When does a cause of action for negligent misrepresentation crystalize such that it triggers the running of the applicable limitation period?  The British Columbia Court of Appeal addressed this issue recently in Weldon v. Teck Metals Ltd., 2013 BCCA 358.

The pertinent facts of the Weldon case are as follows.  The employees of the defendant Teck participated in a defined benefit pension plan.  The defendant Teck offered the employees the option of transferring their pensions from the defined benefit plan to a newly-established defined contribution pension plan, effective January 1, 1993.  The plaintiffs chose to do so.  However, the plaintiffs subsequently alleged that Teck (along with its consultants) provided them with inaccurate and incomplete information regarding the risks and benefits of transferring their pensions, and ultimately commenced legal proceedings in 2009 and 2011, respectively.  The employees’ claims were framed in negligent misrepresentation (among other causes of action).  If the cause of action for negligent misrepresentation accrued in 1993, the employees’ claims were time-barred under the governing B.C. Limitation Act, R.S.B.C. 1996, c. 266.

The employees alleged that their cause of action for negligent misrepresentation did not accrue until they became eligible for payments under their respective pension plans.  They asserted that when a negligent misrepresentation exposes a plaintiff to a loss or liability that is contingent, the cause of action does not accrue until the contingency is fulfilled. The defendants asserted that the employees’ claims for negligent misrepresentation crystallized when the transfer of the pension took place on January 1, 1993,  The chambers judge ruled in favour of the defendants.

On appeal, the B.C. Court of Appeal, after citing prior appellate cases from B.C. and Manitoba, (see also the Ontario Court of Appeal’s decision in Metcalfe) ruled that “[t]he deprivation that grounds the [employees’] claims is the change from one type of pension plan to another. That change occurred on January 1, 1993.  It is on that date that the [employees’] cause of action arose.”  Accordingly, the decision of the Court below was affirmed in this regard.

The B.C. Court of Appeal decision distinguished English and Australian authorities which have recognized a distinction between immediate (but not yet quantifiable) losses, and contingent losses, when determining when a cause of action for negligent misrepresentation crystallizes.  The appellate Court also affirmed that, in any event, the loss in the instant case was “immediate and not contingent” because the present value of a pension plan which exposes beneficiaries to greater risk or uncertainty would be discounted to reflect that risk.

The Weldon case represents a cautionary tale which highlights that, in Canada, when a misrepresentation causes a victim to receive something less than what was represented to him or her, the limitation period begins to run immediately.  It may be too late to wait for the contingency at the heart of the misrepresentation to materialize before commencing a claim.