Plaintiffs Beware: An Alternative Process May Not Suspend Your Limitation Period

• Published date: 23 October 2020
• Subject Matter: Litigation, Mediation & Arbitration, Arbitration & Dispute Resolution, Trials & Appeals & Compensation
• Law Firm: Torkin Manes LLP
• Author: Mr Marco P. Falco

Since 2016, it has been Ontario law that where a plaintiff is pursuing an alternative process to a law suit in order to resolve their dispute, the two-year limitation period for the law suit may be suspended: 407 ETR Concession Co. v. Day, 2016 ONCA 709.

But what happens when the plaintiff pursues that alternative process knowing it may not be the right forum in which to adjudicate their claim? Does the limitation clock for the civil action still run where the plaintiff is advancing their claim in the wrong place?

A 2020 decision of the Ontario Court of Appeal, Beniuk v Leamington (Municipality), 2020 ONCA 238, sheds light on these questions.

Beniuk suggests that where a plaintiff chooses to have their claim adjudicated outside the context of litigation, the limitations clock may continue to run for the plaintiff's civil action if the alternative dispute resolution process has no jurisdiction to hear the plaintiff's claim.

Start in the wrong place, and you may be out of time to fix your mistakes.

To the OMB! (Or perhaps not)

Beniuk involved a claim by the two plaintiff owners of a residential property. Their home experienced significant structural damage allegedly caused by vibrations from heavy truck traffic on a rural road abutting the residence.

After the defendant municipality declined to reconstruct the road and after the home owners retained an engineer to opine on the cause of the damage, the owners commenced a proceeding before the Ontario Municipal Board ("OMB") in December 2009.

At the OMB, the plaintiffs argued that the pre-1927 construction of the rural road caused them injurious affection. In Ontario, the OMB has exclusive jurisdiction over injurious affection claims.

On January 5, 2010, the defendant municipality delivered its reply to the plaintiff's OMB claim. Critically, in that reply the municipality pleaded that the OMB claim was not really one for injurious affection and, in any event, the OMB was not the proper venue to resolve the dispute.

The OMB ultimately held in favour of the municipality on January 10, 2018. The OMB held that it did not have jurisdiction over the home owner's claim. It further held that the essence of the claim was one concerning the use of the road, not its construction. As such, the concept of injurious affection did not apply to the plaintiffs' claim.

Shortly following the dismissal of their OMB claim, the plaintiffs started a civil action in the Ontario Superior Court for nuisance and negligence against the defendant municipality on January 17, 2018.

The municipality moved for summary judgment to dismiss the civil claim.

It argued that the plaintiffs' claim was statute-barred as having been started more than two years after the plaintiffs discovered their claim under section 4 of Ontario's Limitations Act 2002, S.O. 2002, c.24, Sched. B (the "Limitations Act").

In defence of the summary judgment motion, the plaintiffs relied in part on section 5(1)(a)(iv) of the Limitations Act. This section provides that a claim is not discovered until "having regard to the nature of the injury loss or damage, a [civil action] would be an appropriate means to seek to remedy it".

Relying on the Court of Appeal's decision in 407 ETR supra, which was one of the first cases in Ontario to consider section 5(1)(a)(iv) at length, the plaintiffs argued that the two-year limitation...