The “Appropriate Means” factor under section 5 of the Limitations Act, 2002

September 14, 2021 Doreen So Continuing Legal Education, Estate Litigation, Litigation, Uncategorized Tags: , , 0 Comments

The Court of Appeal in Dass v. Kay, 2021 ONCA 565, was recently asked to reconsider the dismissal of a claim that was found to be statute barred pursuant to the Limitations Act, 2002.  The appellant in this case is the principal of two corporations, and the respondent was the principal of a mortgage brokerage.

In 2015, the mortgage brokerage was asked by the appellant’s brother to secure financing to purchase a commercial property on Drew Road in Toronto.  The Drew Road mortgage application listed the appellant as a guarantor and provided that one of his companies would be the tenant.  The Drew Road mortgage application ultimately was denied by Roynat, an affiliate of Scotiabank, although the real issue was that the appellant was never advised of the Drew Road mortgage application, and that the appellant had never agreed to be a guarantor or tenant.  The appellant only discovered the Drew Road mortgage application when he was trying to secure financing from Roynat for his own purposes.  The Drew Road mortgage application was brought to the applicant’s attention by Roynat on July 24, 2015, and he denied any knowledge or involvement with the application to Roynat then.  The appellant’s mortgage application was also ultimately denied by Roynat and he was advised by Roynat that the denial had nothing to do with the appellant’s association with the Drew Road mortgage.  On August 21, 2015, the appellant sought advice from his lawyer on the basis that he believed that his mortgage application was rejected because of the improper Drew Road mortgage application, and that the mortgage broker and his brother have harmed his reputation with Roynat.  His lawyer’s advice in 2015 was that the appellant had no evidence to prove that the mortgage broker’s actions resulted in the denial of the appellant’s mortgage, and it was the lawyer’s view that an action against the mortgage broker was inadvisable because it was unlikely to succeed.  Meanwhile, the appellant was also attempting to borrow from Scotiabank, and he was denied by Scotiabank as well.  The appellant was eventually able to secure financing but at much higher interest rates than those offered by Roynat and Scotiabank.

In 2018, when the appellant’s financing was due for renewal, the appellant approached Roynat and Scotiabank again.  This time, the appellant was told that he had been “blacklisted” due to Drew Road mortgage application.  Thereafter, the appellant issued a statement of claim on April 27, 2018 which sought damages for the reputational and commercial harm suffered by the appellant as a result of the mortgage broker’s submission of the Drew Road mortgage application.

The motions judge found that the appellant knew on July 24, 2015 of the unauthorized application, that he knew on July 27, 2015 of the mortgage broker’s involvement, and that he knew by August 21, 2015 that he suffered financial loss as a result of the unauthorized application because of the appellant’s email to his lawyer.  Of note, the Court of Appeal’s analysis of section 5(1)(a)(iv) of the Limitation Act, 2002 is found at paras. 22-28 of the decision.

First, the determination of whether a proceeding is an appropriate means to remedy an injury, loss, or damage depends on the factual and statutory context.

Second, the Court has recognized two non-exclusive factors that can operate to delay matters: (i) when the plaintiff relied on the defendant’s superior knowledge and expertise, particularly where the defendant has taken steps to ameliorate the plaintiff’s loss, and (ii) where there is an alternative dispute resolution process for an adequate remedy that has not yet been completed.

Third, the “appropriate means” factor has nothing to do with the viability of a claim, or any other practical and tactical reasons for waiting.

While the appellant contented that he was not advised of being “blacklisted” until 2018, this does not fall under the two non-exclusive factors set out above.  The limitation period does not commence only when one is able to assess whether litigation would be an attractive option (para. 46).  Moreover, the appellant’s reliance on the legal advice that he received in 2015 is irrelevant to the limitations analysis (para. 54).

Thanks for reading.

Doreen So

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