In the fast-paced world of commercial litigation, timing is everything. Missed deadlines can have dire consequences for all parties, including the dismissal of a case. One of the most common pitfalls in commercial litigation is the applicable limitation periods (the time frame for legal action to commence).

This blog post will delve into the intricacies of summary judgment motions in Ontario, focusing on limitation periods. It will provide essential insights to help parties avoid costly mistakes and protect their legal rights. It will also consider a recent decision from the Court of Appeal for Ontario in which the motion judge dismissed a summary judgment motion. However, the reasons for the dismissal were ambiguous, and the Court of Appeal was required to carefully consider whether it had jurisdiction to make a finding on the matter.

Summary Judgment Motions

A summary judgment motion is a request to a court to decide a case without going to trial. It is typically filed when there is no genuine dispute of material fact and one party is entitled to judgment as a matter of law. In simpler terms, it means that the case can be resolved based on the evidence presented without the need for a trial.

A summary judgment may be appropriate when it is determined that there is no genuine dispute of material fact (i.e. the parties agree on the key facts of the case or there is not enough evidence to create a genuine dispute). Alternatively, a summary judgment motion may be appropriate in cases where the moving party is entitled to judgment as a matter of law (i.e. the law favours one party, and there is no reasonable argument to the contrary). 

In some cases, a defendant may bring a summary judgment motion seeking to dismiss an action against them because it is statute-barred. If the motion is successful, the action is dismissed, and a final order is made. However, if a summary judgment is dismissed, questions may arise regarding the limitation period. 

Appellants Argue Summary Judgment Motion is Statute-Barred; Motion Dismissed by Motion Judge 

In the recent case of 1819472 Ontario Corp v John Barrett General Contractors Limited, the Court of Appeal for Ontario was asked to consider various questions relating to summary judgment motions and limitation periods. In this case, the respondent corporation (“1819”) alleged that it was defrauded by its former principal, the appellant (“Zaza”) and others. The respondent (controlled by “Barrett”) commenced an action alleging that Zaza caused it to loan a substantial sum to another corporation (“John Barrett”), which was controlled by Zaza, resulting in another related corporation defaulting on a promissory note to Barret. 

When the motion for summary judgment was brought before the court, the appellants argued that the action was started outside of the applicable limitation period and, as such, was statute barred. Accordingly, they sought to have the action dismissed. However, the motion judge found that the action was not statute-barred and the motion was dismissed. 

When Does the Court of Appeal Have Jurisdiction? 

The motion judge initially dismissed the motion based on a limitation defence. However, it was not confirmed whether he had found a genuine issue requiring trial or whether he was determining a question of fact or law. The appellants appealed this decision to the Ontario Court of Appeal because it was a final decision like it would have been had the motion been successful. The appellants argued that the motion judge erred in finding that, among other things, the limitation period did not begin in May 2017, when Barrett first became aware of 1819’s claim. Instead, the motion judge found that the limitation period began on January 6, 2021, when Barrett became a director in 1819.

Although the parties agreed that the order under appeal was final, the Court had to consider the issue because the parties could not confer jurisdiction if the Court of Appeal did not have it. In other words, the Court of Appeal only has jurisdiction to decide if the order is final. The motion judge did not provide the legal basis for his decision to dismiss the summary judgment motion. As such, the Court of Appeal had to determine whether the motion judge made a final determination on the issue. 

Motion Judge Made Final Determination on Limitation Period Issue; Appeal Dismissed 

Here, there was ambiguity in the motion judge’s decision to dismiss the motion. As such, the Court of Appeal stated that “there is a presumption that unless the motion judge specifically references the powers under r. 20.05(1) or r. 20.04(4) of the Rules of Civil Procedure, R.R.O. 1990, Reg 194, to make binding determinations of fact or law, and specifies what material facts or questions of law are now not in dispute, the motion judge did not intend to make binding determinations of fact or law. Those determinations will remain to be made by the trial judge.” 

When assessing the matter, the Court of Appeal made several findings, including:

• The parties agreed on the facts of the case and no material facts were in dispute; 
• The parties all understood that the motion judge intended to make a determination on the legal issue;
• The only issue raised at the motion hearing was the limitation period issue;
• The reasons for the decision did not raise concerns about credibility of the parties; and 
• The reasons for the decision did not identify a need for viva voce evidence (oral testimony).

Overall, the Court of Appeal determined that the reasons for the decision outlined the motion judge’s intention to make a final determination on whether the action was statute-barred. 

Ultimately, the Court of Appeal did not find that the motion judge erred in his decision and dismissed the appeal. 

Addressing Issues of Ambiguity Relating to Limitation Periods

This case highlights the importance of a motion judge explicitly stating the basis for their decision to dismiss a summary judgment motion based on a limitation period issue. In any case, the trial judge and the appeal court in some instances, will need to identify whether the motion judge made a final determination on a limitation period issue. 

Contact the Skilled Litigation Lawyers at Milosevic & Associates in Toronto for Representation in Complex Commercial Disputes

The knowledgeable Toronto corporate litigation lawyers at Milosevic & Associates regularly advise corporate clients on their rights and options regarding various legal matters, including shareholder and corporate disputes, contract disputes, and oppression claims. We provide clients with tailored legal advice and representation in even the most complex matters. To speak with a member of our litigation team regarding your matter, please contact us online or at (416) 916-1387.