Charlebois et al. v. Les Entreprises Normand Ravary Limitee et al. [Indexed as: Charlebois v. Les Entreprises Normand Ravary Ltee]
79 O.R. (3d) 504
[2006] O.J. No. 1114
Docket: C44308
Court of Appeal for Ontario,
Labrosse, Sharpe and Cronk JJ.A.
March 24, 2006
Appeals -- Final or interlocutory order -- Order extending limitation period under s. 46 of Professional Engineers Act so as to bring commencement of action within limitation period constituting final order -- Order appealable to Court of Appeal as of right under s. 6(1)(b) of Courts of Justice Act -- Courts of Justice Act, R.S.O. 1990, c. C.43, s. 6(1)(b) -- Professional Engineers Act, R.S.O. 1990, c. P.28, s. 46.
Limitations -- Extension -- Engineers -- Motion judge dismissing defendants' motion for summary judgment dismissing action as statute-barred under s. 46(1) of Professional Engineers Act on basis that there was genuine issue for trial regarding timing of plaintiffs' knowledge of material facts giving rise to their claim -- Motion judge erring in then granting plaintiffs' motion for order extending limitation period under s. 46(2) of Act -- Question of when plaintiffs became aware of facts underlying their claim relevant on s. 46(2) motion -- Entire question of plaintiffs' knowledge of facts underlying their claim should have been left for determination at trial -- Professional Engineers Act, R.S.O. 1990, c. P.28, s. 46.
The plaintiffs brought an action against the defendant engineers in December 2002 for damages for professional negligence based on work performed in 1997. The defendants brought a motion for summary judgment on the ground that the action was statute-barred pursuant to the one-year limitation period then set out in s. 46(1) of the Professional Engineers Act. The plaintiffs brought a cross-motion for an order pursuant to s. 46(2) of the Act extending the limitation period. The motion judge dismissed the summary judgment motion, holding that a genuine issue for trial existed in relation to the plaintiffs' knowledge of the material facts giving rise to their claim, and granted the plaintiffs' motion, extending the limitation period under s. 46(1) so as to bring the commencement of the action within the limitation period. The defendants appealed the order extending the limitation period. [page505]
Held, the appeal should be allowed.
The effect of the challenged order, subject to reversal on appeal, was to finally dispose of the defendants' right to rely upon the one-year limitation period established by s. 46(1) of the Act. The order was therefore a final order, appealable to the Court of Appeal as of right under s. 6(1)(b) of the Courts of Justice Act.
In determining whether there are reasonable grounds to seek an extension of the limitation period prescribed by s. 46(1) of the Act, the court will consider several factors, including: (i) the length of the delay in the commencement of the proceedings; (ii) the reason for the delay; (iii) the extent to which the plaintiff acted properly and reasonably once it knew that the defendant's conduct might give rise to an action; (iv) any increase in the difficulty of proof occasioned by the passage of time; and (v) prejudice to the plaintiff should the requested extension be denied versus prejudice to the defendant should the extension be granted. Consequently, the issue of the plaintiff's knowledge of the facts giving rise to an action against the defendant, and the timing of the knowledge, are important considerations on a s. 46(2) motion for an extension of the limitation period prescribed by the Act. By holding on the summary judgment motion that there was a genuine issue for trial regarding the timing of the plaintiffs' actual or constructive knowledge of the material facts giving rise to their claim, the motion judge acknowledged that there was a serious dispute on this issue that could only be resolved at trial. Nevertheless, on the plaintiffs' s. 46(2) motion, the motion judge purported to resolve the key questions of when and how the plaintiffs became aware of facts sufficient to support a negligence claim against the defendants, thereby triggering the commencement of the limitation period. This was an error. The entire question of the plaintiffs' knowledge of the facts underlying their claim should have been left for determination at a trial of the action.
APPEAL from the order of Panet J., [2005] O.J. No. 4612, 47 C.L.R. (3d) 234 (S.C.J.) extending the limitation period.
Aurora (Town) v. Reid and Associates Ltd., [1991] O.J. No. 2265 (C.A.); Murphy v. Welsh, 1993 59 (SCC), [1993] 2 S.C.R. 1069, [1993] S.C.J. No. 83, 14 O.R. (3d) 799n, 106 D.L.R. (4th) 404, 156 N.R. 263, 18 C.C.L.T. (2d) 101, 18 C.P.C. (3d) 137, 47 M.V.R. (2d) 1, revg in part (1991), 1991 7253 (ON CA), 3 O.R. (3d) 182, [1991] O.J. No. 711, 81 D.L.R. (4th) 475, 4 C.P.C. (3d) 301, 30 M.V.R. (2d) 163 (C.A.), revg (1987), 1987 4070 (ON SC), 62 O.R. (2d) 159, 44 D.L.R. (4th) 192n, 31 C.P.C. (2d) 209 (Div. Ct.) (sub nom. Stoddard v. Watson), not folld Ball v. Donais (1993), 1993 8613 (ON CA), 13 O.R. (3d) 322, [1993] O.J. No. 972, 45 M.V.R. (2d) 319 (C.A.), apld Other cases referred to Manos Foods International Inc. v. Coca-Cola Ltd., 1999 3022 (ON CA), [1999] O.J. No. 3623, 180 D.L.R. (4th) 309, 40 C.P.C. (4th) 113, 2 C.P.R. (4th) 283 (C.A.); Middlesex Condominium Corp. No. 185 v. Caradon Developments Inc., [1995] O.J. No. 173, 19 C.L.R. (2d) 105, 53 A.C.W.S. (3d) 182 (Gen. Div.); Palladium Corp. v. P.C.L. Constructors Eastern Inc., [1999] O.J. No. 4280, 40 C.P.C. (4th) 317, 107 O.T.C. 151, 92 A.C.W.S. (3d) 687 (S.C.J.) Statutes referred to Courts of Justice Act, R.S.O. 1990, c. C.43, s. 6 [as am.] Highway Traffic Act, R.S.O. 1980, c. 198, s. 180 Limitations Act, R.S.O. 1980, c. 240, s. 47 Limitations Act, 2002, S.O. 2002, c. 24, Sch. B., s. 25 Professional Engineers Act, R.S.O 1980, c. 394, s. 28(2) Professional Engineers Act, R.S.O. 1990, c. P.28, s. 46 [rep.] [page506]
Todd J. Burke, for appellants. Heather L. Acton, for respondents.
The judgment of the court was delivered
CRONK J.A.:--
I. Introduction
[1] The appellant engineer and his firm were retained by the respondents in August 1997 to design a foundation for a house to be built by the respondents. The appellants designed a concrete floating slab foundation, and the necessary construction work was carried out in October 1997. Unfortunately, the following spring, cracks developed in two of the foundation walls of the house, leading to water problems in the basement of the house.
[2] After various investigations to determine the cause of the cracks, the respondents undertook repairs to the foundation walls and other remedial work. Subsequently, on December 12, 2002, they sued the appellants, claiming damages for professional negligence. The appellants defended the action, in part on the basis that it was statute-barred pursuant to the one-year limitation period then set out in s. 46(1) of the Professional Engineers Act, R.S.O. 1990, c. P.28 (the "Act") [See Note 1 at the end of the document].
[3] In June 2005, the appellants brought a motion for summary judgment based on their limitation period defence. In turn, the respondents brought a cross-motion in which they sought an order pursuant to s. 46(2) of the Act extending the one-year limitation period established by s. 46(1) of the Act.
[4] By order dated September 16, 2005, Panet J. of the Superior Court of Justice held that a genuine issue for trial existed in relation to the respondents' knowledge of the material facts giving rise to their claim against the appellants. Accordingly, he dismissed the summary judgment motion. However, he also allowed the respondents' cross-motion and granted an order extending the limitation period under s. 46(1) of the Act "to the extent that the action commenced by the [respondents] on December 12, 2002 be within the limitation period set out in [s.] 46 of the Act". [page507]
[5] The appellants appeal that part of the motion judge's order extending the limitation period. They do not appeal the dismissal of their summary judgment motion. For the reasons that follow, we conclude that the appeal must be allowed.
II. Discussion
(1) Preliminary issue: Status of motion judge's order
[6] As a preliminary jurisdictional matter, the respondents submit that the appeal should be quashed because the motion judge's order was interlocutory, rather than final, in nature. Relying particularly on Aurora (Town) v. Reid and Associates Ltd., [1991] O.J. No. 2265 (C.A.) and Murphy v. Welsh (1991), 1991 7253 (ON CA), 3 O.R. (3d) 182, [1991] O.J. No. 711 (C.A.), revd 1993 59 (SCC), [1993] 2 S.C.R. 1069, [1993] S.C.J. No. 83, the respondents argue that the motion judge's discretionary decision to extend the limitation period did not deprive the appellants of a substantive limitation period defence. Rather, they contend, the effect of the motion judge's order was to confirm that a limitation period defence was not available to the appellants because the respondents' action was commenced within the time prescribed by the Act. We reject these submissions.
[7] In Aurora, this court considered the effect of an order under s. 28(2) of the Professional Engineers Act, R.S.O. 1980, c. 394 (a predecessor statute to the current Act) extending the limitation period applicable to a negligence action against an engineering firm. In a brief endorsement, this court stated at para. 2:
The defendant-appellant, says that the substantive right to defend under the limitation period has been taken away and, thus, the order is final. The deprivation of substantive rights which are less than the entire lis between the parties has produced some confusing decisions over the years, but it is unnecessary to seek to bring them together in this case. This defendant was protected by a limitation period with an elastic length. The effect of the order under appeal and of the reasons of the weekly court judge was simply to determine the length of the period. That is both discretionary and procedural and properly characterized as interlocutory.
[8] In Murphy v. Welsh (1987), 1987 4070 (ON SC), 62 O.R. (2d) 159, 44 D.L.R. (4th) 192 (Div. Ct.), the Divisional Court held that a motion judge's decision to apply s. 47 of the Limitations Act, R.S.O. 1980, c. 240 to extend the limitation period applicable under s. 180(1) of the Highway Traffic Act, R.S.O. 1980, c. 198 to the commencement of a personal injuries action on behalf of a plaintiff under legal disability (a minor) was an interlocutory order. This court reversed that decision on statutory interpretation grounds, making no finding as to whether the order in question was interlocutory or [page508] final in nature. Similarly, the subsequent partial reversal by the Supreme Court of Canada of this court's decision in Murphy rested on other grounds, and the Supreme Court did not address the status of the motion judge's original order.
[9] In these circumstances, the respondents argue that the Divisional Court's holding in Murphy (that the motion judge's decision in that case to 'extend' the applicable limitation period was an interlocutory order) was undisturbed on appeal. Thus, the respondents submit, both Aurora and Murphy support the conclusion that a discretionary order extending a limitation period is interlocutory in nature. That conclusion, if applicable in this case, would preclude an appeal as of right to this court from the motion judge's order and would necessitate an appeal to the Divisional Court, with leave.
[10] This argument, however, is contrary to the subsequent jurisprudence of this court concerning the test for the determination of whether an order is final or interlocutory.
[11] In Ball v. Donais (1993), 1993 8613 (ON CA), 13 O.R. (3d) 322, [1993] O.J. No. 972 (C.A.), decided two years after the decisions in Aurora and Murphy, the issue was whether a plaintiff's action for damages arising from a collision between a motor vehicle driven by the defendant and a snowmobile operated by the plaintiff was barred by the two-year limitation period prescribed by s. 180(1) of the Highway Traffic Act, supra. On a pre-trial motion by the defendant for the determination of a question of law, the motion judge found in favour of the plaintiff, holding that the action was not statute-barred. On appeal, this court stated at p. 324 O.R.:
The effect of the order of [the motion judge] was to preclude the defendant's entitlement to raise thereafter, as a defence to this action, the plaintiff's failure to sue within the limitation period prescribed by the Highway Traffic Act. While that order did not finally dispose of the rights of the parties to the litigation, it did, subject to appeal therefrom, finally dispose of the issue raised by that defence, and thereby deprived the defendant of a substantive right which could be determinative of the entire action. Viewed from that perspective, the order of [the motion judge] was a final order within the contemplation of the decisions of this court.
(Citations omitted)
[12] As appears from this passage, the test for the determination of whether an order is final or interlocutory is whether the order in question finally disposes of an issue between the litigants. This test has been applied in numerous cases by this court in the last decade: see for example, Manos Foods International Inc. v. Coca-Cola Ltd., 1999 3022 (ON CA), [1999] O.J. No. 3623, 40 C.P.C. (4th) 113 (C.A.). Thus, the decisions in Aurora and Murphy on the issue of the status of an order extending a limitation period have been [page509] overtaken by Ball and related cases. Aurora and Murphy are no longer authoritative law in Ontario on this issue.
[13] Accordingly, the issue in this case is whether the motion judge's order under s. 46(2) of the Act, extending the limitation period applicable to the commencement of the respondents' action, finally disposed of an issue between the parties.
[14] In our view, the effect of the challenged order, subject to reversal on appeal, was to finally dispose of the issue of the appellants' right to rely upon the one-year limitation period established by s. 46(1) of the Act. The order, unless reversed, precludes any subsequent reliance by the appellants on a limitation period defence. It, therefore, is a final order appealable to this court as of right under s. 6(1)(b) of the Courts of Justice Act, R.S.O. 1990, c. C.43.
(2) Challenge of motion judge's order
[15] It is necessary for the disposition of this appeal to address only the appellants' argument that, having found that a genuine issue for trial exists in this case, the motion judge thereafter erred in law by implicitly concluding that the record before him permitted the requisite analysis under s. 46(2) of the Act to determine whether the requested extension of the limitation period under s. 46(1) of the Act should be granted.
[16] For the purpose of the appellants' summary judgment motion, the motion judge was required to determine whether a genuine issue exists in this case, necessitating a trial and the dismissal of the appellants' summary judgment motion. The motion judge concluded [at para. 12] that such an issue does exist. He characterized it in this fashion: "[T]here is a genuine issue for trial as to when the [respondents] were aware of the material facts with respect to their claim against the [appellants] or ought to have been aware of same by the exercise of reasonable diligence."
[17] In contrast, for the purpose of the respondents' cross-motion, the focus of the inquiry under s. 46(2) of the Act did not concern the question of whether a genuine issue for trial had been demonstrated. However, as the motion judge recognized, in determining whether there are reasonable grounds to seek an extension of the limitation period prescribed by s. 46(1) of the Act, the court will consider several factors, including: (i) the length of the delay in the commencement of proceedings; (ii) the reason for the delay; (iii) the extent to which the plaintiff acted properly and reasonably once it knew that the defendant's conduct might give rise to an action; (iv) any increase in the difficulty of proof occasioned by the passage of time; and (v) prejudice to the plaintiff should the requested extension be denied versus [page510] prejudice to the defendant should the extension be granted: see Palladium Corp. v. P.C.L. Constructors Eastern Inc., [1999] O.J. No. 4280, 40 C.P.C. (4th) 317 (S.C.J.).
[18] Consequently, the issue of the plaintiff's knowledge of the facts giving rise to an action against the defendant, and the timing of that knowledge, are important considerations on a s. 46(2) motion for an extension of the limitation period prescribed by the Act.
[19] The facts surrounding the respondents' knowledge of the cause of the defects in the foundation of their house were relevant both to the appellants' summary judgment motion and to the factors applicable on a s. 46(2) analysis regarding an extension of the limitation period. The motion judge's conclusion that there exists a genuine issue for trial as to the timing of the respondents' knowledge of those facts precluded any analysis of the evidence bearing on that issue.
[20] Nonetheless, the motion judge stated with respect to the respondents' cross-motion (at para. 18):
The Plaintiffs dealt with the Defendants and, it appears, were told by the Defendants that the cracks encountered could be repaired. In those circumstances, in my view, there was no reason for the Plaintiffs to believe that the problems encountered were due to the negligence of the Defendants . . . It was only on the receipt of the report of Dr. Becker in 2002 that the Plaintiffs were made directly aware of the apparent real cause of the problems encountered by the Plaintiffs with the structure.
(Emphasis added)
[21] The motion judge thus purported to resolve the key questions of when and how the respondents became aware of facts sufficient to support a negligence claim against the appellants, thereby triggering the commencement of the limitation period applicable to their claim. The motion judge determined these questions, notwithstanding his earlier finding that there was a live and disputed issue concerning the timing of the respondents' knowledge of the material facts.
[22] This was an error. By holding that there is a genuine issue for trial regarding the timing of the respondents' actual or constructive knowledge of the material facts giving rise to their claim against the appellants, the motion judge acknowledged that there is a serious dispute on this issue that can only be resolved at trial. In these circumstances, the motion judge erred by failing to consider whether, nevertheless, he could exercise his discretion to extend the limitation period. In our view, on the motion judge's findings and the record before him, he was not positioned to so do. Rather, the entire question of the respondents' knowledge of the facts underlying their claim against the [page511] appellants should have been left for determination at a trial of the action: see for example, Middlesex Condominium Corp. No. 185 v. Caradon Developments Inc., [1995] O.J. No. 173, 19 C.L.R. (2d) 105 (Gen. Div.).
III. Disposition
[23] Accordingly, for the reasons given, the appeal is allowed and paragraph two of the motion judge's order dated September 16, 2005 is set aside. The appellants are entitled to their costs of the appeal on a partial indemnity basis, fixed in the amount of $10,000, inclusive of disbursements and Goods and Services Tax.
Appeal allowed.
Notes
Note 1: Effective January 1, 2004, s. 46 of the Act was repealed by the Limitations Act, 2002, S.O. 2002, c. 24, Sch. B., s. 25.