Discoverablilty and the Limitations of Actions By David I. Marr & Gregory L. Juliano Canadian Litigation Counsellor newsletter Legislatures across Canada have placed limits on the time within which an action must be brought in court. However, if the damage suffered does not become known or apparent until some time after the limitation period expires, a plaintiff could see their case unjustly dismissed. Manitoba's legislature was among the first to deal with this problem through statute, with new provisions in The Limitation of Actions Act. The Limitation of Actions Act in Manitoba, like similar legislation in all provinces, was enacted to encourage the early resolution of disputes and bring certainty to the lives of potential litigants. Section 2 of the statute states that "the following actions shall be commenced within and not after the times respectively hereinafter mentioned" and then proceeds to list various types of actions and limitation periods of between two and ten years. If a particular limitation period is not prescribed for a certain type of action, the deadline would fall under the default provision in section 2(1)(n): 2(1)(n) Any other action for which provision is not specifically made in this act, within six years after the cause of action arose. Although it is certainly a laudable goal to encourage the prompt resolution of disputes, difficulty can result from these prescribed limitation periods when the damage is not discovered until this limitation expires. Classic examples would be abuse as a child which was suppressed until adulthood, or a negligently designed building which does not show it's flaws until the occurrence of an event many years later. As the Manitoba Court of Appeal noted in Rarie v. Maxwell (1998), 131 Man.R.(2d) 184, "Courts have universally agreed that it is unreasonable and unjustifiable in principle that a cause of action should be held to accrue before it is possible to discover any injury and therefore before it is possible to raise any action". This issue has been addressed by both legislatures and the judiciary in different ways. In many jurisdictions, the judiciary has used a "discoverability principle" in order to extend the limitation period and avoid an unjust dismissal of the case. In the case of Kamloops v. Nielsen, [1984] 2 S.C.R. 2, the Supreme Court of Canada held that a cause of action accrued, not when the damage occurred, but on the date of reasonable discoverability. As a result, an action which had, for example, a 6 year limitation period, would then have a limitation period of 6 years after the cause of action was "discoverable". The Manitoba Court of Appeal has interpreted the Supreme Court's reasoning in subsequent cases. As Justice Twaddle noted in Rarie v. Maxwell (1998), 131 Man.R.(2d) 184, "The Supreme Court was not saying that such a rule existed regardless of the statutory intent". In other words, the Judge-made discoverability rule is something only to be applied when the legislature has not already made statutory provisions for extending the limitation period. Manitoba was the first province to address the discoverability problem through legislation. In 1967, The Limitations of Actions Act was amended to add an additional two years to bring a claim for personal injury subsequent to the discovery of the damage. In 1980, the legislature extended the statutory scheme by making it applicable to causes of action beyond those involving personal injuries. These provisions are contained in Part II of the Act and the most important provision in section 14(1): 14(1) Notwithstanding any provision of this Act or of any other act of the legislature limiting the time for beginning an action, the Court on application, may grant leave to the applicant to begin or to continue an action if it satisfied on evidenced adduced by or on behalf of the applicant that not more than twelve months have elapsed between (a) the date on which the applicant first knew, or, in all the circumstances of the case, ought to have known, or all material facts of a decisive character upon which the action is based; and (b) the date on which the application was made to the Court for leave. In essence, the legislature has granted an additional year to bring a claim after the damage has been discovered. Before a claim is filed, the claimant must bring an application to the Court in order to receive the extension of time. The Court will then set a date by which the claim must be filed. The recent Manitoba Queen's Bench case of Manitoba Hydro v. John Inglis (unreported, June 16, 1998) is a good example of such an application. The Court of Appeal has considered Part II of the Act on numerous occasions. The unanimous conclusion has always been that, in any situation to which it would be applicable, Part II replaces the judge-made discoverability principle. In Rarie v. Maxwell (1998), 131 Man.R.(2d) 184, Justice Philp says: I conclude that the legislature has enacted a comprehensive and exclusive code. Part II of the Act occupies the whole field of discoverability and providing relief against the "harsh and absurd" effects of statutory limitation period. The provisions are coherent, effective, and just, they make it unnecessary to apply the discoverability rule in Manitoba in order to construe limitation periods under the Act or under any other Act of the legislature. This same principle was confirmed early this year by Justice Huband in Winnipeg Condominium Corporation No. 36 v. Bird Construction (1999), 131 Man.R.(2d) 283. In those jurisdictions which do not have a statutory scheme such as section 14(1) of the Manitoba Act, the Courts will interpret the law in a manner which will protect a plaintiff against the prospect that his cause of action will be barred before he is even aware of it. But no resort to that rule is necessary in view of section 14(1). The innovative approach taken by the legislature in Manitoba has now been followed by several other provinces. Although it is perhaps less generous to plaintiffs than the judge-made discoverability rules, it still prevents the expiry of limitation periods before the cause of action is known or discovered. It further accomplishes this goal while encouraging the early resolution of disputes and bringing a degree of certainty to the lives of potential litigants.

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