



COURT OF APPEAL FOR BRITISH COLUMBIA




Citation:



Sohal v. Lezama,









2021 BCCA 40




Date: 20210129

Docket: CA46490

Between:

Rupinder Sohal

Respondent

(Plaintiff)

And

Graham Lezama,
Enterprise Rent-A-Car Canada Company/La Compagnie de Location Dautos Enterprise
Canada doing business as Enterprise-Rent-A-Car or Enterprise Rentals,
Enterprise Rent-A-Car of British Columbia doing business as Enterprise Rentals

Appellants

(Defendants)

And

PFM
Productions Inc. and LHP Holdings Inc.

Respondents

(Third Party)






Before:



The Honourable Madam Justice Saunders

The Honourable Madam Justice DeWitt-Van Oosten

The Honourable Mr. Justice Grauer




On appeal from:  An
order of the Supreme Court of British Columbia, dated October 8, 2019 (
Sohal
v. Lezama
, 2019 BCSC 1709, Vancouver Docket M147109).




Counsel for the Appellants:



V.G. Critchley
J. Corbett





Counsel for the Respondent:



G. P. Brown, Q.C.
E. LeDuc





Place and Date of Hearing:



Vancouver, British
  Columbia

November 10, 2020





Place and Date of Judgment:



Vancouver, British
  Columbia

January 29, 2021





Written Reasons by:





The Honourable Mr. Justice Grauer





Concurred in by:





The Honourable Madam Justice Saunders

The Honourable Madam Justice DeWitt-Van Oosten








Summary:

The defendants in a motor
vehicle accident claim applied for leave to file third party notices claiming
contribution and indemnity from the defendant drivers employer. The master
granted leave, and the proposed third parties appealed the masters order to
the Supreme Court. The judge allowed the appeal and set aside the order on the
basis that the claims for contribution and indemnity were time-barred by
application of the new Limitation Act, SBC 2012, c 13. The defendants brought
this appeal, arguing that the judge erred: (1) in his interpretation of the
transition provisions of the new Limitation Act, specifically in finding that
those provisions provided for the application of the new Limitation Act, rather
than its predecessor; and (2) in his interpretation of section 22(2) that,
because the applicable limitation period had expired, the claims for
contribution and indemnity were prohibited. Held: appeal dismissed. Properly
interpreted and applied, the appellants third party claims are time-barred
under the new Limitation Act. Although the judge erred in his interpretation of
the transition provision in section 30, he reached the correct result. Applying
principles of statutory interpretation, it is apparent that a claim for
contribution in an ongoing action does not fall under the definition of pre-existing
claim within the transitional provisions in section 30 of the new Limitation
Act. This is because the act or omission on which the claim for contribution
is based is distinct from the act or omission that gives rise to the
underlying tort claim. As such, it is the new Act that applies and, on the
facts, the applicable limitation period had expired. Moreover, as the judge
properly concluded, a third party claim for contribution constitutes a court
proceeding under the new Limitation Act. Finally, the judge interpreted and
applied section 22(2) correctly. The wording of the provision and principles of
statutory interpretation support the judges conclusion that section 22 of the
new Limitation Act does not permit proceedings for contribution or indemnity to
be brought by way of third party notice or counterclaim after the applicable
limitation period has expired. It follows that the judge correctly concluded
that the master had no discretion to grant the appellants leave to file third
party notices.










Table of Contents



Paragraph Range





1.0 INTRODUCTION



[1] - [9]





2.0 BACKGROUND



[10] - [34]





2.1
  Claims for contribution under the old Act



[10] - [14]





2.2 Claims for contribution under the new Act



[15] - [24]





2.3 Chronology



[25] - [34]





3.0 THE CHAMBERS JUDGES REASONS



[35] - [39]





3.1
  The section 22 issue



[35] - [38]





3.2 The section 30 issue



[39] - [39]





4.0 DISCUSSION



[40] - [112]





4.1
  An overview of the appellants position



[40] - [52]





4.2 Principles of statutory interpretation



[53] - [63]





4.3 Section 30  a pre-existing claim?



[64] - [75]





4.4 Sections 30 and 22  a court proceeding?



[76] - [96]





4.5 Section 22  a bar to third party claims for contribution?



[97] - [112]





5.0 CONCLUSION AND DISPOSITION



[113] - [116]










Reasons for Judgment of the
Honourable Mr. Justice Grauer:

1.0

INTRODUCTION

[1]

This appeal arises out of an application by the defendants in a motor
vehicle accident claim for leave to file third-party notices claiming
contribution and indemnity from the defendant drivers employer.  Those
defendants are Mr. Lezama, the driver of the vehicle allegedly causing
injury to the plaintiff, and the Enterprise Rent-a-Car defendants
(Enterprise), owners of the vehicle.

[2]

The master granted leave.  The proposed third parties, PFM Productions
Inc. and its successor, LHP Holdings Inc. (PFM/LHP) appealed to the Supreme
Court.

[3]

In reasons for judgment delivered October 8, 2019, and indexed at 2019
BCSC 1709, Mr. Justice Kent allowed the appeal and set aside the masters
order.  He did so on the basis that the proposed third party claims were
subject to a two-year limitation period under the
Limitation Act
, SBC
2012, c 13 [the new Act], and accordingly were time-barred.  It followed that
those proposed claims could not be brought as they were prohibited by sections
6(1) and 22(2) of the new Act.

[4]

The defendants appeal to this Court.  They raise issues of law that they
maintain attract a correctness standard of review.  The respondents agree, as
do I, that correctness is the applicable standard.

[5]

The appellants maintain that the judge erred in two respects.  They say,
first, that the judge erred in his interpretation of the transition provisions
of the new Act.  Properly construed, they submit, those provisions provide that
it is the old
Limitation Act
, RSBC 1979, c 266 [the old Act] that
applies to this case, from which it follows that the proposed third party
claims are not time-barred.  As I shall discuss in greater detail below, this
is because the old Act started time running when a cause of action accrued, and
a cause of action for contribution does not accrue until (at least) there has
been judgment against a defendant who seeks to claim it, an event that has yet
to occur in this case.  This approach changed under the new Act, which starts
time running from the date of discovery of the claim, not from the date of
accrual of the cause of action.

[6]

This argument that the old Act governs was not raised before the master,
but debuted before the judge.  He disagreed.  As we shall see, I would
interpret the transition provisions differently from the way the judge did, but
I arrive at the same result.  I conclude, as he did, that it is the new Act
that applies.

[7]

The appellants say, second, that if the new Act applies, the judge erred
in his interpretation of section 22(2), which, they assert, properly
interpreted, does not apply to claims for contribution or indemnity brought by
way of third party notice, as opposed to a separate action.

[8]

As will become apparent, despite the able submissions of counsel for the
appellants, I agree with the judges interpretation and application of this
part of the new Act.

[9]

Accordingly, for the reasons that follow, I would dismiss the appeal.

2.0

BACKGROUND

2.1

Claims for contribution under the old Act

[10]

Claims for contribution and indemnity are not like other claims.  They
can arise only when the party seeking contribution has been found liable to
someone else.  As such, when first pleaded, they are contingent claims.  Their
nature was explained by Madam Justice Neilson, for this court, in
The
Owners, Strata Plan LMS 1751 v Scott Management Ltd,
2010 BCCA 192, one of
the notoriously complex leaky condo cases that arose as a result of water
leaks in condominium developments built during the 90s.  That litigation arose
under the old Act.

[11]

Justice Neilson considered (among other things) the right of defendants
to claim contribution by way of third party notice against parties allegedly
liable to the plaintiff where the plaintiff could not sue those parties
directly because of the expiry of a limitation governing the plaintiffs cause
of action.  In reviewing the background of claims for contribution and
indemnity, Justice Neilson said this:

[18]

The defendants claim for contribution and indemnity is central to this
appeal, and it is useful to set out the characteristics of this cause of action
at the outset. The following description relies heavily on David Cheifetz,
Apportionment
of Fault in Tort
(Aurora, Ont.: Canada Law Book, 1981), updated and
modified for the British Columbia context.

[19]

The terms contribution and indemnity both refer to a restitutionary
remedy rooted in unjust enrichment that provides a right of contribution toward
a plaintiffs damages as between concurrent tortfeasors. A claim for indemnity
seeks recovery of the entire amount that a tortfeasor has paid to the
plaintiff. A claim for contribution seeks only a portion of that amount. For
the sake of brevity, in these reasons I use the term contribution to refer to
both.

[20]

There was no right to contribution at common law between concurrent
tortfeasors. A plaintiff could sue and collect 100 percent of her loss from any
one of several concurrent tortfeasors regardless of his degree of fault. That
tortfeasor had no right to then sue the others to recover the amounts
attributable to their fault.

[21]

In British Columbia, that unfairness was remedied by enacting a
statutory right to contribution and indemnity in 1936. Presently, that right is
found in s. 4 of the

[
Negligence Act
, R.S.B.C. 1996,
c. 333 (the 
Act
)], which reads:

4  (1)  If damage or
loss has been caused by the fault of 2 or more persons, the court must
determine the degree to which each person was at fault.

(2)  Except as provided in
section 5 if 2 or more persons are found at fault

(a) they are jointly and severally
liable to the person suffering the damage or loss, and

(b) as between themselves, in the
absence of a contract express or implied, they are liable to contribute to and
indemnify each other in the degree to which they are respectively found to have
been at fault.

[22]

Section 4(2) thus creates two independent statutory rights. The first is
a plaintiffs right to recover the whole of her loss from any one of several
concurrent tortfeasors on the basis that they are jointly and severally liable.
The second is the right as between those tortfeasors to claim contribution.

[23]

The cause of action for contribution does not accrue, and the
limitation period does not begin to run, until the defendant tortfeasor sued by
the plaintiff has been found liable
:
George Wimpey & Co. v. British
Overseas Airways Corporation
, [1955] A.C. 169 at 177, [1954] 3 All E.R. 661
(H.L.);
British Columbia Hydro and Power Authority v. Van Westen
, [1974]
3 W.W.R. 20 at 22 (B.C.S.C);
Krusel No. 1
at paras. 47-50
.

[24]

The
Limitation Act
, R.S.B.C. 1996, c. 266, does not set out
a specific limitation period for a claim for contribution. It is thus subject
to the residual limitation period of six years pursuant to s. 3(5) of that
Act
.

[Emphasis added.]

(I propose to follow Justice Neilsons example of using the
term contribution to cover both contribution and indemnity, for the sake of
brevity.  Also for the sake of brevity, I propose to treat the appellants
essentially identical separate claims for contribution as one claim.)

[12]

Justice Neilson concluded at para 57:

Section 4(2)(b) of the
Act
creates an independent right of contribution as between the defendants and the
respondents since the plaintiff had a cause of action against each of them when
the alleged tort occurred. The objective of that right is to ensure that any
damages established by the plaintiff will be shared equitably among concurrent
tortfeasors according to their degree of fault. There is no principled reason
why the post-tort conduct of the plaintiff in failing to join the respondents
as defendants before the limitation period against them expired should
interfere with the defendants right of contribution.

[13]

So the expiry of the limitation period governing the plaintiffs cause
of action against the proposed third parties did not prevent the defendants
from claiming against those same parties for contribution.  No limitation had
expired or even started to run in relation to the proposed contribution claim. 
That cause of action would not accrue until there was a finding that the
defendants were liable to the plaintiff; the limitation period would then run
for six years.

[14]

That is the concept that the appellants say applies here, under the old
Act.

2.2

Claims for contribution under the new Act

[15]

The new Act addressed this situation squarely in three ways.

[16]

First
, it changed the starting point for the running of time by
doing away with the relevance of cause of action accrual.  Instead, by section
6(1), it started the running of time from when a claim was discovered:

Basic
limitation period

6

(1)
Subject to this Act, a court
proceeding in respect of a claim must not be commenced more than 2 years after
the day on which the claim is discovered.

[17]

Second
, it dealt expressly with claims for contribution and
indemnity by specifying in section 16 when such claims were deemed to be
discovered:

Discovery rule for claims for
contribution or indemnity

16

A
claim for contribution or indemnity is discovered on the later of the
following:

(a)
the day on which the claimant for contribution or
indemnity is served with a pleading in respect of a claim on which the claim
for contribution or indemnity is based;

(b)
the first
day on which the claimant knew or reasonably ought to have known that a claim
for contribution or indemnity may be made.

[18]

It follows from section 16 that a claim for contribution will generally
be discovered, and time will begin to run, long before a cause of action for
contribution accrues (which is when the party seeking to assert it is found
liable to another party, and when time would have begun to run under the old
Act).

[19]

Third
, it dealt specifically with contribution claims made by way
of counterclaim or third-party claim in the context of other proceedings in
section 22:

Counterclaim or other claim or
proceeding

22
(1)

If a court proceeding has been commenced in
relation to a claim within the basic limitation period and ultimate limitation
period applicable to the claim and there is another claim (the "related
claim") relating to or connected with the first mentioned claim, the
following may, in the court proceeding, be done with respect to the related
claim even though a limitation period applicable to either or both of the
claims has expired:

(a)
proceedings by counterclaim may be brought, including the addition of a new
party as a defendant by counterclaim;

(b)
third party proceedings may be brought;

(c)
claims by way of set off may be advanced;

(d)
new
parties may be added or substituted as plaintiffs or defendants.

(2)

Nothing
in subsection (1) gives a person a right to commence a court proceeding under
subsection (1) (a) or (b)
in relation to a claim for contribution or
indemnity
after the expiry of a limitation period applicable to that claim.

[Emphasis added.]

[20]

The interpretation of section 22, and its impact on the third party
claims in this case, is the subject of the second ground of appeal (the
section 22 issue).  The appellants concede that the new Acts limitation on
claims for contribution had expired before their application to add the
respondents as third parties.  But, they say, section 22(1) preserves the right
to assert that claim by way of third-party proceedings in a related action. 
The issue is whether that right is subject to section 22(2).  That question, as
framed by the appellants, turns on whether the reference in section 22(2) to a
right to commence a court proceeding includes third party proceedings claiming
contribution, or contemplates only independent actions for contribution.  This
focuses on the term court proceeding which is used throughout the new Act.

[21]

But this ground depends on which of the two Acts applies to this
litigation, which is the subject of the first ground of appeal.  The new Act
addressed this issue of transition in section 30 (the section 30 issue):

Transition

30

(1)

In this section:

"effective
date"
means the day on which this section comes into force [
June
1, 2013
];

"former
Act"
means the
Limitation
Act
,
R.S.B.C. 1996, c. 266,
as that Act read immediately before the effective date;

"former
limitation period"
means, with respect to a pre-existing claim, a
limitation period that applied to the pre-existing claim before the effective
date;

"pre-existing
claim"
means a claim

(a)
that is based on an act or omission that took place
before the effective date, and

(b)
with respect to which no court proceeding has been
commenced before the effective date.

(2)
A court proceeding must not be commenced with respect
to a pre-existing claim if

(a)
a former limitation period applied to that claim
before the effective date, and

(b)
that former limitation period expired before the
effective date.

(3)

Subject to subsection (2), if a pre-existing claim was discovered
before the effective date, the former Act applies to the pre-existing claim as
if the right to bring an action occurred at the time of the discovery of the
pre-existing claim.

(4)

Subject to subsection (2), if a pre-existing claim was not
discovered before the effective date,

(a)
in the case of a pre-existing claim referred to in
section 3 of this Act, that section applies to the pre-existing claim,

(b)
subject to paragraph (a) of this subsection, in the
case of a pre-existing claim referred to in section 8 (1) (a) or (b) of the
former Act, Part 2 of this Act and section 8 of the former Act apply to the
pre-existing claim, or

(c)
in the case of any other pre-existing claim,

(i)

subject to subparagraph (ii) of this paragraph, this Act applies
to the pre-existing claim, and

(ii)

Part 3 of this Act applies to the pre-existing claim as if the
act or omission on which the pre-existing claim is based occurred on the later
of

(A
)
the effective date, and

(B)
the day
the act or omission takes place under section 21 (2) of this Act.

[22]

This section 30 issue, then, turns primarily on whether the appellants
claim for contribution against the respondents is a pre-existing claim within
the meaning of section 30(1).  Here, no court proceeding had been commenced
before the effective date of June 1, 2013, satisfying the second branch of the
definition.  This question therefore comes down to the first branch: whether
the claim for contribution can be considered a claim that is based on an act
or omission that took place before June 1, 2013.

[23]

It will be immediately apparent that although the two issues are
separate, and focus on different sections, they both turn on the interpretation
of the new Act.  As I will discuss in more detail below, statutory
interpretation is a process that involves, among other things, reading the
words of an Act in their entire context, harmoniously with the scheme and
object of the Act and the intention of Parliament.  Of necessity, this will
require consideration of the Act as a whole, as well as consideration of the
relevant sections individually.

[24]

Before turning to discuss these issues in detail, and the principles of
statutory interpretation that must inform them, I set out the relevant
chronology of events in this case.

2.3

Chronology

[25]

The motor vehicle accident in question happened on
October 27, 2012
.

[26]

On
June 1, 2013
, the new Act came into effect.

[27]

On
October 27, 2014
, precisely two years after the accident, the
plaintiff filed notice of civil claim.  She named as defendants the appellant
driver, Mr. Lezama, whose name was inaccurately stated, and the appellant
owner, Enterprise.  She also named John Doe, representing Mr. Lezamas
employer (since identified as PFM/LHP).

[28]

The plaintiff amended her notice of civil claim on July 27, 2015, to
correct Mr. Lezamas name.  The amended notice of civil claim was served
on Enterprise on
August 1, 2015
.

[29]

On
September 1, 2015
, counsel representing both Mr. Lezama
and Enterprise (who was not counsel on this appeal or on the application below)
wrote to counsel for the plaintiff identifying the John Doe defendant as PFM
Productions Inc.

[30]

The amended notice of civil claim was served on Mr. Lezama on
September
15, 2015
.  Under the new Act, but not the old, the two-year limitation
period for the defendants to advance a claim for contribution and indemnity
against PFM/LHP would begin running on this date, being the later of the two
available dates under section 16 of the new Act.  The earlier date was
triggered at the beginning of September with defence counsels identification
of PFM as Mr. Lezamas employer.

[31]

The appellants filed their response on April 14, 2016.

[32]

PFM amalgamated with LHP on June 1, 2017.

[33]

On February 23, 2018, the appellant Mr. Lezama filed his
application to add PFM/LHP as third parties.  The appellant Enterprise filed
its application on May 7, 2018.

[34]

On May 30, 2018, the master granted the leave sought by the appellants. 
The judge reversed that decision on October 8, 2019; hence this appeal.

3.0

THE CHAMBERS JUDGES REASONS

3.1

The section 22 issue

[35]

As noted, the appellants argument that it was the old Act that applied
to their third party claim in accordance with section 30 (properly interpreted)
had not been raised before the master.  Accordingly, after a detailed review of
the history and principles of third party proceedings for contribution, the
judge dealt first with the argument that had been raised: the effect of section
22 of the new Act.  He began by identifying the issue:

[54]

Section 22(1) of the new
Limitation Act
permits the filing of a
third party proceeding in an action even though a limitation period applicable
to the third party claims has expired.  Without more, the expiry of such
limitation period would not prevent any court from granting leave pursuant to Rule
3-5(4)(a) for the filing of any such Third Party Notice.

[55]

Unlike the situation under the old
Limitation Act
, there is now
more to the equation: s. 22(2) of the new
Limitation Act
qualifies
the litigation rights granted in s. 22(1).  In particular, that
section provides that s. 22(1) does not give a person the right to
"commence a court proceeding" in relation to a claim for contribution
or indemnity after the limitation period applicable to that claim has
expired.  Hence the question that has given rise to this appeal: 
What exactly is the effect of s. 22(2) of the new
Limitation Act
upon a proposed third party proceeding for contribution under the
Negligence
Act
if the limitation period for such a contribution claim has otherwise
expired?

[36]

The judge then reviewed a number of competing decisions on the subject,
including Master Elwoods decision in
Dhanda v Gill
, 2019 BCSC 1500,
concluding:

[58]

I completely agree with and adopt the analysis of Master Elwood in
Dhanda
insofar as interpretation of the new
Limitation Act
in general and
s. 22 of that Act in particular is concerned.  In my opinion:

·

the legislature intended to radically change the law and
procedure regarding contribution and indemnity claims under the
Negligence
Act
;

·

properly interpreted, the new
Limitation Act
provides that
a two-year limitation period (following "discovery") applies to
contribution or indemnity claims under the
Negligence Act
whether
brought as a plaintiff by way of a separate action or as a defendant by way of
a third party proceeding in an action already underway;

·

expiry of the two-year limitation period is a substantive and
complete defence to any such contribution/indemnity claim and one which, except
in rare circumstances such as waiver or estoppel, will usually result in
dismissal of the claim;

·

unlike s. 4(1) of the old
Limitation Act
, ss. 22(1)
and (2) of the new
Limitation Act
do not remove an accrued limitation
defence as a bar to third party proceeding for contribution or indemnity under
the
Negligence Act
; to the contrary, where such a defence has accrued
and applies, the court should enforce same;

·

Rule 3-5(4) bestows a discretion upon the court to permit the
filing of Third Party Notices; while that procedural discretion must be
exercised judicially and with reference to the factors discussed in the case
law, the rule does not permit the court to extinguish a substantive legal
defence to a proposed contribution claim based on an expired limitation period;
and

·

if the merits of any such limitation defence are in question (
e.g
.
date of discovery, waiver or estoppel,
et cetera
), the court should
direct that the issue be determined in the proposed third party proceeding or,
if considered more appropriate, by way of a separate action.

[37]

The judge then turned to discuss external documents that had been
reviewed by Master Elwood in
Dhanda
and were also in evidence before him
(as they were before us):

[59]

In his Reasons for Judgment Master Elwood refers to the "White
Paper on
Limitation Act
Reform:  Finding the Balance"
(September 2010), issued by the Ministry of Justice as well as another ministry
publication "The New
Limitation Act
Explained" (June
2013).  He observes:

[55]     
The White Paper includes a draft provision in substantially the same language
as s. 22 of the current Limitation Act. The comment below the draft
provision reads, at p. 70:

This section provides that there is
no limitation period for a secondary claim (i.e., a counterclaim, a third party
proceeding, or a claim by way of set-off) so long as this secondary claim is
related to the primary claim (or original lawsuit), and the primary claim was
commenced in time. Judges will still have discretion to refuse relief on
grounds unrelated to the expiry of a limitation period.

This section carries forward the
principles from section 4 of the current Act but removes the application of
this section to claims for contribution. Contribution claims will be governed
by limitation periods in the new Act
. (emphasis added)

[56]     
The New Act Explained provides the following explanation of s. 22, at
p. 41:

Subsection (1)

This provision has been carried
forward from the former Act. It has been revised to fit within the language of
the new Act. Subsection (1) provides that there is no limitation period for a
person to commence a related claim (i.e. a counterclaim, a third party
proceeding, a claim by way of set off, or the addition or substitution of a new
party as plaintiff or defendant), as long as this related claim is related to
or connected with the original claim, and the original claim was commenced
within the limitation period under the new Act. This means that a judge retains
the discretion to allow or not allow a related claim to proceed.

Subsection (2)

Section 22 does not apply to
claims for contribution or indemnity. Contribution or indemnity claims are
governed by the basic and ultimate limitation periods in the new Act
.
Section 16 sets out that the basic limitation period runs from the later of:
the date a person claiming contribution or indemnity is served with the
paperwork starting the original claim (on which the contribution or indemnity
claim is based), or the date that a person first knew or reasonably ought to
have known that he or she could make a claim for contribution or indemnity
against a third party. (emphasis added)

[60]

The latter document also contained an explanation of s. 16, which
further emphasized that the new limitation provisions were designed to remove
judicial discretion to refuse to strike [or to grant leave to issue] a third
party contribution notice in the absence of meaningful delay or prejudice:

Under the former Act there was
potential for lengthy delays between the running of time in the original
lawsuit and the date a third party received notice of a claim against him or
her for contribution or indemnity.

Under the former Act it was open to
the court to consider delay and prejudice in determining whether to strike a
third party notice for contribution or indemnity.

The new Act provides that a claim
for contribution or indemnity cannot be brought against a third party more than
two years from the time when the original claim (i.e. the one from which the
claim for contribution or indemnity would arise) was served ... (p. 30)

[61]

These materials were also before the Court on this appeal along with
extracts from Hansard evidencing discussion of the proposed new Act in the
legislature:




Hon. S. Bond:



What we see in [s. 22] is actually
  a carry-forward of the principles from s. 4 of the current Act, so there
  is no new law.
What it does do, though, is remove the section to
  claims for contribution or indemnity ... basically, it's a carry-forward and
  the removal of contribution or indemnity, which is covered off in s. 16
.
  [Emphasis added.]









Hansard, 2011 Legislative Session:  4th Session
39th Parliament, Thursday, April 26, 2012
(Vol. 3, No. 6) at page 11169




[62]

It is perhaps noteworthy that Canada's leading commentator on the law of
limitations agrees that s. 22 of the new
Limitation Act
does not
permit proceedings for contribution or indemnity once the relevant limitation
period has expired:

The new British Columbia
Limitation
Act
, which came into force 1st June 2013, provides in s. 22(1) that if
a court proceeding has been brought in a timely way, and there is another claim
relating to or connected with the first claim, a proceeding by way of
counterclaim and third party claim may be brought, and claims by way of set off
may be advanced, even though the limitation period applicable to either or both
of the claims has expired.  However,
this provision does not give a
person the right to commence a proceeding for contribution and indemnity once
the limitation period for that relief has expired
. [
Ibid
, s. 22(2)]. 
Claims for contribution and indemnity are governed by s. 16 of the Act ...
[Emphasis added.]

Mew, The Law of Limitations (3d
edit., LexisNexis, Toronto, 2016) at p. 179

[Emphasis original.]

[38]

The judge then turned to the appellants argument that the term court
proceeding in s. 22(2) of the new Act refers only to a claim for
contribution brought by way of a separate court action as opposed to a third
party proceeding. This argument was based in part on what I said in
Mayer
v Mayer
, 2015 BCSC 1193, about the meaning of court proceeding in the
context of the application of section 30 of the new Act to amendments to
pleadings.  The chambers judge disagreed with the appellants argument in this
regard, and, as I will explain further below, so do I.  What the chambers judge
said was this:

[66]      With all due respect, it simply makes no sense for
s. 22(2) of the new Act to be limited to separate lawsuits for
contribution and not to include third party proceedings.

[67]

First the subsection itself refers to "a court proceeding under
subsection (1)(a) or (b)"; that in turn refers only to "proceedings
by counterclaim" and "third party proceedings", neither of which
is a separate lawsuit.  In other words, s. 22(2) says "nothing
in subsection (1) gives a person a right to commence a [proceeding by
counterclaim] or a [third party proceeding] in relation to a claim for
contribution or indemnity after expiry of a limitation period applicable to
that claim."  The meaning of the prohibition is plain.

[68]

Second, I would point out that a Third Party Notice (and indeed also a
Counterclaim) actually is a form of "originating process".  Rule
1-1 contains the following definition:

"originating pleading"
means a notice of civil claim, counterclaim, third party notice or any
document, other than a petition, that starts a proceeding;

The Third Party Notice is the pleading by which the proposed
contribution claim is, quite literally, being originated.

[69]

Third, as noted above, claims for contribution or indemnity under the
Negligence
Act
have traditionally and invariably been brought by way of third party
proceedings.  Separate lawsuits in that regard simply did not (and do not)
occur as a matter of practice.  In such circumstances, it makes no
practical sense to impose a radically different limitation period for an
essentially non-existent lawsuit and yet remove that limitation for the
mechanism almost universally employed in practice to pursue such contribution
claims.  That could not possibly have been the legislature's intent.

[70]

The defendants provide an "example of absurdity" to illustrate
what they consider to be an irrational (and unfair) application of Rule 22-2 if
the latter is considered to apply to contribution third party proceedings:

A plaintiff could commence proceedings
against a first defendant and then add new defendants after the limitation
period has expired.  However, although those new defendants would then be
able to third party each other and the first defendant as of right, the first
defendant would not be able to third party the new defendants.  This could
not have been the intention of the legislature.

[71]

I disagree with the characterization of this example as an
absurdity.  Whether or not the first defendant would be able to third
party the new defendants (or for that matter institute a separate contribution
action against those new defendants) would be determined by the concept of
"discovery".  If the first defendant was aware that the new
defendants had caused or contributed to the plaintiff's loss or injury, then he
could have and should have issued his contribution proceedings within the
applicable two-year limitation period.  If he failed to do so, he has only
himself (or his lawyer) to blame.  If, on the other hand, he was unaware
that the new defendants had caused or contributed to the plaintiff's loss or
injury, then he would have two years to sue for contribution starting from the
date he knew or should have known of that fact.  As Master Elwood rightly
states:

[62]      Section 22(2) represents
a legislative choice to time limit claims for contribution or indemnity.
Whether it strikes the right balance between fairness to potential claimants
and certainty for potential third parties is not for me to decide.

3.2

The section 30 issue

[39]

The judge found that the appellants claim for contribution was a
pre-existing claim within the meaning of section 30(1) of the new Act, but was
not discovered before the effective date (June 1, 2013).  Accordingly, by
section 30(4), the new Act applied, and time began to run after the service of
the amended notice of civil claim on Mr. Lezama on September 15, 2015:

[91]

A claim for contribution under the
Negligence Act
is premised on
the plaintiff's "damage or loss" being caused by the fault of two or
more persons.  The limitation period for a plaintiff to sue on account of
that damage or loss is two years from the date of "discovery". 
Such discovery occurs when the plaintiff knew or reasonably ought to have known
"that the injury, loss or damage was caused by or contributed to by an act
or omission" on the part of a person against whom a claim might be made
(s. 8).  Declaratory claims for contribution or indemnity are thus
"based on an act or omission" that caused or contributed to the
plaintiff's loss or damage.

[92]

In this particular case, the acts, omissions, and resulting
loss/damage all occurred on the date of the motor vehicle accident, namely,
October 27, 2012.
Hence, the proposed third party proceeding meets
the first part of the definition of a "pre-existing claim" under
s. 30(1) of the new
Limitation Act
,
i.e.
an act or omission
occurring before June 1, 2013.

[93
]

It is also clear from the chronology set out above that no court
proceeding, whether a personal injury claim by the plaintiff or a third party
proceeding for contribution or indemnity, was commenced before June 1, 2013
. 
Hence the second condition is met and the proposed third party proceeding thus
qualifies as a "pre-existing claim" within the meaning of s. 30(1)
of the new
Limitation Act
.

[94]

Whether or not this pre-existing claim is governed by the old
Limitation
Act
or the new
Limitation Act
is dependent on the date of its
"discovery".  If such discovery occurred before June 1, 2013,
the old
Limitation Act
applies (s. 30(3)).  If the discovery
occurred after June 1, 2013, the new
Limitation Act
applies
(s. 30(4)(c)(i)).

[95]

Section 16 of the new Act specifies the date on which a claim for
contribution or indemnity is "discovered".  At the very earliest,
that date would be the date on which the defendants were served with the
plaintiff's Notice of Civil Claim,
i.e.
August/September 2015, fully two
years after the new legislation came into force.  The result is that the
proposed third party proceeding in this case is a "pre-existing
claim" governed by the new
Limitation Act
and the two-year
limitation period specified in that Act.

[96]

Hendrix v. Handa Travel Student Trip
, 2016 BCSC 620 (Master), is
an example of a pre-existing claim for claim for contribution or indemnity,
which is governed by the old
Limitation Act
.  There the injury
accident occurred in March 2011 and the defendants proposing to issue a third
party proceeding contribution notice were served with the Notice of Civil Claim
two years later in March 2013.  Master Muir concluded that date of service
was the date the claim for contribution and indemnity was
"discovered" within the meaning of s. 16 of the new
Limitation
Act
and in the particular circumstances of that case.  Hence s. 30(3)
of the new Act applied and the former legislation governed the relevant
limitation period for the contribution claim.

[97]

The present case is very similar except for one crucial point, namely,
that the contribution claim was
not
discovered until after the new
legislation came into force and hence s. 30(4) of the Act provides that
the new legislation governs the relevant limitation period.

[98]

It follows from all of the above that the transition provisions of the
new
Limitation Act
do not "save" the defendants from the
limitation expiry obstacle they otherwise confront.

[Emphasis added.]

4.0

DISCUSSION

4.1

An overview of the appellants position

[40]

The appellant asserts that the term court proceeding, as used
variously in sections 6, 22 and 30 of the new Act, can refer only to an
originating proceeding, such as a petition or action, and not to a claim
brought by third party notice in an existing action.

[41]

Turning to section 30(1), the reference in the second part of the
definition to a claim with respect to which no court proceeding has been
commenced before the effective date therefore does not include a third party
claim for contribution.  Rather, it addresses the underlying litigation to
which a third party claim for contribution relates.  Thus, in the appellants
submission, the chambers judge correctly found that their claim for
contribution was a pre-existing claim under section 30(1), for the reasons
set out in paras 92 and 93 of his reasons for judgment, as quoted above: it was
based on a motor vehicle accident that took place before the effective date,
and no court proceeding had been commenced before the effective date.

[42]

Where the judge erred, the appellants contend, is in his application of
subsections 30(3) and (4).  He interpreted the words if a pre-existing claim
was discovered before the effective date to refer to the discovery of the
third party claim for contribution, when in fact those words, construed
properly, refer to the discovery of the underlying tort claim.  Since the tort
claim was discovered before the effective date, the
old Act
applies.

[43]

But even if the
new Act
applies, the appellants submit, section
22(1) specifically preserves the ability to bring third-party proceedings even
though a limitation period applicable to either the related claim or the third
party claim has expired.  That ability, they contend, is not limited by
subsection (2), which, properly interpreted, must be considered to prohibit
only an independent claim for contribution, not the third party claim permitted
by subsection (1).  This follows from the correct interpretation of the words
court proceeding.

[44]

The appellants argue that in coming to the opposite conclusion, the
chambers judge erred in relying on the external documents from which he quoted
in support of his interpretation.  They submit that the judges reliance on
such documents demonstrates why our courts are generally reluctant to rely on
external publications in interpreting legislation, citing
Morguard
Properties Ltd v City of Winnipeg
, [1983] 2 SCR 493.

[45]

To support their arguments, the appellants raise two scenarios that,
they say, flow from the judges interpretation, but yield absurd anomalies that
the legislature could not possibly have intended.

[46]

The first (anomaly #1) is raised in their factum.  The judges
interpretation, they maintain, leaves the plaintiff governed by the old Act,
while the defendants are subject to the new Act for contribution purposes. 
This means that two different Acts apply to the same proceeding, with the
limitation governing the defendants claims for contribution being different
from the limitation governing the plaintiffs tort claim against the
defendants.

[47]

I observe at this point that this is hardly an anomaly, nor is it a
situation that the legislature could not possibly have intended.  Under the old
regime, this was invariably the result: see
Scott Management
, where the
difference between the limitation governing the plaintiffs claim against the
proposed parties, and the limitation governing the defendants proposed third
party claim against those same parties, was one of the central points.  In my
view, such a result would not offend any interpretive principle, but would
reflect the clear choice of the legislature.

[48]

The second (anomaly #2) is more complicated.  It flows, the appellants
say, from the judges conclusion that the discovery date relevant to section
30(3) is the one applicable to claims for contribution under section 16 of the
new Act, rather than the one applicable to the underlying tort claim under the
old Act.

[49]

Suppose, the appellants posit, the motor vehicle accident took place in 2011,
and the plaintiff commenced action in late 2012, naming two defendants. 
Suppose, then, that the plaintiff served defendant #1 in March 2013.  On the
judges reasoning, it would follow that defendant #1s claim for contribution
was discovered before the effective date of June 1, 2013, and the old Act would
apply in accordance with section 30(3) of the new Act.  The result is that the
limitation applicable to any claim for contribution brought by defendant #1
would not expire for at least six years.

[50]

Assume, then, that the plaintiff served defendant #2 shortly after the
effective date of June 1, 2013.  By the judges reasoning, that defendants
potential claim for contribution, like the claim here, would not be discovered
until
after
the effective date, so the new Act would apply in accordance
with section 30(4)(c)(i).  Defendant #2, then, would have only two years to
start his claim for contribution, not six or more like defendant #1.

[51]

Such an anomaly, the appellants argue, cannot have been intended.  It follows,
they submit, that when subsections 30(3) and (4) of the new Act refer to
whether a pre-existing claim was discovered before or after the effective date,
the reference must be intended to focus on the discovery of the underlying
claim, here the motor vehicle accident claim, not the claim for contribution. 
That way, the anomaly of different Limitation Acts

applying to claims
for contribution brought by different defendants in the same action cannot
arise.

[52]

I observe at this point that anomaly #2, as set up by the appellants,
would arise in only the very narrowest of windows (and not in this case), and
if contrary to the apparent intention of the legislature, may suggest error by
the judge other than in the interpretation of subsections 30(3) and (4).

4.2

Principles of statutory interpretation

[53]

This leads me to the principles of statutory interpretation.  They are
not in doubt.  Where doubt may arise is in their application.

[54]

As we have seen, the appellants submit that the judge erred in his
reliance on the external documents, citing
Morguard Properties,
a 1983
decision of the Supreme Court of Canada.  But this is not the most recent
statement of the law.

[55]

The definitive statement comes from the Supreme Courts decision in
Rizzo
& Rizzo Shoes Ltd (Re)
, [1998] 1 SCR 27, where the court adopted Elmer
Driedgers description of the proper approach:

21

Although
much has been written about the interpretation of legislation (see, e.g., Ruth
Sullivan,
Statutory Interpretation
(1997); Ruth Sullivan,
Driedger on
the Construction of Statutes
(3rd ed. 1994) (hereinafter 
Construction
of Statutes
); Pierre-André Côté,
The Interpretation of Legislation in
Canada
(2nd ed. 1991)), Elmer Driedger in
Construction of Statutes
(2nd ed. 1983) best encapsulates the approach upon which I prefer to
rely.  He recognizes that statutory interpretation cannot be founded on
the wording of the legislation alone.  At p. 87 he states:

Today there is only one principle
or approach, namely, the words of an Act are to be read in their entire context
and in their grammatical and ordinary sense harmoniously with the scheme of the
Act, the object of the Act, and the intention of Parliament.

Recent cases which have cited the above passage with approval
include:
R. v. Hydro-Québec
, [1997] 3 S.C.R. 213;
Royal Bank of
Canada v. Sparrow Electric Corp.
, [1997] 1 S.C.R. 411;
Verdun v.
Toronto-Dominion Bank
, [1996] 3 S.C.R. 550;
Friesen v. Canada
,
[1995] 3 S.C.R. 103.

22

I also rely
upon s. 10 of the
Interpretation Act
, R.S.O. 1980, c. 219,
which provides that every Act shall be deemed to be remedial and directs that
every Act shall receive such fair, large and liberal construction and
interpretation as will best ensure the attainment of the object of the Act
according to its true intent, meaning and spirit.

23

Although
the Court of Appeal looked to the plain meaning of the specific provisions
in question in the present case, with respect, I believe that the court did not
pay sufficient attention to the scheme of the
ESA
, its object or the
intention of the legislature; nor was the context of the words in issue
appropriately recognized.  I now turn to a discussion of these issues.

[56]

In para 34, the Court relied, in aid of interpretation, on statements
made by the Minister responsible for the legislation in question when he
introduced the relevant amendments, and also on what the Minister said in
legislative debates.  The Court went on to address the use of Hansard in para
35:

35

Although the
frailties of Hansard evidence are many, this Court has recognized that it can
play a limited role in the interpretation of legislation.  Writing for the
Court in
R. v. Morgentaler
, [1993] 3 S.C.R. 463, at p. 484, Sopinka
J. stated:

. . . until recently the
courts have balked at admitting evidence of legislative debates and speeches. .
. .  The main criticism of such evidence has been that it cannot represent
the intent of the legislature, an incorporeal body, but that is equally true
of other forms of legislative history.
Provided that the court remains
mindful of the limited reliability and weight of Hansard evidence, it should be
admitted as relevant to both the background and the purpose of legislation
.

[Emphasis added.]

[57]

This Court has also used legislative debates for assistance in
determining the purpose of the legislation.  See, for instance,
Reid v
Strata Plan LMS 2503
, 2003 BCCA 126 at para 27:

This analysis accords with one
of the goals of the Legislature in rewriting the
Condominium Act
, which
was to put the legislation in plain language and make it easier to use
(British Columbia,
Official Report of Debates of the Legislative Assembly,
Vol.
12 (1998) at 10379).

[58]

In her book
Sullivan on the Construction of Statues
, 6th ed
(Markham: Lexis Nexis, 2014) at para 2.1, Professor Sullivan sets forth the
classic three-pronged method to interpretation, as discussed by the Supreme
Court of Canada
in
Canada Trustco
Mortgage Co v Canada
, 2005 SCC 54 at para 10,
Celgene Corp v Canada (Attorney
General)
, 2011 SCC 1 at para 21, and
Canada (Information
Commissioner) v Canada (Minister of National Defence)
, 2011 SCC 25 at para
27
:

(1)

the ordinary meaning approach
using the text of the statute as the primary source;

(2)

the contextual approach
as originally described by Elmer Driedger and refined
by the Supreme Court in
Re Rizzo & Rizzo Shoes Ltd
; and

(3)

the purposive approach
in order to consider the practical idea behind the
enactment of both the relevant section and the statute as a whole, as well as
the real world effects of the Court's interpretation.

[59]

In
Reference re Firearms Act (Canada)
, 2000 SCC 31 at para
17, the Supreme Court discussed what extrinsic material a judge may use to
ascertain the purpose of a statute:

A law's purpose is often stated in the legislation, but it
may also be ascertained by reference to extrinsic material such as Hansard and
government publications: see
Morgentaler
,
supra
, at
pp. 483-84. While such extrinsic material was at one time inadmissible to
facilitate the determination of Parliaments purpose, it is now well accepted
that the legislative history, Parliamentary debates, and similar material may
be quite properly considered as long as it is relevant and reliable and is not
assigned undue weight: see
Global Securities
,
supra
, at
para. 25;
Rizzo & Rizzo Shoes Ltd. (Re)
, [1998] 1 S.C.R.
27, at para. 35; and
Doré v. Verdun (City)
, [1997] 2 S.C.R.
862, at para. 14. Purpose may also be ascertained by considering the
"mischief" of the legislation  the problem which Parliament sought
to remedy: see
Morgentaler
,
supra
, at pp. 483-84.

[Emphasis
added.]

[60]

The key, then, to the use of extrinsic materials, as discussed in the
Firearms
Act Reference
, and
Rizzo
(at para 35) is that they be relevant and
reliable, and not assigned undue weight.  Typically, as in
Reid
, they
will be used to assist the court in determining the third prong of Professor
Sullivans approach, also discussed by
Driedger
, being the purpose of
the legislation and the intention of the legislature.

[61]

In all cases, of course, the court must seek to read the provisions of
an Act as a harmonious whole, and avoid an interpretation that the ordinary
meaning of the words used in the statute cannot bear.

[62]

In the present case, the appellants raise arguments concerning the
interpretation of a number of words and phrases, including claim,
pre-existing claim, based upon, and court proceeding, most of which are
capable of bearing more than one meaning.  In these circumstances, I consider
that the judge was entitled to have regard to the external documents he
reviewed.  The only question is whether he gave them too much weight.

[63]

With these principles in mind, I turn to discuss the issues arising in
this case.

4.3

Section 30  a pre-existing claim?

[64]

As we have seen, the appellants submit that error arose in the judges
finding that the relevant date of discovery for the pre-existing claim was
that deemed by section 16 of the new Act to apply to claims for contribution,
rather than the date of discovery of the underlying tort claim for damages.

[65]

The respondents also say that the judge erred in his interpretation of
the transition provisions in section 30.  They maintain, however, that the
error occurred further back along the judges chain of reasoning.  The problem,
they contend, lay in focusing on the underlying tort claim at all.  The claim
at issue is not the underlying claim, but is the appellants claim for
contribution.  That claim must of necessity be based on an act or omission
that has yet to take place (a finding of liability against the appellants).  It
follows, in the respondents submission, that a third party claim for
contribution in an ongoing action can
never
meet the definition of
pre-existing claim in section 30(1).

[66]

On this analysis, the claim for contribution will always be subject to
the new Act, and co-defendants who claim against each other for contribution
will always be subject to the same limitation period.  If we take the appellants
example, then on this interpretation, whether the plaintiff serves a defendant
before or after the effective date cannot matter.  In either event, the claim
for contribution, whenever it may be brought, must by its nature be based on an
act or omission that has yet to take place, not one that took place before the
effective date.

[67]

In my view, the respondents have it right.

[68]

A pre-existing claim, then, is defined as a claim that
satisfies two conditions.  The second condition, that no court proceeding has
been commenced before the effective date, has been satisfied here regardless of
which claim is intended to be covered.  I therefore begin by looking at the
first condition, that the claim be based on an act or omission that took place
before the effective date.  I will then look at the definition as a whole.

[69]

The new Act defines claim as

a claim to remedy an injury, loss
or damage that occurred as a result of an act or omission.  That does not
enlighten us as to whether a pre-existing claim (in the context of this case)
is intended to be limited to the underlying tort claim, or to the third party
claim for contribution.  Both are claims to remedy injury, loss or damage
occurring as a result of an act or omission.  But are they each based on the
same act or omission?

[70]

With respect to claims for contribution, I go back to what Justice
Neilson said in
Scott Management
at para 23: The cause of action for
contribution does not accrue  until the defendant tortfeasor sued by the
plaintiff has been found liable.  That finding of liability, coupled with a
resultant unjust enrichment of the liable party who fails to contribute his or
her fair share, comprise the act or omission upon which the claim is based.

[71]

That follows from the wording of section 4 of the
Negligence Act
as
cited by Justice Neilson:

4
(1)  If damage or loss has been
caused by the fault of 2 or more persons, the court must determine the degree
to which each person was at fault.

(2)  Except as provided in section 5
if 2 or more
persons are found at fault

(a) they are jointly and severally
liable to the person suffering the damage or loss, and

(b) as between themselves, in the
absence of a contract express or implied, they are liable to contribute to and
indemnify each other in the degree to which they are respectively found to have
been at fault.

[Emphasis added.]

[72]

It is therefore when two or more persons have been found at fault by a
court that a right to contribution arises, based upon the unjust enrichment
that arises in the event of a failure to contribute.  That is why, under the
old Act, the six year limitation did not begin to run until that event had
occurred.

[73]

This leads to what, in my view, was an error in the judges approach to
this part of the case, as set out in para 91 of his reasons, quoted above. 
First, he appears to have melded the acts/omissions giving rise to the
plaintiffs claim (
loss or damage
caused by the fault of others) into
the acts giving rise to the claim for contribution (
finding of fault
of
two or more persons).  He did so on the basis that the claim for contribution
was declaratory (based upon its contingent nature), but that does not alter the
fact that the declaration cannot be made until the finding of fault on the part
of two or more persons has taken place.  It is that finding, and only that
finding, that gives rise to the restitutionary claim for contribution.

[74]

Second, he then wove the discovery provision governing the plaintiffs
claim into his interpretation of the definition of a pre-existing claim under
section 30(1) of the new Act.  But the relevance of discovery comes later, in
subsections (3) and (4).  At that point, the judge found, it is the discovery
of the contribution claim that matters, not the discovery of the tort claim.  I
agree.  Returning to the definition, it asks in subparagraph (a) only whether
the act or omission upon which the claim is based took place before the
effective date, not whether it was discovered before the effective date.  Only
if a claim is found to be a pre-existing claim does the date of its discovery
become relevant in accordance with subsections (3) and (4).

[75]

To what claim, then, does the definition refer?  There is no
doubt, as noted, that the underlying tort claim is a pre-existing claim. 
What we need to determine is whether the contribution claim is a pre-existing
claim.  That, as the respondents point out, is the claim at issue.  And is not
the purpose
of the definition to help the reader
determine whether a particular claim falls under the old Act or the new Act?
Why would that be limited to the circumstances surrounding an underlying
action, as opposed to the claim for contribution itself?

4.4

Sections 30 and 22  a court proceeding?

[76]

The appellants argue that the answer flows from the new Acts use of the
term court proceeding.  Although that term does not appear in the first
branch of the section 30(1) definition of pre-existing proceeding that we
have been discussing, it does appear in the second.  When one takes that into
account, they say, it becomes clear that, viewed contextually, the definitions
reference to a claimbased on an act or omission that took place before the
effective date is intended to refer to that underlying tort claim
and any
related claim
arising from the act or omission.

[77]

I disagree.  The language of the first branch of the definition does not
define a pre-existing claim as a claim that is
related to
, or
connected to
an act or omission; rather, it says based on.  So wide an
interpretation as the appellants suggest could lead to considerable difficulty
in the application of section 30(2), given that claims with quite different
limitation periods could arise from the same facts.

[78]

As we have seen, the
basis
of a claim for contribution is a
statutory right to restitution that flows from findings of liability, not from
the commission of a tort.  The connection to the underlying claim is not to the
act or omission that gives rise to the tort claim.  Rather, the connection
arises from the bare fact of the tort action itself, because it seeks to impose
liability.

[79]

The purpose of the claim for contribution is to remedy the defendants
loss in paying too much of the plaintiffs judgment as a result of the act or
omission of the co-defendant or other third-party in failing to pay its proper
share, thereby being unjustly enriched.  The act or omission on which the claim
for contribution is based thus remains that failure, which is something quite
different from the act or omission giving rise to the tort claim.  That is why
tortfeasors may bring their claims for contribution independently of the tort
claim, in a separate action, and are not obliged to attach them to the tort
action by way of third-party proceedings.

[80]

In my view, this interpretation is consistent with the ordinary meaning
of the words as used in the text of the statute, as well as the contextual
approach described by Elmer Driedger, and the purposive approach of considering
what the legislation was intended to accomplish as discussed in the materials
reviewed by Master Elwood in
Dhanda
and adopted by the chambers judge. 
It is also consistent with the approach taken in other jurisdictions to almost
identical statutory provisions.

[81]

In
Placzek v Green
, 2009 ONCA 83, the Ontario Court of Appeal
considered similar language, and concluded that the claims of contribution in
question were based not on the acts or omissions giving rise to the tort claim,
but on different acts or omissions giving rise to a claim for restitution:

[34]      First, rather than being claims for damages arising
out of a tort, Mr. Greens proposed counterclaims are essentially claims
for restitution based on unjust enrichment.  As such, although Mr. Greens
claims may be related to the tortious acts that underlie the accident, they are
not founded on those acts.  Rather, they are founded on the acts or omissions
giving rise to the claims for restitution.

[35]      There is ample
authority in Ontario for the proposition that a claim for contribution and
indemnity under section 1 of the Negligence Act is not a damage claim arising
out of the tort, but instead is a statutory claim founded on principles of
restitution and unjust enrichment.

I observe that although Justice Simmons, for the court,
used the phrase founded on, the legislation in question (the
Limitations
Act, 2002
, SO 2002, c 24, s 24(2)), like our new Act, used the words
claims
based on
acts or omissions that took place before the effective
date (emphasis added).


[82]

Placzek
was applied by the Court of Appeal for Saskatchewan in
Casbohm
v Winacott Spring Western Star Trucks
, 2013 SKCA 88.  The analysis is
entirely consistent with what Justice Neilson said in
Scott Management
,
and I would apply it in this case: the appellants claim for contribution is
not based (or founded) on the act or omission that gave rise to the tort
claim and took place before the effective date.  Rather, it is (or will be)
based on subsequent acts or omissions that, in accordance with principles of
restitution and unjust enrichment, will found a claim for contribution.

[83]

I do not see that the use of the term court proceeding in the second
branch of the definition of pre-existing proceeding leads to a different
conclusion.

[84]

But the appellants contend that the use of the term throughout section
30, and also in sections 22 and 6, demonstrates that a pre-existing claim
does
not
contemplate a dependent third-party claim, but rather covers
the underlying main action.  This is because, the appellants submit, court
proceeding, as it appears throughout the new Act, can refer only to an
originating proceeding, such as a petition or action, and not to a claim
brought by third party notice in an existing action.  It follows, they say,
that the use of the term excludes a third party claim, and must refer to the
underlying litigation, just as, in their submission, the act or omission
referred to in the first part of the definition must refer to the underlying
claim.

[85]

It would follow from this proposition that a third party claim for
contribution could then constitute a pre-existing claim in accordance with
the second part of the definition in section 30(1)
only
if the
underlying claim to which it is connected had been commenced
after
the
effective date, as is the case here.

[86]

But as I see it, that does not fit with the scheme of the transition
provisions, and the approach the new Act takes to claims for contribution.  The
result of the appellants interpretation yields a result entirely contrary to
the purpose of the legislation.  I raise three points in this regard.

[87]

First, the appellants interpretation would exclude third-party claims
of any kind from the limitation imposed by section 6(1), which provides that a
court proceeding in respect of a claim must not be commenced more than 2 years
after the day on which the claim is discovered.  This is because, according to
the appellants, a third party claim cannot be a court proceeding.  As
discussed below, this would make nonsense of much of section 22.

[88]

Second, it would have a potentially perpetuating effect on independent
claims for contribution.  Such claims still depend upon the prospect of a
finding of liability in an underlying claim, and thus are related claims.  If
the underlying claims were commenced
before
the effective date, it would
not be a pre-existing claim.  The act and omission upon which it is based, the
discovery thereof, and the commencement of the action, would all have taken
place before the effective date. It would follow from the appellants position
that the old Act would apply not only to that underlying claim, but also to any
related claim for contribution no matter when advanced or discovered, even if
commenced as a separate action many years after the effective date.

[89]

Third, it would yield no change to the situation discussed in
Scott
Management
, where third-party proceedings could be commenced long after the
commencement of the original action.

[90]

These points precisely describe the mischief that the new Act was
intended to address.  As was noted by the chambers judge at para 60, quoting
from the ministry document,
The New Limitation Act Explained
:

Under the former Act there was
potential for lengthy delays between the running of time in the original
lawsuit and the date a third party received notice of a claim against him or
her for contribution or indemnity.

[91]

Perpetuating that problem is a result to be avoided unless clear and
unambiguous language compels otherwise.

[92]

Nevertheless, the appellants rely in part on what I said in
Mayer v
Mayer
, 2015 BCSC 1193, about the meaning of court proceeding in the
context of the application of section 30 of the new Act to amendments to
pleadings.  The chambers judge disagreed with the appellants argument in this
regard, and so do I.

[93]

As the chambers judge noted, what I said in
Mayer
about court
proceeding meaning originating processes was not at all inconsistent with
court proceeding including a third party claim.  A third party claim is a
proceeding brought in court that originates a claim: here, the claim for
contribution.  Accordingly, consistent with the definition of originating
pleading in Rule 1-1 of the
Supreme Court Civil Rules
, which includes a
third party notice as a document  that starts a proceeding, a third party claim
would constitute a court proceeding.  This fits with section 6 of the new
Act.

[94]

In para 24 of
Mayer
, I expressed the view that court proceeding
was intended to encompass originating processes.  For the reasons just
discussed, that would include a third party notice.  For present purposes, it
is not necessary to comment any further on that conclusion.  I also suggested
that it would not encompass an application to amend pleadings, which is what
was before me at that time, or proceedings such as the filing of a
counterclaim.  The filing of a counterclaim was not before me; those
dicta
were, accordingly,
obiter
and, as it appears to me now, incorrect.  In
fact, a counterclaim
would
qualify as an originating proceeding, for the
same reason that a third party notice does.  Both are processes that originate
proceedings for claims not previously raised.

[95]

Mayer
, then, properly understood, does not support the
appellants position.  Neither does the manner in which the term court
proceeding is used in section 22.

[96]

I turn next to the section 22 issuewhether the new Act bars the
appellants third party claim for contribution.

4.5

Section 22  a bar to third party claims for contribution?

[97]

Claims for contribution and indemnity can be brought in more than one way. 
Of relevance to this case, they can be brought by a defendant in an existing
action by way of third party notice (as in the
Scott Management
case). 
Alternatively, that same defendant could bring the claim as a plaintiff in a
separate and independent action.  Are both of those proceedings treated the
same way under the new Act?  This raises the interpretation of section 22, and,
again, of the phrase court proceeding as discussed above.  I set out section
22 again, for convenience:

Counterclaim or other claim or proceeding

22


(1)

If a
court proceeding
has been commenced in relation to a claim within the
basic limitation period and ultimate limitation period applicable to the claim
and there is another claim (the "related claim") relating to or
connected with the first mentioned claim, the following may, in the
court
proceeding
, be done with respect to the related claim even though a
limitation period applicable to either or both of the claims has expired:

(a)
proceedings by counterclaim may be brought, including the addition of a new
party as a defendant by counterclaim;

(b)
third party proceedings may be brought;

(c)
claims by way of set off may be advanced;

(d)
new
parties may be added or substituted as plaintiffs or defendants.

(2)

Nothing
in subsection (1) gives a person a right to commence a
court proceeding
under subsection (1) (a) or (b)
in relation to a claim for contribution or
indemnity after the expiry of a limitation period applicable to that claim.

[Emphasis added.]

[98]

Section 22(1)(b) provides that third party claims may be brought in an
existing court proceeding
notwithstanding
that an applicable limitation
period has expired.  This is, however, subject to section 22(2).  The question
is whether that subsection prohibits the bringing of such third party claims
(or counterclaims) where, as here, they are
claims for contribution or
indemnity
.  The chambers judge found that it did.  The appellants argue
that, properly construed, it does not.

[99]

Again, this turns on whether the term court proceeding in section 22
can mean only an independent original action, and excludes a third party
claim.  The appellants say it does.  Accordingly, they assert, subsection 22(2)
refers only to the right to commence a separate, independent action for
contribution, and does not derogate from subsection 22(1)s preservation of the
right to bring a related third-party claim or counterclaim (section 22(1)(b)
and (c)).  Its intention, they say, is to make it clear that while the ability
to make a third party claim or counterclaim for contribution notwithstanding
the expiry of the applicable limitation is preserved, the ability to commence
an independent claim for contribution is not.

[100]

As the
chambers judge intimated, that would be a most peculiar interpretation,
rendering the subsection superfluous and confusing.

[101]

If the
appellants position is correct, then subsection 22(2) would have to be
interpreted as if the words under subsection (1) (a) or (b) were not there,
or perhaps had crept in by mistake.  In any event, they would have to be
ignored.

[102]

If they
were ignored, the subsection would be pointless.  On the appellants
interpretation, it would do no more than confirm what is already apparent from
section 6(1), that one cannot commence an independent claim for contribution
more than two years after it is discovered.  But why single out claims for
contribution?  Third party claims and counterclaims may be based on any number of
different causes of action.

[103]

Moreover,
as discussed above, the basic limitation period in section 6(1) would never
apply to a third party claim for contribution or anything else, because a
third-party claim would not be a court proceeding.  So there would be no need
for section 22(1)(b) to provide that third party claims may be brought in an
existing court proceeding
notwithstanding
that an applicable limitation
period has expired, and section 22(2) would, again, be rendered superfluous.

[104]

This would
make no sense.  It flies in the face of all principles of statutory
interpretation.  Reading the words of subsection 22(2) in their ordinary
meaning, harmoniously with the rest of the statute, and with the contextual and
purposive approaches endorsed by Professor Sullivan and the Supreme Court of
Canada, they unmistakably include proceedings by counterclaim and third-party
proceedings as court proceedings.  That interpretation is fully in harmony
with the rest of the statute, including sections 6(1) and 30(1).

[105]

In my
view, the chambers judge analysed the section 22 issue thoroughly and
correctly.  He dealt appropriately with the conflicting case law, the
legislative background, and the principles of statutory interpretation.  After
carefully considering the appellants arguments, he concluded that section 22
of the new Act does not permit proceedings for contribution to be brought by
way of third-party notice or counterclaim after the limitation for the claim of
contribution has expired, as it had in this case.

[106]

As I see
it, the judge did not err in his consideration of external documents, which
certainly supported the view that the words under subsection (1)(a) or (b) in
subsection 22(2) had not crept in by mistake.  Those documents informed the
entire context of the words including the object of the Act and the intention
of Parliament, as discussed in Driedgers definitive formulation of the proper
approach to statutory interpretation.  Did the judge place too much weight to
those sources?  That he did not, in my view, is evident from the consistency of
his interpretation with the grammatical and ordinary sense of the words taken
in the context of the scheme of the Act.  Taken in the full and proper
statutory context, the language is clear.

[107]

What about
the purported absurdities raised by the appellants?  I have already discussed
anomaly #1, which, in my view, does not give rise to an absurdity at all (see
paras 4647 above).

[108]

As to
anomaly #2, the conclusion that a claim for contribution brought in an ongoing
action can never be a pre-existing claim (see paras 4852 and 6566 above)
means that such claims will always be subject to the new Act, and co-defendants
who claim against each other for contribution will be subject to the same
limitation period.

[109]

The
appellants then submit that the judges interpretation leads to this further
absurdity (anomaly #3): suppose a plaintiff commences action against
defendant A, then 2½ years later, applies to add B as a defendant
notwithstanding the expiry of a limitation, which is permissible according to
section 22(1)(d).  The court finds it is just and convenient to do so, and B is
added.  Defendant A then seeks to claim contribution from defendant B by third
party notice.  But, the appellants say, on the judges interpretation,
defendant As claim for contribution from defendant B would be time-barred.

[110]

Like anomalies #1 and #2, anomaly #3 is something of a mirage.  It
ignores the discoverability provisions for claims of contribution in section
16.  By that section, time begins to run from the
later
of

(a) the day on which the claimant for contribution or
indemnity
is served with a pleading in respect of a claim on which the claim
for contribution or indemnity is based
;

(b)
the first day on which the
claimant knew or reasonably ought to have known that a claim for contribution
or indemnity may be made.

[Emphasis added.]

[111]

As
discussed above, a claim for contribution is
based upon
a finding of
fault against two or more persons.  A pleading alleging damage caused by the
fault of two or more persons could not be served upon defendant A until the
application to add defendant B.  That is when time would begin to run in
accordance with section 16(a).  It follows that, consistent with the scheme of
the new Act as a whole, a third party claim for contribution by defendant A
against defendant B would not be time-barred.

[112]

The
appellants raised additional absurdities, but I do not consider them to have
merit.  In the end, the interpretation for which the appellants contend
stretches the language of the section well beyond what the ordinary meaning of
the words can support, and well beyond the clear intention of the legislature
to limit the time for bringing third-party claims for contribution.  In my
view, the chambers judges interpretation of the section is correct.  Unlike
the appellants interpretation, it is consistent with the grammatical and
ordinary sense of the words, and harmonious with the scheme and object of the legislation.

5.0

CONCLUSION AND DISPOSITION

[113]

I conclude
that the appellants proposed third party claim for contribution against
PFM/LHP is not a pre-existing claim within the meaning of section 30(1) of
the new Act.  Although it is a claim with respect to which no court proceeding
has been commenced before the effective date, it is not a claim that is based
on an act or omission that took place before the effective date.

[114]

This
leads, of course, to the same result as that reached by the chambers judge, albeit
by a different route.  As the proposed third party claim is not a pre-existing
claim, it is the new Act that applies to the question of whether the claim is
time-barred.  This question is answered by determining when the claim was
discovered within the meaning of section 16.  That date was more than two years
before the appellants sought to add the respondents as third parties.

[115]

I further
conclude that section 22(1)(b) of the new Act does not permit the appellants
proposed third party claim for contribution to proceed in the face of an
expired limitation period.  This is because, properly interpreted and applied,
the effect of section 22(2), as the chambers judge determined, is to prohibit
the commencement of that specific type of third party claim after the expiry of
the applicable limitation period in accordance with sections 6(1) and 16.

[116]

It follows, in my view, that the chambers judge was correct in
concluding that the master had no discretion to grant the leave requested. 
Accordingly, I would dismiss the appeal.

The Honourable Mr. Justice Grauer

I AGREE:

The Honourable Madam Justice
Saunders

I AGREE:

The Honourable Madam Justice
DeWitt-Van Oosten


