A limitation period is a stated period of time, the expiry of which extinguishes a party’s legal remedy and forbids the commencement of a legal action. Each province in Canada has general statutes of limitations and many provincial and federal statutes contain limitation periods applicable to a variety of causes of actions. Traditionally, limitation periods have been strictly enforced. More recently, the subject of when time begins to run has received greater attention from our courts.
The discoverability rule has evolved fairly recently in our civil jurisprudence.1 It gives relief in certain factual situations by extending a limitation period. According to the discoverability rule, a limitation period begins to run when the material facts upon which an action is based have been discovered, or ought to have been discovered by the plaintiff through the exercise of due diligence. The effect of the rule is to postpone the running of time until a reasonable person, in the exercise of reasonable diligence, would discover the facts necessary to maintain the action.2 It is a general rule applied to avoid injustice.
It is now over two years since the Supreme Court of Canada upheld the Ontario Court of Appeal’s decision in Peixeiro v. Haberman. Justice Major in Peixeiro adopted Taddle’s J. A.’s statement in Fehr v. Jacob (1993), 14 C.C.L.T. (2d) 200 (Man. C.A.) at 206, which is as follows:
In my opinion, the judge-made discoverability rule is nothing more than a rule of construction. Whenever a statute requires an action to be commenced within a specified time from the happening of a specific event, the statutory language must be construed. When time runs from “the accrual of the cause of action” or from some other event which can be construed as occurring only when the injured party has knowledge of the injury sustained, the judge-made discoverability rule applies. But, when time runs from an event which clearly occurs without regard to the injured party’s knowledge, the judge-made discoverability rule may not extend the period the legislature has prescribed.
In Peixeiro the court concluded that the limitation period under the Ontario Highway Traffic Act did not start to run in a personal injury action arising out of an automobile accident until the plaintiff discovered facts that could sustain a claim that his or her injuries met the threshold under the Insurance Act.
Since Peixeiro, the discoverability rule has enjoyed broad application in Ontario in motor vehicle actions and actions against municipalities and the provincial crown. As such there is now a body of jurisprudence on the scope and application of Peixeiro. The purpose of this paper is to review the way Ontario courts have applied Peixeiro in the context of personal injury litigation so that the parameters of the present authorities in the area of motor vehicle actions and actions against municipalities and the provincial crown can be better understood and defined