Fridays with Rogers Partners

At our weekly meeting, Jack Haddad discussed the recent decision of the Ontario Court of Appeal in Lower William Properties Ltd. v. Santaguida, 2026 ONCA 581.

Facts and Issues

A ByWard Market restaurant caught on fire in 2019 and damaged neighbouring buildings. The restaurant was sued, and filed a third-party claim against an architect who completed renovations in 2001. The architect brought a Rule 21 motion to strike the claim as being barred by the ultimate limitation period under section 15 of the Limitations Act, 2002. The motion was denied and declared not barred by Superior Court on the grounds that the claim was timely because of section 18 of the Limitations Act, which deems the start of the running of the limitation period for contribution claims to be the date on which the defendant is first served with the claim. The architect appealed to the Court of Appeal.

Holding

The appeal was allowed, and the declaration was set aside. Writing for the Court, Justice van Rensburg found that the declaration was premature, and that there needed to be a more fulsome record to determine the limitation issue. Justice van Rensburg examined the conflicting sections of the Limitations Act and provided valuable commentary.  

Analysis

The Court of Appeal thoroughly analyzed conflicts and possible interpretations of the interplay of the ultimate limitations period under section 15 of the Limitations Act, and the contribution and indemnity limitation period under section 18. The Court found that these sections conflict, and that they cannot be reconciled via plain reading.

Justice van Rensburg discussed how the concept of an ultimate limitations period has been studied and discussed as far back as 1977 by the legislature, that the will of the legislature was clear in its desire for this limitation period, and that this must be strongly considered in the analysis.

Justice van Rensburg made an important distinction in the types of third party claims for contribution and indemnity. The first set of claims are based on the third party owing a duty to the plaintiff, such that the third party claim is derivative of the plaintiff’s claim. The other type of third party contribution and indemnity claims originate from an independent duty between the defendant and the third party. This was a significant distinction relevant to the limitations period.

The Court considered if the latter type of claims should benefit from the more relaxed section 18 limitation period, and appeared to lean in favour of these being excluded, although the Court found valid arguments for each perspective. If section 18 would not apply in these cases, the court also considered if the limitations clock starts in independent claims with the original breach of duty, or with the failure to indemnify. The Court again suggested that both perspectives have merit, but the Court appeared to prefer starting the clock with the original breach, because of the distinct legal basis for the independent claim.

Finally, the Court analyzed whether contribution claims that are derivative of the plaintiff’s claim may be barred because the plaintiffhas had their claim extinguished by the ultimate limitations period, despite section 18. The Supreme Court of Canada’s holding in Giffels v. Eastern Construction, [1978] 2 SCR 1346, was that a third party claim was barred as against a party against whom the plaintiff could not claim directly. Following this reasoning, the Court in this case suggested that if the plaintiff’s claim is barred by the ultimate limitations period, then the Giffels doctrine would therefore bar the third party claim despite section 18. The Court did not determine this issue, but again appeared to lean in favour of it.