In Salewski v. Lalonde, the Court of Appeal for Ontario held that an order dismissing a motion to strike a claim based in part on limitations periods was interlocutory. The Court concluded that, contrary to the appellants’ arguments, the motion judge had not decided whether the respondent’s claims were statute-barred; in fact, the Court held that the motion judge could not finally decide that issue on a pleadings motion. Therefore, the appeal was quashed.
The respondent commenced a number of actions against various parties, including the appellants, to recover the proceeds of an alleged Ponzi scheme. The appellants moved to strike the respondent’s claims and, in part, argued that the claims were statute-barred.
The motion judge dismissed the appellants’ motion. The appellants appealed to the Court of Appeal, which raised the issue of whether the order under appeal was final or interlocutory. The appellants argued that the order was final because the motion judge found that the respondent’s claims were not statute-barred under Rule 21.01(1)(a) of Ontario’s Rules of Civil Procedure, which allows for a determination of a question of law before trial.
The order was interlocutory
The Court concluded that the order under appeal was interlocutory for three reasons.
First, the appellants’ notice of motion did not ask for a determination of a question of law, and neither the order nor the motion judge’s reasons purported to make such a determination. In particular, the Court noted that the formal order simply dismissed the appellants’ motion and did not determine any question of law.
Second, the motion judge’s reasons did not reveal any final determination of a question of law. Although the motion judge referred to and rejected the appellants’ submission asking him to find that the respondent’s claims were statute-barred, the Court stated that it did not follow that he had made a finding that the claims were not statute-barred. Rather, the Court concluded that the motion judge’s reasons simply provided his justification for dismissing the appellants’ motion and nothing more.
Third, the motion judge could not make a finding on a limitations issue on a motion to determine a question of law. According to the Court, the basic limitation period established under the Limitations Act, 2002 was premised on the discoverability rule, which raises questions of mixed fact and law and which cannot generally be resolved on a motion to determine a question of law. The Court acknowledged having accepted in the 2001 case of Beardsley v. Ontario that a claim could be struck based on the expiry of a limitation period. In the Court’s view, however, Beardsley had likely been overtaken by the enactment of the Limitations Act, 2002 and, in any event, was not meant to apply to a factually complex and novel case like the one before the Court.
The appeal was quashed
At the hearing of the appeal, the Court had reserved its decision on the jurisdiction issue and indicated that it would seek permission from the Chief Justice of the Superior Court to reconstitute itself as a panel of the Divisional Court to decide the merits if it found that the order under appeal was interlocutory. However, ultimately, the Court simply quashed the appellants’ appeal. It concluded that the appellant’s motion was premature since the motion judge could not determine the limitations issue before the close of pleadings and without a more fulsome record, and therefore it was not appropriate to seek permission from the Chief Justice of the Superior Court. The Court also noted that the parties had not addressed the issue of leave to appeal, which was necessary given that the order under appeal was interlocutory.