Tuesday, 20 September 2011

Negotiations Can Delay a Limitation Period

Limitation periods can be both, bane and a boon, depending on your client's role in the litigation.  For those wondering whether they should engage in negotiations to resolve or conflict, or simply file a lawsuit, lest the limitation period expires, the decision of Justice Burnyear in Iezzi v. R.  may be of some interest.

In this decision, Justice Burnyeat concluded that settlement discussions were one of the factors that postponed the commencement of the limitation period under s. 6(4) of the Limitations Act:
[15]        I am satisfied that there was a postponement of the limitation period to sometime between the Spring of 2008 and the Fall of 2008 as a result of a number of factors.  There were negotiations with the Ministry during 2006 and until April 2008 regarding a possible settlement of damages flowing from the Hepatitis C infection and from the breach of contract.  It would have been unwise to interrupt those by the commencement of an action.  While negotiations were ongoing and while there was still a hope that a settlement could be reached, a reasonable person would believe that it was not necessary to commence an action for damages flowing from the Hepatitis C infection.  It was not until the April 1, 2008 meeting with a Ministry representative that the final position of the Ministry regarding a possible settlement was received.  Even then, Ms. Iezzi advised the Ministry that she had “no desire to go to a lawyer” although she also did advise that “I have been left with no other choice”.  It was only at that point that negotiations came to a conclusion and that Ms. Iezzi was left with no other alternative.
Does this mean that limitation period is postponed under R. 6(4) when parties agree that negotiations have this effect, or are negotiations, even in the absence of such an agreement, an indicator it was not in the plaintiff's own interest to bring an action as provided under R. 6(4)(b). I lean towards the latter view.