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Case Comment. Faulty Construction: Dhanda v Gill By George J Hall

Faulty Construction: Dhanda v Gill
By George J Hall
Part Marks: Dhanda v Gill 2019 BCSC 1500

 

On September 6, 2019, Master Elwood ruled that the City of Surrey was statute barred in bringing a third party claim after the expiry of a limitation period. Where this takes a turn is that Master Elwood held that the request was beyond the court’s jurisdiction and discretion under Rule 3-5(4) of the Supreme Court Civil Rules. The conclusion was based in Section 22(2) of the Limitation Act which, according to the decision, precludes third party proceedings for claims of contribution or indemnity following the expiry of a limitation period relating to that third party claim.

 

In Dhanda v Gill, the Plaintiff was seeking damages for personal injury resulting from a motor vehicle accident that occurred on April 6, 2015 at an intersection controlled by a stop sign. The Plaintiff alleged that the City of Surrey had let a tree grow in front of a stop sign obscuring it from view. However, the tree was growing from a residential property. Nearly three and a half years after being served with the Plaintiff’s Notice of Claim, the City of Surrey decided that they should add the owners of the residential property as third parties to the action.

 

As background, the limitation period we are referring to is the 2 year basic limitation period set out in section 6 of the Limitation Act as extended by discoverability set out in section 16. Section 16 essentially starts the clock on claims for contribution and indemnity from: 1) the day the Notice of Civil Claim is served; or 2) the first day on which the Defendant knew or ought to have known a Third Party claim may be made.

 

Notably, in Dhanda v Gill, there were no issues regarding discoverability – the limitation period had expired. The question was whether Master Elwood should exercise his discretion pursuant to Rule 3-5 and decide whether it would be just and convenient for the third party claim to be decided in the existing action. Master Elwood succinctly summarized the existing jurisprudence at paragraph 2 as follows:

 

Caselaw under Rule 3-5 and the statutory predecessor of s.22(1) allows claims of contribution or indemnity to be added to an action after the expiry of a limitation period for a separate action when it is just and convenient for those claims to be decided in the existing action. Under this jurisprudence, the expiry of a limitation is a relevant, but not determinative, factor in the exercise of the court’s discretion whether to grant leave to issue a third party notice.

 

The Master concluded that he did not have the discretion to entertain such a request as the third party claim was statute barred by section 22(2) of the Limitation Act.

 

So how did the Master get to his conclusion? You guessed it, good old fashion statutory interpretation but don’t get too excited, Latin maxims were nowhere to be found.

 

The Master attempted to follow the structure of the court’s interpretation in the seminal case of Rizzo & Rizzo Shoes Ltd (Re), [1998] 1 S.C.R. 27. The Master examined the meaning of ‘court proceeding’ within section 22, the statutory scheme of the Limitation Act, the object of the Act, and we even saw deployment of the mischief rule. A rule designed to assist interpreters understand the intention of the legislature by identifying the ‘mischief’ the legislation was intended to address.

 

However, Master Elwood builds his house without a foundation. At paragraph 15, he simply asserts that section 22(1) of the Limitation Act provides the court with discretion. He does so by blurring previous interpretations of Rule 3-5 with how it interacts with Section 22 of the Limitation Act. The Master then circles back to his assertion throughout the decision to support different lines of argument. Further, it is concluded at paragraph 26 that the plain language of section 22(2) removes the discretion of the court under section 22(1).

 

However, does section 22(1) provide the court with any discretion or power?

 

Section 22(1) of the Limitation Act reads:

 

22   (1)If a court proceeding has been commenced in relation to a claim within the basic limitation period and ultimate limitation period applicable to the claim and there is another claim (the “related claim”) relating to or connected with the first mentioned claim, the following may, in the court proceeding, be done with respect to the related claim even though a limitation period applicable to either or both of the claims has expired:

(a)proceedings by counterclaim may be brought, including the addition of a new party as a defendant by counterclaim;

(b)third party proceedings may be brought;

(c)claims by way of set off may be advanced;

(d)new parties may be added or substituted as plaintiffs or defendants.

 

Nowhere within section 22(1) is the court mentioned as an actor. Typically, a section granting discretion to the court has phrases such as the court may or with leave of the court. However, these are not present within section 22(1). As is argued below, the plain wording of the section can be seen to empower litigants rather than the court.

 

I say litigants because the section has a condition precedent requiring that a court proceeding  be already commenced. This is reflected in the introductory phrase ‘ìf a court proceeding has been commenced’ and by use of the phrase ‘related claim’. Therefore, the section has no application to those who are not already engaged in litigation.

 

The plain wording of sections 22(1)(a)-(d), supports the notion that the section empowers litigants rather than the courts. These subsections provide various steps that litigants can take rather than must take. The section does not permit the court to unilaterally advance these options or impose these terms on parties. To do so under the guise of section 22(1) would amount to judicial activism and require a rewriting of the legislation, which we know is not allowed.

 

Now inspecting sections 22(a)-(d), these sections empower litigants. This proposition is supported through the use of the word ‘may’. As set out in section 29 of the Interpretation Act, ‘may’ is to be construed as permissive and empowering.

 

So now that we have established that section 22(1) empowers litigants and not the court, what is the role of section 22(2)?

Section 22(2) of the Limitation Act reads:

 

(2) Nothing in subsection (1) gives a person a right to commence a court proceeding under subsection (1) (a) or (b) in relation to a claim for contribution or indemnity after the expiry of a limitation period applicable to that claim.

 

It can be easily deciphered that the plain wording of the section limits the powers of litigants in subsection (1) (a) and (b) in relation to specific claims for contribution and indemnity. However, what is unclear is the meaning of the term ‘right’. Notably, throughout Master Elwood’s interpretation he does not specifically examine this term.

 

The Interpretation Act defines ‘right’ to include a power, authority, privilege and licence. Given the context of the section, we can discern that the Act is not referring to a licence. Therefore, to paraphrase the provision: ‘nothing in subsection (1) gives a person the power, authority or privilege to commence a court proceeding under subsection (1)(a) or (b) in relation to a claim for contribution or indemnity after the expiry of a limitation period applicable to that claim.’

 

Now that we’ve shown our work, we begin to see a similar interpretation to that of Master Elwood’s emerge in that section 22(2) removes any power that might be granted by section 22(1) from litigants to commence third party proceedings for claims of contribution and indemnity after the expiry of a limitation period.

 

Here I will assert that there are two possible ways section 22(2) limits the power of litigants within section 22(1). First, it completely precludes the commencement of third party proceedings for claims of contribution and indemnity after the expiry of a limitation period. Second, it could allow for the commencement of third party proceedings for claims of contribution and indemnity after the expiry of a limitation period but does not grant litigants a right to do so above the court’s discretion granted in Rule 3-5.

 

As statutory interpretation is somewhat fluid, there are a number of ways to continue our interpretation. We could begin the Rizzo & Rizzo style of analysis or we could also look to how the term right is used within the Limitation Act itself. In this case, I would prefer the latter and then jump into the modern approach to statutory interpretation. The latter gives credence to the presumption of consistent expression. It would further delineate our understanding from the 3 generic terms we’re currently working with. As set out by Sullivan in the Construction of Statutes, “the legislature is presumed to avoid stylistic variation. Once a particular way of expressing a meaning is adopted, it is used each time that meaning is intended.”

 

Unfortunately, this is where we finish as the thrust of this article was to demonstrate that Master Elwood did not show his work; and in doing so, he built an interpretation on a fallacy. When I first read the decision, I disagreed with his interpretation based on the fact he jumped to conclusions. Now, I do believe that he may have a plausible interpretation but the door is still open as there are errors within the decision.

 

Anyways, just like high school calculus, always show every step when engaging in statutory interpretation. Otherwise, you will only get part marks and the end result will be confusing.

 

By George J Hall

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