Canada: Stilwell V. World Kitchen Inc.: Ontario Court Of Appeal Clarifies Standard Of Review For Decisions On Limitation Period Defences

The Ontario Court of Appeal's November 4, 2014 decision in Stilwell v. World Kitchen Inc. considered the standard of review concerning a finding of when a limitation period commenced running against a particular defendant. Hourigan J.A., for a unanimous Court of Appeal, confirmed that great deference must be given to trial judges' decisions in this respect, and the standard of review of a trial judge's application of the test is palpable and overriding error.

In this product liability case, there was no dispute that the plaintiffs added a second defendant ("Corning") outside of what would have been the applicable limitation period if the limitation period began running from the date of the injury. The question therefore was when the plaintiffs knew or should have known that they had a cause of action against Corning. Corning conceded that this is primarily a question of fact and the corresponding standard of review by an appellate court is one of palpable and overriding error. However, it argued that the articulation and application of this legal threshold must be reviewed on a standard of correctness.

Hourigan J.A. rejected Corning's submissions for a number of reasons:

[18]      Corning submits that where the identity of a potential defendant is in question, the limitation period commences when the plaintiff has, or is deemed to have, prima facie grounds to infer that the relevant acts or omissions were caused by a particular party: Kowal v. Shyiak, 2012 ONCA 512, 13 C.L.R. (4th) 7, at para. 18.

[19]      Corning concedes that the determination of when the plaintiff has, or is deemed to have, such prima facie grounds is primarily a question of fact and that the corresponding standard of review by an appellate court is one of palpable and overriding error. However, Corning argues that the articulation and application of this legal threshold must be reviewed on a standard of correctness. The motion judge, it submits, erred in articulating too low a standard of reasonable diligence on the part of the respondent in investigating its potential claim. Corning claims that this error is extricable from the trial judge's findings of fact and is, therefore, reviewable according to a standard of correctness.

[20]      I would reject this argument for the following reasons.

[21]      Counsel for Corning conceded in oral argument that the trial judge articulated the correct legal issue in his ruling when he stated that "the real question to be answered is whether the plaintiffs and/or their counsel learned that they had a cause of action against Corning Incorporated, or through the exercise of reasonable diligence ought to have learned that they had a cause of action against Corning Incorporated prior to August 19th, 2002."

[22]      Corning submits that the trial judge subsequently erred when he stated that the material fact in question was the "identity of the party likely to bear responsibility for that alleged Visions Dutch oven," and when he concluded that he could not find that the respondents knew or ought to have known the "material facts concerning the advisability of a formal claim against Corning".

[23]      In my view, the trial judge made no error in principle in his analysis of the limitation defence. There is nothing in the impugned comments of the trial judge, or in his ruling as a whole, that evidences any change in the formulation of the test. I reject Corning's submission that the phrases "likely to bear responsibility" or "advisability of a formal claim" indicate any material departure from the prima facie threshold.

[24]      Having failed to identify a legal error, Corning's argument essentially amounts to an attack on the trial judge's factual findings that supported his conclusion that the respondents exercised reasonable diligence in attempting to identify the proper defendants. In my view, the trial judge's factual findings were amply supported by the evidence [...]

[25]      Based on this evidence, the trial judge concluded that there was "a good deal of support for the plaintiffs' position that, in these early stages of the investigation and litigation, the available information pointed to World Kitchen as the entity likely to bear responsibility, if any, for the Visions cookware".

[26]      Contrary to the submission made by counsel for Corning, the trial judge did not ignore the evidence that Corning says should have alerted the respondents to a potential claim. Rather, the trial judge considered that evidence and declined to draw the inferences urged upon it by Corning.

[27]      In considering Corning's arguments, the trial judge also recognized the practical difficulties the respondents faced in trying to identify the correct defendant in the context of a very complicated corporate organizational structure. In these circumstances, the trial judge concluded that the respondents' reliance on the representation by World Kitchen that they had sued the correct party was reasonable.

[28]      On the evidence, it was open to the motion judge to come to the conclusion he did and Corning has failed to identify any palpable or overriding error in the trial judge's limitation period analysis. There is, therefore, no basis for appellate interference with the motion judge's ruling regarding the limitation period.

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