trustee Act. This distinguishes Waterloo.

[45] It also distinguishes Canaccord. Canaccord involved an indemnification agreement in an employment contract. This agreement required the employee to indemnify Canaccord for any claims made against Canaccord arising out of the employee's acts or omissions. Canaccord settled a claim against it and the employee. Canaccord then requested indemnification pursuant to the employment agreement, but the employee resisted the claim for indemnification. Nearly three years after the delivery of the statement of claim, Canaccord brought an action against the employee claiming damages for breach of contract. The issue before the court was whether the limitation period in s. 18 applied to this type of claim. This court concluded that it did.

[46] Neither case is authority for the proposition that s. 18 trumps other limitation periods. In Waterloo and Canaccord, there was no conflicting limitation period that applied to the claims for contribution and indemnity. Such a conflict exists here.

[47] By the terms of s. 19(4) of the Limitations Act, 2002, limitations provisions set out in the Schedule prevail over the provisions of the Limitations Act, 2002. As s. 38(3) of the Trustee Act is set out in the Schedule, it must prevail if it applies.

[48] This court reached the same conclusion in Bikur Cholim Jewish Volunteer Services v. Penna Estate (2009), 94 O.R. (3d) 401, 2009 ONCA 196, at para. 26:

In these circumstances, s. 19(4) is clear. If there is a conflict between a limitation period established by a provision referred to in s. 19(1), such as s. 38(3), and a limitation period established by any other provision of the Limitations Act, 2002, the limitation period established by a provision such as s. 38(3) prevails.

[49] The motion judge distinguished Bikur Cholim on the basis that it did not involve a claim for contribution and indemnity. While this is true, nothing about the court's holding depended on whether the claim was for contribution and indemnity or something else. The question was the interaction between a limitation period established by a provision of the Limitations Act, 2002 (which would include s. 18) and a limitation period set out in the Schedule to the Limitations Act, 2002.

[50] Further, the result reached in Bikur Cholim is consistent with the nature, purpose and history of the Trustee Act provision.

[51] The Limitations Act, 2002 is based on discoverability. Section 18(1) deems the claim to be discovered on the date the claim is served on the person who seeks contribution or indemnity. In contrast, s. 38(3) of the Trustee Act is a "hard" or absolute limitation period. It is triggered by a fixed and known event -- the death of the party against whom a claim is made.

[52] The purpose of the Trustee Act limitation period is clear. It is to provide a remedy for a limited time, without indefinite fiscal vulnerability to the estate: Waschkowski, at para. 9.

[53] As this court observed in Independence Plaza 1 Associates, L.L.C. v. Figliolini (2017), 136 O.R. (3d) 202, 2017 ONCA 44, limitations statutes reflect public policy about efficiency and fairness in the justice system. See Manitoba Metis Federation Inc. v. Canada (Attorney General), [2013] 1 S.C.R. 623, 2013 SCC 14, at paras. 231-34 (per Rothstein J. in dissent, but not on this point). They have several goals. They promote finality and certainty in legal affairs by ensuring that potential defendants are not exposed to indefinite liability for past acts. They reflect a policy that, after a reasonable time, people should be entitled to put their pasts behind them and should not be troubled by the possibility of "stale" claims emerging from the woodwork. They ensure the reliability of evidence. And they promote diligence, because they encourage litigants to pursue claims with reasonable dispatch.

[54] As Sharpe J.A. noted in Canaccord, at para. 24, the purpose of the Limitations Act, 2002 is to "balance the plaintiff's right to sue with the defendant's need for certainty and finality".

[55] The legislative history of the Limitations Act, 2002, dating back to 1969, reflects a concern about the Trustee Act limitation period and no less than five recommendations or legislative initiatives to abolish it. The fact that it was expressly retained in the Schedule reflects a clear policy choice in favour of certainty and finality in estate matters after a fixed period of two years.

[56] As this court noted in Bikur Cholim, at para. 25, the result of the application of the strict rule in the Trustee Act can sometimes be harsh. In this case, its application results in a claim being time-barred before it is discovered. In Bikur Cholim, the court noted that the statute's harshness may, in some circumstances, be mitigated by common law rules. That was the case, for example, in Giroux Estate v. Trillium Health Centre (2005), 74 O.R. (3d) 341, where the common law doctrine of fraudulent concealment applied. No such remedy is available here.

G. Disposition

[57] For these reasons, I would allow the appeal with costs to the appellant fixed at $6,000, inclusive of disbursements and all applicable taxes. If the parties are unable to resolve the disposition of costs in the court below, they may make written submissions within 60 days of the release of these reasons.

Appeal Allowed

Notes

1 Ontario Law Reform Commission, Report on Limitation of Actions (Toronto: Department of the Attorney General, 1969); Discussion Paper on Proposed Limitations Act (Toronto: Ontario Ministry of the Attorney General, 1977); Bill 160, An Act to revise the Limitations Act, 3rd Sess., 32nd Leg., Ontario, 1983; Consultation Group on the Limitations Act, A Consultation Draft of the General Limitations Act (Toronto: Ministry of the Attorney General, 1991); and Bill 99, An Act to revise the Limitations Act, 2nd Sess., 35th Leg., Ontario, 1992.

End of Document