Executive Summary: Key Legal and Evidentiary Issues

Statutory presumption under the Limitations Act, 2002 provides that a claim is discovered on the day the act or omission took place, unless the contrary is proven. Appellant bore the evidentiary burden to displace this presumption but provided insufficient evidence regarding when the claim was actually discovered. No material contested facts existed; the motion was brought more than two years after the relevant events occurred involving a writ of seizure and sale expiring February 13, 2020, and property sold in February 2022. Allegations in the proposed amended pleading were not evidence, and the affiant did not attest to the truth of claims about discovery timing. The proposed added parties were lawyers and a law firm against whom negligence and fiduciary duty claims were asserted. Leave to amend should be denied where the limitation period for pursuing claims has already expired.

Background of the dispute

C & C Nestco Corporation commenced a lawyer's negligence and fiduciary duty action in September 2024 against David Timothy Starr. The plaintiff subsequently brought a motion seeking to add three additional defendants to the action: Robert Wilfred Walter Dowhan, Francis Mario Valeriote, and Smith Valeriote Law Firm LLP, which is a law firm. The motion sought leave to amend the statement of claim to include these parties as defendants to the existing negligence and fiduciary duty claims.

The motion judge's decision

The motion judge refused the application to add the proposed defendants, determining that the claims against them were statute barred under Ontario's Limitations Act, 2002. This statute establishes a two-year limitation period for bringing claims, with a critical provision addressing when the period begins to run. The motion judge found that the appellant had failed to provide adequate evidence to overcome the statutory framework governing the commencement of the limitation period.

The limitation period analysis

The central issue in the case concerned the application of section 5(2) of the Limitations Act, 2002, which establishes a statutory presumption that a claim is discovered "on the day the act or omission on which the claim is based took place, unless the contrary is proved." This presumption is significant because it establishes when the two-year limitation period begins to run. Once established, a party has two years from the date of discovery to commence an action; failure to do so results in the claim being statute barred.

The appellant argued that the motion judge should not have resolved what it characterized as a "contested and fact-dependent limitations issue" regarding when the claim against the proposed added parties was discovered on a motion to amend. The appellant essentially contended that the limitations question was sufficiently complex and factually dependent that it should not be determined at the motion stage.

Evidentiary deficiency

The Court of Appeal found no merit in this argument. The court noted that there were no material contested facts before the motion judge. Critically, the appellant brought the motion in November 2024 without providing any evidence sufficient to displace the statutory presumption. The appellant bore the evidentiary burden of proving that the claim was discovered at a time other than when the alleged act or omission occurred, yet it failed to meet this burden.

The affidavit filed in support of the motion, which came from the appellant's principal, merely attached the proposed amended pleading without providing proper evidence regarding the discovery date. The paragraphs in the proposed amended pleading that addressed when the claims were discovered were not evidence in themselves. Moreover, the affiant did not swear to the truth of the allegations contained in the proposed pleading regarding discovery timing. The affidavit was entirely silent on when the claim was actually discovered or why it could not have been discovered at an earlier date.

The underlying factual events

The proposed amended pleading alleged that the acts or omissions of the proposed added parties resulted in a writ of seizure and sale expiring on February 13, 2020, and specific property being sold in February 2022. These dates became critical to the limitation analysis. The motion judge emphasized that the plaintiff had presented no evidence demonstrating when it actually discovered its claim, or providing any basis to conclude that it did not discover the claim against the proposed added parties on the date the relevant acts or omissions occurred, or at least prior to the February 13, 2020 expiry of the writ of seizure and sale or the February 2022 property sale.

The court's decision

The Court of Appeal upheld the motion judge's decision and dismissed the appeal. The court found no error in the motion judge's conclusion that the motion to amend was brought more than two years after the claim was discovered according to the statutory presumption, which the appellant had entirely failed to rebut. Since the claims against the proposed added defendants were statute barred under the Limitations Act, 2002, the motion to add them as parties was properly refused.

Outcome and costs

The appeal was dismissed, and the respondents—Robert Wilfred Walter Dowhan, Francis Mario Valeriote, and Smith Valeriote Law Firm LLP—were successful in defending against the motion to add them as defendants. The court ordered the appellant to pay costs to the respondents in the amount of $5,000, inclusive of disbursements and applicable taxes.