In Ledoux v. Lee, 2020 ONSC 1659 (“Ledoux”), the Ontario Superior Court of Justice summarized the legal principles that apply on a plaintiff’s motion to add a party as a defendant in a motor vehicle claim where the proposed defendant argues that the claim is time-barred. The court confirmed that the plaintiff is required to prove two things: first, that the claim was discovered on a date that is less than two years before the motion; and second, that reasonably diligent efforts were made to discover the claim prior to this date.
The plaintiff, Ludovic Ledoux, was injured in a motor vehicle accident on July 5, 2016 when his motorcycle collided with a vehicle operated by the defendant, Byeongehon Lee. At the time of the accident, Mr. Lee was using his vehicle to work as a driver for a ride-sharing platform (the “Proposed Defendant”). Mr. Ledoux commenced an action against Mr. Lee who, in turn, issued a third party claim against a company related to the Proposed Defendant. Mr. Ledoux was served with a copy of the Third Party Claim on July 23, 2018. As a result, Mr. Ledoux brought a motion for leave to amend his Statement of Claim to add the Proposed Defendant as a defendant in the main action. Mr. Ledoux alleged that Mr. Lee was acting as an agent for the Proposed Defendant at all material times and, as a result, the Proposed Defendant is responsible for the negligence of Mr. Lee. The Proposed Defendant opposed the motion arguing that the two-year limitation period had expired.
Under Rule 26.01 of the Rules of Civil Procedure, RRO 1990, Reg 194, the court shall grant leave to amend a pleading, at any stage of the action, on such terms as are just, unless prejudice would result that could not be compensated for by costs or an adjournment. Rule 5.04(2) allows the court to add a party to a proceeding unless the same kind of prejudice would occur.
The Limitations Act, 2002, SO 2002, c 24, Sch B (the “Limitations Act”) states that a proceeding must be brought within two years of the day on which the claim was discovered. Under section 5(1), a claim is discovered when the person with the claim first knew, or a reasonable person with the abilities and in the circumstances of the person with the claim first ought to have known, among other things, the identity of the person who caused the injury, loss, or damage. There is a statutory presumption under section 5(2) that the person with a claim knows the identity of the person who caused the injury, loss, or damage on the day the act or omission on which the claim is based took place, unless the contrary is established. If a limitation period in respect of a claim against a person has expired, section 21(1) of the Limitations Act states that the claim shall not be made by adding the person as a party to any existing lawsuit.
Justice Gomery referred to Arcari v. Dawson, 2016 ONCA 715, for the proposition that “the clear expiration of a limitation period is an absolute bar to the addition of a party to an already existing action.” Her Honour went on to quote from the leading case of Morrison v. Barzo, 2018 ONCA 979, in which the Court of Appeal for Ontario described the analysis on a motion to add a party, as follows:
[29] Where there is a question as to whether claims covered by the basic two-year limitation period are statute-barred, such that parties cannot be added pursuant to s. 21(1) of the Limitations Act, the court must make a finding as to when the plaintiff first knew the elements of the claim listed in s. 5(1)(a). If the date of actual discovery, as determined by the court, would bring the claim within the limitation period, and the proposed defendant relies on “reasonable discoverability” to contend the claim was brought outside the prescription period, the court must go on to determine under s. 5(1)(b) when “a reasonable person with the abilities and in the circumstances of [the plaintiff] first ought to have known of the matters referred to in clause (a)”. […]
[30] […] The court must be satisfied that a reasonable person in the plaintiff’s circumstances ought to have discovered the claim, and the date of such reasonable discovery must be determined. It is not sufficient for the court to say that the claim was discoverable “before the expiry of the limitation period”, without explaining why. It may be that the date of reasonable discoverability can only be determined at a later stage in the proceedings, at trial or on a summary judgment motion. In such a case, the motion to add the defendant should be granted, with leave for the defendant to plead a limitation defence […].
Mr. Ledoux was therefore required to demonstrate that he only discovered that Mr. Lee worked for the Proposed Defendant on a date that was less than two years before he brought his motion, and that he made a reasonably diligent attempt to discover the claim before that date.
Having regard to subjective knowledge, there was no evidence before the court to contradict the position of Mr. Ledoux that he did not have actual knowledge of the relationship between Mr. Lee and the Proposed Defendant until he received the Third Party Claim on July 23, 2018.
The evidentiary threshold on the plaintiff to provide an explanation as to why the claim could not have been discovered earlier through the exercise of reasonable diligence is low and should be given a generous reading. Mr. Ledoux tendered two affidavits from his lawyer, which indicated that counsel had obtained the police report and hospital records, and exchanged correspondence with Mr. Lee’s insurance company. Justice Gomery stated that Mr. Ledoux was not obliged to provide a list of the steps taken by his counsel to explore potential claims. The plaintiff is only required to raise a triable issue on the question of when he reasonably ought to have discovered the claim.
According to Justice Gomery, there was no triggering event that called for additional inquiries by counsel for Mr. Ledoux. There was nothing about the motor vehicle accident that suggested that Mr. Lee was in an agency, contractor, or employee relationship with the Proposed Defendant. Further, the insurance adjuster never suggested that it might deny coverage or disclosed that Mr. Lee was participating in a ride-sharing service, notwithstanding the fact that it had advised Mr. Lee of its denial of coverage on this very basis shortly after the accident. The Proposed Defendant, for its part, failed to lead clear evidence demonstrating how Mr. Ledoux could have investigated whether Mr. Lee was working for a ride-sharing platform.
The court granted Mr. Ledoux’s motion to amend his claim to add the Proposed Defendant as a party in the main action. The Proposed Defendant was, of course, allowed to plead a limitations defence. Ledoux demonstrates the plaintiff’s low evidentiary burden on a motion to add a defendant after the apparent expiry of a limitation period. The decision also confirms that speculative arguments about how taking certain steps could have led to earlier discovery will not displace a plaintiff’s explanation that he or she took reasonable steps to discover the potential claim.
