Reforming Statutes of Limitations

R E F O R M IN G S T A T U T E S O F L IM IT A T IO N S K e n t R oach * I n tr o d u c tio n The legal environm ent concerning statutes o f limitations has been rem arkably dynam ic over the last 20 years and presents particular challenges to the law reform er. In two landm ark decisions in the 1980s, the Suprem e C ourt o f C anada decided that statutes o f lim itations are subject to principles o f discoverability.1These cases responded to the "injustice o f a law w hich statute-bars a claim before the p lain tiff is even aw are o f its existence.”2 They in turn adversely affected the traditional functions o f statutes o f limitations prom oting repose for potential defendants, diligence for potential plaintiffs and ensuring that cases are litigated w hile the evidence is reasonably fresh. These purposes were re-asserted in a num ber o f provinces by ultim ate limitation periods which apply regardless o f discoverability. In B ritish Colum bia, for exam ple, there are ultim ate limitation periods o f 30 years w ith special ultim ate lim itation periods o f 6 years fo r actions against doctors and hospitals. In A lberta and N ewfoundland, there are 10 year ultim ate lim itation periods to balance the statutory incorporation o f discoverability principles.3 This paper will focus on recent developm ents in Canada, m ajor law reform proposals in C anada and abroad and their im plications for future legislative reform . The first part o f this paper w ill exam ine judicial developm ents in the interpretation and im position o f discoverability principles. There have been som e m ajor innovations w hich m ake the case for legislative reform , including the establishm ent o f ultim ate limitation periods to re-assert som e o f the traditional purposes o f statutes o f lim itations, a relatively urgent priority. The Suprem e C ourt’s decisions in K .M . * Professor of Law, University of Toronto. An earlier draft of this paper was originally prepared for the Ontario Ministry of the Attorney General, Policy Division. I thank various members o f the Ministry for their valuable assistance, but add that the views expressed in this paper are only my own. 1 C ity o f K a m lo o p s v. N ielso n e t al. (1984), 10 D.L.R. (4th) 641 (S.C.C.); C en tra l T rust Co. v. R a fu se e ta l. (1986), 31 D.L.R.(4th) 481. 2K a m lo o p s, ibid. at 685. 3L im ita tio n A c t R.S.B.C. 1996, c.266, s.8; L im ita tio n s A ct S. A . 1996, c.L-15.1, s.3; L im ita tio n s A c t, S.N. 1995, c.L-16.1, ss.7 ,14. v. H .M .4 and N o v a k v. B o n d 5 arguably constituted two revolutions in the judicial developm ent o f discoverability principles. N o v a k led the m inority o f the Court to accuse the m ajority o f effectively abolishing statutes o f limitations. This is strong language, b u t it has a ring o f truth. A t a m inim um , N o v a k v. B o n d adds further uncertainty to the application o f discoverability principles and strengthens the case for the introduction o f ultim ate limitation periods. A lthough the Suprem e C ourt has consistently adverted to defendant and public interests in encouraging diligence in bringing law suits, ensuring that lawsuits are based on fresh evidence, and providing defendants w ith certainty and repose; I w ill suggest that the trajectory o f its jurisprudence has been to favour plaintiff interests in bringing lawsuits even after the plaintiff is aw are o f the m aterial facts on w hich the law suit is based. In their concern for achieving full fairness for plaintiffs, the Suprem e C ourt o f Canada has eroded the repose, evidentiary and diligence functions associated w ith statutes o f limitations. The second part o f this paper w ill exam ine m ajor law reform proposals concerning lim itations law reform not only in C anada but abroad. M any law reform agencies have issued reports on statutes o f lim itations and their m ain proposals will be exam ined. Law reform ers are frustrated w ith the com plexity o f the current situation and propose new lim itation periods w hich will generally apply to all claims. The consensus that seems to be em erging is the need to accept and codify discoverability principles, but to balance them w ith ultim ate limitation periods. There also is an interesting debate in E ngland and A ustralia about w hether judges should be given an explicit discretion to depart from lim itation periods in exceptional cases w here their application w ould cause injustice. The third part o f this paper will focus on possible legislative responses to the various law reform proposals. A lthough the legislature should not be oblivious to the interests o f plaintiffs, it m ay wish to re-assert defendant and public interests in statutes o f lim itations. The legislature m ay also attem pt to create greater certainty and less litigation than the current state o f affairs in which courts have dom inated the debate. O ne option open to legislatures is to codify the discoverability principles to be applied by the courts. The Suprem e C ourt’s decision in N o v a k v. B o n d to allow the plaintiff to w ait until it was reasonable in her circum stances to sue may be related to the am biguous language used in B ritish C olum bia’s L im it a tio n A c t. I f discoverability principles w ere codified, this type o f problem m ight be avoided. A t the sam e tim e, courts guided by their view s o f the equities o f the individual case 4 (1992), 96 D.L.R. (4th) 289 (S.C.C.). 5 (1999), 172 D.L.R. (4th) 385 (S.C.C.), (1999) 32 C.P.C. (4th) 197 (S.C.C.). m ight have reached the sam e result if the legislature had chosen different language. Legislative attem pts to codify discoverability principles and to reply to court decisions on discoverability could generate m ore uncertainty and litigation. The fourth p art o f this paper will deal with the sensitive and, at times, controversial issue o f special lim itation periods. M any provinces have num erous special short lim itation periods often affecting m edical m alpractice claim s and claim s against public authorities. I w ill suggest that the issue o f special limitation periods is connected w ith the length o f general lim itation periods. A 6 year general lim itation period will require m ore short lim itation periods than a 2 year period and a 30 y ear ultim ate lim itation period m ay require m ore shorter exceptions than a 10 y ear lim itation period. There is also a question o f w hether limitation periods should be applied to claim s based on breach o f fiduciary duty, including claims that may be b rought by A boriginal people against the Crown. There are also sensitive issues with respect to w hether lim itation periods should be applied to claim s based on sexual abuse. These cases raise fundam ental issues about w hether the diligence, certainty and repose purposes o f lim itation periods should be applied in all contexts. Although there is a w ide consensus am ong law reform com m issions, the legal profession and judges about the need for limitations reform , special lim itations are a potentially controversial issue that should be treated with care. Otherwise, needed lim itations reform that could bring greater clarity and uniform ity to the law could be underm ined by a lack o f sensitivity to contextual considerations that argue in favour o f som e special lim itation periods. I . T h e C o u r t ’s E v o l v i n g D i s c o v e r a b il i t y D o c t r i n e T h e K .M . v. H .M . R e v o lu tio n K .M . v. H .M 6 is a case involving a claim o f assault, battery and breach o f fiduciary duty by a w om an who, as a child, had been a victim o f incest by her father. The p lain tiff turned 18 years o f age in 1975 but did not com m ence her action until 1985, shortly after entering therapy. B ecause she was aw are o f the incest before she turned 18, the trial ju d g e and the O ntario C ourt o f A ppeal held that her claim w as statute barred. This case seem ed so clear at the tim e that the Ontario C ourt o f A ppeal only issued a short endorsem ent in rejecting her appeal. T he Suprem e Court, however, unanim ously allow ed the appeal. L a Forest J. took a functional approach that focused on w hat he identified as the three purposes o f statutes o f lim itations: certainty or repose, evidentiary concerns and diligence. A lthough he recognized that “there are instances w here the public interest is served by granting repose to certain classes o f defendants, fo r exam ple, the cost o f professional services if practitioners are exposed to unlim ited liability,”7 he found that the defendant (w ho had been found liable at trial) had no valid interest in repose. H e also dism issed evidentiary concerns in this case on the basis that childhood sexual abuse claim s w ould often be decided years after they w ere alleged to occur. Finally, he held that diligence concerns should be tem pered by an understanding o f the devastating nature o f incest. This justified the creation o f “a presum ption that certain incest victim s only discover the necessary connection betw een their injuries and the w rong done to them (thus discovering th eir cause o f action) during som e form o f psychotherapy.”8 B oth Justices Sopinka and M cLachlin expressed concerns about the creation o f this presum ption with Justice M cLachlin arguing that “some incest survivors m ay n o t discover their cause o f action until after lengthy therapy or several therapeutic relationships, and that such a presum ption m ight inure to their disadvantage.”9 K .M . suggests that statutes o f limitations will only run, at least in cases o f incest, when the plaintiff fully appreciates his or her injuries and their connection w ith the defendant’s wrong. It also suggests a w illingness to apply the rationales and purposes o f statutes o f lim itations on a case by case basis. This has allowed courts to tailor their decisions to the m erits o f particular cases. A t the sam e time, however, it has created uncertainty in the law and difficulty in separating the procedural issue o f w hether a claim w as statute barred from the m erits o f the case. The particular context o f K .M . m eant that the Court understandably discounted defendant interest in repose and diligence by the plaintiff and concerns about the age o f evidence. A nother im portant feature o f K .M . was the C ourt’s holding that statutes o f limitations did not apply to claim s o f breach o f fiduciary duty in Ontario. La Forest J. concluded that s.2 o f the L im it a tio n s A c t, w hich provides that nothing in the Act interfered w ith any rule o f equity in refusing relief, “gives rise to the inference that there is a category o f equitable claim s not subject to the A ct at all, and that the 7 Su p ra note 4 at 302. 8 Ibid. at 314. 9 Ibid. at 340. equitable defences survive in these cases.” 10H e noted that “O ntario is rather unique in this regard” 11 and that equitable claim s w ere caught by general statute o f lim itations legislation in m ost other jurisdictions. D is c o v e r a b ility C o n tin u e s : M u r p h y v. W e ls h a n d P e ix e ir o v. H a b e r m a n A y ear after K M . , the Suprem e Court decided another limitations case. The issue in M u r p h y v. W e ls h 12 involved a general provision in O ntario’s L im it a tio n A c t that held that the beginning o f a lim itation period did not start until a p laintiff turned 18 years o f age. The Suprem e C ourt o f C anada indicated that this w ould also apply to a special lim itation period, in this case the two year lim itation period under the H ig h w a y T r a ffic A c t. The Ontario C ourt o f A ppeal had held that the special lim itation period excluded the provisions o f the general legislation. A s in K M . , how ever, the C ourt o f A ppeal’s decision was overturned and a result m ore favourable to the p lain tiff was reached in the Suprem e Court. The C ourt again focused on the purposes o f limitations legislation. M ajor J. held that not extending accident claim s until the plaintiff becam e 18 years o f age inequitably “favours the defendant.” 13 The principle o f diligence w ould not be served because a p laintiff under 18 years o f age could not be expected to com m ence litigation: “W hatever interest a defendant m ay have in the universal application o f the 2 year m otor vehicle lim itation period m ust be balanced against the concerns o f fairness to the p lain tiff under legal disability.” 14 Concerns about fairness to the plaintiff prevailed over the defendant’s interests in repose and fresh evidence w ith the C ourt holding that the special lim itation should be extended by the general provision in the L im ita tio n s A c t. This case reveals, once again, the strong em phasis the C ourt places on achieving fairness to plaintiffs when interpreting statutes o f limitations. M ajor’s J. statem ent that the special limitation period “truncates liability” but that “surely the legislature did not intend to rem ove these risks altogether” 15 even hints at a doctrine o f strict construction in interpreting special lim itation periods. In 1997, the Suprem e C ourt again revisited the two year lim itation period under 10S u p ra note 4 at 329. 11Ib id . at 328. 12(1993), 18 C.P.C. (3d) 137 (S.C.C.). 13I b i d at 150. u Ib id . at 150. xs Ibid. at 151. Ontario ’s H ig h w a y T r a ffic A c t. The issue in P e ix e ir o v. H a b e r m a n 16was w hether the legislature had precluded discoverability principles w hen it provided that actions arising from traffic accidents w ould be barred “after the expiration o f tw o years from the tim e when the dam ages w ere sustained.” 17The trial jud g e held that this language did preclude discoverability principles, but this finding was overruled by the Suprem e Court. M ajor J. stated that “discoverability is a general rule applied to avoid the injustice o f precluding an action before a person is able to raise it.” 18 H e noted that discoverability principles w ere applied in K a m l o o p s '9 to a sim ilar statute that had based the running o f the limitation period on w hen the dam age was sustained. M ajor J. w ent so far as to state that “the discoverability rule has been applied by this C ourt even to statutes o f limitations in which plain construction o f the language used w ould appear to exclude the operation o f the rule.”20 This suggests that there w ill be a strong presum ption that discoverability principles apply to all statutes o f limitations. O ther parts o f P e ix e ir o suggest a judicial willingness to defer to clear legislative expressions o f a desire to displace discoverability principles. M ajor J. adopted a M anitoba Court o f A ppeal decision w hich indicated that “the judge-m ade discoverability rule is nothing m ore than a rule o f construction” and that “when time runs from an event w hich clearly occurs w ithout regard to the injured party’s knowledge, the judge-m ade discoverability rule m ay not extend the period the legislature has prescribed.”21 This suggests that the presum ption o f discoverability can be displaced w henever the legislature clearly m akes the plaintiff’s knowledge irrelevant. The Suprem e C ourt’s decision in P e ix e ir o to apply discoverability principles to a statute o f limitations that began w hen “dam ages w ere sustained”22 continues the trend started in K .M . o f tailoring discoverability to the particular cause o f action. The issue is not w hen the plaintiff is aw are he or she was injured in a traffic accident, but rather w hen he or she knew the injury was severe enough that it could be litigated 16(1997), 12 C.P.C. (4th) 255 (S.C.C.). 17Ibid. at 261. 18Ibid. at 267. 19Su p ra note 1. 20 S u p ra note 16 at 268. 21 Ibid. at 267. 11 Ibid. at 261. under O ntario’s no fault scheme. This approach is m ore generous to the plaintiff and displaces the traditional com m on law position that “ignorance o f or m istake as to the extent o f the dam ages does not delay tim e under a lim itation period.”23 The U nited States Suprem e C ourt has taken a position less generous to the plaintiff and held that tim e starts to run once the p laintiff knows about the injury.24 The above cases all suggest that the Suprem e C ourt is firm ly com m itted to the principle that a statute o f lim itation should not expire before a particular cause o f action is reasonably discoverable. M ere know ledge o f an injury o r a w rong is not sufficient as the Court tailors discoverability to the particular cause o f action; the Suprem e C ourt will not apply statutes o f lim itations in a uniform o r m echanical m anner. Rather, the C ourt will tailor the application o f discoverability principles to the particular cause o f action brought by the plaintiff. Individualized justice for plaintiffs, not uniform ity for defendants, is the C ourt’s m axim . The cases also reveal a w illingness to exam ine the im portance o f the certainty, evidentiary and diligence rationales o f lim itation periods in particular cases, as well as a tendency to place achieving fairness to plaintiffs before defendant and public interests in repose, . diligence and fresh evidence. T h e N o v a k v. B o n d R e v o lu tio n The Suprem e C ourt’s decision in N o v a k v. B o n d 25 suggests a willingness to go beyond these rulings when it com es to achieving full fairness for the p laintiff over defendant and public interests in statutes o f limitations. The case involved a m edical negligence claim , com m enced in 1996, by a w om an on the basis that her doctor had failed to diagnosis her breast cancer betw een O ctober, 1989 and October, 1990. The p lain tiff was diagnosed w ith breast cancer in O ctober 1990 by another doctor and received treatm ent at that time. She considered suing h er form er doctor at that tim e, but after discussion w ith her priest decided to concentrate on m aintaining h er health. U nfortunately, in 1995, her cancer recurred and spread. She brought the m alpractice action against the first doctor in 1996, alm ost six years after she knew she had been m isdiagnosed. A n im portant feature o f this case is that it arose under w hat the Court noted was 23 S u p ra note 16 at 263. 24 U n ite d S ta te s v. K u b rick 444 U.S. 111 (1979) at 123. 25 (1999), 32 C.P.C. (4th) 197 (S.C.C.). an “obscure” and “troublesom e” provision in B ritish C olum bia’s L im ita tio n A c t 26 codifying discoverability principles which, over the years, had been subject to four different interpretations by the B.C. courts.27 Section 6(4) o f the B.C. A ct provides that tim e, under lim itation periods, does not start to run until: those facts w ithin the p la in tiffs m eans o f know ledge are such that a reasonable person, know ing those facts and having taken the appropriate advice that a reasonable person w ould seek on those facts, w ould regard those facts as show ing that...(b) th e person w hose m eans o f know ledge is in question ought, in the p erson’s ow n interests and taking the p erson’s circum stances into account, to be able to bring an action. The language in the legislation suggests an approach tailored to the subjective know ledge, interests and circum stances o f particular plaintiffs. The C ourt divided 4:3 on w hether the lim itation period had expired in this particular case. For the m ajority28, M cLachlin J. concluded that the proper approach to the B.C. legislation w as if a reasonable person could conclude that som eone in the p la in tiffs position “could” reasonably bring an action. The reasons for delay had to be “serious, significant and com pelling,” not “tactical.”29 The issue was w hen “in light o f the p la in tif fs particular situation, the bringing o f a suit is reasonably p o s s i b l e , not w hen it w ould be i d e a l from the p la in tiffs perspective to do so.”30 In addition to the repose, diligence and evidentiary functions o f lim itation periods identified in prior cases, M cL achlin J. added a new concern: nam ely, a desire to “account for the p la in tiffs ow n circum stances w hen assessing w hether a claim should be barred by the passage o f tim e.”31 This extends the individualized approach in K .M . beyond the incest and sexual abuse context. On the facts in N o v a k , the m ajority held that the plain tiff had acted reasonably in not bringing a lawsuit earlier than 1996 given h er serious and com pelling interest in concentrating on her health. Tim e started to run in 1995 w hen her cancer recurred and spread because at the point o f tim e she reasonably could have brought an action: 26 R.S.B.C. su p ra note 3 at s.6(4). 27 This very fact is a powerful warning that attempts to codify discoverability principles can create uncertainty and litigation. 28 The majority included L’Heureux-Dube, McLachlin, Gonthier and Cory JJ. 29S u p ra note 25 at 213. 30Ibid. at 227 (emphasis in original). 31 I b id at 222. T he circum stances that precluded a decision to sue earlier - the need to m aintain a positive outlook and believe h erself cured- w ere no longer operative. A bsent these considerations, h er need to redress the serious w rong allegedly done to h er and her consequent w illingness to undergo th e stresses and strains o f litigation outw eighed h er intensely felt desire to concentrate on regaining h er health. Litigation becam e a realistic option.32 In dissent, Lam er C.J., Iacobucci and M ajor JJ. w ould have found that tim e started to run in 1990 w hen the plain tiff discovered that her breast cancer had been m isdiagnosed. They argued that the m ajority had focussed on the reasonableness o f the particular p lain tiff delaying her law suit whereas “the proper analysis should be...to find the earliest point at which a reasonable person, contem plating the facts w ithin the p la in tiffs m eans o f know ledge and taking into account h er particular circum stances, could reasonably have brought an action.”33 This test does not seem that different from that articulated by M cLachlin J. even though the results reached are radically dissim ilar. The dissenters stressed that the p laintiff received no qualified professional advice that h er health w ould be threatened by bringing a suit betw een 1991 and 1995 and that the B.C. legislation focussed on w hen it was reasonable for the plaintiff “to be able” to bring an action as opposed to w hen it was reasonable “to bring an action.”34 The m inority w ent on to speculate that under the m ajority’s approach a w hole host o f personal factors, including the p la in tiffs econom ic and em otional circum stances, w ould justify delaying the bringing o f an action. The m inority also argued that it was difficult, if not im possible, to separate perm issible personal factors from im perm issible tactical factors. Iacobucci and M ajor JJ. concluded w ith the dire w arning that the m ajority had interpreted “a section designed to tem per the injustice o f an absolute statute o f lim itation...[to] com m it the opposite but equal injustice o f effectively abolishing the statute o f lim itations.”35 A n interesting feature o f N o v a k v. B o n d is the attitude the judges take to the issue o f ultim ate lim itation periods. M cLachlin J. seem ed to suggest that the existence o f a special 6 year ultim ate lim itation period against m edical m alpractice claim s in B.C. justified the pro-plaintiff approach she adopted in the application o f discoverability principles. She stated that the debate was sim ply about “the type o f 32 S u p ra note 25 at 232. 33 Ibid. at 207. 34Ibid. at 209. 35 Ibid. at 211. circum stances in which, w ith in t h a t l a r g e r p e r i o d o f t i m e , the com m encem ent o f the lim itation period for the initiation o f an action that has a reasonable prospect o f success should be postponed.”36 She discounted the defendant’s interests in the general lim itation period by suggesting that it w as only after the ultim ate lim itation period had expired that “the potential defendant truly [could] be assured that no p lain tiff m ay bring an action against him or her.”37 In contrast, Iacobucci and M ajor JJ. w arned that the m ajority effectively m ade the ultim ate limitation period (w hich they observed in m ost cases w as 30 years) the only recognition o f defendant and public interests in repose, fresh evidence and diligence. They argued that such a result “does n o t appear to be the British C olum bia legislature’s intended result” and effectively abolished lim itation periods, other than ultim ate limitation periods.38 N o v a k v. B o n d suggests that ju d g es w ill not ignore the existence o r length o f ultim ate lim itation periods w hen interpreting general lim itation periods. They m ay, as the m ajority did in N o v a k v. B o n d , favour plaintiff interests w hen interpreting general lim itation periods if they are satisfied that defendant interests are w ell served by the ultim ate lim itation period. U ltim ate lim itation periods m ay be the only effective m eans o f recognizing defendant interest in repose and certainty. W hat is the effect o f N o v a k v. B o n d outside o f British Colum bia? Defendants w ill argue that the case is based on the particular language used in the British C olum bia legislation. M ost other legislation does not focus on the subjective know ledge, interest and circum stances o f the plaintiff as the B.C. legislation does. Plaintiffs will argue that the case is the natural developm ent o f discoverability principles w hich should apply throughout C anada so long as the legislature has not clearly displaced them. B efore N o v a k v. B o n d is too quickly dism issed as applying only to the particular legislation in British C olum bia, it should be recalled that the Suprem e C ourt in K .M . applied a British C olum bia C ourt o f A ppeal decision based on the particular w ording o f the B.C. legislation despite the fact that the K .M . case arose in Ontario. L a Forest J. noted that “British C olum bia’s limitations legislation is very different from the statute before us in the instant case,”39 but nevertheless adopted a B.C. test that tied discoverability to w hether the hypothetical reasonable person in the shoes o f the plain tiffh ere w ould not have been acting sensibly in com m encing an action until such a person cam e to appreciate 36S u p ra note 5 at 411 (emphasis in original). 37 S u p ra note 25 at 223. 38 Ib id . at 211. 39 S u p ra note 4 at 313. that a wrong or wrongs that had occasioned significant harm to her well-being could be established.40 The Suprem e C ourt could apply N o v a k v. B o n d to existing and future lim itation periods in other provinces. There are strong argum ents on both sides o f the issue on w hether N o v a k v . B o n d w ill apply in other provinces. It is at least arguable that consideration o f N o v a k v. B o n d m ight have changed the result in som e recent m edical m alpractice cases in w hich the O ntario C ourt o f A ppeal held that the statute o f limitations had expired.41 It w ould be possible to design new legislation to attem pt to displace N o v a k v . B o n d , bu t there are no guarantees given the C ourt’s com m itm ent to discoverability and achieving fairness for plaintiffs. The only guarantee is that N o v a k v. B o n d will increase uncertainty and litigation surrounding lim itation periods throughout Canada. II . L a w R e fo r m P r o p o s a ls The issue o f lim itation reform has been a favourite o f law reform com m issions. Lim itation periods cry out fo r sim plification and m odernization, but rarely com m and legislative attention. W hat follows is an outline o f som e recent law reform proposals w ith an em phasis on w hether a consensus is em erging on how legislatures should respond to the increased willingness o f courts to interpret existing statutes o f lim itations subject to discoverability principles. In 1969, the O ntario Law Reform Com m ission recom m ended com prehensive lim itation reform that w ould have replaced num erous special limitation periods with lim itation periods o f tw enty, ten, six and two years w ith tim e generally running from the occurrence o f dam age, but w ith an extension procedure for cases in w hich the p lain tiff was not aw are that he or she had a cause o f action w ith a reasonable prospect o f succeeding.42 In keeping w ith the practice o f the tim e, the Com m ission suggested a range o f lim itation periods as opposed to one general one. In 1992, Bill 99, w hich was an attem pt at com prehensive reform o f lim itation 40 S u p ra note 4 at 313. 41 See for example F in d la y v. H o lm es ( 1998) 111 O.A.C. 319 (C.A.); S o p e r v. S o u th c o tt ( 1998) 39 O.R. (3d) 737 (C.A.). 42 Ontario Law Reform Commission R ep o rt on L im ita tio n o f A ctio n s (Toronto: Department of the Attorney General, 1969). periods, received first reading in the O ntario Legislature. It established a basic lim itation period o f tw o years and attem pted to codify com m on law principles o f discoverability by providing that a claim is only discovered when the person knew that the "injury, loss o r dam age had occurred, been caused or contributed to by an act or om ission o f the defendant and that having regard to the nature o f the injury, loss o r dam age, a proceeding w ould be an appropriate m eans to rem edy it" or w hen "a reasonable person w ith the abilities and in the circum stances o f the person with the claim " w ould know the above factors.43 It also contained a general 30 year ultim ate lim itation period that w ould apply regardless o f discoveiy, and special 10 year ultim ate lim itation periods w ith respect to claim s against doctors, hospitals and building contractors.44 In a 1986 report, the N ew foundland Law R eform Com m ission proposed three lim itation periods that w ould run upon dam age. They w ere 2 years for personal injury, property dam age and defam ation, 6 years fo r other actions in contract and tort, and 10 years for estate and breach o f trust.45 This approach was follow ed in 1995 reform s which codified discoverability principles for personal injury, property dam age and professional negligence actions on the sim ple basis that tim e "does not begin to run against a person until he o r she know s or, considering all circum stances o f the m atter, ought to know that he o r she has a cause o f action."46 The 1995 N ew foundland legislation also introduced tw o ultim ate limitation periods: a 10 year ultim ate lim itation period applies to personal injury, professional negligence, property dam age and m ost trust claim s w hile a 30 year ultim ate limitation period applies to other claim s under the act.47 N o lim itation periods apply to claim s for a declaration as to the title o f property, "to personal status" o r m isconduct o f a sexual nature w here the p laintiff was under the care o r authority o f the defendant.48 A 1989 Saskatchewan Law Reform C om m ission report recom m ended a 2 year lim itation period for contract and tort actions, a 6 year period for m ost trust m atters and a 10 year lim itation for breach o f trust and actions on judgm ent. As w ith the 43 Bill 99, Ontario Legislature Nov 25,1992 s.5(l), 35th Legislature, 2nd session. 44 Ibid. s. 15. 45 Newfoundland Law Reform Commission R e p o rt on L im ita tio n o f A ctio n s (St. John’s: Law Reform Commission, 1986) at 4-5. " L im ita tio n s A ct, S.N. 1995, c.L-16.1, s. 14(1). 47Ibid. ss 7,14, 22. " I b i d . s . 8. O ntario and N ew foundland reports, this approach seems overly com plex and against the trend to a general 2 year lim itation period. The 1993 Heilbron report fo r exam ple argued that a general 6 year lim itation period, w hich has its origins in English legislation enacted in 1623, was too long. It dryly concluded: “w e can see no reason w hy it should take longer to decide w hether or not, for exam ple to bring a claim for professional negligence, than it did to fight the Second W orld W ar.”49 T he Saskatchewan C om m ission also recom m ended that m ost short lim itation periods, including those for defam ation and those benefiting various professions, be elim inated w ith the rem aining ones listed in an accessible schedule w ithin the general lim itations legislation. It also proposed that discoverability principles apply to the general lim itation period, but that a 30 year ultim ate limitation period w ould also apply.50 The B.C. Law Reform Com m ission dealt with the issue o f ultim ate lim itation periods the next year, recom m ending that its ultim ate lim itation period be reduced from 30 to 10 years except in fraud and breach o f trust cases. The C om m ission also suggested that special ultim ate limitation periods o f 6 years for m edical m alpractice claim s be replaced by a general 10 year ultim ate lim itation period. The reasons for the recom m endations included defendant concerns about the expense o f m aintaining records and insurance for the 30 year period.51 In its 1989 report, the A lberta Law Reform Institute proposed a 2 y ear general lim itation period, subject to discoverability, and a 15 year ultim ate lim itation period that w ould apply even i f the plaintiff could not reasonably be expected to know o f the cause o f action. It rejected a 10 year ultim ate limitation period as too short, but concluded that som e “ultim ate lim itation period is essential for the achievem ent o f the objectives o f a lim itations system .”52 The limitation periods w ould apply to all com m on law or equitable claim s but w ould be postponed in the case o f fraudulent concealm ent o r disability. The Institute recom m ended that requests for declarations be excluded from both lim itation periods, recognizing that “declarations represent a grow th area in law. T heir exclusion from the operation o f the general lim itations 49 Heilbron Report C iv il J u s tic e o n T ria l (June, 1993) para 4.5-4.7; The Law Commission, L im ita tio n o f A ctio n s: A C o n su lta tio n P a p er (London: The Stationary Office, 1998) at 5. 50Law Reform Commission o f Saskatchewan, P r o p o sa ls fo r a N ew L im ita tio n o f A ctio n A c t (Saskatoon: Law Reform Commission, 1989). 51 Law Reform Commission of British Columbia, R ep o rt on th e U ltim ate L im ita tio n P erio d : S ectio n 8 (Victoria: Ministiy o f Attorney General, 1990) at 28-30. 52 Alberta Law Reform Institute L im ita tio n s (Edmonton: Alberta Law Reform Institute, 1989) at 35. schem e leaves room for creative play by lawyers and courts.”53 The report also recom m ended a concise 14 section law that w as largely follow ed in the enactm ent o f new legislation in A lberta in 1999. T he m ain differences are that the legislature opted fo r a 10 year ultim ate lim itation period and am ended the bill so that the lim itation w ould not apply to claim s brought by Aboriginal people against the Crown. In 1997, the Law Reform Com m ission o f W estern Australia54 m ade recom m endations fo r com prehensive lim itations reform. It suggested the abolition o f special short lim itation periods in favour o f a general 3 year limitation period that w ould apply to all com m on law or equitable claim s. These claim s w ould be subject to legislated discoverability principles based on w hen the plaintiff knew or ought to have know n about the injury and th at it w arranted bringing proceedings. The Com m ission also proposed a 15 y ear ultim ate lim itation period that w ould run regardless o f discoverability. Courts w ould have the discretion to extend either lim itation period in exceptional circum stances w here the prejudice to the defendant and the pub lic interest is outw eighed by other factors, including the plaintiffs conduct and reasons fo r delay and the conduct o f the defendant. This discretion was designed to deal w ith latent injuries that w ould be statute barred by the new ultim ate lim itation period, including child sexual abuse. It also suggested that a stronger case m ay b e needed to ju stify the exercise o f the discretion to extend the ultim ate period than the discovery period. D isregarding the ultim ate period m eans perm itting litigation to proceed even though m ore than 15 years have elapsed since the acts or om issions in question, and there are strong argum ents in the interests o f both the defendant and the public fo r upholding the tim e-bar provided by the ultim ate lim itation period in all but th e m ost exceptional case.55 W hile it is true that exem ptions from an ultim ate lim itation period could harm defendant and public interests, it m ay be necessary in cases o f latent injury because the ultim ate lim itation period applies w ithout regard to discoverability principles. It is doubtful that there is a need for any exem ptions from a general limitation period that is subject to discoverability principles. G iven the Canadian approach to discoverability principles in K .M . and N o v a k v. B o n d , it is difficult to im agine equitable claim s th at the plaintiff m ight have that w ould not be interpreted by the 53 S u p ra note 52 at 3. 54 Law Reform Commission of Western Australia, R e p o rt o n L im ita tio n a n d N o tice o f A ctions, (Perth: The Commission, 1997). 55 Ibid. at 183. courts so as to delay the date o f reasonable discovery. In 1998, the Q ueensland Law Reform Com m ission56 recom m ended a general 3 year limitation period, subject to codified discoverability principles, and a 10 year ultim ate limitation period that w ould run from the date o f the conduct, act or om ission giving rise to the claim . The periods w ould cover equitable claim s based on breach o f trust as w ell as com m on law claims. Like the W estern A ustralia Com m ission, the Q ueensland C om m ission also recom m ended that courts be given the discretion to extend lim itation periods in the interest o f justice in all cases. Courts w ould consider the reasons w hy the plain tiff did not bring a claim , the nature o f the injury, the prejudice to the defendant, the defendant's conduct and the public interest. This general discretion was recom m ended instead o f specific provisions dealing with sexual and institutional abuse or fraudulent concealm ent. In 1998, the English Law Reform Com m ission issued a com prehensive consultation docum ent on lim itation reform s. Its provisional proposals w ere a general 3 year lim itation period subject to codified discoverability principles w ith a 10 year ultim ate lim itation period (also know n as a long stop) for m ost claim s, but a 30 year ultim ate lim itation period for personal injury claims. The longer ultim ate lim itation period fo r personal injury claims m ay well be related to the recom m endation to abolish the residual discretion that English judges have to depart from lim itation periods in personal injury cases, as well as the tentative decision not to have adult disability stop the running o f the ultim ate lim itation period. The Com m ission also observed that in the case o f latent personal injuiy, such as asbestosis, “the m erits o f cutting into the ‘discoverability’ test are particularly questionable” and even dem onstrated som e sym pathy for having no ultim ate lim itation period.57 The English C om m ission also proposed that both equitable and com m on law actions be covered by this regim e, as well as claim s against public authorities. R elying in part on a decision o f the European Court o f H um an Rights in w hich it w as decided that the application o f a statute o f limitation to a sexual abuse claim did no t violate the European Convention58 or the ability o f discoverability principles to 56Queensland Law Reform Commission, R ev iew o ft h e L im ita tio n o f A ctio n s A c t 1974 (Brisbane: Major Offset, 1998). 57 Law Reform Commission, L im ita tio n o f A ctio n s: A C o nsultation P a p er (London: The Stationery Office) at 287. 58 S tu b b in g s v. U n ited K in g d o m (1997), 23 E.H.R.R. 213. achieve a ju s t result, the C om m ission recom m ended no special exem ption o f sexual abuse claim s from the limitations regime. It also proposed that the general regim e apply to fiduciary claim s, including claim s based on fraudulent breach o f trust. The Com m ission also raised, but did not answer, the issue o f w hether parties should, by contract, be able to extend or shorten a lim itation period.59 T here has n o t been a significant am ount o f w ork by legal academ ics in the area o f lim itation periods. Som ew hat surprisingly, legal academ ics w ere not the cham pions o f discoverability principles. W riting in 1987, Professor Gerald R obertson argued that it w as not desirable to apply discoverability principles to all statutes;60 how ever, in 1994, he adm itted he had changed his m ind and argued against a case in w hich discoverability principles w ere not applied to legislation that precluded law suits against doctors after one year. Professor Robertson concluded that “the m ost striking feature” o f the case was “the patent injustice o f the decision - ‘the injustice o f a law w hich statute-bars a claim before the plaintiff is even aw are o f its existence.’”61 The 1994 case he criticized cam e from the A lberta courts which, even after the Suprem e C ourt had applied discoverability principles to claims in tort and contract, continued to resist the im position o f discoverability principles.62 It is significant that even in the province m ost resistant to discoverability principles, the legislature has now codified discoverability principles, albeit subject to a 10 year ultim ate lim itation period. A num ber o f academ ic com m entators have criticized discoverability principles for introducing uncertainty in the law and underm ining the purposes o f statutes o f limitations. P rofessor R ichard Baum an argued that “the discoverability principle itself creates a significant m easure o f injustice.... the discoverability approach to the application o f a tim e lim it leaves potential defendants exposed to the risk o f a suit indefinitely into the future.”63F or Professor B aum an, discoverability underm ines the four m ain purposes o f limitations, w hich he sees as: 1) ensuring litigation based on 59S u p ra note 57 at 390. 40 G. Robertson, “Fraudulent Concealment and the Duty to Disclose Medical Mistakes” (1987) 24 Alta.L.Rev. 215 at 219-220. 61 G. Robertson, “Case Comment: Limitation Periods in Medical Malpractice Cases” (1994) 32 Alta.L.Rev. 181. « C ostigan v. R u zic ka (1984), 33 Alta. L.R.(2d) 21 (C.A.); F id e lty Trust v.W eile r, [1988] 6 W.W.R. 428 (Alta. C.A.). 63 R. Bauman, “The Discoverability Principle: A Time Bomb in Alberta Limitation Law,” (1993) 1 Health L. J. 65 at 79. fresh evidence, 2) providing peace and repose, 3) “the predictability o f costs involved in insuring against the hazards arising from legal liability," and 4) “the advisability o f having judgm ents reflect m oral and scientific standards contem poraneous w ith the triggering events.”64 Even though he was w riting in the A lberta context and the A lberta courts resisted for a tim e the m ove to discoverability principles, Professor B aum an nevertheless accepted the judicial application o f discoverability as a f a i t a c c o m p li. His argum ent was that the unfairness o f discoverability principles to defendants had to be counteracted by the adoption o f ultim ate lim itation periods that w ould apply regardless o f discoverability. Such new legislated lim itation periods w ere necessary so that defendants, such as doctors, could have cases against them litigated on the basis o f reasonably fresh evidence and the application o f m oral and legal standards sim ilar to those in existence at the time o f the act o r om ission. H e also argued that ultim ate lim itation periods w ould ensure that insurance risks could be accurately predicted and priced, that records could be safely thrown aw ay, and that defendants w ould enjoy repose after som e time. M ost law reform com m issions have accepted sim ilar argum ents as a justification for the introduction o f ultim ate lim itation periods that w ould apply regardless o f discoverability. Professor A ndrew s is also opposed to the uncertainty created by discoverability principles. H e proposes that discoverability principles should only be applied in personal injury and fatal accident cases, latent dam age relating to real property, and to all claim s m ade by individuals and corporations w ho are not engaged in a trade o r business. His rationale for not allowing those in trade or business to benefit from discoverability principles is that “those engaged in trade o r business should be expected to look after their interests prudently.”65 A ny special needs o f business can be adequately served by allowing them to contract around lim itation periods.66 One problem with Professor A ndrew ’s proposal is that not even a prudent business m ay be expected to anticipate som e form s o f latent damage. A nother problem is that the line betw een “trade o r business” and other enterprises will create uncertainty and litigation. H e suggests that ‘“ trade o r business’ should be given a w ide definition to 64 S u p ra note 63. 65N.H. Andrews, “Reform of Limitation o f Actions: The Quest for Sound Policy” ( 1998) 57 Camb. L.J. 589 at 601. “ Professor Andrews suggests that because of the public interest in limitations, parties should not be allowed to provide a longer period in contract than in the statutory limitation period to bring a lawsuit. In my view, this is questionable. There may be a public interest in limiting claims, but is not likely to be so strong as to justify the state in overriding the informed wishes of contracting parties. include activities o f governm ent at all levels, local and other public authorities, sovereign states and the C row n,”67but any legislated definition o f a trade o r business w ill have borderlines w hich w ill be litigated if the difference is betw een being able to bring an im portant law suit and not being able to bring it. A num ber o f trends can be seen from the above law reform proposals. O ne is the general acceptance o f discoverability principles and the desirability o f their codification. There are no law reform proposals, even in A lberta and England w here there w as the greatest judicial reluctance to adopt discoverability principles, that do not propose the legislative acceptance and codification o f discoverability principles. A t the sam e tim e, there is also a trend to recom m end the adoption o f ultim ate lim itation periods that w ould run regardless o f discoverability. These are generally seen as necessary to re-assert the traditional evidentiary and repose functions o f statutes o f lim itations in a w orld w here various form s o f latent dam age m ay only be discoverable decades after the event in question. There is also a trend in law reform proposals tow ards shorter lim itation periods, w ith respect to both general and ultim ate lim itation periods. Six year lim itation periods are to be reduced to two or three years w hile thirty year ultim ate lim itation periods are to be reduced to ten or fifteen years. The issue o f w hether courts should have a legislated residual discretion to depart from lim itation periods is m ore contentious. Both England and A ustralia have considerable experience w ith such a discretion.68Australian law reform com m issions approve o f the discretion because it can be used to avoid the harshness o f limitation periods in exceptional cases and avoids the need for special limitation periods to deal w ith sexual abuse and other cases. The English law reform com m ission, as w ell as English academ ics, do not like the residual discretion on the basis that it creates uncertainty and litigation and underm ines the purposes o f lim itation periods. The Canadian approach has been closer to that o f England, but at the sam e tim e it is fair to say that the residual discretion issue has received m uch less attention than in England o r A ustralia. Cases such as K .M . and N o v a k v. B o n d suggest that ou r courts are prepared to interpret discoverability principles in an equitable enough fashion to accom m odate exceptional cases in w hich plaintiffs have good reasons for delay that outweigh the harm to defendants and the public. G iven our pro-plaintiff discoverability principles, there seems to be little need for a discretion to depart from 67 S u p ra note 65 at 602. 68 In Canada, only Nova Scotia gives courts a discretion to disapply limitation periods if it appears equitable to do so. L im ita tio n o f A ctio n s A c t R.S.N.S. 1989 s.3. general limitation periods. There may, however, be a stronger case for a discretion to depart from an ultimate limitation period that applies regardless o f discoverability principles, especially if that period is, as in Alberta, only 10 years. Nevertheless, no Canadian jurisdiction that has adopted or proposed either a 30 or 10 year ultimate limitation period has seen fit to provide for a residual discretion to depart from the limitation period. They have, however, exempted some claims from the ultimate limitation period. The choice may be between exempting specific claims from an ultimate limitation period or providing a general discretion to depart from an ultimate limitation period. in . D e s ig n I s s u e s fo r L e g is la tio n The law reform proposals discussed above suggest that Canadian legislatures should engage in comprehensive limitation reform in order to simplify and modernize limitation periods. This would also reassert the traditional defendant and public interests that are served by limitation periods, including the creation o f certainty or repose for defendants, ensuring that plaintiffs are duly diligent in pursuing their rights and encouraging litigation on fresh evidence. So far, only Newfoundland and Alberta have undertaken the task o f comprehensive limitation reform. In what follows, I will examine the major design options available to legislatures. C o d ify in g D is c o v e r a b ility P rin c ip le s There may be temptation to define discoverability principles in a manner that attempts to restrict the uncertainty created by cases such as K .M . and N o v a k v. B o n d . Most language that could be used to define such principles will, however, be somewhat ambiguous. The cases examined in part one o f this paper suggests that courts will not be overly deterred by language that stands in the way o f what they believe to be a just result. The legislature cannot be assured that the language it uses to define discoverability principles will be interpreted in any particular way. Attempting to reassert defendant and public interests in statutes o f limitations via codified discoverability principles may promote a dialogue between courts and legislatures, but it may be an unproductive and frustrating one. It could lead to a scenario in which the legislature frequently corrects the court by amending limitations legislation to reverse pro-plaintiff judicial decisions. Each amendment, however, would create more uncertainty and litigation, thus defeating one o f the main goals o f limitation reform. Discoverability ought to be defined in a simple fashion that recognizes that courts will have considerable discretion in interpreting the new statutory discoverability provisions. For example, the new Alberta legislation simply defines discoverability as when “the claimant knew, or in the circumstances ought to have known, o f a claim....”69 This allows the courts to decide the extent to which K .M . and N o v a k v . B o n d are applicable in Alberta. It could be argued even under the Alberta legislation that some plaintiffs are not in the position to bring their claim. This would strain the statutory language, but still be in the realm o f possible statutory interpretations, especially if the court felt it was necessary to reach a just result. A more radical alternative, which may not be feasible in the Canadian context, is the one proposed by Professor Andrews. He would propose that appellate courts not have the power to interpret statutes o f limitation except to resolve the case before them. A committee would have the power, from time to time, to issue regulations which would serve as precedents and “authoritatively enunciate the current rules and practice governing potential claims commenced during the ensuing year.”70 Such a radical proposal would be o f dubious constitutionality by infringing one o f the traditional tasks o f superior courts. Even if it were constitutional, it is doubtful that a committee would be better able than the courts to provide “a short and definitive guide”71 that would give lawyers, litigants and judges simple answers to all limitation questions.72 All in all, it is best for the legislature to accept that discoverability principles will be developed in a case by case fashion in order to respond to the equities o f the particular case. It would be unwise for legislatures to get into a war with the courts over the precise meaning o f a discoverability principle, especially when the interests o f the legislatures in promoting certainty and repose can more directly be achieved by the adoption o f ultimate limitation periods. L e g is la tin g U ltim a te L im ita tio n P e r io d s The most effective means to re-assert the interests o f the public and defendants regarding limitation periods is for the legislature to create ultimate limitation periods that clearly apply regardless o f whether the cause o f action is discoverable. Given the uncertainty and pro-plaintiff orientation o f the discoverability cases, this is the only sure way to promote repose. It is reasonably clear that the courts will accept ultimate limitation periods provided the legislation clearly precludes the application 69L im ita tio n s A ct, S.A. supra, note 3 at s .2 (l. 1). 70 S u p ra note 65 at 608. 71Ib id . 72 Ibid. o f discoverability principles. Even in N o v a k v. B o n d , McLachlin J. assumed that the special 6 year ultimate limitation period would apply to Mrs. Novak’s claim regardless o f discoverability. Thus, if her cancer had recurred 7 years after the misdiagnosis, she would have been precluded from suing the doctor even though it m ight have been perfectly reasonable for her to wait 7 years before bringing the lawsuit. In fact, the 6 year ultimate limitation period for medical malpractice claims in B.C. would preclude claims even in cases o f latent injury that could not have been reasonably discovered. Ultimate limitation periods can be effective in re-asserting the interests o f defendants and the public, but they are a blunt instrument. An ultimate limitation period that is too short may preclude claims before they are reasonably discoverable. A longer ultimate limitation period may create injustice in less cases, but may not adequately serve defendant and public interest in repose. What then is the optimal length o f an ultimate limitation period? In a 1990 report,73 the Law Reform Commission o f British Columbia recommended that the province’s existing 30 year general ultimate limitation period and special 6 year ultimate limitation period for medical claims be replaced by a general 10 year ultimate limitation period. It reasoned that the 30 year period appears to be unnecessarily long. Very few claims arise after so long a time. While limitation periods have not been a significant factor in the liability insurance crisis, a shorter ultimate limitation period would reduce some o f the uncertainty associated with long-term risks and thus help to maintain the availability o f coverage at a reasonable cost.74 Alberta subsequently adopted a 10 year ultimate limitation period, but qualified it by providing that it did not apply in cases o f fraudulent concealment; persons under disability, including minors; claims based “on conduct o f a sexual nature including, without limitation, sexual assault;”75or to actions “by an aboriginal people against the Crown based on a breach o f a fiduciary duty alleged to be owed by the Crown.”76 The Alberta legislation illustrates how the length o f an ultimate limitation period is connected with whether there are special exceptions. A shorter ultimate limitation 73 S u p ra note 51. 74 Ibid. at 43- 44. 75 S u p ra note 3 s.5(2)(b). 76 Ibid . s. 13. period places pressure on legislatures to either exempt certain categories o f claims from that period or to give judges a general discretion to depart from the ultimate limitation period in exceptional cases where it would cause an injustice. The B.C. experience suggests the converse: a longer ultimate limitation period such as 30 years may allow most exceptional cases to be litigated, but places pressures for the existence o f special shorter ultimate limitation periods especially in the area o f medical malpractice. Legislatures m ust make a choice: have a long general ultimate limitation period (i.e. 30 years in B.C.) and special shorter ultimate limitation periods (i.e. 6 years in B.C.) or have a shorter general ultimate limitation period (i.e. 10 years as in Alberta) that exempts some types o f claims (i.e. claims by Aboriginal people and sexual abuse claims in Alberta). L e g is la tin g a R e s id u a l D is c re tio n to D e p a r t f r o m L im ita tio n P e r io d s There is another option that is also open to legislatures: legislate a residual discretion that allows judges to deal with exceptional cases in which it would not be reasonable to expect the plaintiff to discover the cause o f action and commence litigation within 10 years o f the breach. The residual discretion, like carving out special exceptions from the ultimate limitation period, makes it easier for legislatures to adopt a shorter ultimate limitation period as it allows for litigation to proceed in exceptional cases. Given the discretionaiy way in which courts interpret discoverability principles, it could be argued that it would be more forthright to simply give courts an explicit discretion to depart from or postpone limitations in cases in which their application would cause an injustice. This has indeed been done in England, some Australian states and Nova Scotia. A separate question arises, however, concerning whether this discretion would apply to a general limitation period or an ultimate limitation period. The Law Reform Commission o f Western Australia77 proposed that courts be given the power to make exceptions from both a 3 year general limitation period and a 15 year ultimate limitation period in exceptional circumstances when the prejudice to the defendant and the general public interest in repose would be outweighed by other factors, such as the nature o f the plaintiffs injury and the defendant's conduct. Interestingly, the Commission cites the Court's decision in K .M . v. H .M . as a rationale for providing such discretionary extensions. A 1998 report by the 77 S u p ra note 54. Queensland Reform Commission also supports a similar extension provision although it recommends a 10 year ultimate limitation period.78That report rejects the Alberta Law Reform Institute’s argument that a residual discretion to extend limitation periods would defeat the repose, certainty and diligence functions o f statutes of limitations.79Hence, the Australian position is one in favour o f a residual discretion to extend limitation periods. The English Law Reform Commission, however, has opposed residual discretion in large part because courts have made frequent use o f that discretion under existing legislation.80 Noting over 115 reported decisions interpreting the residual discretion, the Commission concludes the English experience “demonstrates the difficulty o f restricting the discretion. Moreover, the ability to ask a court to exercise its discretion or the Court o f Appeal to review the exercise o f the discretion by the court o f first instance means a huge drain o f court resources (as well as the costs for defendants in resisting such applications).”81 Professor Andrews is even stronger in his criticisms o f residual discretion under s.33 o f the English L im ita tio n A c t, 1 9 8 0 . The many cases interpreting s.33 are “a juristic disaster”82: S u ch d isc re tio n a ry liftin g o f th e lim itatio n b a r is b o u n d to red u ce th e la w ’s p re d ic ta b ility an d c o n siste n c y . It m u st b e accep ted th a t a system o f lim itatio n b y referen ce to a fix ed p e rio d o f tim e is in trin sically arb itrary . I f th e leg islatu re creates a g en eral p o w e r to d isa p p ly th e ru les, th e en su in g p attern o f fo ren sic b e h a v io u r and in stitu tio n al a c c o m m o d atio n is fam iliar. A ‘h a rd -lu c k ’ ju risd ic tio n en co u rag es th e b rin g in g o f d ila to ry claim s w h ich are m a d e in th e h o p e th a t th e p la in tiff can b e ad m itted o u t-o f-tim e. P o in ts o f n ic e in terp re tatio n are tak en o n appeal. T h e se a p p ellate d isc u ssio n s g e n e ra te an e la b o rate g lo ss u p o n th e re lev an t statute. T h e law o f lim itatio n b eco m e s a q u a g m ire .83 The Commission agrees with Professor Andrews’ criticisms and counsels against the introduction o f a residual discretion to depart from limitation periods. In my view, a residual discretion should not be legislated to allow courts to 78 S u p ra note 56. 79 S u p ra note 52 at 135. 80 Law Commission, L im ita tio n o f A ctio n s: A C o n su lta tio n P a p e r (No. 151 ) (London: Her M ajesty’s Stationary Office, 1998) at 322. Ib id . at 322 para. 12.194. 82 S u p ra note 65 at 591. 83 Ibid. at 596. depart from a general limitation period that includes discoverability principles. The purposes o f the residual discretion - avoiding an unjust application o f a limitation period - are already adequately served by discoverability principles. These principles may be flexible and evolving, but they are at least defined in jurisprudence and open to debate; a residual discretion would create even more uncertainty not only concerning when the discretion would be exercised, but the degree to which appellate courts would review a trial judge’s discretionary decision. There is a somewhat stronger case for giving courts a residual discretion to depart from an ultimate limitation period, especially if that limitation period is only 10 years. This would respond to the potential injustice o f precluding a claim based on latent personal injury or environmental damage when a plaintiff was not and could not be reasonably aware o f the cause o f action. It would allow the legislature to select a shorter ultimate limitation period without precluding meritorious claims or exempting category o f claims. The main disadvantage o f legislating a residual discretion to depart from an ultimate limitation period would be that it would undermine the repose function o f the long stop for all defendants and claims. They would be exposed to long tail liability, albeit only in exceptional circumstances, and cases might be litigated on the basis o f old evidence. As well, it would be difficult to price and obtain insurance for cases that would only be allowed to proceed in exceptional circumstances. There would also be uncertainly and costs caused by satellite litigation around the residual discretion. The alternative to a general discretion to depart from ultimate limitation periods is the creation o f special limitation periods, either in the form o f exemptions or extensions from ultimate limitation periods or special short ultimate limitation periods in cases such as medical malpractice where the need for repose and certainty is considered particularly pressing. The carving out o f exceptions from limitation periods is somewhat messy and awkward, but it may have the virtue o f allowing an ultimate limitation period to provide repose in most cases while placing potential defendants in certain categories o f cases on notice that they may not be protected by the ultimate limitation period and be exposed to the risk o f litigation for a longer period than others. I V . S p e c ia l L im ita tio n P e r io d s Although they have been challenged under s. 15 o f the C h a rter, it seems clear that direct challenges to special short limitation periods will generally fail.84 Section 7 o f the C h a r te r h a s also been interpreted to not include the right to bring a civil action for recovery o f personal injury damages that might be violated should a short limitation period not accord with the principles o f fundamental justice.85 The fact that special limitations are likely Charter-proof does not, however, mean that they are good policy. Special limitation periods are not inherently good or bad86; in every case, they must be justified in the particular context as consistent with the public interest. In what follows, I will examine the main contexts in which there are arguments to support special limitation periods. C la im s A g a in s t P u b lic A u th o r itie s In 1989, the Ontario Court o f Appeal rejected a s. 15 challenge to the short 6 month limitation period that applies to claims brought against provincial, and now federal,87 public authorities. Nevertheless, four years later the Ontario Court o f Appeal held that this short statutory limitation period did not apply to claims brought under s.24(l) o f the Charter. Carthy J.A. concluded that th e p u rp o se o f th e C h a r te r , in so fa r as it co n tro ls ex cesses b y g o v ern m en ts, is n o t a t all serv ed b y p e rm ittin g th o se sam e g o v e rn m e n ts to d e c id e w hen th e y w o u ld lik e to b e free o f th o se co n tro ls an d p u t th e ir h o u se s in o rd e r w ith o u t th reat o f fu rth er c o m p la in t.88 Thus, the short limitation period can be circumvented if the plaintiffs claim against the public authority can be based on a violation o f a Charter right. This decision may have been affected by the harshness o f the short limitation period. In any event, it remains good law in Ontario and suggests that statutes o f limitations will not apply to claims under s.24(l) o f the Charter. Other provinces, including New Brunswick, 84 C o lan g elo v. M ississa u g a (C ity) (1988), 66 O.R. (2d) 29 (C .A .);M irh a d iza d e h v. O n ta rio (1989), 69 O.R. (2d) 422 (C.A.); F ilip v. W aterloo (1992), 98 D.L.R. (4th) 534 (Ont. C.A.), as discussed infra note 83 at 736-44. 85 F ilip v. W aterloo, ibid. 86K. Roach “The Problems o f Public Choice: The Case o f Short Limitation Periods” ( 1993) 31 Osgoode Hall L.J. 721. 87 A l ’s S te a k H o u se a n d T avern Inc. v. D elo ite a n d T ouche, [ 1997] O.J. No. 3046 (C.A.). 88 P re te v. O n ta rio (1993), 16 O.R. (3d) (C.A..) 161 at 167-8. have not, however, followed this approach;89 short limitation periods protecting public authorities may apply to Charter claims in other provinces. One o f the m ajor effects o f limitation reform will likely be the repeal o f short limitation periods protecting public authorities, including municipalities. Governments could be adversely affected by late claims, but because they are selfinsuring, they may be in a better position than other defendants to deal with this uncertainty. There are also strong arguments that governments should avoid the appearance o f self-interest by enacting protective short limitation periods. C la im s b y A b o r ig in a l P e o p le In B lu e b e r r y R iv e r In d ia n B a n d v. C a n a d a (D e p a r tm e n t o f In d ia n A ffa ir s a n d N o r th e r n D e v e lo p m e n tf ° , the Supreme Court applied both the 30 year ultimate limitation period and the 6 year general limitation period under B.C. legislation to an Indian Band’s claims o f breach o f fiduciary duty in relation to the surrender o f their lands. In that case, the Band avoided the 30 year period by bringing its c la im 29 years after surrender and the Court held that the 6 year limitation period had not expired because “the Bands were ignorant o f critical facts in the exclusive possession o f the Crown”91 which constituted the basis o f their cause o f action. This was a relatively uncontroversial case that was close to fraudulent concealment. In less clear cases, courts might have to apply the principles in N o v a k v . B o n d to claims brought by Aboriginal people. Depending on the circumstances o f the particular case, it may be unfair to expect Aboriginal people to have brought claims against governments until relatively recently. The Alberta experience with respect to Aboriginal claims and limitation reform is noteworthy. After it was first introduced, s. 13 o f the A lb e r ta A c t was amended to provide that A n actio n b ro u g h t, a fter th e co m in g in to fo rce o f th is A ct, b y an ab o rig in al p erso n a g a in s t th e C ro w n b ased o n a b reach o f fid u c ia ry d u ty alleg ed to b e o w ed b y th e C ro w n to th o s e p e o p le is g o v e rn e d b y th e law o n lim itatio n o f actio n s as i f th e 89M cG illiva ry v. N .B . (1997), 111 D.L.R. (4th) 483 (N.B.C.A.); N a g y v. P h illip s ( 1996), 137 D.L.R. (4th) 715 (Alta. C.A.) as discussed in K. Roach, “Constitutional Remedies in Canada” (Aurora: Canada Law Book, 1994) at 11.320. 90 (1995), 130 D.L.R.(4,h) 193 (S.C.C.). 91 Ibid. at 234. L im itatio n o f A c tio n s A c t h ad n o t b een rep ealed an d th is A c t w ere n o t in fo rce.92 This provision appears designed to ensure that the new limitation periods in that Act, and in particular the new 10 year ultimate limitation period, does not apply to fiduciary claims brought by Aboriginal people. It should be recalled that the Supreme Court in B lu e b e r r y H ill applied B.C.’s 30 year ultimate limitation period to fiduciary claims by a Band and that the Band only brought the claim with one year left on the ultimate limitation period. A 10 year ultimate limitation might statute bar many Aboriginal claims against the Crown for breach o f fiduciary duty given the long term dealings between the Crown and Aboriginal people. In my view, s. 13 o f the A lb e r ta A c t is justified by the Crown’s particular obligation to deal with Aboriginal people in an honourable and good faith manner. Arguments can be made, however, that s. 13 is underinclusive as it does not exempt from the 10 year ultimate limitation period other claims based on breach o f fiduciary duty, including those arising from non-sexual abuse o f positions o f trust and authority by doctors, teachers, prison guards and others. It may be preferable to follow the current approach in Ontario where limitation periods do not apply to fiduciary claims. If Aboriginal or other fiduciary claims are not exempted from newly enacted ultimate limitation periods, it is possible that a court would hold that the Crown should not be allowed to rely on limitations to defeat an Aboriginal claim under s.35(l) o f the C o n stitu tio n A c t, 1 9 8 2 . The argument would stress the inconsistency between the Crown’s reliance on an ultimate limitation period and the trust-like character o f Aboriginal rights. S e x u a l A b u s e a n d A s s a u lt C la im s As discussed above, the Court in K .M . has interpreted existing Ontario legislation so that there is a presumption that claims based on incest are not discoverable until the plaintiff has received therapy. There are concerns that K .M . may not do enough to recognize the difficult position faced by those who survive sexual abuse.93 In response to this and similar concerns, a number o f provinces, including British Columbia and Newfoundland, have amended their limitation periods to provide that they do not apply to claims based on childhood sexual abuse.94 Bill 99 introduced 92A lb e rta A ct, R.S.C. 1985, App. II, No. 20, s. 13. 93 J. Mosher, “Challenging Limitation Periods: Civil Claims by Adult Survivors,” (1992) 44 U.T.L.J. 169. 94L im ita tio n A c t R.S.B.C. 1996 c. 266 s. 3; A n A c t to R evise th e L a w R esp ectin g L im ita tio n s S.N. 1995 c.L-16.1. in Ontario in 1992 also took this approach by providing in s. 16(h) that no limitation period applied in a p ro c e e d in g a risin g fro m a sexual a ssa u lt i f a t th e tim e o f th e assau lt o n e o f th e p a rtie s to it h a d c h a rg e o f th e p erso n assau lted , w as in a p o sitio n o f tru st and au th o rity in re latio n to th e p erso n o r w as so m e o n e o n w h o he o r sh e w as depen d en t, w h e th e r o r n o t fin a n c ia lly .95 Section 9 also provided that the 2 year basic limitation period did not run in respect o f sexual assault and assault claims if the plaintiff was “incapable o f commencing the proceeding because o f his physical, mental or psychological condition”96 and created presumptions o f incapacity in cases o f assault in contexts o f intimacy and dependence as well as in all cases o f sexual assaults. There is a strong case that the special treatment o f claims based on sexual assault should be extended to claims based on assault by a person in a position o f trust or authority. For example, people in residential schools suffered both sexual and physical assaults and the Law Commission has recommended that “legislatures should revise the principles governing limitation periods in cases o f institutional child abuse” including “increasing the limitation period whenever the action is based on misconduct committed in the context o f a relationship o f dependency.”97 The Supreme Court has also recognized that some o f the same reasons for delayed reporting in K .M . may apply to cases involving physical abuse by a person in authority.98 S p e c ia l L im ita tio n s a n d U ltim a te L im ita tio n P e r io d s The emerging consensus among law reform proposals is towards a general limitation period o f 2-3 years. The greatest divergence is with respect to the length o f ultimate, or long stop, limitation periods with proposals ranging from 10-30 years. As suggested above, the length o f the long stop is intimately tied to the question o f whether courts will be given a residual discretion to depart from it in exceptional cases or whether there will be special ultimate limitation periods. There are valid concerns that a general discretion to depart from an ultimate limitation period will 95 S u p ra note 43 at s. 16(h). 96 Ibid. ats.9 . 91 Law Comm ission o f Canada, “Restoring Dignity: Responding to Child Abuse in Canadian Institutions,” (Ottawa: Public Works, 2000) at 178. 98 G a u th ier v. B ro m e L a k e (Tow n), [ 1998] 2 S.C.R. 3. undermine the repose function o f long stops and create uncertainty and litigation. The best choice, then, appears to rely on the ultimate limitation period with special exceptions. Special ultimate limitation periods can be crafted to provide a shorter long stop for some claims and a longer or no long stop for other claims. A 30 year long stop may not serve repose functions particularly well, especially in the medical malpractice and product liability areas; however, it can still cause injustice in exceptional cases, such as those dealing with sexual or institutional abuse or breach o f fiduciary duty. A 10 year long stop would be better at promoting repose, but would cause injustice in more cases. The alternative is to identify those claims in which the shorter long stop is most likely to cause injustice and impose a longer long stop on those claims. The Alberta approach is to have a 10 year ultimate limitation period, but not to apply it to claims by Aboriginal people or claims based on sexual abuse. The English Law Reform Commission proposes a longer 30 year long stop for personal injury claims while recognizing that in exceptional cases even this special long stop could cause injustice. The decision about the length o f the long stop cannot be divorced from the decision about whether it will apply to all claims or whether some claims can be either exempted from the long stop altogether or have their own longer ultimate limitation period. Another alternative would be the Bill 99 approach in which a general 30 year long stop is established, but in recognizing its weakness in promoting repose, create a special 10 year ultimate limitation for medical and building claims. This is also the approach used in British Columbia where there is a special 6 year ultimate limitation period for medical malpractice claims and a general 30 year ultimate limitation period. The above approaches may differ, but the results are the same: the creation o f a general ultimate limitation period, but carving out exceptions to that limitation. The choice may be whether one desires legislative debate to be focussed on the special repose interests o f those who will have a shorter long stop or the special equity claims o f those who will have a longer or perhaps no long stop. Whether the debate is focussed on particular defendants or plaintiffs, it may generate a "me too" dynamic and legislatures may have to consider expanding the ambit o f the special ultimate limitation periods. As suggested above, there is a case to exempt all claims based on breach o f fiduciary duty, as opposed to only claims brought by Aboriginal people, from limitation periods. Similarly, there is a case that assaults, including sexual assaults committed by those in a position o f trust and authority, should be exempted from limitation periods. Even though limitation reform will involve the repeal o f most existing special limitation periods, the introduction o f a new ultimate limitation period will inevitably generate a new debate about the need for exceptions and special ultimate limitation periods. Conclusion This paper has examined recent legal developments both with respect to the judicial evolution o f discoverability principles and major law reform proposals. The most important development is the Supreme Court’s continued commitment and expansion o f discoverability principles. Although the Court may have achieved fair and just results by tailoring limitations to particular plaintiffs and claims, it has also created increased uncertainty and litigation about when limitation periods will be applied. Legislatures must, however, be careful not to create even more uncertainty and litigation when codifying discoverability principles. The safest route may be to follow the Alberta example by having a simple general two year limitation period subject to bare bones discoverability principles that will be interpreted by the courts with an emphasis on achieving fairness to plaintiffs. Attempts by legislatures to restrict how the courts apply discoverability principles are possible, but they may only generate more uncertainty and litigation. The safest legislative response may be to concede that the courts will interpret discoverability principles in a manner that is generous to plaintiffs, but to re-assert defendant and public interests in diligence, certainty, repose and litigation based on fresh evidence and legal standards by enacting an ultimate limitation period that clearly excludes discoverability principles. The consensus among law reformers seems to be that discoverability principles are desirable and should be codified, but they should be balanced by an ultimate limitation period. There is, however, considerable disagreement over the length o f the long stop and whether courts should have a discretion to depart from it. Despite Australian enthusiasm for a residual discretion to depart from long stops, such a discretion will undermine the repose function o f the ultimate limitation period and have the potential to create considerable uncertainty and litigation. At the same time, one long stop may not be appropriate in all cases. If one size must fit all, the legislature will be placed on the horns o f a dilemma between opting for a long ultimate limitation period that will allow most exceptional cases to proceed but may not effectively achieve repose, or a shorter long stop that will better promote repose but more frequently statute bar claims before they could not be reasonably discovered and litigated. The best solution may be to go with a shorter (10-15 year) long stop, but then exempt certain categories o f claims from it. The focus o f the debate would be on trying to predict the types o f cases where legitimate claims would most likely arise after the expiration o f the 10-15 year long stop. The debate would centre on the equitable claims o f plaintiffs not the repose interests o f defendants. The alternative is to have a 25-30 year long stop, but then enact special short ultimate limitation periods in those cases where defendant’s needs for repose and certainty are most legitimate and best known. Exempting categories o f cases from the ultimate limitation period inevitably raises problems o f over and under inclusion, as well as uncertainty and litigation concerning the ambit o f the categories. Some o f these problems might be avoided by exempting all claims based on breach o f fiduciary duty - this should include claims brought by Aboriginal people and by people who suffered assaults and sexual assaults in situations in which the defendants were in positions o f trust and authority. The legitimate repose interests o f those institutions and individuals who are in a fiduciary relationship with someone subject to their power is less than other defendants and can still be protected by the more flexible equitable doctrine o f laches. Exempting all fiduciary duty claims from limitation periods may encourage the expansion o f such claims, but it is likely that other factors, such as doctrinal and remedial flexibility are driving the Canadian expansion o f fiduciary duty claims. In the end, the case for limitation reform is even more compelling now than it was ten years ago. Decisions such as N o v a k v. B o n d suggest that limitation periods subject to discoverability principles can achieve fairness for many plaintiffs, but that they create much uncertainty and even possible unfairness for defendants. The wisest course seems to be to allow courts to develop and impose discoverability principles within a general 2 year limitation period, but to advance defendant and public interests in limitation periods by adopting a 10 or 15 year ultimate limitation period that runs regardless o f discoverability. Unless one is willing to accept the injustice that comes from a “one size fits all” approach or provide courts with a general discretion to depart from the ultimate limitation period in exceptional cases, the challenge then becomes to identify those categories o f cases in which this ultimate limitation period is most likely to create injustices and to create limited, certain and principled exceptions from the new ultimate limitation period.