Limitation/Prescription PeriodsTime LimitsIntroductionThe limitation periods that apply to claims governed by maritime law are not always easy to identify or locate. The following table identifies the federally prescribed limitation periods for many of the more common claims subject to maritime law. For those claims for which there is not a specific limitation period, s. 140 of the Marine Liability Act now provides for a general limitation period of three years. Federally Prescribed Limitation Periods
Where there is no Federal Limitation PeriodNote: The discussion below has been superseded by the enactment of a general limitation period of three years for claims governed by Canadian maritime law and for which there is no specific limitation period. (s.140 - Marine Liability Act) However, as s. 140 only came into force on 21 September 2009, the discussion below may still be relevant for some older claims and, in any event it explains the mischief that s. 140 was intended to correct. Prior to the decision of the Supreme Court of Canada in Ordon v Grail, [1998] 3 S.C.R. 437 (the summary of this important decision can be found here), it was generally thought that the limitation periods prescribed in the general limitation statutes of the various provinces of Canada would apply in those situations where there was no federally prescribed limitation period. Ordon v Grail now makes it extremely doubtful that the provincial limitation statutes will apply of their own force to maritime matters and means that there may be no limitation periods for certain types of claims. Section 39 of the Federal Court Act provides a partial solution to the problem of the lack of a federal limitation statute of general application.
Section 39 differentiates between actions arising within a single province and actions arising in more than one province or outside of any province. For actions arising within a single province, section 39(1) incorporates the general limitation act of the province. Thus, such actions will be subject to the limitation period prescribed by the province (which can vary depending upon the province and type of claim). For actions arising in more than one province or completely outside of a province, section 39(2) prescribes a six year limitation period. It might be argued that section 39 of the Federal Court Act provides a solution to the problem of a lack of a federal limitation statute of general application. However, section 39 is not an appropriate solution to the problem created by Ordon v Grail. An obvious and apparent difficulty with section 39 is that the limitation period will differ depending on where the cause of action arose. A further, and even more important, difficulty with section 39 is that it applies only to actions commenced in the Federal Court. It has no application whatsoever to actions commenced in the superior courts of the provinces and many maritime actions are commenced in those courts. The state of the law in Canada (before the enactment of s. 140 of the MLA) in respect of those matters governed by Canadian maritime law and for which there was no federally prescribed limitation period created a multiplicity of limitation periods and rules that differed depending on the court and the jurisdiction. If action was commenced in the Federal Court and all of the elements of the cause of action arose within a single province, the applicable limitation period was as prescribed by the Limitation Act of that province. If action was commenced in the Federal Court and the elements of the cause of action arose in more than one province or outside of any province, the applicable limitation period was 6 years as prescribed by s.39(2) of the Federal Court Act. If action was commenced in the superior court of a province and regardless of where the cause of action arose, s.39 of the Federal Court Act did not apply and there was probably no limitation period. Case SummariesNote: For cases involving limitation periods in carriage of goods cases please review the Carriage of Goods section. Pleadings - Amendment - Limitation Period Bank of the West v. The 26' Well Craft Scarab (Ship), 2007 FC 1112 The Defendant marine insurer sought leave to amend its pleading to plead a limitation period contained in its policy. At first instance the Prothonotary denied the application without giving reasons. On appeal, the motions Judge noted the general rule is to allow amendments at any stage of an action provided there is no prejudice or injustice to the other party that cannot be compensated for in costs. Given that the proceeding had not advanced significantly and the Plaintiff was unable to identify any particular prejudice, the Judge allowed the appeal and gave leave to the Defendant to plead the limitation period defence. Collision - Limitation Period - Extension Rioux c. Bégin, 2007 QCCQ 4119 The issue in this case was whether the Court should exercises its discretion under s.23(2) of the Marine Liability Act to extend the limitation period. The Plaintiff was an infant and the limitation period had apparently been missed because legal advisors thought the provincial limitation period of two years applied. The Court granted the request for an extension. (Note: Unfortunately, this decision is only published in the French language, a language in which the author is not fluent, and it is not entirely clear to the author why the extension was granted.)Carriage of Passengers - Fatal Accident - Limitation Period - Applicable Law - Athens Convention - Extension Frugoli c. Services Aériens des cantons de L'Est inc., 2007 QCCS 6203 This was an action by dependents of two persons who werepresumed drowned when the boat they were in capsized. The boat had been chartered and operated by the Defendant. The issue was whether the limitation period was the three year period prescribed in the Quebec Civil Code, the two year period prescribed by s. 14(2) of the Marine Liability Act (MLA”) or the two year period as prescribed by Art. 16(2) of the Athens Convention as enacted by the MLA. Due to a mistake by Plaintiff’s counsel, the action was commenced more than two years after the accident but less than three years. The Court reviewed the various authorities and held without much difficulty that the claim should be subject to federal maritime law and not the Quebec Civil Code. The Court next considered whether it was the two year period in the MLA or the two year period in the Athens Convention that applied and whether the period could be extended. The issue was relevant because Art. 16(3) of the Athens Convention provides that “the law of the court seized of the case shall govern the grounds of suspension or interruption” of the limitation period. The Court held that the “law of the court seized of the case” meant Canadian maritime law. The Court then thoroughly reviewed the authorities and ultimately held that there was no discretionary power to extend the limitation period under maritime law except with respect to collision action governed by s. 23 of the MLA. Finally, the Court was of the view that in any event an error of counsel was not sufficient grounds for interruption or suspension of the limitation period in the circumstances. Personal Injury - Athens Convention - Limitation Period - No Power to Extend - Applicable Law Russell et al. v. MacKay, 2007 NBCA 55, reversing in part 2006 NBQB 350 The Plaintiff was a passenger on a whale watching vessel and was injured at sea when she tripped over a cooler while leaving the washroom on the vessel. The accident occurred on 3 August 2003 but action was not commenced until 20 July 2006. The Defendants brought this motion to dismiss the Plaintiff's claim on the grounds that it was statute-barred by the two year limitation period in the Athens Convention as enacted by the Marine Liability Act. The Plaintiff argued that the applicable limitation period was six years as provided the New Brunswick Limitation of Actions Act. Alternatively, the Plaintiff argued that the Court had the discretion to suspend or interrupt the running of the limitation period. The trial Judge concluded that the Plaintiff's claim was in pith and substance in relation to navigation and shipping and governed by federal Canadian maritime law and not the provincial limitations statute. The trial Judge then considered whether the court had a discretion to suspend or interrupt the running of the limitation period. The trial Judge referred to art. 16(3) of the Athens Convention which provides that “The law of the court seized of the case shall govern the grounds of suspension and interruption of limitation periods...”. The trial Judge held that the phrase “law of the court seized of the case” referred to Canadian maritime law and not the law of New Brunswick. The trial Judge noted that a three part test had been established to determine when an extension of a limitation period should be made under s. 572(3) of the Canada Shipping Act and that this was the appropriate test to apply. The test was: 1. did the Plaintiff have a valid prima facie case; 2. was the Defendant aware of the claim and would it suffer prejudice by an extension, other than the loss of the limitation defence; and 3. having regard to all the circumstances, was it in the best interest of justice that time be extended. Applying this test the trial Judge held it was in the best interests of justice that the limitation period be interrupted or extended On appeal to the New Brunswick Court of Appeal, the Court of Appeal agreed with the trial Judge that the case was to be governed by federal maritime law and further agreed that the limitation period was to be found in the Athens Convention but disagreed with respect to the powers of the court to suspend or extend the limitation period. Specifically, the Court of Appeal said that the trial Judge erred in relying upon and applying the test flowing from the old s. 572(3) of the Canada Shipping Act which dealt with collisions between ships (as does its successor in s.23 of the Marine Liability Act ) not injuries to passengers. The Court said that Art. 16 of the Athens Convention did not include any power to extend the limitation period and held that superior courts do not have inherent powers to extend limitation periods. The Court of Appeal next considered the meaning of Art. 16(3) and noted that the reference to the law of the court seized of the case did not imply such law would necessarily provide grounds for suspension or interruption. The Court held that there was no federal legislation that would provide grounds for suspension or interruption. Finally, the Court considered whether the law should be reformed to include a power to suspend or interrupt a limitation period and suggested, without deciding, that 1) waiver; (2) estoppel; (3) absence from the jurisdiction; (4) infancy; and (5) mental incompetency might be grounds. However, as the evidentiary record supported none of these grounds, the matter was not decided. Marine Insurance – Bad Faith – Limitation Period - Pleading – Striking – Reasonable Cause of Action Forestex Management Corp. et al. v Underwriters at Lloyds et al., 2004 FC 1303 “Many years ago when small boys wore suspenders and ships had gender...” So begins the Reasons for judgment of Prothonotary Hargrave in this application by the Defendants to strike out the Statement of Claim of the Plaintiff. The facts were that on 4 August 2000 the “Texada” went aground in a passage in the Queen Charlotte Islands and was subsequently declared a constructive total loss. The Plaintiff gave underwriters notice of the casualty on 8 August 2000 and underwriters denied coverage for breach of the trading warranty on 10 August 2000. The Plaintiff subsequently commenced an action against underwriters for coverage under the policy of insurance. That action was, however, dismissed following a status review on 9 January 2003. The dismissal was appealed by the Plaintiff but the appeal was not served. The Plaintiff attempted to bring on a motion ex parte to extend the time to serve the appeal but was ordered to serve the underwriters. This was not done and the Federal Court of Appeal dismissed the appeal for delay on 13 January 2004. The Plaintiff subsequently commenced the present action against underwriters alleging bad faith. The Defendant underwriters filed a Statement of Defence and brought the present motion to dismiss the action on various grounds. However, as they had filed a Statement of Defence the Prothonotary held that they were only entitled to argue that the Statement of Claim failed to disclose a reasonable cause of action. The thrust of the Defendants argument was that there could be no action for bad faith without an initial finding that there was coverage under the policy. The Prothonotary first considered the requirements of an action for bad faith. He reviewed American and Canadian authorities and noted that although a claim under a policy and a claim for bad faith are two distinct causes of action they are related in that a claim for bad faith cannot succeed unless there is a finding that there is coverage under the policy. He next considered the effect of the dismissal of the claim under the policy and held that an order dismissing an action for delay does not set up a res judicata defence and therefore, subject to any time bar defence, does not prevent a Plaintiff from re-commencing an action. The Prothonotary next considered whether there was a limitation period that would bar the Plaintiff from re-commencing an action on the policy. The Court was referred to s. 39 of the Federal Court Act which incorporates provincial limitation periods and was urged to apply the one year limitation period set out in section 22(1) of the British Columbia Insurance Act. However, the Prothonotary questioned whether the British Columbia Insurance Act extended or ought to extend to marine insurance, a federal undertaking. The Prothonotary did, however, apply the two year limitation period in the British Columbia Limitations Act and applying that period held that the action was not time barred. (The denial of coverage occurred on 10 August 2000 and the bad faith action was commenced on 9 August 2002.) Accordingly, the Prothonotary noted that the existing bad faith action could be amended by adding a supporting claim under the policy and held that if this was done it was not plain and obvious and beyond doubt that the Plaintiff's action could not succeed. In result, the motion to strike the claim was dismissed. Limitation Period - Extension of Time
Croisieres
A.M.L. Inc. v Goelette Marie Clarisse Inc., [2000] F.C.J. No.
1559 This was an application to extend the two year limitation period set by s. 572(1) of the Canada Shipping Act for the commencement of an action against a ship for damage to property or personal injury. The evidence showed that the Plaintiff had sent the Defendant a notice of its claim within the two year period. The Defendant acknowledged the notice and requested the Plaintiff send relevant documentation “without prejudice and without making any admission”. No further evidence or explanation was offered. The Court held that the evidence was not a sufficient explanation by the Plaintiff of the delay and dismissed the application. Fatal Accidents - Limitation Periods Nicholson v Canada, (February 17, 2000) No. T-748-94 (F.C.T.D.). This was a summary judgment motion by the Crown for an order dismissing the claims of the Plaintiffs as time barred. The Plaintiffs were the dependents and the executor of the deceased who died when his vessel hit a rock and sank. The Plaintiffs alleged that the accident was caused by the breach of statutory duties on the part of the Coast Guard. The accident occurred on April 2, 1992, but the action was not commenced until March 30, 1994. The Defendant argued that the applicable limitation period was one year from the time of death as prescribed by section 649 of the Canada Shipping Act. (Note: This provision has since been amended and the limitation period is now two years.) The Plaintiffs argued that the discoverability principle operated to extend the time bar under the circumstances of the case, that the court had inherent jurisdiction to extend the limitation period, that there was a non-statutory cause of action to which section 649 did not apply, that the tolling provision of the Ontario Limitations Act applied, and that, in any event, the claim of the estate was not covered by section 649. The court dealt with each of these arguments. With respect to the discoverability principle (i.e. that the limitation does not run until the Plaintiff is aware of the material facts giving rise to a cause of action) the court held that this principle applied but that it did not assist the Plaintiffs as they were aware of the material facts at the conclusion of the inquest into the death of the deceased yet they did not commence their action within one year from that date. With respect to the inherent jurisdiction of the court to extend the limitation period, the court held that, in the absence of a clear statutory authority it had no such jurisdiction. (Note: This is contrary to the decision of the Ontario Court of Appeal in Dreifelds v Burton, (March 6, 1998) No. C 2456 &: C24580 (Ont. C.A.) but is consistent with the decision of the British Columbia Supreme Court in Vogel v Sawbridge, (April 3, 1996) No. 24638 Kelowna Registry.) With respect to the alleged common law non-statutory cause of action, the court held that there was no such cause of action. With respect to the argument that the tolling provisions of the Ontario Limitation Act applied, the court held that the incorporation of the tolling provisions would be inconsistent with the statutory scheme set out in Part XIV of the Canada Shipping Act. Finally, with respect to the action by the executor of the estate of the deceased, the court held that this action (which was newly created by the Supreme Court of Canada in Ordon Estate v Grail, [1998] 3 S.C.R. 437) was not time barred as it was not a claim by dependents and was governed by the two year limitation period in the Ontario Trustee Act as incorporated by section 39 of the Federal Court Act. (Note: It is not apparent why the limitation period in the Ontario Trustee Act would apply to the action by the executor as that action is a common law action and is not based on the Trustee Act.) Fatal Accidents Ordon Estate v Grail, (November 26, 1998) No.25702 (S.C.C.). Notwithstanding section 649 of the Canada Shipping Act the limitation period for a fatal accident is two years as provided for in section 572(1) of the Canada Shipping Act. There is ambiguity between sections 649 and 572 and the ambiguity must be resolved in favour of the plaintiff. For the full summary of this case see Canadian Maritime Law. Fatal Diving accident - Application of Canadian Maritime Law - Limitation Periods Dreifelds v Burton, (March 6, 1998) No. C 2456 &: C24580 (Ont. C.A.) This was an appeal from a decision of the Ontario Court General Division. The case concerned a fatal scuba diving accident in Lake Ontario. A chartered vessel was used to take the divers to the dive site but the vessel was otherwise not involved in the accident. The deceased died from a gas embolism. The issue in the case was whether the accident was governed by Canadian maritime law and the one year limitation period in the Canada Shipping Act or by the two year period in the Ontario Family Law Act. Both at the trial level and on appeal it was held that the case was not governed by Canadian maritime law and that the two year period in the Family Law Act applied. The Court of Appeal noted that "not every tortious activity engaged in on Canada's waterways is subject to Canadian maritime law. Only if the activity sued about is sufficiently connected with navigation or shipping... will it fall to be resolved under Canadian maritime law." It is noteworthy that the Court of Appeal said, in obiter dicta, that if the case was governed by the one year limitation period in the Canada Shipping Act, the Court would nevertheless have the inherent jurisdiction to extend the one year limitation period and would have done so in the absence of any prejudice to the Defendants. (Editor's Note: Compare this to the decision of the British Columbia Supreme Court in Vogel v Sawbridge et.al.(April 3, 1996) No. 24638 Kelowna Registry (B.C.S.C.) where that Court refused to recognize any such inherent jurisdiction.) Time Extensions Sidmar N.V. v Fednav Limited,(February 25, 1997) Nos. A-807-96, A-808-96 & A-809-96 (F.C.A.) This matter concerned the interpretation of various agreements to extend suit time in a carriage of goods case. The cargo was carried by sea from Belgium to Detroit and Chicago under bills of lading which provided that suit should be brought in Canada. The carrier granted suit time extensions which were conditional on any subsequent actions being filed in Detroit. The Shipper, however, commenced the actions in the Federal Court of Canada pursuant to the jurisdiction clauses in the bills of lading. The Federal Court of Appeal held that the provision in the suit time extension agreement requiring suit to be filed in Detroit was invalid as contrary to the Hague-Visby Rules. Personal Injury Smallwood v Hill, (January 8, 1997) Nos. C24305 & C24306 (Ont. C.A.) This was an appeal from an order under s. 572 (3) of the Canada Shipping Act extending the time in which to issue a Statement of Claim. The facts of the matter were that a boating accident occurred on August 4, 1990, but action was not commenced by the injured Plaintiff until January 26, 1995 i.e.. 30 months after the two year limitation period in s. 572(1) of the Canada Shipping Act had expired. The cause of the missed limitation period was solicitor's negligence which was then compounded by the solicitor's failure to do anything about the mistake when it was drawn to his attention. The Court of Appeal noted that this was a marginal case but nevertheless held that the motions judge had not erred in exercising his discretion in favour of an extension of time. Fatal Accident Vogel v Sawbridge et.al., (April 3, 1996) No. 24638 Kelowna Registry (B.C.S.C.) This was a summary trial to dismiss two actions as time barred. The actions arose out of the deaths of two persons aboard the yacht "Kingfisher" while it was moored at Nanaimo Harbour, British Columbia. It was alleged in the Statement of Claim that the deaths were caused by the faulty operation of a heater in the yacht which emitted high levels of carbon monoxide. The deaths occurred on December 22, 1992 but actions were not commenced until December 21, 1994. The Plaintiffs claimed relief under the Family Compensation Act of British Columbia. The British Columbia Supreme Court, following the earlier decision of the British Columbia Court of Appeal in Shulman v McCallum [1933] 7 W.W.R. 567, held that the actions were governed by Canadian Maritime Law and not the provincial Family Compensation Act. Accordingly, the Court held that the actions were governed by the fatal accident provisions of the Canada Shipping Act and that the applicable limitation period was therefore the one year period provided by s.649 of that Act. The Court refused to exercise any inherent jurisdiction to extend the limitation period stating that to do so would conflict with and abrogate the clear provisions of a statute which contained no curative provisions. For the full text of this decision, click here. Collision - Limitation Periods - CSA s.572 - Extension Dupras v Bezzina, (February 23, 1995), No.214/91, (Ont.Ct. Gen. Div.). This case dealt with an interesting issue concerning the validity and applicability of section 572 of the Canada Shipping Act. Section 572 provides for a two year limitation period in actions involving, inter alia, personal injury suffered by a person on board a vessel. The Plaintiffs had rented a vessel which went dead and was struck by the Defendant's vessel. Four years after the accident the Plaintiffs decided to join the lessor of their boat to the action as a Defendant. The lessor opposed the joinder on the basis that the action against it was time barred by section 572. The Plaintiffs, in turn, challenged the constitutional validity of section 572. The Court held that section 572 was valid legislation. The Court went on, however, to hold that it was at least arguable that section 572 applied only to actions by a person on board one ship against the owner of another ship. The Court further held that it was arguable that section 572(3) gives the plaintiff a prima facie right to have the time within which to commence an action extended unless the extension would prejudice the Defendant.
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