Introduction

Nova Scotia’s new Limitation of Actions Act, SNS 2014, c 35 received Royal Assent on November 20, 2014, but has not yet been proclaimed into force.[1] This post argues that the new Act will streamline the presumptive limitation periods, which is a welcome development, but will still maintain some of the uncertainty that has plagued its predecessor. The uncertainty will be especially acute in personal injury cases – and therefore especially problematic for defendants in those cases.

The new Act: The good … and the unpredictable

First, the good news.

The current version of the Limitation of Actions Act, RSNS 1989, c 258 is notorious for creating complicated limitation periods that depend on particular causes of action. See, for example, section 2(1)(e):

(e) all actions grounded upon any lending, or contract, expressed or implied, without specialty, or upon any award where the submission is not by specialty, or for money levied by execution, all actions for direct injuries to real or personal property, actions for the taking away or conversion of property, goods and chattels, actions for libel, malicious prosecution and arrest, seduction and criminal conversation and actions for all other causes which would formerly have been brought in the form of action called trespass on the case, except as herein excepted, within six years after the cause of any such action arose;

Compare that wordy provision to section 8 of the new Act, which establishes the general limitation periods applicable to all claims (“claim” is broadly defined in section 2(1)(a)):

8 (1) Unless otherwise provided in this Act, a claim may not be brought after the earlier of

(a) two years from the day on which the claim is discovered; and

(b) fifteen years from the day on which the act or omission on which the claim is based occurred.

(The rest of section 8 explains how to determine when a claim is discovered, and when an act or omission occurred.)

There are some exceptions to these limitations, including for sexual assault claims (see section 11(a)) and where another statute sets out a different limitation period (see section 6).[2] But for the most part, the new streamlined limitation periods will create more certainty in litigation.

Except for personal injury litigation.

Recall that the current Limitation of Actions Act in section 3(2) allows the court to disallow a limitations defence if it would be “equitable in the circumstances,” based on the factors listed in section 3(4). This provision has created an in-joke amongst local lawyers that Nova Scotia doesn’t really have any limitation periods.

That was supposed to change with the new Act. When it was first introduced as Bill 64, there was no discretion to extend a limitation period. This made sense: Bill 64 was based on the Uniform Law Conference of Canada’s limitations statute,[3] which does not give this kind of discretion to the court.[4]  Neither does New Brunswick’s similar Limitation of Actions Act, SNB 2009, c L-8.5, in force since 2010.

But before third reading, Bill 64 changed. Submissions before the law amendments committee caused the committee to add “a safeguard provision” for victims of personal injuries.[5]

Section 12 of the Act, as passed, contains this safeguard provision. It is worth setting out in full:

12 (1) In this Section, “limitation period” means the limitation period established by

(a) clause 8(1)(a); or

(b) any enactment other than this Act.

(2) This Section applies only to claims brought to recover damages in respect of personal injuries.

(3) Where a claim is brought without regard to the limitation period applicable to the claim, and an order has not been made under subsection (4), the court in which the claim is brought, upon application, may disallow a defence based on the limitation period and allow the claim to proceed if it appears to the court to be just having regard to the degree to which

(a) the limitation period creates a hardship to the claimant or any person whom the claimant represents; and

(b) any decision of the court under this Section would create a hardship to the defendant or any person whom the defendant represents, or any other person.

(4) Where a limitation period has expired, a person who wishes to invoke the limitation period, upon giving at least 30 days’ notice to any person who may have a claim, may apply to the court for an order terminating the right of the person to whom such notice was given from commencing the claim and the court may issue such order or may authorize the commencement of the claim only if it is commenced on or before a day determined by the court.

(5) In making a determination under subsection (3), the court shall have regard to all the circumstances of the case and, in particular, to

(a) the length of and the reasons for the delay on the part of the claimant;

(b) any information or notice given by the defendant to the claimant respecting the limitation period;

(c) the effect of the passage of time on

(i) the ability of the defendant to defend the claim, and

(ii) the cogency of any evidence adduced or likely to be adduced by the claimant or defendant;

(d) the conduct of the defendant after the claim was discovered, including the extent, if any, to which the defendant responded to requests reasonably made by the claimant for information or inspection for the purpose of ascertaining facts that were or might be relevant to the claim;

(e) the duration of any incapacity of the claimant arising after the date on which the claim was discovered;

(f) the extent to which the claimant acted promptly and reasonably once the claimant knew whether or not the act or omission of the defendant, to which the injury was attributable, might be capable at that time of giving rise to a claim;

(g) the steps, if any, taken by the claimant to obtain medical, legal or other expert advice and the nature of any such advice the claimant may have received;

(h) the strength of the claimant’s case; and

(i) any alternative remedy or compensation available to the claimant.

(6) A court may not exercise the jurisdiction conferred by this Section if the claim is brought more than two years after the expiry of the limitation period applicable to that claim.

(7) This Section does not apply to a claim for which the limitation period is 10 years or more.

In many ways, this provision is remarkably similar in language and tone to section 3 of the current Act (although “equitable” has been changed to “just,” and “disability” is now “incapacity”). And there are two additional factors for the court to consider in deciding whether to extend a limitation period:

  •  “the strength of the claimant’s case” – Section 12(5)(h)
  •  “any alternative remedy or compensation available to the claimant” – Section 12(5)(i)

However, the new Act will limit judicial discretion in two key ways:

  1. The judicial discretion will only apply to personal injury lawsuits. This is a big difference from the current discretion provision, which applies to most causes of action.
  2. The court will not be able to exercise its discretion “if the claim is brought more than two years after” the applicable limitation period has expired. This is down from the four-year ultimate extension in the current section 3(6).

Discretion from a defence perspective

These new parameters on the court’s discretion represent a major change from the current state of the law. But personal injury defendants will still be exposed to possible extensions to limitation periods and all the uncertainty that brings. So what arguments and procedural steps will be available to potential defendants in these cases?[6]

  • The defendant can make a hardship argument under section 12(3)(b).
  • Section 12(4) lets the defendant apply for an order terminating the plaintiff’s right to bring the claim, once the limitation period has expired and the defendant has given 30 days’ notice. However, the court will have discretion to allow the plaintiff’s claim, as long as it is brought “on or before a day determined by the court.”
  • Defendants can argue that the factors in subsection (5) are on their side, especially if they can show that the delay was not for good reason and harmfully affects their ability to defend the case, and that the plaintiff’s case is weak.
  • The defendant’s position will be stronger if it can show that it has responded to reasonable requests of the plaintiff (subsection (5)(d)) and / or notified the claimant about an upcoming limitation period (subsection (5)(b)).
  • Under subsection (5)(i), the defendant can point to any “alternative remedy or compensation” that may be “available to the claimant” as a factor against permitting the lawsuit to proceed. This provision may serve an access to justice function as well, pushing cases out of the courts and into alternative dispute resolution.

Conclusion

Traditionally, the rationales for limitation periods, which La Forest J outlined in M (K) v M (H), were considered “from the perspective of fairness to the potential defendant”:[7]

  • Certainty – That the potential defendant is entitled at some point to rest assured that it no longer faces the jeopardy of a lawsuit.
  • Evidentiary – That claims “based on stale evidence” should not proceed: “Once the limitation period has lapsed, the potential defendant should no longer be concerned about the preservation of evidence relevant to the claim…”
  • Diligence – That plaintiffs should not be allowed to “sleep on their rights” and should “bring suit in a timely fashion.”[8]

However, Justice La Forest went on to say that “fairness to the plaintiff” must also play a role in the limitations analysis.[9]

Nova Scotia’s new Limitation of Actions Act tips the balance in favour of the plaintiff, at least in the personal injury context. For this reason, the new Act’s reforms were not as wholesale as some in the defence Bar had expected (and hoped). But there is cautious optimism that the Act will bring increased certainty to other areas of the law, once it comes into force.