



COURT OF APPEAL FOR ONTARIO

CITATION: Fennell v. Deol, 2016 ONCA 249

DATE: 20160405

DOCKET: C61000

MacPherson, van Rensburg and Miller JJ.A.

BETWEEN

Daniel Fennell

Plaintiff (Appellant)

and

Gurjinder Deol
,
Boota Shergill
and Coachman Insurance Company

Defendants (
Respondent and Appellant by way of cross-appeal)

(
Respondent by way of cross-appeal
)

William G. Scott, for the appellant

Agatha Dix, for the respondent and appellant by way of cross-appeal

Cary N. Schneider and Philip Pollack, for the respondent
    by way of cross-appeal

Heard: February 24, 2016

On appeal from the order of Justice Suhail A.Q. Akhtar of
    the Superior Court of Justice, dated August 12, 2015, with reasons reported at 2015
    ONSC 4835.

van Rensburg J.A.:

A.

Introduction

[1]

Daniel Fennell was involved in a four vehicle accident on August 24,
    2010. On August 16, 2012, he commenced a personal injury claim against one of
    the other drivers, Boota Shergill. On March 20, 2014, the statement of claim
    was amended to add as a defendant Gurjinder Deol, the driver of another vehicle
    involved in the accident. On October 20, 2014, Shergill served a statement of
    defence and crossclaim, asserting a claim for contribution and indemnity
    against Deol.

[2]

Deol moved for summary judgment to dismiss both the claim and the
    crossclaim against him on the basis of expired limitation periods. The motion
    judge dismissed the action against Deol as statute-barred. He refused to
    dismiss the crossclaim. These reasons address both Fennells appeal of the
    dismissal of his claim against Deol and Deols appeal of the refusal to dismiss
    Shergills crossclaim.

B.

Facts

[3]

The following facts are relevant to both appeals.

[4]

At the time of the accident on August 24, 2010, Fennells wife, who was
    a passenger in his vehicle, noted the details of Deols drivers licence and
    vehicle registration, and she took photos of the vehicles. At the scene,
    Fennell was given page two only of the motor vehicle accident report (the MVAR),
    which named Shergill and another party (not Deol) as drivers involved in the
    accident.

[5]

On April 24, 2012, Fennells lawyer wrote to the police requesting the MVAR,
    a complete copy of which he received on August 15, 2012. The following day he
    issued a statement of claim, but neglected to include Deol as a defendant.

[6]

The statement of claim was served on Shergill on September 16, 2012. On
    January 29, 2013, Shergill received the MVAR from the police and Shergills
    counsel provided Fennells counsel with details of Deols identity on March 3,
    2013. Fennell amended his statement of claim to add Deol as a defendant on
    March 20, 2014. In the interim, his counsel wrote to the police and obtained
    the police notes. On October 20, 2014, Shergill crossclaimed against Deol.

C.

Decision of the Motion Judge

[7]

In response to the motion to dismiss his claim Fennell made two
    arguments. First, he asserted that he had not discovered the claim against Deol
    until he received the first page of the MVAR on August 15, 2012. The motion
    judge rejected this argument, based on Fennells actual knowledge of Deols
    identity on the day of the accident and his lack of due diligence in obtaining
    the first page of the MVAR. This argument is not renewed on appeal.

[8]

Second, Fennell asserted that it was only when he received the report of
    Dr. Kwok, dated August 8, 2014, that he reasonably believed that he had
    sufficient medical information to meet the requirement of s. 267.5(5) of the
Insurance
    Act
, R.S.O. 1990, c. I.8 of having sustained a permanent serious
    impairment of an important physical, mental or psychological function.

[9]

The motion judge considered Fennells assertion that he had only
    discovered his claim on receipt of Dr. Kwoks diagnosis. He noted that,
    according to Fennells own discovery testimony, his back injuries were apparent
    and serious well before he was examined by Dr. Kwok. His injuries were serious
    enough that he stopped working within a week of the accident and his employment
    was terminated in November 2010. He was unable to work full-time for three
    years and unable to accomplish even light housekeeping duties until July 2012. He
    received physiotherapy treatments through to the end of 2010. An MRI scan in
    July 2012 disclosed a disc herniation, which was confirmed by a second MRI in
    May 2014.

[10]

The
    motion judge stated that, for Fennell to rely on the discoverability principle
    to toll the start of the limitation period, he had to show that he exercised
    due diligence in discovering his claim. He concluded that Fennell failed to act
    with due diligence, and that his alleged failure to discover his permanent and
    serious impairment was due to the lackadaisical and indifferent approach of
    Fennell and his counsel.

[11]

The
    motion judge, at para. 31 of his reasons, found that, if Fennell had fulfilled
    his due diligence obligations in the manner required, his permanent serious
    impairment would have been discovered no later than around the time he
    commenced his action against Shergill. He concluded at para. 32 that,
    [a]ccordingly Fennell knew or ought to have known of his claim against Deol
    more than two years before he amended his Statement of Claim to add Deol as a
    party to the litigation, and he dismissed Fennells claim against Deol.

[12]

The
    motion judge refused to dismiss Shergills crossclaim. The two-year limitation
    period presumptively ran from the date Shergill was served with the statement
    of claim, September 16, 2012. He concluded that Shergill ought to have
    discovered his claim for contribution and indemnity later in the month of
    October 2012 or early November 2012, and, therefore, his crossclaim for
    contribution and indemnity on October 20, 2014 was not statute-barred.

[13]

The
    motion judge also stated that, although Shergill waited 19 months after
    receiving the MVAR on January 29, 2013 to claim contribution and indemnity from
    Deol, this was not contrary to his duty of due diligence. It made sense for
    Shergill to wait for Deol to be added to the main action as a co-defendant so
    that he could crossclaim rather than bringing a third party claim for
    contribution and indemnity.

D.

Analysis

(1)

Fennells Appeal

[14]

Fennell
    contends that the motion judge erred in his approach to the limitation issue:
    both in finding that he had not exercised due diligence to discover his
    permanent and serious impairment in the circumstances of the various medical
    reports he had received, and in considering events that occurred within two
    years of Deol being added as a party.

[15]

Deol
    contends that there was sufficient evidence for the motion judge to have
    concluded that Fennells claim was reasonably discoverable well before two
    years before Deol was added to the action. Deol also relies on the motion
    judges findings about due diligence  that the delay in discovering the claim
    was due to the lackadaisical and indifferent approach taken by both Fennell and
    his counsel.

[16]

For
    the reasons that follow, I would allow Fennells appeal.

[17]

In
    my view, the motion judges dismissal of Fennells claim against Deol is
    inconsistent with the one finding he made about when the claim was reasonably
    discoverable, that is, no later than when he issued the claim against Shergill.
    This finding was driven almost entirely by his conclusion that Fennell and his
    lawyer did not exercise due diligence.

[18]

While
    due diligence is a factor that informs the analysis of when a claim ought to
    have reasonably been discovered, lack of due diligence is not a separate and
    independent reason for dismissing a plaintiffs claim as statute-barred.

[19]

The
    two-year limitation period and the principle of discoverability are codified in
    sections 4 and 5 of the
Limitations Act, 2002
, S.O. 2002, c. 24,
    Sched. B, as follows:

4. Unless this Act provides otherwise, a proceeding
    shall not be commenced in respect of a claim after the second anniversary of
    the day on which the claim was discovered.

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).

5. (2)
A person with a claim shall
    be presumed to have known of the matters referred to in clause (1) (a) on the
    day the act or omission on which the claim is based took place, unless the
    contrary is proved

[20]

The
    basic two-year limitation period begins to run on the day the claim was
    discovered. The date of discovery is the earlier of the two dates under s. 5(1)
     when (a) the person with the claim had knowledge of, or (b) a reasonable
    person with the abilities and in the circumstances of the person with the claim
    first ought to have had knowledge of, the matters referred to in s. 5(1)(a)(i)
    to (iv). If either of these dates is more than two years before the claim was
    issued, the claim is statute-barred.

[21]

Section
    5(1)(a) considers when the person with the claim had actual knowledge of the
    material facts underlying the claim. Unless the contrary is proved, under s.
    5(2), the person is presumed to have known of the matters in s. 5(1)(a)(i)
    through (iv) on the date of the events giving rise to the claim.

[22]

I
    pause here to note that, in the present case the key consideration was when
    Fennell knew or a reasonable person with his abilities and in his circumstances
    ought to have known that the impairments from his injuries sustained in the
    accident were permanent and serious.

[23]

Due
    diligence is not referred to in the
Limitations Act, 2002
. It is,
    however, a principle that underlies and informs limitation periods, through s.
    5(1)(b). As Hourigan J.A. noted in
Longo v. MacLaren Art Centre Inc.
,
    2014 ONCA 526, 323 O.A.C. 246, at para. 42, a plaintiff is required to act with
    due diligence in determining if he has a claim, and a limitation period is not
    tolled while a plaintiff sits idle and takes no steps to investigate the
    matters referred to in s. 5(1)(a).

[24]

Due
    diligence is part of the evaluation of s. 5(1)(b). In deciding when a person in
    the plaintiffs circumstances and with his abilities ought reasonably to have
    discovered the elements of the claim, it is relevant to consider what
    reasonable steps the plaintiff ought to have taken. Again, whether a party acts
    with due diligence is a relevant consideration, but it is not a separate basis
    for determining whether a limitation period has expired.

[25]

The
    issue here was whether the two-year limitation period had run before Deol was joined
    as a defendant. The specific issue was the discoverability of the fact that
    Fennells injuries resulted in permanent and serious impairment. If the
    permanent and serious impairment was known by Fennell (s. 5(1)(a)) or ought
    reasonably to have been known by a person with his abilities and in his
    circumstances (s. 5(1)(b)) at any point between August 24, 2010 (the date of
    the accident) and March 20, 2012 (two years before Deol was added as a
    defendant), the claim was statute-barred.

[26]

The
    motion judge erred in focussing primarily on whether Fennell exercised due
    diligence, and in concluding that the onus was on Fennell to show due diligence
    to rebut the presumption in s. 5(2) of the
Limitations Act, 2002
. As
    discussed above, to overcome the presumption Fennell needed to prove only that
    he did not know of his permanent and serious impairment on the date of the
    accident, not that he exercised due diligence.

[27]

Fennell
    claimed that he only discovered his claim in August 2014, when he received Dr.
    Kwoks opinion that his injuries were permanent. The motion judge considered
    this, but he did not make a specific finding as to when Fennell had actual
    knowledge of his permanent and serious impairment. He could not have known of
    his permanent and serious impairment when the accident happened. As such,
    Fennell successfully rebutted the presumption in s. 5(2) that he knew of all of
    the elements of his claim on the date of the occurrence.

[28]

The
    next question under s. 5 was when a person with Fennells abilities and in his
    circumstances, ought reasonably to have known of his claim, and in particular
    that he had suffered a permanent and serious impairment.

[29]

After
    reviewing the evidence of Fennells medical condition and restrictions, as well
    as the MRIs he received in 2012 and 2014, the motion judge stated, at para. 31:

If Fennell had fulfilled his due diligence obligations in the
    manner required, his permanent serious impairment would have been discovered no
    later than around the time that he commenced his action against Shergill
    without joining Deol.

[30]

This
    is the motion judges only finding on the question of when the claim ought
    reasonably to have been discovered, and in my view is determinative of the
    appeal. The motion judge found that Fennells claim was discovered no later
    than when he commenced his action against Shergill. The action was commenced
    against Shergill on August 16, 2012. Deol was added as a defendant within two
    years of that date (on March 20, 2014). As such, the motion judges conclusion
    that Fennells claim against Deol was statute-barred is inconsistent with his
    finding as to when the claim was reasonably discoverable.

[31]

The
    motion judges criticisms of Fennell and his lawyers lackadaisical and
    indifferent approach may well be warranted. In the absence of a finding that
    Fennells claim ought reasonably to have been discovered before March 20, 2012,
    however, the motion judge was wrong to dismiss his claim against Deol at the
    summary judgment stage. The motion judges finding that Fennell ought to have
    discovered his claim against Deol no later than August 16, 2012, left the
    limitation question open.

[32]

Accordingly,
    I would allow Fennells appeal, set aside the order of the motion judge, and
    direct the limitation defence in relation to the claim against Deol to proceed
    to trial. I would reverse the costs order on the motion so that Fennell shall
    have the costs of the motion originally awarded against him.

[33]

I
    would grant costs of the appeal to the appellant fixed at $4,000, inclusive of
    applicable taxes and disbursements.

(2)

Deols Appeal

[34]

Deol
    raises two arguments on appeal.

[35]

First,
    he says that the motion judge misapprehended the facts and the applicable law
    in finding that Shergill ought to have discovered his claim for contribution
    and indemnity in late October or early November 2012. He submits that there
    were no discoverability issues that prevented Shergill from crossclaiming
    against Deol within the presumptive two-year limitation period, and that Shergill
    did not tender any evidence as to why, despite being present at the scene of
    the accident, he did not know or could not discover the identity of Deol.

[36]

Deol
    also submits that the motion judge erred in finding that it made sense for
    Shergill to wait until Deol was added to the main action as a co-defendant
    before issuing his crossclaim.

[37]

I
    would not give effect to these arguments.

[38]

The
    presumptive two-year limitation period for Shergills claim against Deol for
    contribution and indemnity ran from September 16, 2012 when Shergill, as
    defendant, was served with the statement of claim. The claim did not name Deol
    as a defendant.

[39]

The
    motion judge rejected Shergills argument that he discovered the facts
    necessary for his crossclaim only when he obtained the police records four and
    a half months later. However, he found, at para. 38 of his reasons, that
    Shergill ought to have discovered his claim for contribution and indemnity
    later in the month of October or early November, and that therefore his
    crossclaim on October 20, 2014 was timely. The motion judges determination of
    when Shergills claim for contribution and indemnity against Deol ought reasonably
    to have been discovered was founded on the evidence and is entitled to
    deference.

[40]

As
    for the motion judges view that Shergill acted reasonably after having the
    necessary information, in waiting 19 months to crossclaim against Deol, rather
    than commencing a third party claim, nothing turns on this finding. As I have
    already observed, whether a party acted with diligence is not a separate
    question in determining whether a limitation period has run. Whether Shergill
    acted reasonably in waiting to crossclaim against Deol, while the limitation
    period continued to run, instead of bringing Deol in through a third party
    claim is not determinative. The issue here was when a person with Shergills
    abilities and in his circumstances ought to have discovered his claim for
    contribution and indemnity.

[41]

For
    these reasons, I would dismiss Deols appeal. I would award costs to the
    respondent Shergill fixed at $2,600 inclusive of disbursements and applicable
    taxes.

Released: (JCM) April 5, 2016

K. van Rensburg J.A.

I agree J.C.
    MacPherson J.A.

I agree B.W. Miller
    J.A.


