Author: Silvia Purcarin, Associate
On January 29, 2021, the Court of Appeal for British Columbia decided that third party proceedings may not be brought after the expiry of the two-year limitation period under the Limitation Act, SBC 2012, c. 13 (the “New Limitation Act”). This decision has broad implications for multi-party proceedings in B.C.
Limitation Periods under the New Limitation Act in BC
There are currently two types of limitation periods in British Columbia, a “basic limitation period” and an “ultimate limitation period” – the old Limitation Act used the term “limitation period” interchangeably to refer to both. The New Limitation Act introduced a definition for the “basic limitation period” as two years after the day on which the claim is “discovered” (as opposed to when the right to sue accrued at law, under the former Limitation Act). This basic limitation period is applicable to all claims, unless otherwise specified under the New Limitation Act (i.e. claims that enforce monetary judgments) or unless the claim is subject to a limitation period prescribed by another statute.
Under section 8 of the New Limitation Act, a claim is “discovered” when a person knows or ought to have known that he/she has a cause of action.
Section 16 of the New Limitation Act sets out the discoverability rules applicable to claims for contribution or indemnity (i.e. for commencing third party proceedings). Specifically, it provides that a claim for contribution or indemnity cannot be brought against a third party more than two years from either the time when the original claim was served, or, if it is later, two years from the date the claimant knew or reasonably ought to have known that such a claim for contribution or indemnity could be made. 
For present purposes, it is important to note that section 22(1) of the New Limitation Act gives the courts discretion to allow a person to commence a “related claim” even when the limitation period for such a claim has expired, as long as the “original claim” was commenced within its applicable limitation period. However, section 22(2) prohibits claims for contribution or indemnity after the expiry of the limitation period applicable to such claims.
The limitation period for commencing a claim for contribution or indemnity under the Negligence Act expires two years following discovery of the negligence claim (i.e. on the later of service of the Notice of Civil Claim or on the first day the plaintiff know or reasonably ought to have known that such a claim for contribution or indemnity could be made). In Sohal, the court considered whether section 22(2) of the New Limitation Act gives any discretion to the court to allow third party claims for contribution under the Negligence Act when the limitation period for such claims had expired.
Overview of Facts
The action in Sohal arose out of a motor vehicle accident that took place on October 27, 2012. The defendant Lezama struck the plaintiff Sohal with his vehicle. Lezama’s vehicle was owned by a rental car company, Enterprise Rent-A-Car (“Enterprise”), and had been rented by Lezama’s employer (the “Employer”) for Lezama to use.
Chronology of Events & Procedural History
A chronology of events is essential to understanding the arguments advanced by the parties in this case:
On May 30, 2018, both applications were heard in chambers and the Master granted the leave sought by both defendants to file third party claims against the Employer based on claims of vicarious liability and negligence. The Master ruled that the two-year limitation period applicable to the defendant Lezama’s claim for contribution and indemnity had not expired (because his application was filed in February 2018). However, the Master found that the limitation period applicable to the defendant Enterprise’s claim for contribution and indemnity had expired (as their application was filed in May 2018, 2 years and one month after the date of filing of the Response to Civil Claim), but exercised her discretion under Rule 3-5 of the Supreme Court Civil Rules, to permit the claim to be brought notwithstanding expiry of that limitation period, thereby dismissing the defendant’s argument that s. 22(2) of the New Limitation Act prohibited the third party proceedings.
Supreme Court Decision
The Employer appealed the Master’s decision arguing that the third party proceeding was a transitional claim (under section 30 of the New Limitation Act) and the New Limitation Act applied, thereby barring the defendants’ claims to add it as a third party to the lawsuit. The defendants argued that the old Limitation Act applied and their third party claims were not time barred because the words “court proceeding” in section 22(2) is limited to originating proceedings for contribution (i.e. new/separate actions in respect of a contribution claim), excluding third party proceedings.
Mr. Justice Kent disagreed with the defendants’ reasoning and highlighted that, pursuant to Rule 1-1 of the Supreme Court Civil Rules, a Third Party Notice is a form of “originating process”; accordingly, the Third Party Notice” originates the contribution claim. It follows, then, that the contribution claim is a
“pre-existing claim” within the meaning of section 30(1) as it is based on an act or omission that took place before June 1, 2013 and no court proceeding was commenced before that date.
On October 8, 2019, Mr. Justice Kent reversed the decision of the Master and ordered that the Third Party Notices be struck out on the basis that the proposed third party claims were subject to a two-year limitation period under the New Limitation Act, and accordingly were time-barred (section 6(1) of the New Limitation Act stipulates that the proposed claims for contribution or indemnity “must not be commenced”).
The following points from Mr. Justice Kent’s analysis are noteworthy:
Court of Appeal
Lezama and Enterprise appealed the decision of Mr. Justice Kent on the basis that the judge erred in his interpretation of sections 22(2) and 30 of the New Limitation Act. Specifically, the defendants/appellants argued that the applicable limitation period for their third party claim had not expired and the old Limitation Act should apply for the following reasons:
With respect to the section 30 issue, the Employer pointed out that the defendants’ reasoning leads to the conclusion that “a third party claim for contribution in an ongoing action can never meet the definition of a ‘pre-existing’ claim in section 30(1)”. The Court of Appeal agreed.
The “act or omission” upon which the third party claim is based is different from the “act or omission” upon which the underlying tort action is based. Thus, the underlying motor vehicle claim was a “pre-existing claim” (i.e. MVA took place in October 2012 and proceedings were initiated in October 2014), but the third party claim for contribution does not satisfy the first part of the definition in section 30(1) – it is not a claim based on an act or omission that took place before the effective date” since the cause of action for a contribution claim only arises after a defendant has been found liable. As the Court put it at para 78, “the basis of a claim for contribution is a statutory right to restitution that flows from findings of liability, not from the commission of a tort. The connection to the underlying claim is not to the act or omission that gives rise to the tort claim. Rather, the connection arises from the bare fact of the tort action itself, because it seeks to impose liability”.
Therefore, the notion of a “pre-existing claim” under section 30(1) does not include claims for contribution in ongoing lawsuits. Accordingly, the defendants’ third party claims are governed by the New Limitation Act.
Lastly, the Court held that section 22(1) prevents the defendants from initiating third party proceedings given that the limitation period to do so had expired, because section 22(2) prevents such proceedings after the expiry of the limitation period in accordance with sections 6(1) and 16 of the New Limitation Act. The appeal was dismissed.
Pursuant to Rule 3-5(4) of the Supreme Court Civil Rules, a party of record who is not a plaintiff in an action may commence third party proceedings for contribution against any person by filing a Third Party Notice with the court registry. The Third Party Notice may be filed without leave of the court, if it is filed within 42 days of being served with a Notice of Civil Claim or Counterclaim; if the Third Party Notice is filed outside the 42-day deadline, then the Third Party Notice may be filed at any time with leave of the court.
The New Limitation Act altered limitation periods applicable to claims in British Columbia in several ways. First, it expressly addresses claims for contribution or indemnity; second, it establishes that the running of time commences from the date when a claim is discovered; and third, it provides that a two-year limitation period applies to contribution or indemnity claims under the Negligence Act. In Sohal v. Lezama, the Court of Appeal confirmed that section 22(2) of the New Limitation Act bars a claim for contribution or indemnity after the limitation period for such claim has expired.
While the former Limitation Act allowed the court to consider delay and prejudice in determining whether to strike a third party notice for contribution or indemnity, the New Limitation Act puts pressure on defendants to identify potential third party claims early on so that third party proceedings can be brought in a timely manner.
Defence counsel and claims examiners alike ought to be aware that the courts have no discretion to grant leave to parties who wish to file third claims for contribution or indemnity once the limitation period applicable to such claims has expired.
 In Grant Thornton LLP v. New Brunswick, 2021 SCC 31, the Supreme Court of Canada has narrowed the scope of discoverability for the purposes of calculating limitation dates and held that a plaintiff will have “discovered” a claim when he/she has knowledge of the material facts upon which a plausible interference of liability on the defendant’s part can be drawn. Although this case dealt with the New Brunswick’s Limitation of Actions Act, its ratio extends to the rest of the provincial limitation statutes.
Supreme Court of Canada Clears the Way to Characterizing Core Policy Decisions
Author: Corey M. Smith, Articled Student
Case: Nelson (City) v. Marchi, 2021 SCC 41
In October 2021, the Supreme Court of Canada ruled that the City of Nelson (the “City”) could be held responsible for injuries caused by its snow clearing decisions.
After a heavy snowfall in Nelson, British Columbia, between January 4th and 5th 2015, the City started plowing and sanding streets pursuant to its snow clearing and removal policies. The City’s work crews cleared snow from angled parking stalls on Baker Street, located in the City’s downtown core. In plowing the parking stalls, the work crews created a snowbank along the curb that separated the parking stalls from the sidewalk. On January 6th, Ms. Marchi, parked in one of the angled parking stalls on Baker Street and attempted to cross over the snowbank. While attempting to cross the snowbank, Ms. Marchi’s foot fell through the snow and she seriously injured her leg.
Ms. Marchi sued the City alleging that it had been negligent in leaving the snowbank along the road with no space for pedestrians to cross onto the sidewalk. At trial, the judge agreed with the City that its snow clearing decisions were “core policy” decisions. Accordingly, the judge concluded that the City did not owe Ms. Marchi a duty of care as its snow clearing decisions were immune from liability. The trial judge also found that, in the alternative, there was no breach of the standard of care, or in the further alternative, that if there was a breach, Ms. Marchi was the proximate cause of her own injuries.
Ms. Marchi appealed to the BC Court of Appeal which disagreed with trial judge on all three of its conclusions and ordered a new trial. The City then appealed that decision to the Supreme Court of Canada.
Appeal to the Supreme Court of Canada
The Supreme Court agreed with the BC Court of Appeal that the City could be held responsible for its snow clearing decisions.
Justices Karakatsanis and Martin for a unanimous court agreed with the BC Court of Appeal that the trial judge erred on all three conclusions. In terms of duty of care, the City’s decisions about its snow clearing were not core policy decisions immune from negligence liability. As such, they found that the City owed Ms. Marchi a duty of care.
The Court found that the present case fell under an already established duty of care based on Just v. British Columbia,  2 SCR 1228. The category established in Just involves cases where a public authority has undertaken to maintain a public road or sidewalk and a plaintiff alleges injury due to failure of the public authority to maintain the road or sidewalk in a reasonably safe condition.
This finding meant a duty of care would be imposed on the City unless they could show that their snow clearing decisions were protected by core policy immunity. The Court noted that while core policy decisions are exempt from claims in negligence, the operational implementation of policy may be subject to a duty of care in negligence.
They went on to discuss the rationale behind shielding core policy decisions from liability in negligence, which is to maintain the separation of powers between the judiciary and the executive. In the Court’s words, subjecting core policy decisions to private law duties of care would “entangle the courts in evaluating decisions best left to the legislature or the executive.”
The Court set out the following four factors to help identify core policy decisions:
Based on these factors, the Court found that the City had not proven its decision to clear snow was a core policy decision. The Court allowed the appeal, set aside the order dismissing Ms. Marchi’s action and ordered a new trial.
The Court’s reasons clarify the analysis of core policy versus operational decisions. The primary consideration in shielding core policy decisions from liability in negligence is to protect the separation of powers. Based on this consideration, the Court outlined a number of factors to consider in assessing whether a core policy immunity defence will apply. For immunity to apply, the decision will have to be high-level and deliberative, made by someone close to an elected government official and involve a weighing of competing interests characteristic of government officials in their decision making process.
This decision has important implications for municipalities and their insurers. Municipalities will likely wish to review their decision making processes in terms of the discretion afforded to individual employees versus the involvement of municipal officials.
Overall, the decision clears the way for parties to better determine whether a defence of core policy immunity may apply.
Clarification from the Supreme Court of Canada on the Interpretation of Releases
Author: Corey M. Smith, Articled Student
Case: Corner Brook (City) v. Bailey, 2021 SCC 29
On March 3, 2009, while driving her husband’s car, Mrs. Mary Bailey struck a Corner Brook City (the “City”) employee who was performing road work. The employee sued Mrs. Bailey for injuries he sustained in the accident.
In a separate action, Mrs. Bailey and her husband sued the City for property damage to their car and the physical injury Mrs. Bailey suffered. Eventually, the Baileys reached a settlement with the City that released the City from liability relating to the accident and discontinued their action. The release stated that the Bailey’s agreed to release the City from all demands and claims of any kind or nature whatsoever arising out of the 2009 accident.
Nearly five years later, Mrs. Bailey brought a third party claim against the City for contribution or indemnity in the action brought against her by the employee. A third party claim involves a party to an action other than the plaintiff seeking relief from another party. Mrs. Bailey’s third party claim in effect asked that the City be liable for any injury to the employee if Mrs. Bailey were found to be responsible for the employee’s injuries.
In response, the City brought a summary trial application on the basis that the release barred the third party claim. Mrs. Bailey’s position was that the release did not bar the claim because the third party claim was not specifically contemplated by the City and the Baileys when they signed the release.
The application judge concluded that the release barred Mrs. Bailey’s third party claim against the City. The Court of Appeal allowed the appeal and reinstated Mrs. Bailey’s third party notice. The City then appealed to the Supreme Court of Canada.
The Supreme Court agreed with the application judge and the City. They allowed the City’s appeal and held that the release barred Mrs. Bailey’s third party claim against the City.
Releases to be interpreted like any other contract
The Supreme Court clarified that releases are contracts and that the general principles of contractual interpretation apply to them. The Court referred to its previous decision in Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53 that directs courts to “read the contract as a whole, giving the words used their ordinary and grammatical meaning, consistent with the surrounding circumstances known to the parties at the time of formation of the contract”. Based on Sattva, courts should use objective evidence of the facts at the time of the agreement to aid in their interpretation. After considering Sattva, the Court held that there is no special rule of contractual interpretation that applies to releases.
The Court discussed application of the Blackmore Rule which previously set out a special approach to the interpretation of releases. The Blackmore Rule stated that a release would not apply to circumstances of which a party had no knowledge of when the release was executed. The Blackmore Rule also meant that if a release was so general as to include matters never contemplated by the parties, a party
would be entitled to relief. The Court said that the Blackmore Rule is no longer useful in interpreting releases and should no longer be referred to because Sattva has taken over its function.
In the present case, the release included “all actions, suits, causes of action . . . foreseen or unforeseen . . . and claims of any kind or nature whatsoever arising out of or relating to the accident which occurred on or about March 3, 2009”. The Court found that Mrs. Bailey’s third party claim came within the plain meaning of the words of the release. They also found that the surrounding circumstances confirmed that the parties had objective knowledge of all facts underlying Mrs. Bailey’s third party claim when they agreed upon the release. The parties had also limited the scope of the release to claims arising out of the 2009 accident and there was nothing in the surrounding circumstances to suggest departing from the plain meaning of the release.
The Court offered a number of further considerations for the interpretation of releases. Distinctions between claims based on facts known to both parties and claims based on facts known only to one party may be useful in assessing whether parties mutually intended to release a particular kind of claim. However, the ultimate question in interpreting a release is whether a claim is of the type to which a release is directed. Whether a release covers a claim depends on the wording and surrounding circumstances of the release in each case.
Releases may cover unknown future claims. Yet the broader the wording of a release, the more likely the release will conflict with the surrounding circumstances of the agreement. In contrast, releases that include wording as to whether they will cover particular subject matter or time periods are less likely to lead to disputes.
What counts as “using” a cell phone under the Motor Vehicle Act?
Author: Corey M. Smith, Articled Student
Case: R. v. Rajani, 2021 BCCA 292 (CanLII)
Resting your phone or other electronic device on or under your leg may be an offence under the Motor Vehicle Act (the “MVA”). In R. v. Rajani, 2021 BCCA 292, the Court of Appeal held that using a cell phone is not limited to having it in a person’s hands. In other words, if someone is supporting a phone or other electronic device in any way with their body, this may count as using an electronic device.
Mr. Rajani was issued a ticket for using an electronic device while driving. The ticket was issued after an officer approached Mr. Rajani’s car and found a cell phone connected to a cord face-up in his lap. At the Court of Appeal, Mr. Rajani argued he had the phone wedged between his thigh and the seat, while the officer said the phone was on Mr. Rajani’s lap facing up. The Court held that in either scenario Mr. Rajani was holding the phone by physically supporting it with a part of his body in a position in which it could be used.
Under the MVA, a person must not use an electronic device while driving or operating a motor vehicle on a highway. The word “use” in the MVA includes holding the device in a position in which it may be used.
The Court of Appeal determined that “holding” is not limited to holding with one’s hands. The Court looked to common dictionary definitions of “holding” and concluded that physically grasping, carrying, or supporting a device with any part of one’s body in a position which the device may be used, are all considered holding.
The important question raised by the case is whether the prohibition against using an electronic device while driving applies to a cell phone that is resting on or wedged beneath someone’s leg but not in their hands, and whether this counts as “holding”? More generally, should the words “use” and “holding” be interpreted broadly enough to include electronic devices being supported by a driver in some way but not in their hands? Based on this decision, it appears that the courts will take a broad approach to interpreting “using” an electronic device. Under this approach, “using” includes when someone supports a device in any way with their body, and not simply when they are holding it with their hands.
The Guiding Principles of Management Fees: Contemporary Trends in British Columbia Litigation.
By: Tiffany Tsang and David M. Giroday
An award for management fees, when justified, can be granted by the court to compensate a plaintiff for the cost of hiring an investment manager to handle the investment of their damages award in a personal injury matter. These are more often awarded where the plaintiff has limited investment experience and in instances where a plaintiff receives a sizeable award. In such circumstances, a consideration of management fees by the court and counsel may be necessary.
Tiffany P.K. Tsang and Callan W. MacKinlay
Originally presented at CLEBC’s Personal Injury Conference, 2018, held at Vancouver, BC on June 15, 2018.
The purpose of this paper is to provide an overview of the current state of the law and jurisprudence on the current and potential future guidelines for authorization of medical marijuana by medical practitioners; judicial considerations for awarding versus denying medical marijuana claims; and the factual considerations that counsel should pay attention to when seeking or defending an award for medical marijuana.
Tiffany P.K. Tsang and Callan W. MacKinlay
In cases such as motor vehicle accident claims, it is tempting for parties (and even courts) to infer negligence from a breach of a statutory regulation; however, we are reminded in the recent case of Haynes v. Haynes, 2017 BCCA 131 that the factual matrix and evidence of surrounding circumstances ultimately determines liability. A regulatory breach is just one element of that factual matrix. Fundamentally, the plaintiff still bears the burden of proving a breach of the common law standard of care, notwithstanding the presence of a regulatory breach by the defendant. That breach alone will not suffice to prove negligence.
Scott W.K. Urquhart and Nikta Shirazian
In most instances where a duty to defend has been triggered the insurer has the obligation to pay the defence costs and will have conduct of the defence. However, this arrangement is not true in all cases. Indeed, certain circumstances arise where the costs of defending an action can be allocated amongst various parties. For example, such a scenario may arise when an insured has more than one liability insurer and both are obligated to defend an action. It may also arise in instances where there are covered and uncovered aspects to a particular claim. The purpose of this paper is to provide an overview of the legal principles governing the allocation of defence costs in the aforementioned scenarios. This paper will also address the legal principles governing the determination of which party obtains conduct of the defence in such circumstances.
British Columbia is in the process of rolling out a new dispute resolution mechanism for strata disputes and matters falling within the Provincial Court Small Claims jurisdiction ($25,000.00). The object of the Civil Resolution Tribunal (the “CRT”) is admirable. The aim is to provide convenient and cheaper access to justice through an online portal that is user friendly and purged of byzantine legal processes.
Author: Scott W.K. Urquhart
Acciona v. Allianz and Claims for Increased Expense.
Much ink has been spilled on the BC courts’ decisions in Acciona Infrastructure Canada Inc. v. Allianz Global Risks US Insurance Company. But the lion’s share of the commentary has focussed on the defect exclusion at issue in that case, known as the LEG 2/96 exclusion, and the finding that it did not exclude damage to defectively constructed property. Garnering less attention are the courts’ rulings with respect to the economic claims presented by the insured.