*Since the writing of this blog the decision has been affirmed (not overturned).

The recent Ontario Court of Appeal decision in Fennel v. Deol 2016 ONCA 249 addressed the question of whether the lack of due diligence will preclude a plaintiff from relying upon the principle of discoverability in relation to the tolling of the two year Highway Traffic Act limitation period (Spoiler alert:  the answer is: not necessarily).

Mr. Fennel was involved in a four-vehicle collision on August 24, 2010 and commenced a claim against one of the drivers on March 20, 2012.  On March 20, 2014, Fennel amended his Statement of Claim to add another driver, Deol. Deol moved successfully for summary judgement on the basis that the limitation period had lapsed.

Despite the fact that he had issued his initial claim within two years of the loss, relative to the “late” claim against Deol, Fennel took the position that he was not aware that he would meet the threshold requirement of the Insurance Act until he received a doctor’s report on or around August 8, 2014.  He therefore argued this was the date upon which the limitation would begin to run.

The motions judge concluded that in order to rely on the argument that the claim was not discoverable, the Plaintiff had to show he had exercised due diligence, which he had not.  To the contrary, the motion judge (in the words of the Court of Appeal), found that the plaintiff and his counsel took a “lackadaisical and indifferent approach” to the investigation of his claims.

The Court of Appeal overturned the motion judge and directed that the limitation defence is a triable issue not subject to summary judgment.  Critically, the Court found that the disposition of the summary judgment motion was inconsistent with the motion judge’s own finding that the claim had been discovered “no later than” when the first claim was issued, meaning that the limitation could have expired on August 16, 2014, months after the claim against Deol was served.  The decision of the motion judge had essentially turned essentially on the question of whether the plaintiff had exercised due diligence in seeking to discover he had a threshold claim, without a actually making a finding of when the claim ought reasonably have been discovered.  Without a specific determination as to when the claim ought reasonably to have been discovered, it was wrong to dismiss the claim against Deol at the summary judgment stage.

While concluding that the lack of due diligence is not itself sufficient to determine a question of discoverability, the Court did affirm that there is a positive duty upon a plaintiff seeking to rebut the presumption that a claim is “discovered” on the date of loss.

Citing Longo v. MacLaren Art Centre Inc., 2014 ONCA 526, the court affirmed that due diligence is a “principal that underlies and informs limitation periods.”

[42]       A plaintiff is required to act with due diligence in determining if he has a claim. A limitation period will not be tolled while a plaintiff sits idle and takes no steps to investigate the matters referred to in s. 5(1)(a). While some action must be taken, the nature and extent of the required action will depend on all of the circumstances of the case.

In Fennel, however, the court appears to have back-peddled from this statement in concluding that the plaintiff only needed to prove that he was unaware that he had suffered a threshold injury as of the date of loss but did NOT need to prove that he had used due diligence in investigating has claim.  At the same time, the importance of due diligence was emphasized by the Court:

[24]       Due diligence is part of the evaluation of s. 5(1)(b). In deciding when a person in the plaintiff’s circumstances and with his abilities ought reasonably to have discovered the elements of the claim, it is relevant to consider what reasonable steps the plaintiff ought to have taken. Again, whether a party acts with due diligence is a relevant consideration, but it is not a separate basis for determining whether a limitation period has expired.

Based upon this decision, it would appear that due diligence is a significant (but definitely not determinative) factor in deciding when a claim is discoverable.  For a plaintiff seeking to rebut the presumption of immediate discoverability, the demonstration of due diligence will assist in tolling the limitation period.  For a defendant seeking to assert a limitation defence, the lack of due diligence will be relevant but not determinative.  It will also be necessary for the defendant to lead evidence to establish that the claim could reasonably have been discovered at an earlier date.