



COURT OF APPEAL FOR ONTARIO

CITATION: Lilydale Cooperative Limited v.
    Meyn Canada Inc., 2019 ONCA 761

DATE: 20190930

DOCKET: C64740

Feldman, Roberts and Fairburn
    JJ.A.

BETWEEN

Lilydale Cooperative Limited

Plaintiff

and

Meyn Canada Inc.
,
Mey-Can Equipment
    Ltd.
,
Meyn Food Equipment Inc.
, EMK NV and Elboma Moortgat
    Konstruktie NV

Defendants (
Appellants)

and

Allied Boiler Services
    Inc. and
Weishaupt Corporation

Third Parties (
Respondent)

Sandra L. Secord, for the appellants

Kammy K. Digambar and Alicia
    Piotrowski, for the respondent

Heard: March 7, 2019

On appeal from the judgment of Justice Peter
    J. Cavanagh of the Superior Court of Justice, dated November 22, 2017, with
    reasons reported at 2017 ONSC 6983.

Feldman J.A.:

[1]

This is an appeal from a summary judgment dismissing
    the appellants third party claim against the respondent as statute barred. The
    motion judge relied on issue estoppel

or abuse of process to prevent the
    appellants from relitigating the limitation issue, based on the summary
    judgment that had dismissed as statute barred another third party claim by the
    appellants seven years earlier.

[2]

I would dismiss the appeal based on
    discoverability. The motion judge erred in applying the doctrine of issue
    estoppel or abuse of process, but the third party claim is nonetheless out of
    time and should be dismissed. It was not legally appropriate for the appellants
    to wait for a jurisdictional dispute to be resolved before commencing its third
    party claim.

Facts

[3]

The plaintiffs action arises from a fire at its
    poultry processing plant on January 29, 2004. The plant was owned and operated
    by the plaintiff, Lilydale Cooperative Limited, now Sofina Foods Inc.
    (Lilydale).

[4]

There are two groups of defendants to the main
    action: Meyn Canada Inc., Mey-Can Equipment Ltd., and Meyn Food Equipment Inc.
    (collectively, Meyn); and EMK NV and Elboma Moortgat Konstruktie NV
    (collectively, EMK).

[5]

At all relevant times, Meyn was a supplier of
    food processing equipment. Meyn designed a fryer and oven system which it sold to
    Lilydale in 1994. EMK supplied a component, a thermal boiler, for the fryer and
    oven system that was supplied by Meyn to Lilydale.

[6]

On December 22, 2004, Lilydale commenced an
    action in Alberta against Meyn and EMK for damages arising from the fire,
    alleging that the parts each company had supplied were defective. Lilydale
    claimed breach of contract against Meyn, and negligence against both Meyn and
    EMK.

[7]

Because of a limitation issue in the Alberta
    action, Lilydale commenced the Ontario action against Meyn and EMK on January
    19, 2006, making essentially the same claims as in the Alberta action.

[8]

Lilydale served Meyn with the statement of claim
    in both the Alberta and the Ontario actions on March 10, 2006. In a letter on
    the same date, Lilydale stated that it would proceed only in one of the two
    provinces. On April 4, 2006, Lilydale also served EMK with the statement of
    claim in both actions.

[9]

On November 14, 2006, Meyn moved to stay
    Lilydales action in Ontario on the basis that Alberta was the most convenient
    forum, or alternatively because the Ontario action was an abuse of process. According
    to counsel for Meyn, the three parties to the two actions (Lilydale, Meyn and
    EMK) had an understanding that Lilydales claims against EMK and Meyn would be
    held in abeyance until the forum issue was determined. Pending the resolution
    of the forum issue, neither Meyn nor EMK pleaded in the Ontario action.

[10]

There is no evidence indicating that Weishaupt
    Corporation, the respondent in this appeal, was made aware of this understanding,
    or of the status of the Ontario action during this time.

[11]

Meyns motion was dismissed by Day J. on
    February 13, 2007:
Lilydale Co-operative Ltd. v. Meyn Canada Inc.
(2007), 84 O.R. (3d) 621 (S.C.) and the appeal was dismissed by this court on
    February 14, 2008:
Lilydale Co-operative Ltd. v. Meyn Canada Inc.
,
    2008 ONCA 126, 50 C.P.C. (6th) 1. On March 6, 2008, Meyn informed the other
    parties that it would not pursue a further appeal. As a result, the Alberta
    action was discontinued.

[12]

On May 22, 2008, Meyn served its statement of
    defence and cross claim against EMK in the Ontario action.

[13]

On November 14, 2008, just over two years and
    eight months after the Ontario claim was served on it, Meyn issued third party
    claims in the Ontario action against Weishaupt and Allied Boiler Services Inc.,
    claiming against Weishaupt for breach of contract, and against Allied for
    breach of contract and in tort.

[14]

On November 27, 2008, EMK also issued third
    party claims against Weishaupt and Allied in tort.

[15]

In July 2010, Allied sought an order striking
    out both Meyns and EMKs third party claims against it on the grounds that
    they were statute barred. Weishaupt did not bring a similar motion to strike at
    that time.

[16]

On July 21, 2010, the Allied motion judge granted
    Allieds motion and dismissed both third party claims against Allied:
Lilydale
    Co-operative Limited v. Meyn Canada Inc.
, 2010 ONSC 4114. Meyn took no
    position on this motion and did not attend.

[17]

The grounds for the motion were based on s.
    18(1) of the
Limitations Act
,
2002
, S.O. 2002, c. 24, Sched. B,
    which provides:

18 (1) For the purposes of subsection 5 (2)
    and section 15, in the case of a claim by one alleged wrongdoer against another
    for contribution and indemnity, the day on which the first alleged wrongdoer
    was served with the claim in respect of which contribution and indemnity is
    sought shall be deemed to be the day the act or omission on which that alleged
    wrongdoers claim is based took place.

(2) Subsection (1)
    applies whether the right to contribution and indemnity arises in respect of a
    tort or otherwise.

[18]

In dismissing the third party claims against
    Allied, the Allied motion judge made two findings: 1) under s. 18(1) the
    discoverability principles in s. 5 of the
Limitations Act

do
    not apply; and 2) even had she accepted that s. 5 applied to claims under s.
    18(1), she would have found that EMK failed to issue its third party claim
    against Allied within two years from the discovery of its claim.

[19]

In 2013, EMK and Meyn brought a special case
    motion to determine whether Alberta law, including its limitation provisions,
    applied to Lilydales claims. On October 30, 2013, Pollak J. determined that
    Alberta law applies to Lilydales tort claims and Ontario law applies to its
    contract claims:
Lilydale Cooperative Ltd. v. Meyn Canada Inc.
, 2013
    ONSC 5313. As a result, the parties agreed that Lilydales tort claims against
    Meyn and EMK were statute barred by Albertas ultimate ten year limitation
    period, but the contract claim against Meyn in Ontario continued. That decision
    was upheld by this court on April 22, 2015:
Lilydale Cooperative Limited v.
    Meyn Canada Inc.
2015 ONCA 281, 335 O.A.C. 7.

[20]

The motion to dismiss Meyns third party claim
    that is the subject of this appeal, was brought by Weishaupt in July 2017 on
    the same ground that Allied had raised in its 2010 motion, that the claim is statute
    barred.

[21]

On November 22, 2017, the motion judge granted summary
    judgment, dismissing Meyns third party claim against Weishaupt on the basis of
    issue estoppel. He held that Meyn was precluded by the doctrine of issue
    estoppel, or in the alternative, abuse of process, from relitigating the same
    question that had been decided seven years earlier in the Allied motion in
    which Meyns third party claim against Allied was dismissed, i.e. whether s.18
    of the
Limitations Act
,

was subject to the discoverability
    criteria in s. 5. Because he relied on issue estoppel and abuse of process, the
    motion judge did not address and apply the discoverability criteria under s. 5
    of the
Limitations Act
to Meyns claim against Weishaupt.

Issues

1)

Did the motion judge err by applying the
    doctrine of issue estoppel?

2)

Did the motion judge err by applying the
    doctrine of abuse of process?

3)

If yes, is Meyns third party claim against Weishaupt
    statute barred?

Analysis

(1)

Did the motion judge err by applying the doctrine of issue estoppel?

[22]

Issue estoppel is a branch of
res judicata
(the other branch being cause of action estoppel) which precludes the relitigation
    of issues previously decided in court in another proceeding:
Toronto (City)
    v. C.U.P.E.
, Local 79
, 2003 SCC 63, [2003] 3 S.C.R. 77, at para.
    23. There are three preconditions to invoking the doctrine of issue estoppel:

1)

The issue must be the same as the one decided in
    the prior decision;

2)

the prior judicial decision must have been
    final; and

3)

the parties to both proceedings must be the same,
    or their privies:
C.U.P.E.
at para. 23, quoting from
Danyluk v.
    Ainsworth Technologies Inc.
, 2001 SCC 44, [2001] 2 S.C.R. 460, at para. 25.

[23]

In
C.U.P.E.
, an employee of the City of
    Toronto who worked as a playground supervisor was convicted of sexual assault
    of a boy under his supervision. When the employee grieved his dismissal by the
    City, the arbitrator determined that he was not bound by the findings of the
    criminal trial judge that formed the basis for the conviction and ordered the
    employee re-instated on the basis that he had not committed the sexual assault.

[24]

One of the issues on the appeal was whether the
    doctrine of issue estoppel applied to preclude the arbitrator from making a
    different finding than the one made at the criminal trial. The stumbling block for
    applying issue estoppel was the third requirement: that the parties to both
    proceedings must be the same, or their privies, as the Crown and the City are
    not the same party nor is the City a privy of the Crown.

[25]

In that context, the Supreme Court considered,
    and rejected dispensing with the third requirement of issue estoppel, known as
    mutuality, as has been done in some other jurisdictions, in order to be able
    to apply the doctrine. Arbour J. examined the rationales for and the
    consequences of abandoning the mutuality requirement in the United States. She
    concluded at para. 29:

What emerges from
    the American experience with the abandonment of mutuality is a twofold concern:
    (1) the application of the estoppel must be sufficiently principled and predictable
    to promote efficiency; and (2) it must contain sufficient flexibility to
    prevent unfairness. In my view, this is what the doctrine of abuse of process
    offers, particularly, as here, where the issue involves a conviction in a
    criminal court for a serious crime.

[26]

Arbour J. observed that because the primary
    concern in that case was with the integrity of the criminal process rather than
    the traditional issue estoppel concerns such as costs and multiple vexatious
    proceedings, she was satisfied that issue estoppel did not apply. She stated at
    para. 32: [f]or these reasons, I see no need to reverse or relax the
    long-standing application of the mutuality requirement in this case and I would
    conclude that issue estoppel has no application.

[27]

On the motion under appeal, Weishaupt submitted
    that Meyn was precluded from relitigating the legal issue respecting whether
    the doctrine of discoverability applies to s. 18 of the
Limitations Act
because that issue was decided in the Allied motion. Meyn responded that issue estoppel
    could not apply because it failed on the third requirement, mutuality. Because
    Weishaupt was not a party to the Allied motion, the requirement that the same
    parties or their privies must be parties to both proceedings was not met. Meyn
    made the further point that by waiting to bring its motion to strike, Weishaupt
    took the risk that subsequent judicial decisions could change the
    interpretation and application of s. 18 of the
Limitations Act
.

[28]

The motion judge based his conclusion that issue
    estoppel did apply on the fact that Weishaupt was a party to Meyns third party
    action against Allied and Weishaupt, even though it was not a party to the Allied
    motion to strike the claims against Allied. He found that because Weishaupt was
    a party to the proceeding in which the Allied motion was brought, Weishaupt would
    be affected by [the Allied motion judges] decision, and therefore issue
    estoppel applied.

[29]

The motion judge quoted no authority for this
    conclusion and, with respect, it does not accord with the law on issue
    estoppel. Rather it assumes the result  if issue estoppel applied, then
    Weishaupt would be affected by the prior decision, but not if it did not apply.

[30]

Issue estoppel requires mutuality of parties in
    the proceeding that resulted in the binding decision. Weishaupt was not a party
    to the Allied motion. While in this case it is in Weishaupts interest to apply
    issue estoppel, it would be different had Allied lost its motion to strike. In
    that case, Meyn could not seek to rely on that outcome to bind Weishaupt, when
    Weishaupt had no right to participate and no ability to appeal. Issue estoppel
    is intended to dictate a fair outcome  that the same parties are precluded
    from relitigating the same issue. To bind Weishaupt to a decision that it had
    no right to participate in would be unfair and contrary to the principles
    underlying
res judicata
and issue estoppel. That is why mutuality
    remains one of the requirements for applying the doctrine.

[31]

It is also unfair to Meyn to bind it to a
    decision from another motion that it chose not to dispute, brought by another party.
    While the record does not disclose the reason for Meyns strategic decision not
    to oppose the Allied motion, it was entitled to make that decision for reasons
    that applied to Allied but may not have applied to Weishaupt. To effectively
    penalize Meyn for that choice may have the effect of encouraging unnecessary
    litigation, especially in complex multi-party actions. Meyns decision not to
    try to hold Allied as a third party cannot prevent Meyn from taking a different
    position with Weishaupt, if Weishaupt seeks the same relief. It is not bound by
    issue estoppel because Weishaupt was not a party to the earlier proceeding.

[32]

The motion judge listed the following four
    requirements of issue estoppel that he found were met in this case at para. 39
    of his reasons:

a.

The question that was decided by [the Allied motion judge] that is
    said to create the estoppel, that the discoverability principles in s. 5 of the
Limitations Act

do not apply to claims subject to section 18 of
    the
Limitations Act

and each of EMK and Meyn had two years from
    the date of service of Lilydales Statement of Claim in which to issue its
    Third Party Claim, is the same question that is before me.



b.

The decision of [the Allied motion judge] is final.



c.

Both Weishaupt and Meyn are parties on the motion before me in which
    issue estoppel is raised, and both were parties to Meyns third party action in
    which the decision of [the Allied motion judge] was made.



d.

The question decided by [the Allied motion judge] on the application
    of the discoverability principles in s. 5 of the
Limitations Act

to
    a claim for contribution and indemnity that is subject to s. 18 was fundamental
    to the substantive decision to dismiss Meyns Third Party Claim against Allied.

[33]

However, his statement at c) is incorrect: the
    decision made by the Allied motion judge was not made in Meyns third party
    action against Weishaupt. It was made in Meyns third party claim against
    Allied. While both claims are made in the same pleading, they are separate,
    independent, stand-alone claims. The fact that they are made in the same
    pleading does not make Weishaupt, a non-party to the Allied motion, a party for
    the purpose of issue estoppel. To do so would undermine the purpose of the
    doctrine and the fairness of its application.

(2)

Did the
    motion judge err by applying the doctrine of abuse of process?

[34]

The doctrine of abuse of process is a flexible
    doctrine unencumbered by the specific requirements of issue estoppel, and can
    be applied where the requirements of issue estoppel may not be met to prevent
    what is essentially the relitigation of an issue that has already been
    determined:
C.U.P.E.

at paras. 35-37.

[35]

The motion judge stated that if the lack of
    mutuality had prevented him from deciding the motion on the basis of issue
    estoppel, then in the alternative, he would have found that Meyn was precluded
    by the doctrine of abuse of process from relitigating the question decided in
    the Allied motion. Referring to
C.U.P.E.
, he stated at para. 41 of his
    reasons that the rationales for applying both doctrines are based on the
    principles of judicial economy, consistency, finality and the integrity of the
    administration of justice.

[36]

While the application of the doctrine of abuse
    of process involves the exercise of discretion by a motion judge, in my view,
    the motion judge erred in the exercise of his discretion by applying the
    doctrine of abuse of process to these facts. He should have rejected the
    application of the doctrine for two reasons: 1) by the time the motion was
    argued, the law with respect to s. 5 and s. 18 of the
Limitations Act

had changed since the Allied motion in 2010; and 2) it is unfair to Meyn to
    essentially penalize it for not participating in the Allied motion.

[37]

First, on the Allied motion, the Allied motion
    judge decided that the two year limitation period in s. 18 of the
Limitations
    Act
was not subject to the discoverability criteria in s. 5. Since her
    decision, this court has determined in

Mega International Commercial
    Bank (Canada) v. Yung
, 2018 ONCA 429, 425 D.L.R. (4th) 439, that
    properly interpreted, s. 18 is subject to discoverability under s. 5. While the
    question of the proper interpretation of s. 18 and whether it is subject to
    discoverability under s. 5 was the subject of conflicting decisions prior to
    the 2018 decision in
Mega
,
that law has now been settled in a
    manner that is inconsistent with the Allied motion judges decision.

[38]

In
Minott v. O'Shanter
    Development Co.

(1999),
42 O.R.
    (3d) 321 (C.A.)
, Laskin J.A. commented on the role
    of a change in the law when a judge is deciding whether to apply the doctrine
    of issue estoppel. He stated at para. 51:

If the decision of a court on a point of law in
    an earlier proceeding is shown to be wrong by a later judicial decision, issue
    estoppel will not prevent relitigating that issue in subsequent proceedings. It
    would be unfair to do otherwise.

[39]

The same discretionary fairness factors apply to
    a judges decision whether to apply the doctrine of abuse of process:
C.U.P.E.
at para. 53. Because the law with respect to s. 18 and s. 5 of the
Limitations
    Act

was unsettled when the Allied motion was heard, Meyn was
    entitled to argue that discoverability principles should be applied. Its
    argument was that it did not discover that a third party claim in the Ontario
    action was the appropriate means to seek a remedy, until after the issue of
    where Lilydales action would proceed, i.e. the forum issue, had been finally
    determined.

[40]

I would add that even if the motion judge did
    not err in his exercise of discretion, it would be an error for this court to
    uphold his decision now that this court has held in
Mega
that the
    correct interpretation of s. 18 includes the principles of discoverability,
    contrary to the decision on the Allied motion in 2010.

[41]

Second, in
C.U.P.E.
, the Supreme Court
    could not apply the doctrine of issue estoppel because the parties to the
    criminal proceeding and to the arbitration were not the same. The
    accused/employee was the same but the Crown and the City were separate parties.
    The court therefore considered whether it could and should apply the doctrine
    of abuse of process to prevent the factual finding of the criminal conviction
    from being undermined by the opposite finding of the arbitrator on the same
    facts.

[42]

The court explained that abuse of process
    focuses on the integrity of the adjudicative process rather than on the interests
    of the parties to the attempted relitigation of an issue. For example, in the
C.U.P.E.
case itself, the court found that the relitigation of the issue whether the employee
    sexually assaulted the child amounted to a blatant abuse of process. It
    undermined the integrity of the criminal process.

[43]

However, the court pointed out circumstances
    where it would be unfair to apply abuse of process or issue estoppel even if
    the requirements were met. One example it gave was where the stakes in the
    original proceeding were minor but in the subsequent proceeding they were very
    significant. In that case it would be unfair to favour the goal of finality where
    the incentive to defend the original proceeding was low. That example appears
    to apply squarely in this case, where Meyn was apparently not concerned about
    maintaining Allied in the litigation and chose not to respond to the Allied
    motion, but certainly wants to keep Weishaupt in as a third party.

[44]

The motion judge favoured the goal of finality
    in this case. He stated at para. 42 of his reasons: 
[i]f parties were permitted to relitigate questions that were finally
    decided because of new views they may later take of the law that applies in a
    given case, whether based upon new judicial decisions or other considerations,
    litigation would have no end [citation omitted]
. However, he did not
    consider the unfairness discussed by the Supreme Court in
C.U.P.E.
when a party chooses for its own reasons not to respond to one partys motion,
    but has reasons to respond to anothers.

[45]

There was no abusive conduct by Meyn. It chose
    to respond to the motion by Weishaupt as it was entitled to do, and make the
    legal and factual arguments that it believed applied in the context of its
    claim against Weishaupt.

(3)

Is Meyns third-party claim against Weishaupt statute
    barred?

[46]

As discussed above, the motion under appeal was
    heard and decided before this courts decision in
Mega
. Because the
    motion judge decided the motion based on issue estoppel or abuse of process, he
    concluded that he did not need to decide the legal issue whether discoverability
    principles apply under s. 18. He therefore never considered when Meyn
    discovered its third party claim, applying the criteria in s. 5 of the
Limitations
    Act
.

[47]

While Meyns position on the appeal was that the
    court should dismiss the summary judgment motion and send the limitation issue
    on to be heard as part of the trial, it was acknowledged in oral argument that it
    had put its best foot forward on the motion as required. The respondent
    submitted that this court should decide the limitation issue.

[48]

Meyns argument rests on the fourth criterion
    that governs the discovery date for a claim under s. 5(1)(a) of the
Limitations
    Act
, which reads: that, having regard to the nature of the injury, loss
    or damage, a proceeding would be an appropriate means to seek to remedy it.

[49]

Meyns position is that it was not legally
    appropriate under s. 5(1)(a)(iv) of the
Limitations Act
to bring the
    third party proceedings until the forum issue was finally decided in February
    2008 and that the two years ran from that time. Its submission is based on what
    occurred in the main action where Lilydale took the position by letter dated March
    10, 2006 that it would only be proceeding in one jurisdiction, Alberta or
    Ontario. Meyn did not defend or take any steps in the Ontario action. In its
    submissions on this appeal, Meyn explained that the reason for this was because
    it believed that doing so had the potential to undermine its position in
    support of the stay of the Ontario action.

[50]

Meyns argument regarding discoverability has
    two prongs. First, it could not deliver any third party claim in the Ontario
    action to ensure that it did not attorn and thereby jeopardize the forum
    argument. Second, if it had been successful in establishing that Alberta was
    the correct forum, then the Ontario action would have been discontinued and
    there would have been no need for any third party proceedings. Therefore, the
    principle applies from
407 ETR Concession Co. v. Day
,
2016 ONCA
    709, 133 O.R. (3d) 762, and
Presidential MSH Corp. v. Marr, Foster &
    Co. LLP
,
2017 ONCA 325, 135 O.R. (3d) 321, that it would not be legally
    appropriate to commence a legal proceeding while another resolution process that
    may resolve the matter is ongoing.

[51]

Dealing first with the issue of how this court
    should proceed, I am satisfied based on the record and the submissions, that the
    record for the summary judgment motion was complete and that there is no
    genuine factual issue that requires a trial. Therefore, while it would have
    been better for this court to be reviewing a finding by the motion judge on the
    issue of discoverability, this court is in as good a position as the motion
    judge to determine that issue based on the record.

(a)

Does the risk of attornment and prejudice to the
    forum motion postpone the commencement of the limitation period?

[52]

Attornment to a courts jurisdiction by a
    defendant signifies acquiescence to the jurisdiction of the court. When a party
    takes steps beyond merely contesting the jurisdiction of a court, that party
    may be found to have voluntarily engaged the jurisdiction of the court and
    therefore attorned to it:
Wolfe v. Pickar
,
2011 ONCA 347, 332
    D.L.R. (4th) 157, at para. 44.
See
    also
Kunuthur v. Govindareddigari
, 2018 ONCA 730, 427 D.L.R. (4th) 120, at
    para. 18, leave to appeal refused, [2018] S.C.C.A. No. 449
.
Meyn
    submits that filing pleadings in Ontario, including by serving the third party
    claim, could have prejudiced the position it was taking on the forum motion,
    that Alberta was the more appropriate forum.

[53]

In support of its assertion of potential
    prejudice, Meyn cites four cases where the issue was whether steps taken
    amounted to attornment:
Stoymenoff v. Airtours PLC

(2001), 17
    C.P.C. (5th) 387 (Ont. S.C.), at paras. 35, 38-9;
Atlas Copco Inc. v. Hillier
,
    2009 CanLII 2897 (Ont. S.C.), affd 2009 ONCA 687, at paras. 17-18;
Stanley
    v. Stanley
, [2003] O.T.C. 307 (S.C.); and
Carolina Foods Inc. v.
    838116 Ontario Inc.
,
2015
    ONSC 1342. In my view, these cases do not assist Meyn. None of these cases involved
    the impact of attornment on a limitation period.

[54]

This court held in
Federation Insurance Co.
    of Canada v. Markel Insurance Co. of Canada
,
2012 ONCA 218, 109
    O.R. (3d) 652, that in s. 5(1)(a)(iv), the word appropriate means legally
    appropriate, and that tactical choices that arise during litigation do not
    delay the commencement of the limitation period. Sharpe J.A. stated at para.
    34, in the context of pre-claim negotiations:

To give
    "appropriate" an evaluative gloss, allowing a party to delay the
    commencement of proceedings for some tactical or other reason beyond two years
    from the date the claim is fully ripened  would, in my opinion, inject an
    unacceptable element of uncertainty into the law of limitation of actions.

[55]

While a finding that serving a third party claim
    amounted to attornment could be prejudicial, or even fatal to a partys forum
    challenge, the strategic decision of how to deal with this risk of prejudice is
    the type of tactical consideration that does not affect the legally
    appropriate calculus in s. 5(1)(a)(iv) of the
Limitations Act
. The
    issue of whether serving a third party claim solely to protect a limitation
    period will amount to voluntary attornment is for the forum judge to decide. It
    does not affect the discoverability of the third party claim and therefore the
    commencement of the limitation period.

[56]

I also note that a party such as Meyn, facing
    the expiry of a limitation period, had a number of procedural avenues to take
    to avoid that consequence rather than allow a limitation period to expire or be
    found to have expired on the application of discoverability principles.

[57]

First, Meyn could have alerted Weishaupt that
    the third party claim was coming and sought its agreement under s. 22(3) of the
Limitations Act
to a stand-still pending the determination of the
    forum issue. I can see no reason for the third party not to agree. However, if
    there were one, then judicial authorization on the attornment issue could be
    sought. That is what occurred in
Joyce v. MtGox Inc.
, 2016 ONSC 581,
    where Perell J., on a case management conference in advance of the expiry of
    the limitation period, involving a party in Meyns position, ruled that issuing
    the third party claim would not amount to attornment.

[58]

Second, Meyn could have served the third party
    claim, with an express reservation of its rights, and then argued at its forum
    motion that it did so only to preserve the limitation period and therefore has
    not attorned to Ontarios jurisdiction. Meyn brought a
forum non conveniens
motion. It was understood by all the existing parties that Meyn was not
    acknowledging the convenience of Ontario as the forum for the action by
    bringing the motion. While that motion was outstanding, it would be anomalous
    indeed if Meyns service of a third party claim to preserve a limitation period
    in Ontario would be found to amount to such an acknowledgement.

[59]

To conclude, while risk of attornment was a
    potentially legitimate concern for Meyn, that concern related to its position
    on the forum issue and did not affect the discoverability of its third party
    claim and the need to take the steps necessary to preserve the claim within the
    limitation period.

(b)

Was it legally inappropriate to bring third
    party proceedings before the forum issue had been determined?

[60]

In
Presidential
,
this court,
    following
407 ETR
, explained that a proceeding could be legally
    inappropriate and therefore not discoverable within the meaning of s. 5(1)(a)(iv)
    of the
Limitations Act
, where the party with the claim is pursuing
    another resolution process that would eliminate the loss and thereby avoid
    needless litigation.

[61]

Meyn submits that this principle applies to the
    facts of this case. Meyn was pursuing a challenge to Ontario as the convenient
    forum, which, if successful, would have ended the Ontario action and obviated
    the need to commence a third party claim against Weishaupt. I would reject Meyns
    submission. A forum challenge does not resolve the dispute between the parties
    but merely moves the dispute to a court in another jurisdiction. It is not an
    alternative process, but rather, it is the same process but in a different
    jurisdiction.

[62]

This is consistent with recent decisions of this
    court where the alternative process argument from
407 ETR
and
Presidential
was raised and rejected in the context of multiple court or alternative dispute
    resolution proceedings. For example, in

Ridel v. Goldberg
, 2019 ONCA 636, 71
    C.B.R. (6th) 1, van Rensburg J.A. held that the determination of an appeal, which
    had the potential to eliminate a new claim against a different defendant, did
    not postpone the commencement of the limitation period with respect to that new
    claim. She stated at para. 77:

While not determinative, this courts decision
    in
Tapak v. Non-Marine Underwriters, Lloyds of
    London
, 2018 ONCA 168 (CanLII), 76 C.C.L.I. (5th)
    197, leave to appeal refused, [2018] S.C.C.A. No. 157, is instructive. In that
    case, the appellants relied on s. 5(1)(a)(iv) to argue that an appeal against
    other parties, if successful, might have eliminated their losses and that they
    therefore did not know that their action for contribution and indemnity was an
    appropriate means to seek to remedy their losses until the appeal was
    dismissed. At para. 13, the court rejected this argument, stating:

[Section] 5(1)(a)(iv) is not intended to be
    used to parse claims as between different defendants and thus permit one
    defendant to be pursued before turning to another defendant. Rather, it is
    intended to address the situation where there may be an avenue of relief
    outside of a court proceeding that a party can use to remedy their injury,
    loss or damage.

See also
Gravelle (CodePro
    Manufacturing) v. Denis Grigoras Law Office
, 2018 ONCA 396, at para. 6.

[63]

The forum challenge is conceptually similar to
    settlement discussions, which may resolve the entire claim so that no court
    proceeding need be commenced, but nonetheless do not postpone the running of
    the limitation period: see
Presley v. Van Dusen
,
2019 ONCA 66,
    432 D.L.R. (4th) 712, at para. 25; and
Markel
at para. 34.

[64]

As in
Ridel
,
Tapak v. Non-Marine
    Underwriters
,
Lloyds of London
,
2018 ONCA 168, 76
    C.C.L.I. (5th) 197, leave to appeal refused, [2018] S.C.C.A. No. 157, and
Gravelle
,
    in this case, there was no alternative resolution process to which Weishaupt
    was a party that could have resolved the issue between it and Meyn. Rather, Meyn
    was attempting to have the whole Ontario action dismissed, obviating the need
    for the third party claim.

[65]

To allow parties to wait, at their discretion,
    for other court or arbitral proceedings to conclude, where the result could
    obviate the need to bring a claim that they know exists, is inconsistent with
    the purpose of the
Limitations Act

for two reasons. First, this
    approach could extend the limitation period well beyond the two year original
    threshold in an uncertain and unpredictable manner. Second, there were no significant
    savings to be achieved by not commencing the third party claim until the forum
    challenge was complete. Procedurally, a stand-still or tolling agreement could
    be sought until the forum issue had been finalized by the court so that the
    third party would not be required to plead in response. However, it would be on
    notice that if the Ontario action proceeds, it is a named party, required to
    preserve its documents, and respond to the action as advised.

[66]

In my view, these factors drive the conclusion
    that the day Meyn was served with the statement of claim by Lilydale, it knew
    that a third party claim against Weishaupt was the appropriate means to seek a
    remedy from Weishaupt. It was therefore not legally appropriate for Meyn to
    wait until the forum issue had been decided before the commencing third party
    claim.

Result

[67]

In the result, while the doctrines of
    issue estoppel and abuse of process are not applicable in this case, I would
    dismiss the appeal on the basis that under s. 18 of the
Limitations Act
,
    applying the discoverability criteria under s. 5, Meyn discovered its third
    party claim against Weishaupt when it was served with the statement of claim by
    Lilydale in March 2006. Its third party claim brought in November 2008 was
    therefore statute barred. I would award costs to Weishaupt in the agreed amounts
    of $15,000 inclusive of disbursements and HST for the appeal and $23,000
    inclusive for the motion.

Released: K.F. September 30, 2019

K. Feldman J.A.

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

I agree. Fairburn J.A.


