Skip to Content

More limits: NSCA tightens the test for disallowing a limitations defence

By Jennifer Taylor

The Nova Scotia Court of Appeal (“NSCA”) has issued an important decision clarifying the test to disallow a limitations defence. The decision, Halifax (Regional Municipality) v Carvery (“Carvery”), has real implications for personal injury cases where the claim is commenced after the limitation period has expired, and the defendant takes the position that the claim should be dismissed for being out of time. As a result of this decision, it will likely be harder for tardy plaintiffs to have a limitations defence disallowed — which is good news for defendants and their insurers.

 

Background

In April 2017, the Plaintiff was allegedly injured when the doors of a Halifax Transit bus “made contact with his body” (in the Court’s words). His lawyer did not start an action against HRM within the statutory one-year limitation period for suing the municipality.[1] The Plaintiff got a new lawyer, and eventually filed his action in February 2019 — almost two years after the bus incident.

Unsurprisingly, the Halifax Regional Municipality (“HRM”) pleaded a limitations defence.

The Plaintiff amended the action to add his former lawyer as a defendant. The former lawyer then moved under section 12 of the Limitation of Actions Act (“LOAA”) to have HRM’s limitations defence disallowed.

Justice Ann Smith (the “Motion Judge”) granted the former lawyer’s motion, and HRM appealed. There were two key issues on appeal: whether the former lawyer actually had standing to ask for their co-defendant’s limitations defence to be disallowed, and whether the Motion Judge misapplied the test under section 12.

 

A tightened-up approach to Section 12

Under section 12(3) of the LOAA, the court may disallow a limitations defence if the claim is commenced within two years of the limitation period expiring, and the claim is “brought to recover damages in respect of personal injuries.” Assuming those criteria are met, subsection (3) directs the court to compare the degree of “hardship” that could befall the parties depending on whether the limitations defence is allowed to stand.

Section 12(5) lists several mandatory factors for the court to consider in its “hardship” analysis.

The Court of Appeal took the opportunity in Carvery to “provide directions” on the application of these factors, and section 12(3) motions more generally.[2]

The Court emphasized that the plaintiff’s diligence (or lack thereof) “is a critical factor in assessing the degree of hardship suffered.”[3]

Following Carvery, plaintiffs will now be required to submit direct evidence on section 12 motions (and can no longer rely on, say, solicitor’s affidavits); otherwise, their motions will be dismissed. Earlier decisions granting a plaintiff’s motion in the absence of direct evidence no longer have “precedential value.”[4]

The Court’s specific directions on the section 12(5) factors include:

 

  • (a) the length of and the reasons for the delay on the part of the claimant – The plaintiff must explain the reasons for their delay, although they can rely on other evidence regarding the length of the delay. The significance of the delay will depend on contextual factors – e.g. how long the limitation period is; whether the defendant knows about a potential claim or it “comes as a complete surprise”; etc.[5]

 

  • (b) any information or notice given by the defendant to the claimant respecting the limitation period – The Court confirmed that, “Contrary to lower court decisions that state or imply otherwise, this provision does not create an obligation for a defendant to advise the plaintiff about the limitation period generally, nor its impending expiry.”[6] Instead, this factor looks at “what type of information, if any, the plaintiff received from a defendant regarding the existence and length of the limitation period in order to assess the reasonableness of their subsequent conduct.”[7]

 

  • (c) the effect of the passage of time on the ability of the defendant to defend the claim, and the cogency of any evidence adduced or likely to be adduced […] – This factor is about the full delay, not just delay after the limitation period expired. As Justice Bourgeois commented, “A plaintiff who has diligently met their other obligations in advancing the claim will be viewed favourably. However, if missing the limitation period is part of a pattern of foot-dragging on the plaintiff’s part, this would weigh against granting relief.”[8]

 

  • (d) the conduct of the defendant after the claim was discovered […] – “The purpose of this factor,” according to the NSCA, “is to assess whether the defendant’s conduct contributed to the plaintiff’s delay in filing a claim.” This is another point to be addressed in the plaintiff’s direct evidence.[9]

 

  • (e) the duration of any incapacity of the claimant arising after the date on which the claim was discovered – The Court explained that, if the plaintiff was experiencing incapacity, that might explain the delay and “would weigh in their favour on the motion.” However, if there was no incapacity, that does not make this factor neutral (as some decisions have suggested); instead, it “favours maintaining the limitation defence.”[10]

 

  • (f) the extent to which the claimant acted promptly and reasonably once the claimant knew whether or not the act or omission of the defendant, to which the injury was attributable, might be capable at that time of giving rise to a claim – This factor tracks the language of the discoverability provision in section 8(2) of the Limitation of Actions Act. It is another area for the plaintiff to address in their direct evidence.[11]

 

  • (g) the steps, if any, taken by the claimant to obtain medical, legal or other expert advice […] – Seeking and acting on expert advice may help the plaintiff show they were acting diligently, but this will depend on a contextual assessment of the evidence.[12]

 

  • (h) the strength of the claimant’s case – For this factor, the plaintiff must “put their best foot forward” and show “their case is more than ‘arguable.’”[13] This seems to be a heightened threshold for plaintiffs, and it will require “establishing an evidentiary basis for both liability and damages.”[14]

 

  • (i) any alternative remedy or compensation available to the claimantCarvery provides much-needed clarification on this factor for cases where the plaintiff’s lawyer missed a limitation period.

 

Some Nova Scotia Supreme Court decisions had expressed reluctance to find that the “alternative remedy or compensation available to the claimant” includes lawyers’ professional liability insurance (e.g. LIANS). Several had cited Smith v Lord, which was not a limitations case but where the Court of Appeal had remarked that a plaintiff’s potential claim against his lawyer was “mere speculation.” According to Carvery, that “two sentence conclusion regarding the speculative nature of the plaintiff’s claim against his counsel was based on the record in that case” and “should not be viewed as a principle of broader application.”[15]

The Court of Appeal has now clearly directed that “the plaintiff’s former lawyer is another potential source of compensation.”[16] It will be an error in principle for motion judges not to consider it.

 

Application to the facts

HRM succeeded on both substantive issues. On the standing issue, the Court of Appeal held that the plaintiff’s former lawyer had no standing to bring the section 12 motion: “Although a co-defendant may provide evidence and argument in support of a disallowance motion, it is a plaintiff who must, for the reasons outlined earlier, be the moving party. It is only a plaintiff who has the ability to respond fully to the enumerated factors.”[17]

The Court also agreed with HRM that the Motion Judge misapplied the section 12(5) factors. In particular, it was an error in principle not to consider the Plaintiff’s claim against his former lawyer as a potential alternative remedy.[18]

In the result, HRM was allowed to maintain its limitations defence.

 

Conclusion

With Carvery, the NSCA has established a newly rigorous approach to the factors under section 12(5), including a requirement for plaintiffs to submit direct evidence. As a result, section 12 motions may be less attractive to plaintiffs who have missed a limitation period. The motions that do go forward should be more predictable, with more limitation defences being upheld.

As Justice Bourgeois put it:[19]

A defendant should not be deprived of a limitation defence unless the plaintiff establishes it would be unjust and unduly harsh for it to be maintained. It is for the plaintiff to tip the scales in their favour, not for a defendant to justify why it should be entitled to maintain its legally valid defence.


This client update is provided for general information only and does not constitute legal advice. If you have any questions about the above, please contact a member of our Insurance group.

Click here to subscribe to Stewart McKelvey Thought Leadership.


[1]     Halifax Regional Municipality Charter, SNS 2008, c 39, s 376. See also the Municipal Government Act, SNS 1998, c 18, s 512.
[2]     Para 24.
[3]     Para 28.
[4]     Para 34.
[5]     Para 37.
[6]     Para 39; bolding the Court’s.
[7]     Para 40.
[8]     Para 44.
[9]     Paras 45-46.
[10]    Paras 47-49.
[11]    Para 50.
[12]    Paras 50-51.
[13]    Paras 55-56.
[14]    Para 55.
[15]    Para 63.
[16]    Para 60.
[17]    Para 70.
[18]    Para 78.
[19]    Para 29.

 

Archive

New rules allowing Nova Scotia private sector employers to join Public Service Superannuation Plan take effect

BY Dante Manna & Noah Archibald

By Dante Manna and Noah Archibald The Provincial Government recently proclaimed the Private Sector Pension Plan Transfer Act (the “Transfer Act”) and newly released regulations on February 4, 2025. The…

Read More

Outlook for 2025 proxy season

By Andrew V. Burke, Colleen P. Keyes, Gavin Stuttard, David F. Slipp and Logan G. Walters With proxy season on the horizon, many public companies are once again preparing their…

Read More

Here we go again … how recent updates to Canada’s supply chain transparency reporting guidance may impact your 2025 reporting obligations

By Christine Pound, Colleen Keyes, K.C., and Daniel Roth As reporting entities and government institutions prepare their supply chain transparency reports, Public Safety Canada (“PSC“) has updated its guidance for…

Read More

Energy Watch 2025

Stewart McKelvey is pleased to present Energy Watch – a review of key legislative and policy advancements in the renewable energy sector in 2024 in Newfoundland and Labrador, Nova Scotia and New Brunswick and a look forward to anticipated activities in 2025.

Read More

Land use planning in Prince Edward Island – the year in review

BY Curtis Doyle

By Curtis Doyle Once again, the time has come to review the year that was and to chart the course for the year ahead. For municipalities and planning professionals in…

Read More

The impact of possible tariff changes on Canadian importers and strategies for consideration (Part II)

BY Michelle Chai & Graeme Hiebert

By Michelle Chai and Graeme Hiebert This is the second in a two-part Thought Leadership series. To read Part I, click here. Appearance, design, best use, marketing and distribution While the…

Read More

Canada’s Energy Story: Energy Transition

Lawyers from our Energy Group were pleased to be featured in the latest issue of Canada’s Energy Story, an annual compendium of energy sector articles published by the Energy Council…

Read More

The impact of possible tariff changes on Canadian importers and strategies for consideration (Part I)

BY Michelle Chai & Graeme Hiebert

By Michelle Chai and Graeme Hiebert On January 20th, 2025, Donald Trump will be inaugurated as President of the United States. He has promised to swiftly impose tariffs on all…

Read More

Canada’s new criminal rate of interest takes effect

BY David Wedlake & Noah Archibald

By David Wedlake and Noah Archibald The Federal Government’s changes to the criminal rate of interest under the Criminal Code came into effect on January 1, 2025. These changes reduced…

Read More

Nova Scotia’s Regulated Health Professions Act: What’s in store for 2025 and beyond?

BY Tyana R. Caplan & Jennifer Taylor

By Tyana Caplan & Jennifer Taylor As 2025 begins, the legal landscape for regulated health professions in Nova Scotia remains in transition. Nova Scotia’s Regulated Health Professions Act (“RHPA” or…

Read More

Search Archive