When The Clock Starts Ticking: Supreme Court Of Canada Speeds Up The Clock For Discoverability Of Claims

• Published date: 11 August 2021
• Subject Matter: Litigation, Mediation & Arbitration, Arbitration & Dispute Resolution, Personal Injury, Professional Negligence
• Law Firm: Fasken
• Author: Michael Parrish and Tom A. Posyniak

Summary

Statutes of limitations in Canadian provinces generally bar plaintiffs from bringing claims against a defendant within a specified period of time from the date on which the plaintiff knew or reasonably ought to have known they had a claim against a defendant. For many types of claims, the date on which the limitation period begins to run is more easily determined (for example, the date of a car crash in which the plaintiff was hurt). But for other types of claims, particularly misrepresentation and professional negligence, figuring out when the plaintiff knew or ought to have known of the claim can be more difficult. Is it enough for the plaintiff to merely have held a suspicion or belief the defendant did something wrong? Or must the plaintiff know with some certainty that the defendant committed each of the required legal elements of the cause of action? Or something in-between?

In Grant Thornton LLP v. New Brunswick, 2021 SCC 31, the Supreme Court of Canada addressed these fundamental questions about the law of discoverability, a topic that has not been considered by the Court for many decades. The Supreme Court rejected a higher threshold of knowledge found by the lower court and applied a new--and quite low'test for discoverability which the Court described as a "plausible inference of liability". Under the plausible inference of liability test, it is not necessary for the plaintiff to know the defendant owed or breached a duty of care from a legal perspective or the exact type or amount of the loss. Rather, so long as the plaintiff actually or constructively knew or ought to have known a loss had occurred generally, and was plausibly due to the conduct of the defendant, this will be sufficient knowledge for "discovery" of a claim.

The Supreme Court avoided setting any bright analytical lines in its new test; instead, the Court held knowledge must be more than mere suspicion or speculation but less than perfect knowledge or certainty of liability. Essentially, a notional state of knowledge which is more than a hunch and less than an indisputable fact. However, practically speaking, when a plaintiff's state of mind moves from the foggy realm of suspicion to the clarity of plausible inference of liability will be a fraught and highly individualistic analysis requiring a close inquiry into the state of mind of the plaintiff and all of the surrounding circumstances. The analysis is further complicated by the Court's statement that a suspicion alone may trigger an obligation on the plaintiff to investigate whether it has a claim. As a result, future litigation interpreting and applying the Supreme Court's new (or at least re-articulated) test for discoverability can be anticipated.

Based on the Court's reasoning in Grant Thornton, parties who have suffered losses and are considering prospective claims are commended to retain counsel and examine closely whether the facts and circumstances indicate there...