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Peter Griffin, Lenczner Slaght LLP

SCC ‘clarified and reaffirmed’ discoverability principle in limitations period decision: counsel

Thursday, August 05, 2021 @ 9:17 AM | By Amanda Jerome

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The Supreme Court of Canada’s decision in Grant Thornton LLP v. New Brunswick 2021 SCC 31 has been flagged by counsel as a reaffirmation of the discoverability principle and noted as having a broad application to the profession.

Peter Griffin, a founding partner at Lenczner Slaght LLP and counsel for Grant Thornton LLP, noted that the Supreme Court interpreted the New Brunswick statute as to how it related to the “common law of discoverability,” which was an issue dealt with by the court in Central Trust Co. v. Rafuse [1986] 2 S.C.R. 147.

 Peter Griffin, a founding partner at Lenczner Slaght LLP

Peter Griffin, Lenczner Slaght LLP

“The Supreme Court decided the Rafuse case, which dealt with discoverability, in 1986, which is a long time ago,” he said, noting that the Supreme Court has reaffirmed “the discoverability principle to tell us that, absent any specific language in the limitation statute, the discoverability test and analysis is essentially the same as it was in 1986.”

The court’s decision in Grant Thornton LLP, which was released on July 29, overturned a New Brunswick Court of Appeal decision on limitation periods, ruling the Province missed its deadline to file a $50-million claim against the appellant accounting firm.

Griffin stressed that every “limitations cases is facts specific when you get to it,” so what’s important from this decision is the discoverability principle the Supreme Court “clarified and reaffirmed.”

Highlighting Justice Michael Moldaver’s reasons, Griffin suggested that the first thing lawyers do is “look at the particular statute and see if it codifies the common law.”

“If it does, then it kind of comes right down the road that Justice Moldaver described in his decision,” he explained, noting that some provinces have “some wrinkles on that language, such as Ontario saying that one of the elements of discoverability is that, commencing a proceeding, there’s an appropriate way to pursue the remedy.”

In the decision, Justice Moldaver specifically noted that he was satisfied that s. 5(1)(a) and (2) of the Limitation of Actions Act (LAA) “codifies the common law rule of discoverability.”

“As established by that rule and the LAA, the limitation period is triggered when the plaintiff discovers or ought to have discovered through the exercise of reasonable diligence the material facts on which the claim is based,” he wrote. 

The second takeaway from the decision Griffin highlighted was that the plausible inference of liability test the court applied asks “ ‘what’s enough’ to tip the balance for discoverability.”

“It’s a very practical approach,” he said, noting it was essentially balancing “a position, which is you had to know each of the constituent elements of your cause of action to the point of a virtual certainty (as I read the position of New Brunswick) before the clock would ever start to run.”

Griffin said the “anomaly” in this case was, on that theory, the Province had “commenced the action before they knew they had a cause of action, which didn’t make a lot of sense either.”

“Plausible inference of liability means that you’ve got something, whether it’s going to win is another question, but you’ve got something where you’re really put on [in] your inquiry to do more,” he said, adding that the “message for lawyers facing this sort of situation” is “if you think that there’s something there than you should get started because you can’t afford to wait and have a debate about degrees of certainty.”

“If you think you’ve got something, you should get on with it because the risk is if you miss [it] you don’t want to have a debate about how much is enough. There are certain kinds of cases, true discoverability cases such as a sponge in a medical case, where you won’t know about it until it manifests itself to the point that you know something was there,” he said, stressing that it boils down to “when in doubt, take a step.”

Even though the decision involved the Province of New Brunswick and its Limitation of Actions Act, Griffin said the Supreme Court’s decision has a “much broader application …”

“We went through a bit of a calculation in the leave application about the number of reported cases on limitation periods across the country and it is, as you can imagine, very significant,” he said, noting that the Supreme Court’s decision is “a message for everybody” and “one’s wise to pay attention to it.”

“I think it is kind of a national message. [The] variability is what each province’s Limitations Act does, but by and large they’re on the same track with some variability,” he added.

“I think it’s something we all should read because we spend our lives being terrified of limitation periods,” Griffin said.

Counsel for the Province of New Brunswick did not respond to request for comment.

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