Canada: Third-Party Claim: Is It Out Of Time?

Third party proceedings can be an efficient, and cost-effective way of adding parties and any related claims arising from the same set of facts. Rule 29.02 provides the time constraints for when third party claims must be issued: within ten days after the delivery of a statement of defence, within ten days after the plaintiff delivers a reply in the main action, or at any time after this, either with the plaintiff's consent or with leave of the court.[1] Leave must be granted by the court according to the Rule, unless the plaintiff would be prejudiced thereby, which the court has interpreted as needing to be "more than a mere inconvenience".[2] Examples of when the court has found prejudice to the plaintiff and has disallowed the commencement of third party proceedings include when examinations for discovery have long been completed or when trial for the matter is imminently approaching and the addition of a third party claim would cause an inordinate delay to same.[3]

Problems arise because oftentimes in insurance law, information as to potential third party claims only comes to light once certain evidence is provided, either through documentary production or through examinations for discovery, and by this time, there may be a limitation period issue. Section 18 of the Limitations Act, 2002 marginally addresses this problem, providing that for claims of contribution and indemnity, whether arising from a tort or otherwise, the limitation period is presumed to begin to run from the date that defendant is sued.[4] This buys a little more time for a third party claim to be commenced.

The question remains of whether the discoverability principles in section 5(2) of the Limitations Act, 2002 apply to the running of such a limitation period for third party claims of contribution and indemnity; essentially, whether consideration is given to the point at which a defendant discovered or ought to have discovered sufficient facts to make it possible to bring its third party claim.[5] Although there is some conflicting case law on this point, the most recent word from the Court of Appeal in 2015 on this point in Miaskowski v Persaud is that the start date for the limitation period in section 18 is a presumed start date, so that discoverability provisions do apply. If the defendant can show reasonable due diligence in determining a potential claim and can show that it was only discovered subsequent to the date he was served with the claim, that presumption will be rebutted and the limitation period will be determined to begin on that day of discovery.[6] It is the defendant who bears the onus of proving he used reasonable due diligence and took steps to discover the potential claim and the identity of the third party prior to the expiry of the limitation period.[7] A defendant cannot sit idly by, having knowledge of a potential third party claim, and waiting on the commencement of same.

A good discussion of what this required due diligence looks like in the context of an automobile insurance claim can be found in the Justice Gordon's decision in White v Mannen, where the defendant submitted that the examinations for discovery and accompanying expert opinions were necessary to have first in order to discover the cause of action against the third party.[8] The court emphasized that the test for discoverability requires that the party have knowledge, actual or constructive, of "material" or "sufficient" facts necessary in order to commence a claim only, rather than enough facts or evidence to be in a position to "prove" the claim.[9] Essentially, all the defendant must know for a third party claim to be deemed as "discovered" is that there is a potential third party who may have been involved in some way in the injuries claimed, and the identity of this third party; details as to potential liability are not required to be known at this point.

As discussed in White v Mannen [10], in some cases, this will require an expert opinion in order to ascertain the material facts, as was the case in Zurba v Lakeridge Health Corp. It was only after the defendant received an expert medical opinion that identified the initial care provided by the doctor at the hospital as a possible cause of the plaintiff's injuries, that discovery of this third party claim was established.[11] The limitation period for commencement of the third party claim thus only began to run upon receipt of this expert report.

Similar principles apply to examinations for discovery; an examination for discovery may or may not be necessary to be completed prior to knowledge of a third party claim.[12] For example, in Bentley v Ontario (Ministry of Transportation), the defendant asserted that it only discovered its third party claim against the municipality after the examination for discovery which disclosed a new or different version of the facts, as to the iciness of the bridge and whether or not there were signs warning of bridge icing.[13] However, the court rejected this argument, finding that no new or different information about the presence or absence of signs warning about bridge icing were actually disclosed at the examination for discovery, as the witness merely provided she could not recall either way, so that the defendant failed to rebut the presumption that the limitation period began to run on the date he was served.[14] The defendant ought to have already known of the potential liability of the municipality in the injury claimed; no new information as to the nature of the damages implicating the third party was obtained at the discovery. Thus, in order for the court to find it necessary for an examination for discovery to be held prior to the third party claim being discovered, there must be material facts discovered for the first time in that discovery, as relating to the nature of the injury itself.[15]

The standard used for the question of whether due diligence was satisfied in discovering the potential third party claim is that of a "reasonably prudent person in pursuing the facts".[16] The principle of "better to be safe than sorry" definitely applies in this instance to avoid a claim being statute-barred, impressing upon defendants the need, where possible, to be speedy with bringing any third party claims against individuals potentially involved in the fact situation, rather than waiting for concrete evidence of proof against such persons to come to light.

Footnotes

[1] Rule 29.02(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, as amended.

[2] Siket v Milczek (1993), 23 C.P.C. (3d) 204 at para 6 (Ont. Gen. Div.)

[3] Ibid at para 6.

[4] Section 18 of Limitations Act, 2002, S.O. 2002, c. 24, Sched. B; Placzek v Green, 2009 ONCA 83 at para 24.

[5] Hughes v Dyck, 2016 ONSC 901 at para 23.

[6] Miaskowski (Litigation Guardian of) v Persaud, 2015 ONCA 758 at para 27.

[7] Ibid.

[8] White v Mannen, 2011 ONSC 1058 at para 16.

[9] Ibid at para 26.

[10] Ibid at paras 27, 28.

[11] Zurba v Lakeridge Health Corporation, 2010 ONSC 318 at para 66.

[12] Supra note 8 at para 28.

[13] Bentley v Ontario (Ministry of Transportation) (2009), 182 A.C.W.S. (3d) 958 (ONSC) at para 15.

[14] Ibid at para 19.

[15] Ibid at para 15.

[16] Castronovo v Sunnybrook & Women's College Health Sciences Centre (2008), 163 A.C.W.S. (3d) 225 (ONSC) at para 13, affirmed 2008 ONCA 655.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions