In Prescott & Russell (United Counties) v David S. Laflamme, 2018 ONCA 495, the Court of Appeal for Ontario held that interlocutory motions requiring a finding in respect of a limitations issue does not, in fact, mean that the motions judge has made a final and binding finding on that limitations issue. Accordingly, the issue is still to be determined at trial.
The plaintiff brought a motion under Rule 5.04(2) for an order adding WSP Canada Inc. (“WSP”) as a defendant in an ongoing action. WSP argued that the 2-year limitation period had already expired. The motions judge held that the plaintiff could add WSP as a defendant to the action because of the discoverability principle.
On appeal, the Court of Appeal’s analysis focused around the availability of the limitations defence at trial. The Court held that because the order was interlocutory, WSP retained the right to raise the limitations issue at trial. The Court of Appeal identified four factors relevant to the analysis: the terms of the original order, the motion judge’s reasons for the order, the nature of the proceedings giving rise to the order, and any other contextual factors that inform the nature of the order.
Despite the fact that the motions judge’s reasons focused primarily on the discoverability issue, the Court of Appeal noted that the underlying Order did not reference the Limitations Act, 2002. Further, and despite the motions judge making numerous references to, and clear findings of fact regarding discoverability in the context of analyzing the applicability of the limitations issue, the Court of Appeal held that the motions judge’s reasons did not contain any language suggesting that the findings regarding the applicability of the Limitations Act, 2002 applied beyond the motion itself. In other words, a trial judge would not be bound by the motions judge’s findings regarding discoverability.
The Court of Appeal further pointed to the fact that motions made under rule 5.04(2) of the Rules of Civil Procedure(motions to add a party to a proceeding) do not, as a rule, generate findings that are binding on the trial judge. Finally, the Court referred to the language of s. 21 of the Limitations Act, 2002, which forbids adding a party where a limitation period has expired. The Court noted that there does not necessarily need to be an affirmative finding that a limitation period has not expired in order to permit a party to be added to a proceeding.
While this decision is ultimately correct, it creates a moment for pause – if the trial judge ultimately determines that the limitation period had expired such that WSP should have never been added, WSP would have been dragged through years of needless litigation when it never should have been added in the first place. From the defendant’s perspective, in order to avoid having to argue the limitations issue twice, a defendant may consider consenting to being added as a party without prejudice to its right to maintain its limitation defence at trial. If the defendant feels they have a very strong limitations defence, then the defendant may consider immediately moving for summary judgment under Rule 20, as the Court recently determined that a Rule 21 motion is no longer appropriate where a limitations question is at issue (see Brozmanova v. Tarshis, 2018 ONCA 523).
