In Presidential MSH Corporation v. Marr Foster & Co. LLP, the Ontario Court of Appeal found that the Corporation's claim against its accountants, who had filed corporate tax returns after their due date, was discoverable when the Canada Revenue Agency responded to the Notice of Objection and confirmed its initial assessment, not when the Corporation initially received the CRA's Notice of Assessment disallowing its tax credits. In applying s.5(1)(a)(iv) of the Limitations Act, the Court of Appeal held that time begins to run when the alternative resolution process has run its course or is exhausted, which must be reasonably certain or ascertainable by a court.
In this case, the accountants' late filing resulted in damages of approximately $550,000 in unpaid taxes, interests and penalties. The Court went through the case law on limitations which stands for the proposition that a legal proceeding against an expert professional may not be appropriate if the claim arose out of the professional's alleged wrongdoing but may be resolved by the professional himself without recourse to the courts, rendering the proceeding unnecessary. The Court then examined the case law which states that it is premature for a party to bring a court proceeding to seek a remedy if a statutory dispute resolution process offers an adequate alternative remedy and that process has not fully run its course. There, the concept of a proceeding being "legally appropriate" was interpreted to mean that it must be reasonably certain or ascertainable when this process has run its course.
The Court found that the professionals in this case attempted to eliminate the Corporation's loss. Had they been successful, it would have been unnecessary to resort to the court proceeding to remedy it. The CRA's process was "legally appropriate" in the sense that its end date was clear. Therefore, time started to run from the moment the CRA issued its final decision.
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