Ontario’s Limitations Act 2002 was intended to bring clarity and certainty to this area of the law. Ha! Anything but. The common law provided that a judge had the discretion to extend an expired limitation period, where ‘special circumstances’ warranted doing this in the interests of justice. It is clear from the case law that the doctrine is no longer available for claims that are subject to the Limitations Act 2002 (except to the extent that the statute preserves some aspects of it), but Perell J has held that it may still offer relief to a plaintiff making a claim which is not subject to that legislation – including a claim for secondary market liability under Part XXIII.1 of the Ontario Securities Act.
The issue arose in Trustees of the Millwright Regional Council of Ontario Pension Trust Fund v Celestica Inc, 2012 ONSC 6083, where the defendants moved to strike a class claim against them for having misrepresented the progress of Celestica’s restructuring. The plaintiffs appear to have believed (incorrectly) that the filing of their class proceedings suspended the limitation period and wanted to see how parallel US proceedings would unfold. After providing his usual review of the case law, Justice Perell concluded that by virtue of excluding the Part XXIII.1 limitation period from the application of the Limitations Act 2002, the legislature had intended the common law rule to continue to apply to secondary market claims, in order to allow a court to ‘ameliorate the rigours of an absolute limitation period’ like that found in s 138.14 of the Securities Act. Application of the ‘special circumstances’ doctrine will (where available) always be ‘principled, limited and narrow’, but on the facts of the case it was appropriate to use it to give the plaintiffs a break. The defendants had long been aware of the claim against them, the law had changed in the mean time to the plaintiffs’ detriment and the defendants had not previously raised a limitations defence. The defendants couldn’t say that the plaintiffs’ failure to proceed expeditiously with the Ontario claim was prejudicial; if anything, it gave the defendants some breathing room while they defended the parallel action in New York.
[Link available here].