In an important decision, released today, the Court of Appeal in York Condominium Corporation No. 382 v. Jay-M Holdings Limited et al. reversed a ruling by Mr. Justice John Ground and held that if a claim is not discovered until January 1, 2004 but the act or omission giving rise to the claim occurred before that date, the “ultimate limitation period” of fifteen years starts to run as if the act or omission had taken place on January 1, 2004. An earlier post on our site commented on Justice Ground’s decision.
In this action, the plaintiff condominium corporation alleged that the City of Toronto (one of the defendants) had been negligent in its inspection of the condominium building in 1978. It claimed that it did not discover until May, 2004, that the demising walls were not fire-rated in accordance with the Building Code.
In June, 2005, the condominium corporation sued the builder and the City of Toronto. It sued within two years of the date on which it discovered the claim, which would have made the action in time to comply with the two-year limitation period in s. 4 of the Limitations Act, 2002. However, the City of Toronto had successfully argued before Justice Ground, that the 15-year “ultimate limitation period” in s. 15 of the Act meant that the action was prescribed, the negligent act having taken place over 27 years ago.
However, the Court of Appeal said that Ground J. had misinterpreted the transitional provisions of the Limitations Act, 2002 in construing s. 15. In particular, Rule 1 of s. 24(5) says that “If the claim was not discovered before the effective date, this Act applies as if the act or omission had taken place on the effective date.” The effective date of the Act is January 1, 2004.
The Court of Appeal (Justices Janet Weiler, Susan Lang and Paul Rouleau) noted that just because opposing counsel put forward conflicting interpretations of a statutory provision (as was the case here) did not mean that the provision is ambiguous.
The reasons of the court, written by Madam Justice Weiler, contain a detailed statutory interpretation, grouped into “grammatical and ordinary sense” and “legislative and broader context”. This analysis led it to conclude that:
In moving to a new regime with an ultimate limitations period, s. 24(5) Rule 1 effectively creates a 15-year transition period for undiscovered claims. Although such a transition provision may be regarded as generous, it is part of the Act’s attempt to ensure that, with respect to pre-existing situations, access to justice be preserved while limiting liability on a go-forward basis.