Limitation periods exist in litigation in order to facilitate a reasonable resolution to a legal matter. Without limitation periods, a party could choose to ignore a matter for years, and then pick it up out of the blue, dragging the other parties back into the courtroom after years of inaction. To give parties more certainty, and to facilitate an expeditious resolution, limitation periods are set for several steps in the litigation process. If a party misses a deadline, the matter will often be closed.
However, in class proceedings, there are provisions in place to allow for the suspension of certain limitation periods pending the resolution of various steps in the action. The classification process can be long, and so without suspending certain time limits, the class members could be severely prejudiced while awaiting a determination regarding certification of the matter.
Section 28 of the Class Proceedings Act
The Class Proceedings Act (CPA) provides for a suspension in favour of class members of any limitation period that applies to a cause of action being asserted by them in a commenced class proceeding until certain specified events occur as set out in section 28 of the CPA. The suspension has always begun on the commencement date and then continued until one of the specified events occurred. Therefore, as long as none of the enumerated steps take place, the limitation period will be suspended indefinitely.
One such possibility which existed before the recent amendments to the CPA was where the proceeding had not yet been certified after a motion to certify the action as a class proceeding. That possibility is now foreclosed due to the addition of section 28(1)(a). However, that still leaves the issue open for cases commenced before October 1st, 2020 when the amendments became effective.
28 (1) Any limitation period applicable to a cause of action asserted in a proceeding under this Act is suspended in favour of a class member on the commencement of the proceeding and, subject to subsection (2), resumes running against the class member when,
(a) the court refuses to certify the proceeding as a class proceeding;
(b) the court makes an order that the cause of action shall not be asserted in the proceeding;
(c) the court makes an order that has the effect of excluding the member from the proceeding;
(d) the member opts out of the class proceeding;
(e) an amendment that has the effect of excluding the member from the class is made to the certification order;
(f) a decertification order is made under section 10;
(g) the proceeding is dismissed without an adjudication on the merits, including for delay under section 29.1 or otherwise;
(h) the proceeding is abandoned or discontinued with the approval of the court; or
(i) the proceeding is settled with the approval of the court, unless the settlement provides otherwise. 2020, c. 11, Sched. 4, s. 26.
ONCA: A Question for the Legislature
Recently, the Ontario Court of Appeal (ONCA) was called upon to deal with an indefinite suspension of the limitation periods running against class members in R.G. v. The Hospital for Sick Children. The certification was denied by the motions judge, who ruled that despite the denial of certification the suspension would continue given the ordinary and literal reading and meaning of section 28 of the CPA.
The defendant/appellants took the position that the motion judge’s interpretation of s. 28 resulted in an indefinite suspension of the limitation period following the denial of certification, a result they describe as so absurd as to be inherently wrong. In advocating for a purpose-driven interpretation of the CPA they advanced alternative interpretations in that vein.
Two such arguments were put forward:
- Once the refusal to certify occurs then it should follow that since no cause of action is being asserted in a class proceeding that the CPA, and in particular, section 28, are no longer operable or relevant.
- In the alternative, they submitted that the denial of certification could be interpreted as a dismissal of the class proceeding without any adjudication on the merits, as contemplated by s. 28(1)(d), and that the limitation period would therefore resume running.
The plaintiff/respondent responded with the expected argument that the plain meaning of section 28 supports the motion judge’s interpretation. The proceeding had to be dismissed following a motion for that purpose in order for the suspension to end. The court was urged to not use a purposive interpretation to rewrite the section to include language that the Legislature could have included but chose not to.
The ONCA concluded that an indefinite suspension of the limitation period was not necessary to promote the purpose of the CPA. They also agreed that such a result undermined the purpose of the Limitations Act, 2002. Despite these conclusions, the Court determined that this was a problem for the Legislature to address. Given this result, defendants who are involved in class proceedings commenced before October 1st, 2020 must leave the suspension running or move to dismiss the proceeding.
With the recent amendments, it appears the Legislature has provided a resolution to this issue. However, cases which began prior to the amendments will likely be subject to the CPA as it stood before October 1, 2020.
At Milosevic & Associates, our team of Toronto corporate commercial lawyers regularly represent clients in complex commercial litigation matters ranging from straightforward contract and partnership disputes to complex multi-party commercial claims including class action litigation. Over the years, our team of exceptional litigators has seen it all and has successfully fought for our clients’ rights. Our impressive track record speaks for itself. Call us at 416-916-1387 or contact us online for a consultation.