



COURT OF APPEAL FOR ONTARIO

CITATION: 407 ETR Concession Company Limited v. Day, 2016
    ONCA 709

DATE: 20160928

DOCKET: C60894

Laskin, MacFarland and
    Roberts JJ.A.

BETWEEN

407 ETR Concession
    Company Limited

Plaintiff (Appellant)

and

Ira J. Day

Defendant (Respondent)

J. Thomas Curry and Rebecca Jones, for the appellant

Ronald D. Manes and Joshua Ginsberg, for the respondent

Heard: February 29, 2016

On appeal from the order of Justice
    Mark L. Edwards of the Superior Court of Justice, dated July 21, 2015, with
    reasons reported at 2014 ONSC 6409, 123 O.R. (3d) 95, and supplementary reasons
    reported at 2015 ONSC 4682, 69 M.V.R. (6th) 279.

Laskin J.A.:


A.

Overview

[1]

Highway 407 is a toll highway. It was built to relieve traffic
    congestion on public highways in and around the Greater Toronto Area. Unlike
    other toll roads, however, Highway 407 is an open access highway. Tolls are
    not collected at points of entry or exit. Instead, drivers use of the highway
    is captured by a scanner if they have a transponder and by a camera if they do
    not. People are invoiced monthly for their use of the highway.

[2]

The appellant 407 ETR operates Highway 407 and has authority to collect
    tolls from those who use it. This appeal raises two issues about how Ontarios
Limitations
    Act, 2002
applies to the methods available to 407 ETR to collect unpaid
    tolls under the
Highway 407 Act
,
1998
.
[1]
Two methods are available: a civil action in the courts, or a process known as
    licence plate denial in which the Registrar of Motor Vehicles will not validate
    (renew) or issue a vehicle permit to any person with an outstanding debt to 407
    ETR.

[3]

The respondent Ira Day began using Highway 407 occasionally in 2005, has
    used it regularly since January 2008, and in March 2010, he leased a
    transponder. Despite his frequent use of the highway, Mr. Day has a long and
    consistent record of refusing to pay his debts to 407 ETR on time. Three times
    he was put into licence plate denial and each time, facing the expiry of his
    vehicle permit, he eventually paid his debt. He has not, however, paid an
    outstanding invoice since December 2010. And, though his vehicle permit expired
    in December 2011 and was not renewed, Mr. Day continued to use Highway 407.

[4]

Finally, in June 2013, 407 ETR sued Mr. Day for payment of the debts he
    owed. The amount owing is not large  $13,719.00, plus accumulating interest 
    but the two issues surrounding it are significant. In his statement of defence,
    Mr. Day pleaded that 407 ETRs claim was partly barred by the
Limitations
    Act, 2002
. 407 ETR then brought a motion under r. 21 of the
Rules of
    Civil Procedure
to determine the two issues arising under the statute.
[2]


[5]

The first issue is when was 407 ETRs claim discovered, triggering the
    start of the basic two-year limitation period under the
Limitations Act,
    2002
. The motion judge held that 407 ETRs claim was discovered on May 26,
    2011, which was the earliest date under the
Highway 407 Act
,
1998
that 407 ETR could have given notice to the Registrar to put Mr. Day into
    licence plate denial.

[6]

407 ETR submits that the motion judge erred in his holding. The Act
    provides that a claim is not discovered until a civil action is appropriate,
    and 407 ETR contends that it was not appropriate to sue Mr. Day until the date
    the licence plate denial process had run its course and his vehicle permit
    expired, which was December 31, 2011.

[7]

The second issue arises out of Mr. Days use of a transponder. The
    transponder lease agreement he signed provides for a limitation period of 15
    years. The issue is whether the 15-year period is enforceable.

[8]

Section 22 of the
Limitations Act, 2002
permits parties to
    contract out of the two-year limitation period and agree to a longer period.
    The motion judge held, however, that 407 ETR could not rely on s. 22 because
    the transponder lease agreement was not a business agreement as defined in
    that section. 407 ETR submits the motion judge erred in law in his
    interpretation of s. 22. It contends that s. 22 permits parties to agree to
    extend a limitation period even if their agreement is not a business agreement.
    Mr. Day responds that even if the motion judge erred in his interpretation of
    s. 22, the 15-year period is still unenforceable at common law.

[9]

For the reasons that follow, I would allow the appeal and give effect to
    407 ETRs position on both issues.

B.


Issues

(1)

Did the motion judge err by
    holding that 407 ETRs claim was discovered once it could have given the
    Registrar notice to put Mr. Day into licence plate denial?

(a)

Toll collection under the
Highway
    407 Act
,
1998

[10]

As
    I have said, 407 ETR can try to collect unpaid tolls in two ways: by civil
    action in the courts, or by the licence plate denial process. The statutory
    authorization for these two methods of toll collection is set out in ss. 13-22
    and s. 25 of the
Highway 407 Act, 1998
. I will briefly summarize the
    statutory regime providing for licence plate denial and authorizing a court
    action.

[11]

When
    a vehicle is driven on Highway 407, s. 13(1) provides that the person in whose
    name the vehicles licence plate is registered is liable to pay the tolls and
    related charges. If a transponder is used, it is the person to whom the
    transponder is registered who is liable. Under s. 14(3), all tolls and related
    charges belong to 407 ETR.

[12]

Sections
    15(1) and 15(2) provide that tolls are due and payable on the day the invoice
    is sent, and interest begins to accrue 35 days later. Section 15(3) affirms
    that tolls and related charges are a debt owing to 407 ETR and states that 407
    ETR has a cause of action in the courts for payment of that debt.
[3]

[13]

The
    two key provisions of the licence plate denial process are the s. 16 notice and
    the s. 22 notice.

·

Under s. 16(1), if the toll is not paid within 35 days after the
    invoice is sent, 407 ETR may send the person responsible for payment a notice
    of failure to pay.

·

Under s. 22(1), if a toll and related charges are not paid within
    90 days of the day a person receives a notice of failure to pay under s. 16,
    407 ETR may notify the Registrar of Motor Vehicles of the failure to pay. This
    notice puts the defaulting debtor into licence plate denial.

·

Under s. 22(3), 407 ETR must also inform the person who was sent
    the s. 16 notice that the Registrar has been given notice.

·

Under s. 22(4)  and this provision is key to the licence plate
    denial process  if the Registrar receives a notice under s. 22(1), then at the
    next opportunity the Registrar
must
refuse to
    validate the vehicle permit issued to the person who received the s. 16 notice
    and refuse to issue a vehicle permit to that person.

·

The next opportunity under s. 22(4) would typically be the date
    the validation for a vehicle permit expires and must be renewed. The
Vehicle
    Permits Regulation
, under the
Highway Traffic Act
, stipulates that
    the maximum period for which a vehicle permit can be validated is two years.
[4]
The validation for Mr. Days vehicle expired on December 31, 2011 (his
    birthday). This date, 407 ETR argues, is the date its claim against Mr. Day was
    discovered.

[14]

Finally,
    s. 25 provides that any action 407 ETR takes leading to licence plate denial is
    in addition to any other methods of enforcement and collection available at
    law. In other words, licence plate denial is a complementary, not an
    exclusive, remedy.

[15]

As
    ss. 16(1) and 22(1) provide, the earliest 407 ETR can give the Registrar notice
    to put a debtor into licence plate denial is 125 days after an unpaid invoice
    is sent to the person responsible for payment. That date  for Mr. Day, May 26,
    2011  the motion judge held was the date 407 ETRs claim was discovered,
    triggering the start of the two-year limitation period.

(b)

Mr. Days default

[16]

Between
    August 2008 and November 2010, Mr. Day was placed in licence plate denial for
    unpaid tolls three times. He never disputed that he owed the money. Each time
    he eventually paid, but not after he received a s. 16 notice of his failure to
    pay, only after 407 ETR sent the Registrar a s. 22 notice to start the licence
    plate denial process. Mr. Days last payment to 407 ETR was on December 21,
    2010  a payment of $2,894, which allowed him to renew his vehicle permit.

[17]

Since
    December 2010, Mr. Day has continued to use Highway 407 approximately 60 times
    a month. He has been invoiced regularly, but he has refused to pay a single
    invoice. I note parenthetically that it is doubtful his failure to pay is because
    he cannot afford to do so. Mr. Day is an experienced businessman, the president
    and owner of a company called Prosperity Foods, and since using Highway 407 has
    driven either a Porsche 911 or a Mercedes.

[18]

The
    first unpaid invoice  for $162.09  was sent to Mr. Day on January 21, 2011.
    407 ETR could have sent him a s. 16 notice of failure to pay 35 days from the
    invoice date, on February 25, 2011. It sent the s. 16 notice on March 21, 2011.
    Had 407 ETR sent a s. 16 notice on February 25, 2011, it could have sent a s. 22
    notice to the Registrar 90 days later, on May 26, 2011. It actually sent the s.
    22 notice on August 10, 2011.

[19]

Mr.
    Days unpaid invoices continued to accumulate. On December 31, 2011, his
    vehicle permit expired and the Registrar refused to renew or validate it. Still,
    Mr. Day continued to use Highway 407 and his unpaid invoices continued to
    mount. Finally, on June 14, 2013, 407 ETR brought this action.

[20]

Assuming
    the two-year limitation period (and not the 15-year period in the transponder
    lease agreement) applies, if December 31, 2011 is the start date, then 407
    ETRs claim is not out of time. If May 26, 2011 is the start date, 407 ETRs
    claim for some of the unpaid invoices is statute-barred.

(c)

The motion judges reasons

[21]

Under
    the
Limitations Act, 2002,
the limitation period begins to run when a
    claim is discovered. But s. 5(1)(a)(iv) of the Act provides that a claim is not
    discovered until bringing a claim is an appropriate means to recover a loss.

[22]

In
    deciding when 407 ETRs claim was discovered, the motion judge was guided by
    the Divisional Courts approach in
407 ETR Concession Co. Limited v. Ontario
    (Registrar of Motor Vehicles)
(2005), 82 O.R. (3d) 703. There, at paras. 27
    and 60, the Divisional Court emphasized that the licence plate denial process is
    both an effective and necessary method for collecting unpaid tolls and that
    civil actions would choke the court system:

[T]he purpose of the Act was to privatize the operation of
    Highway 407 and, given its open-access character, to provide the owner an
    effective method of toll collection. The legislature recognized that plate
    denial is a necessary feature of an open-access toll highway given the
    exceptionally large number of transactions, the small balances and the cost of
    other means of debt collection.



The Registrar submits the owner can achieve collection of tolls
    by other means,
i.e.
, collection agencies or court proceedings. We
    reject this submission. The use of collection agencies would result in a
    significant percentage loss of tolls collected; we take judicial notice of the
    fact that collection agencies seldom, if ever, act without fee. Court
    proceedings would choke the court system, particularly Small Claims Court.
    Between November 1, 2002 and June 30, 2004, 531,350 s. 16 notices were issued.
    It does not take a febrile imagination to conclude court action is not a useful
    alternative.

[23]

The
    motion judge therefore rejected Mr. Days argument that the two-year limitation
    period should start when 407 ETR sends out an invoice. Instead, he took what he
    characterized as a common sense approach and fixed the start date of the
    limitation period as the date when 407 ETR could give notice to the Registrar
    to put Mr. Day into licence plate denial. An earlier date would generate
    needless litigation over relatively small amounts. The motion judge wrote, at
    paras. 53 and 55:

The Divisional Court in
407 ETR Concession Company Limited
    v. Registrar of Motor Vehicles
made it quite clear that the purpose of
    the
407 Act
was not only to privatize the operation of Highway 407, but
    also to provide to the 407 ETR
an effective method of toll collection
.
    An effective method of toll collection, in my view, has implicit in it a common
    sense approach to a reasonable limitation period, recognizing that the
    interests of both the 407 ETR and the consumer need to be protected. Such a
    common sense approach, in my view, would not accord with the arguments made by
    Mr. Day that the limitation period commences when an invoice is rendered. The
    most realistic and common sense approach must start with the recognition that
    the
407 Act
provides for a method of collection that ultimately
    concludes with the Registrar placing a non-paying consumer like Mr. Days
    licence plate into licence plate denial. Only then, in my view, would the 407
    have discovered that unpaid invoices were not going to be paid. To accept the
    submission of counsel for Mr. Day would result in an untold volume of small
    claims being made through our court system resulting in needless litigation.



The appropriate limitation period that protects both the
    interests of the 407 ETR as well as the consumer is one that recognizes a
    limitation period that begins two years from the time that a non-paying
    customer of the 407 has been placed into licence plate denial. [Emphasis in original.]

(d)

The parties positions on appeal

[24]

407
    ETR submits that the motion judges underlying approach was correct but that he
    did not go far enough. 407 ETR contends that it discovers its claim only when
    it knows the debtors vehicle permit has expired, which means that the notice
    to the Registrar to put a debtor into licence plate denial failed to prompt the
    debtor to pay. The notice to the Registrar is a red flag to the debtor, but
    until the licence plate denial process has run its course, 407 ETR will not
    know if a court action is appropriate. Thus, only when Mr. Days vehicle permit
    expired on December 31, 2011 was litigation an appropriate means for 407 ETR to
    collect his debt. Until then, 407 ETR had reason to believe Mr. Day would pay.

[25]

More
    generally, 407 ETR submits that to fix the start of the limitation period
    earlier would result in so large a volume of small claims that the Small Claims
    Court would be overwhelmed with unnecessary litigation. Mr. Curry succinctly
    put 407 ETRs position in oral argument: the civil justice system begins when
    the licence plate denial regime ends.

[26]

Mr.
    Day submits that the date chosen by the motion judge for the start of the
    two-year limitation period is reasonable. He no longer presses the argument
    that the limitation period should start to run when an invoice is sent out, or
    even when 407 ETR first notifies a debtor that an invoice is unpaid.

[27]

In
    essence, Mr. Days position is as follows. The licence plate denial process is
    an additional or optional method the legislature gave to 407 ETR to collect
    delinquent accounts. However, the legislature never intended to exempt 407 ETR
    from the normal application of the
Limitations Act, 2002
. To give effect
    to 407 ETRs position would either inject unjustified uncertainty into the
    start date of the two-year period, or could even mean that no limitation period
    applies to the collection of debts owed to 407 ETR. The uncertainty arises
    because 407 ETR has discretion if and when to send a notice to the Registrar to
    put a debtor into licence plate denial. It can manipulate the start date and,
    as a result, the end date of the process. There might even be no applicable
    limitation period at all because 407 ETR could exercise its discretion not to
    send a notice to the Registrar and so not put a defaulting user into licence
    plate denial.

[28]

Conversely,
    the date chosen by the motion judge has the advantage of certainty. The date
    when 407 ETR can give the Registrar notice and put a debtor into licence plate
    denial is certain, because it is a date fixed by the statute. That date, Mr.
    Day submits, is the date a civil action was an appropriate means to sue him
    to collect his unpaid invoices, and therefore, that date is the date when 407
    ETR discovered its claim against him.

[29]

Moreover,
    Mr. Day contends the date chosen by the motion judge will not prejudice 407
    ETR. As vehicle permits must be renewed every two years, in virtually every
    case 407 ETR would be able to ascertain whether the licence plate denial
    process has prompted payment, and if it did not, still be able to sue within
    the limitation period.

(e)

Analysis: On what date was a civil action an appropriate means for 407
    ETR to recover the money Mr. Day owed?

[30]

Assuming
    the 15-year limitation period in Mr. Days transponder lease agreement does not
    apply, 407 ETRs claim is subject to the basic two-year limitation period in s.
    4 of the
Limitations Act, 2002
. Under s. 4, a proceeding shall not be
    commenced in respect of a claim after the second anniversary of the day on
    which the claim was
discovered
 (emphasis added).

[31]

The
    day on which 407 ETRs claim was discovered is the day on which 407 ETR knew or
    ought to have known the four matters set out in s. 5(1)(a) of the Act:

5. (1) A claim is discovered on the earlier of,

(a) the day on which the person with the claim first
    knew,

(i) that the injury, loss or damage had occurred,

(ii) that the injury, loss or damage was caused by
    or contributed to by an act or omission,

(iii) that the act or omission was that of the
    person against whom the claim is made, and

(iv) that, having regard to the nature of the
    injury, loss or damage, a proceeding would be an appropriate means to seek to
    remedy it; and

(b) the day on which a reasonable person with the
    abilities and in the circumstances of the person with the claim first ought to
    have known of the matters referred to in clause (a).

[32]

Obviously,
    407 ETR knew the first three matters in s. 5(1)(a) as early as the delivery of
    its s. 16 notice in March 2011. It knew by then it had suffered a loss; it knew
    the loss was caused by the failure to pay an invoice that was due and payable;
    and it knew that Mr. Day had failed to pay it. This first issue on the appeal
    turns on s. 5(1)(a)(iv): when should 407 ETR have known that a civil action
    against Mr. Day was an appropriate means to recover its loss?

[33]

The
    appropriateness of bringing an action was not an element of the former
    limitations statute or the common law discoverability rule. This added element can
    have the effect  as it does in this case  of postponing the start date of the
    two-year limitation period beyond the date when a plaintiff knows it has
    incurred a loss because of the defendants actions.

[34]

Also,
    when an action is appropriate depends on the specific factual or statutory
    setting of each individual case: see
Brown v. Baum
, 2016 ONCA 325, 397
    D.L.R. (4th) 161, at para. 21. Case law applying s. 5(1)(a)(iv) of the
Limitations
    Act, 2002
is of limited assistance because each case will turn on its own
    facts.

[35]

In
    the case before us, the date when a civil action would be an appropriate
    means for 407 ETR to recover its loss must be assessed not only in the context
    of the purpose of that element of s. 5(1)(a) and the words that qualify it, but
    also in the context of the statutory regime under which 407 ETR operates.

[36]

Under
    the
Highway 407 Act, 1998
, five options for the start date of the
    two-year period are available to choose from:

1.

The date 407 ETR sends an invoice to the vehicle permit-holder, which is
    the date the debt becomes due and payable.

2.

Thirty-five days after the invoice is sent, which is the date the toll
    debt becomes delinquent and entitles 407 ETR to send the vehicle permit-holder a
    notice of failure to pay under s. 16.

3.

Ninety days after a notice of failure to pay is sent, which is the date
    407 ETR can ask the Registrar to put the vehicle permit-holder into licence
    plate denial under s. 22.

4.

The date 407 ETR actually sends a s. 22 notice asking the Registrar to
    put the vehicle permit-holder into licence plate denial.

5.

The date the vehicle permit expires for non-payment of the debt.

[37]

I
    would immediately eliminate options one and two from consideration. Neither of
    these first two options is tied to the licence plate denial process. And to
    give effect to the legislatures intent, it seems to me that the start date of
    the limitation period must be tied to that process. The legislature enacted
    that process for a reason: it was not content to force 407 ETR to sue in the
    courts for unpaid toll debts. I fully agree with the Divisional Court that
    licence plate denial is an effective, necessary and indeed integral feature of
    an open access toll highway. Tying the start date of the limitation period to
    the licence plate denial process acknowledges the significance the legislature
    attached to that process for the collection of unpaid tolls. In this court, Mr.
    Manes on behalf of Mr. Day fairly did not urge us to adopt option one or two. The
    start date of the two-year period then turns on whether we should adopt on the
    one hand option three or four, or on the other hand option five.

[38]

The
    motion judges reasons and order were a source of some confusion to the
    parties. His formal order adopts option three (the date 407 ETR could have
    asked the Registrar to put Mr. Day into licence plate denial), but parts of his
    reasons may be read as adopting option four (the date 407 ETR actually did send
    notice to the Registrar to put Mr. Day into licence plate denial). Nothing
    turns on this apparent confusion, as I would adopt option five.

[39]

A
    civil action only becomes appropriate when 407 ETR has reason to believe it
    will not otherwise be paid  in other words, when the usually effective licence
    plate denial process has run its course. Thus, the date when a vehicle permit
    expires for the failure to pay a toll debt is the date a civil action is an
    appropriate means to recover that debt. This date starts the two-year
    limitation period. For Mr. Day, this date is December 31, 2011. I say this for
    four reasons.

[40]

First,
    under s. 5(1)(a)(iv) of the
Limitations Act, 2002
, the date a
    proceeding would be an appropriate means to recover a loss must have regard to
    the nature of the ... loss. So, in fixing the appropriate date, it may not be enough
    that the loss exists and the claim is actionable. If the claim is the kind of
    claim that can be remedied by another and more effective method provided for in
    the statute, then a civil action will not be appropriate until that other
    method has been used. Here, a claim will not be appropriate until 407 ETR has
    used that other method, without success.

[41]

As
    the Divisional Court recognized it its 2005 decision, and the motion judge
    recognized in this case, the other method for toll collection provided for in
    the
Highway 407 Act, 1998
 licence plate denial  is far more effective
    than a civil action. By providing for licence plate denial, the legislature
    must be taken to have recognized its effectiveness. People who cannot renew their
    vehicle permits until they deal with their toll debts have a powerful incentive
    to pay.

[42]

The
    statistical evidence bears out the effectiveness of licence plate denial. 407
    ETR issues over one million invoices a month. Nearly 70 per cent of those invoices
    are paid within one month, which means just over 30 per cent are not.
    Significantly, about 75 per cent of permit holders in default pay their toll
    debts after being advised the Registrar has sent a s. 22 notice. Of those, just
    over one half pay before or on the date their vehicle permits have to be
    renewed; the remainder pay after their vehicle permits have expired.

[43]

These
    statistics show that the motion judges start date  the delivery of a s. 22
    notice to the Registrar  is too early in the process. It comes at the
    beginning of the process instead of where I think it should come, at the end.
    The licence plate denial process should be allowed to run its course. As the statistics
    show, most people, fearing the consequences, eventually pay after receiving a
    s. 22 notice. Only if the process fails to prompt payment does litigation
    become an appropriate means to recover the debt.

[44]

Second,
    in determining when a claim ought to have been discovered, s. 5(1)(b) of the
Limitations
    Act, 2002
requires the court to take account of the circumstances of the
    person with the claim. 407 ETRs circumstances differ from those of many
    other creditors. Highway 407 itself is enormously busy: 380,000 trips on an
    average workday. As a consequence, 407 ETR must process an enormous number of
    invoices, almost all for amounts of no more than a few hundred dollars apiece.
    And unlike, for example a credit card company, which can cancel a customers credit
    card for non-payment of a debt, 407 ETR cannot bar a defaulting debtors access
    to the highway.

[45]

407
    ETRs circumstances strongly suggest that requiring it to sue before finding
    out whether licence plate denial has achieved its purpose would be
    inappropriate. An important case on the significance of a plaintiffs
    circumstances is the majority judgment in
Novak v. Bond
, [1999] 1
    S.C.R. 808. In that case, McLachlin J. considered s. 6(4)(b) of British
    Columbias
Limitations Act
, R.S.B.C. 1996, c. 266, which provided that
    time did not begin to run against a plaintiff until the person whose means of
    knowledge is in question ought, in
the persons own
    interests and taking the persons circumstances into account
, to be able
    to bring an action (emphasis added). At para. 85 of her reasons, McLachlin J.
    discussed interests and circumstances and cautioned against the potential
    unfairness of requiring a plaintiff to bring an action at the time a claim
    first materializes:

Litigation is never a process to be embarked upon casually and
    sometimes a plaintiffs individual circumstances and interests may mean that he
    or she cannot reasonably bring an action at the time it first materializes.
This approach makes good policy sense. To force a plaintiff to
    sue without having regard to his or her own circumstances may be unfair to the
    plaintiff and may also disserve the defendant by forcing him or her to meet an
    action pressed into court prematurely
. [Emphasis added; footnotes omitted.]

[46]

Similarly
    here, holding that time begins to run against 407 ETR before it knows whether
    licence plate denial has prompted payment would be unfair, or to use the word
    of our statute, would not be appropriate.

[47]

Holding
    that the two-year period begins after the licence plate denial process fails to
    prompt payment does not raise the concern Sharpe J.A. referred to in
Markel
    Insurance Co. of Canada v. ING Insurance Co. of Canada
, 2012 ONCA 218, 109
    O.R. (3d) 652, at para. 34. There, he said that appropriate must mean
    legally appropriate. By using that phrase he signified that a plaintiff could
    not claim it was appropriate to delay the start of the limitation period for
    tactical reasons, or in circumstances that would later require the court to
    decide when settlement discussions had become fruitless. In this case, however,
    407 ETR seeks to delay the start of the limitation period for a legally
    appropriate reason: waiting until a statutorily authorized process has been
    completed.

[48]

A
    third consideration is what I take to be an important purpose of s. 5(1)(a)(iv).
    The overall purposes of limitation statutes are well-established and well-known:
    certainty, finality and the unfairness of subjecting defendants to the threat
    of a lawsuit beyond a reasonable period of time. But it seems to me one reason
    why the legislature added appropriate means as an element of discoverability
    was to enable courts to function more efficiently by deterring needless
    litigation. As my colleague Juriansz J.A. noted in his dissenting reasons in
Hare
    v. Hare
(2006)
, 83 O.R.
    (3d) 766 (C.A.), at para. 87, courts take a dim view of unnecessary litigation.

[49]

If
    the limitation period runs concurrently with the licence plate denial process,
    as would be the case under the motion judges start date, then there would be
    the real possibility of numerous Small Claims Court claims. And these claims
    would be needless because the vast majority of defendants would likely pay
    their debts to avoid having their vehicle permits expire. The evidence in the
    record shows that as of June 2014, for invoices outstanding for 23-24 months,
    10,144 separate court actions would be required. The average amount of each
    claim would be $497. Only one to two per cent of claims would exceed $5,000.

[50]

I
    acknowledge Mr. Days argument that if the motion judges start date is used,
    407 ETR could in almost every case still bring any necessary actions within the
    two-year period, because vehicle permits have to be renewed every two years. But
    imposing a burden on 407 ETR to keep track of two concurrent proceedings 
    licence plate denial and the running of the two-year limitation period  is
    impractical and unnecessary. Such a burden does not provide an effective method
    of toll collection. A far simpler and more appropriate solution is to delay the
    start of the limitation period until the licence plate denial process has
    ended.

[51]

Finally,
    although 407 ETR has discretion when and even whether to send a s. 22 notice to
    the Registrar, that discretion does not detract from the appropriateness of
    using the end of the licence plate denial process as the start of the two-year
    limitation period. In theory, I suppose, as Mr. Day contends, 407 ETR could use
    its discretion to manipulate the start date. But why, one may ask rhetorically,
    would it do so? Its commercial interests dictate otherwise.

[52]

In
    this case, we have no evidence 407 ETR manipulated the date for sending Mr. Day
    a s. 16 notice or the Registrar a s. 22 notice. A short delay occurred between
    the date it could have given these notices under the statute and the dates it
    actually gave these notices. The short delay was presumably attributable to the
    necessity of accessing the relevant databases and other administrative matters.

[53]

Also,
    even accepting that 407 ETR has discretion when to send the s. 16 and s. 22
    notices, the end date of the licence plate denial process is a date that is certain
    and easily ascertainable. It is the date when the holders vehicle permit comes
    up for renewal. If the holders debt has not been paid by this date, then an
    action becomes an appropriate means to recover the debt and the two-year
    limitation period begins to run.

[54]

I
    would therefore give effect to 407 ETRs position on this first issue.

(2)

Did the motion judge err in law by
    holding that the 15-year limitation period in Mr. Days transponder lease
    agreement was unenforceable, because it was not a business agreement under s.
    22 of the
Limitations Act, 2002
?

[55]

On
    March 2, 2010, Mr. Day obtained a transponder by entering into a transponder
    lease agreement with 407 ETR. For frequent users of Highway 407, using a
    transponder is cheaper than driving without one. The first page of Mr. Days
    transponder lease agreement states: The limitation period provided for in this
    lease to commence proceedings to collect amounts owing thereunder is 15 years.
    Therefore, if the transponder lease agreement is enforceable, it ousts the
    two-year limitation period for those toll charges incurred while Mr. Day was a
    transponder customer.

[56]

Before
    the motion judge, 407 ETR sought a determination that the provision for a
    15-year limitation period was enforceable under s. 22 of the
Limitations Act
,
2002
. Mr. Day took the position that this provision in the transponder
    lease agreement was unenforceable both under the statute and at common law. The
    motion judge held that though the provision was enforceable at common law, 407
    ETR could not rely on it because the transponder lease agreement was not a
    business agreement under s. 22 of the Act.

[57]

407
    ETR submits that the motion judge erred in law in his interpretation of s. 22
    of the Act. Mr. Day submits that the motion judges interpretation was correct;
    alternatively, he submits that the motion judge erred in holding that the
    provision was enforceable at common law. I agree with 407 ETRs submission and
    do not agree with either of Mr. Days submissions.

(a)

Section 22 of the
Limitations
    Act, 2002

[58]

Section
    22 provides that by agreement parties can suspend, extend, or in some
    circumstances even shorten the basic two-year limitation period provided for in
    s. 4 of the Act. Section 22 provides:

22. (1) A limitation period under this Act applies
    despite any agreement to vary or exclude it, subject only to the exceptions in
    subsections (2) to (6).

(2) A limitation period under this Act may be varied
    or excluded by an agreement made before January 1, 2004.

(3) A limitation period under this Act, other than
    one established by section 15, may be suspended or extended by an agreement
    made on or after October 19, 2006.

(4) A limitation period established by section 15 may
    be suspended or extended by an agreement made on or after October 19, 2006, but
    only if the relevant claim has been discovered.

(5) The following exceptions apply only in respect of
    business agreements:

1. A limitation period under this Act, other than
    one established by section 15, may be varied or excluded by an agreement made
    on or after October 19, 2006.

2. A limitation period established by section 15
    may be varied by an agreement made on or after October 19, 2006, except that it
    may be suspended or extended only in accordance with subsection (4).

Definitions

(6) In this section,

business agreement means an agreement made by
    parties none of whom is a consumer as defined in the
Consumer Protection
    Act, 2002
;

vary includes extend, shorten and suspend.
[5]

[59]

The
    motion judge correctly found that the transponder lease agreement Mr. Day
    signed was not a business agreement. In his application for a transponder, Mr.
    Day checked the box for personal use, not business use. Additionally, Mr. Day
    is a consumer under the
Consumer Protection Act
,
2002
, which in
    s. 1 defines consumer to mean, an individual acting for personal, family or
    household purposes and does not include a person who is acting for business
    purposes.
[6]

[60]

The
    motion judge then concluded that parties could only rely on s. 22 to contract
    out of the basic limitation period in s. 4 if their agreement is a business
    agreement as defined in s. 22(6). As the transponder lease agreement Mr. Day
    signed was not a business agreement, the motion judge held 407 ETR cannot
    enforce the provision for a 15-year limitation period.

[61]

I
    agree that the transponder lease agreement is not a business agreement. But,
    respectfully, in my opinion the motion judge erred in his interpretation of s.
    22. He focused on ss. 22(5) and 22(6) but he did not take account of s. 22(3).
    Under s. 22(3), parties can agree to contract out of the two-year limitation
    period even if one of the parties is a consumer and their agreement is
    therefore not a business agreement. There is, however, a crucial distinction
    between an agreement made under s. 22(3), which applies when one or both of the
    parties is a consumer, and a business agreement under s. 22(5), which applies
    only when none of the parties is a consumer.

[62]

Under
    s. 22(3), parties can only suspend or extend the two-year limitation period.
    Under s. 22(5), parties may vary or exclude altogether the two-year period.
    Importantly, in s. 22(6) vary is defined to include extend, shorten and
    suspend. Thus, parties to an agreement under s. 22(3), such as the transponder
    lease agreement, in which one party is a consumer, can suspend or extend the two-year
    limitation period. They cannot, however, shorten it. Only parties to a business
    agreement can also agree to shorten the two-year period. As Mr. Days
    transponder lease agreement extends the two-year limitation period to 15 years,
    it is enforceable under s. 22(3).

(b)

Common law

[63]

On
    appeal, Mr. Day renews his submission that the provision for a 15-year
    limitation period in the transponder lease agreement is unenforceable at common
    law and therefore 407 ETR cannot rely on s. 22 of the
Limitations Act, 2002
.

[64]

Page
    four of the transponder lease agreement contains, in small print, a provision
    for the limitation period of 15 years:

You agree that we may commence proceedings to collect each
    amount payable by you under the terms of this lease until the later of (a) the
    fifteenth (15
th
) anniversary of the most recent date on which you
    agree that the terms and conditions of this lease apply (or continue to apply)
    to you, and (b) the fifteenth (15
th
) anniversary of the Bill Date of
    the bill that first indicates such amount is payable by you[.]

[65]

In
    addition, the first page of the agreement provides, under the heading
    Important information about this lease, the statement I referred to earlier:
    The limitation period provided for in this lease to commence proceedings to
    collect amounts owing thereunder is 15 years.

[66]

In
    rejecting Mr. Days submission that this provision was unenforceable at common
    law, the motion judge held that the 15-year limitation period should have been
    clear to anyone reading the transponder application or lease agreement. The
    motion judge also refused to accept that the 15-year limitation period was
    unfair, as he concluded that there was no inequality of bargaining power. He
    noted that although the terms of the transponder lease agreement may not have
    been negotiable, Mr. Day had the option of simply driving without a
    transponder.

[67]

Although
    Mr. Day accepts the motion judges findings, he contends that for an agreement
    to be enforceable under s. 22, the common law has imposed certain additional
    requirements. One  not met here  is that the agreement must expressly refer
    to and exclude the application of the basic two-year limitation period. I
    disagree with his submission.

[68]

The
    resolution of this issue and its interplay with s. 22 is governed by this
    courts decision is
Boyce v. The Co-operators General Insurance Co.
,
    2013 ONCA 298, 116 O.R. (3d) 56, leave to appeal refused, [2013] S.C.C.A. No.
    296. That case is directly against Mr. Days position. In
Boyce
, the
    owners of a womens fashion boutique sued their insurer Co-operators for
    damages caused when an incident forced them to close their store for a period
    of time. They started the action less than two years after the incident, but
    more than one year after the limitation period provided for in their insurance
    policy.

[69]

Co-operators
    moved for summary judgment to dismiss the action on the ground that it was
    statute-barred. The motion judge disagreed. He held that the agreement between
    the boutiques owners and Co-operators was not a business agreement and so the
    parties could not agree to shorten the two-year period. The motion judge also
    held, apart from whether the agreement was a business agreement, that the
    agreement was unenforceable under s. 22, because it did not contain the
    following four requirements:

·

Specific reference to the statutory limitation period;

·

Clear and unequivocal language that the parties were intending to
    vary the statutory protection;

·

A provision clearly alerting the insured that they were foregoing
    a statutory right to a two-year limitation period; and

·

The signature of the person foregoing the right to the longer
    limitation period.

[70]

This
    court allowed Co-operators appeal. The panel held that the agreement was a
    business agreement, and at para. 16 held that an agreement could be enforceable
    under s. 22 without any of the requirements imposed by the motion judge:

We cannot accept that an agreement purporting to vary the
    statutory limitation period is enforceable under s. 22 of the
Limitations
    Act, 2002
only if it contains the specific requirements set out by the
    motion judge. Nothing in the language of s. 22 offers any support for imposing
    these requirements. The only limitation in s. 22(5) is found in the definition
    of business agreement. No other limitation appears, expressly or by
    implication, and certainly no content related requirements appear in s. 22(5).

[71]

Instead,
    at para. 20, this court set out what was required for the enforceability of an
    agreement under s. 22:

A court faced with a contractual term that purports to shorten
    a statutory limitation period must consider whether that provision in clear
    language describes a limitation period, identifies the scope of the
    application of that limitation period, and excludes the operation of other
    limitation periods. A term in a contract which meets those requirements will be
    sufficient for s. 22 purposes, assuming, of course, it meets any of the other
    requirements specifically identified in s. 22.

[72]

The
    court concluded that those requirements had been met in the agreement it was
    considering.

[73]

Similarly,
    these requirements have been met in Mr. Days transponder lease agreement. The
    provision for a 15-year limitation period is described in clear language, not
    once but twice in the agreement. The scope of the limitation period is
    identified by stating the period is 15 years; any other period is excluded.

[74]

Specifically
    in response to Mr. Days contention, it is unnecessary to refer expressly to
    the exclusion of the two-year period. There was no express reference to it in
    the agreement in the
Boyce
case, yet this court held the agreement was
    enforceable under s. 22. Similarly, I would hold that the transponder lease
    agreement signed by Mr. Day is enforceable under s. 22(3) of the
Limitations
    Act, 2002
and is not rendered unenforceable at common law.

C.

Conclusion

[75]

I
    would allow the appeal, set aside paras. 1-4 of the order of the motion judge
    dated July 21, 2015 and, in their place, substitute the following:

1.

The 15-year limitation period provided for in the transponder lease
    agreement between Mr. Day and 407 ETR is enforceable under s. 22(3) of the
Limitations
    Act, 2002
.

2.

For those unpaid invoices not covered by the transponder lease agreement,
    the two-year limitation period under s. 4 of the
Limitations Act, 2002
applies.

3.

The two-year limitation period starts to run from December 31, 2011, the
    date when Mr. Days vehicle permit expired because of his failure to pay his
    toll debts.

[76]

The
    parties resolved the question of costs, and I would therefore order no costs of
    the appeal.

Released: September 28, 2016 (J.L.)

John Laskin J.A.

I agree. J. MacFarland J.A.

I agree. L.B. Roberts J.A.





[1]
S.O. 2002, c. 24, Sched. B.; S.O. 1998, c. 28.



[2]
R.R.O. 1994, Reg. 194.



[3]
Sections 17-19 set out a process by which a person may dispute that a toll is
    owing  initially before 407 ETR and on appeal before an independent dispute
    arbitrator. Mr. Day did not dispute any of the invoices sent to him.



[4]
R.R.O. 1990, Reg. 628; R.S.O 1990, c. H. 8.



[5]
Parts of s. 22 refer to s. 15. Section 15 provides for an ultimate limitation
    period of 15 years and for various exceptions. Section 15 has no bearing on the
    issues in this appeal.



[6]
S.O. 2002, c. 30, Sched. A.


