In Amelin Engineering Ltd. v. Blower Engineering Inc., 2022 ONCA 785 (“Amelin”), the Court of Appeal for Ontario held that, while ameliorative efforts may reduce or eliminate a plaintiff’s damages and render litigation unnecessary, the discovery of a claim is a “modified objective” analysis and the start of the limitations clock cannot be delayed indefinitely.
The appellants bought steam generators from the respondents over a period of many years, starting in 1995. The appellants almost immediately experienced a number of difficulties and technical problems with the generators. In April 2003, the appellants engaged an independent firm to carry out tests on one of the generators. The appellants received a report from the independent firm on April 16, 2003, following which, the appellants demanded payments from the respondents.
By statement of claim issued on April 3, 2009, the appellants commenced an action against the respondents seeking damages for negligent misrepresentation. The trial judge determined that, although the former six year limitation period applied in the circumstances, the appellants’ claim was nevertheless statute barred. According to the trial judge, the appellants knew, or ought to have known, of their claim against the respondents as early as 1998 and, in any event, by January 2003.
On appeal, the appellants maintained that the respondents’ various assurances and ameliorative efforts delayed the discovery of their claim until May 2003, when efforts stopped, or April 2003, when the independent firm’s report was delivered. The Court of Appeal dismissed the appeal.
As explained by the Court of Appeal, “it may be appropriate to delay the start of a limitation period if a plaintiff is relying on a defendant’s superior knowledge and expertise, especially where the defendant was taking steps to ameliorate a loss.” However, “discovery cannot be delayed indefinitely” and section 5(1)(b) of the Limitations Act, 2002, SO 2002, c 24, Sch B creates “a ‘modified objective’ test that requires consideration of what a reasonable person with the abilities and in the circumstances of the claimant ought to have known.”
The Court of Appeal underscored the fact that the principal of the appellant company was a professional engineer with extensive industry experience. The respondents’ ameliorative efforts had been going on for many years before the independent firm’s report was obtained. In other words, “[i]t was not necessary to commission an expert report to confirm what the appellants ought reasonably to have known.”
The decision in Amelin is a reminder that a potential plaintiff must not remain passive in the face of a potential defendant’s ongoing ameliorative efforts, particularly when the plaintiff is sophisticated and capable of making its own decision without information from an independent expert. It may be appropriate for a potential plaintiff to explore the possibility of a tolling agreement to suspend the running of the limitation period while the potential defendant takes steps to remedy the situation.
