Here’s a wake-up call for those of you handling breach of insurance contract claims under commercial general liability (CGL) and other types of business insurance policies for clients. (more…)
Archive for the ‘Limitations Act’ Category
Ontario Court of Appeal: One-year statutory limitation period applies to business property loss claimsSeptember 11, 2013
Today’s decision of the Court of Appeal for Ontario in Streamline Foods Ltd. v. Jantz Canada Corporation, 2012 ONCA 174 [“Streamline Foods”] deals with amendment of pleadings after the expiry of a limitation period and confirms that, with the exception of the Solicitors Act, the doctrine of special circumstances has expired.
In Streamline Foods, The appellant moved unsuccessfully to amend its statement of claim by adding its parent corporation as a plaintiff and by adding assertions that it was the parent corporation that was entitled to some of the damages claimed. On appeal, the argument was that the motion judge erred in holding that this was not a case of misnomer and further erred in failing to find that s. 21(1) of the Limitations Act, 2002 did not apply to plaintiffs and that the doctrine of special circumstances continues to permit the addition of plaintiffs based on special circumstances.
The appeal panel (per Simmons, Cronk and Watt JJ.A.) agreed with the motion judge and dismissed the appeal, noting that” in order to advance a claim on behalf of the parent corporation, it was necessary to add the parent corporation as an additional party and also to plead additional material facts to support the parent corporation’s claims.” The Court of Appeal concludes:
 This, in our view, is not misnomer or misdescription. The appellants were not seeking to correct the name of a party; rather, they were seeking to add a party and to pursue that party’s claims.
 On these facts, the special circumstances doctrine, even if it survived the enactment of the Limitations Act, 2002, would not assist the appellants.
 In any event, in our view, Joseph v. Paramount Canada’s Wonderland 2008 ONCA 469 stands for the proposition that the special circumstances doctrine did not survive the enactment of the Limitations Act, 2002, as the appellants seek to argue. A challenge to that determination would require consideration by a five-person panel of this court.
Kovachis v. Dunn, 2011 ONSC 4174 (CanLII) confirms that failure to renew a writ of fieri facias (also referred to as a writ of seizure and sale or writ of execution) within the 20-year limitation period under the old Limitations Act, R.S.O. 1990, c. L.15 (the old Act) results in a time-bar of the enforcement of the underlying judgment under the transition provisions of the Limitations Act, 2002, S.O. 2002, C. 24, Sch. B, (the new Act). (more…)
Article 28(1) An action for damages must be brought, at the option of the plaintiff, in the territory of one of the High Contracting Parties…(2) Questions of procedure shall be governed by the law of the Court seized of the case.Article 29(1) The right to damages shall be extinguished if an action is not brought within two years, reckoned from the date of arrival at the destination, or from the date on which the aircraft ought to have arrived, or from the date on which the carriage stopped.(2) The method of calculating the period of limitation shall be determined by the law of the Court seized of the case.
“…In common law jurisdictions, the expiry of a statutory limitation period does not extinguish the underlying claim, but rather creates a procedural bar to proceeding with the claim. The appellant submits that the two-year period laid down by the article 29 has a fundamentally different character and that after two years, the claim is extinguished. It follows, in the appellant’s submission, that when the statement of claim expired for want of service after the two year prescription in article 29 had expired, the Warsaw Convention claim was extinguished and there was nothing to revive.
 We disagree. In our view, once a claim is issued within the two-year limitation period, article 29 of the Warsaw Convention has been satisfied and the claim then falls to be governed by the procedure in the jurisdiction where the claim has been issued. Any subsequent procedural requirements, including those relating to the time for service or renewal of the statement of claim, are governed by the Rules. This is apparent from article 28(2) of the Warsaw Convention, which specifically provides that the procedure of the court seized of the claim governs. Indeed, the very requirement that service must be effected within six months is provided for by the Ontario Rules, not by the terms of the Warsaw Convention.
The Court of Appeal concludes:
 Applying the Rules of Civil Procedure and this court’s decision in Brown v. Humble does not violate any of the provisions of the Warsaw Convention – once the respondents complied with the requirement in article 29 that a claim be issued within the two-year period, they brought themselves within Ontario’s Rules. Pursuant to those Rules and the jurisprudence governing them, the nunc pro tunc extension to the time for service did not amount to the bringing of a new claim; the claim had already been “intentée” and the time for service of the existing claim was extended in accordance with Ontario procedure. Accordingly, we see no error in the master’s application of the Ontario Rules, as interpreted by decisions of this court.
Conflict of laws23. For the purpose of applying the rules regarding conflict of laws, the limitations law of Ontario or any other jurisdiction is substantive law.” 2002, c. 24, Sched. B, s. 23.
“The language used and the subject matter with which it deals demonstrate that what was sought to be achieved was a uniform international code, which could be applied by the courts of all the High Contracting Parties without reference to the rules of their own domestic law. The convention does not purport to deal with all matters relating to contracts of international carriage by air. But in those areas with which it deals—and the liability of the carrier is one of them—the code is intended to be uniform and to be exclusive also of any resort to the rules of domestic law.”
“ The plaintiff waited until two days before the expiry of the limitation period to issue his claim. There is no evidence that the defendant conducted itself in any way prejudicial to the plaintiff’s position. As the statement of claim was served after the expiry of the limitation period, nothing the defendant did could have any impact on the limitation issue. That said, I am not persuaded that the plaintiff is without remedy. I note that he was represented by a solicitor in issuing the claim (who was not counsel on the motion).”
On 13 October 2009, the claimant applied for permission to amend the Particulars of Claim to name “Mr Gabb t/a Heart of England Balloons” as the defendant in the limited company’s stead. However, the limitation period under the Montreal Convention had expired by then. While the Civil Procedure Rules in England and Wales (CPR Part 17.4(3) and CPR 19.5) allows for amendment to a party’s statement of case or a change of name of a party after expiry of a limitation period, the court held that the limitation defense under the Montreal Convention was substantive, and that procedural rules cannot normally be used to remove substantive rights.Under these circumstances, to allow a procedural amendment would be in conflict with the express provision of the Montreal Convention.
1) Naming: consumers are able to identify and understand their legal rights as debtors;2) Blaming: consumer complaints are enforced against collection agencies/debt collectors in breach of the CAA regulations; and3) Shaming: collection agencies that employ unfair, unlawful and unethical tactics are exposed as scofflaws and are subject to fines and possibly license suspension or revocation.
Getting harassed, threatened or berated by someone on the phone who probably also doesn’t pay their bills on time is nothing newAfter all, anyone who owns a computer and has internet access can find information about their legal rights from the helpful Ministry of Government Services website: Your Rights When Dealing With Collection Agencies (see backgrounder here)
Based upon the Ministry’s statistics above, some collection agencies/debt collectors are not getting the message about the new “Rules of the Road”. So, as a public service, I will endeavour to assist those in the debt collection industry who still think that the law does not apply to them, by using a case study of one particular collection agency that really, really, really needs to revise its debt collection notice letter.
Contact Resource Services Inc.,
P.O. Box 47009 2225 Erin Mills Parkway
Mississauga, Ont. L5K 2P0
PHONE: 1-800-673-2203 FAX: 905-403-1410
A National Collection Agency
“RE: ________ CREDIT CARD
AMOUNT OUTSTANDING: $xxxx.xx
COLLECTION REFERENCE: __________
THIS LETTER IS TO INFORM YOU THAT CONTACT RESOURCE SERVICES INC. RECENTLY PURCHASED YOUR ________ CREDIT CARD ACCOUNT. WE WOULD LIKE YOU AN OPPORTUNITY TO SATISFY YOUR ACCOUNT. YOU CAN DO SO BY CHOOSING ON THE FOLLOWING OPTIONS:
PAY $xxx.xx IN FULL SATISFACTION OF YOUR ACCOUNT; OR
MAKE CONSECUTIVE MONTHLY PAYMENTS OF $xx.xx, AND WE WILL DELETE THE ENTIRE INTEREST BALANCE OF $xxxx.xx; OR
CALL OUR OFFICE AT 1-800-673-2203 TO DISCUSS OTHER POSSIBLE ARRANGEMENTS.
IF YOU CHOOSE ONE OF THESE OPTIONS, YOU MUST DO SO ON OR BEFORE 2010/07/12. PLEASE CALL US WITH ANY QUESTIONS YOU MAY HAVE REGARDING YOUR ACCOUNT.
CONTACT RESOURCE SERVICES
But wait, there’s more. In slightly smaller but no less imposing capitalized font, the demand letter reads:
UNLESS YOU NOTIFY THIS OFFICE WITHIN 30 DAYS AFTER RECEIVING THIS NOTICE THAT YOU DISPUTE THE VALIDITY OF THE DEBT OR ANY PORTION THEREOF, THIS OFFICE WILL ASSUME THIS DEBT IS VALID. IF YOU NOTIFY THIS OFFICE IN WRITING WITHIN 30 DAYS FROM RECEIVING THIS NOTICE, THIS OFFICE WILL OBTAIN VERIFICATION OF THE DEBT OR OBTAIN A COPY OF A JUDGEMENT [sic] AND MAIL YOU COPY OF SUCH JUDGEMENT [sic] OR VERIFICATION. THIS IS AN ATTEMPT TO COLLECT A DEBT AND ANY INFORMATION OBTAINED WILL BE USED FOR THAT PURPOSE. THIS OFFICE WILL PROVIDE THE NAME AND ADDRESS OF THE ORIGINAL CREDITOR, IF REQUESTED BY YOU WITHIN 30 DAYS FROM RECEIVING THIS NOTICE.” [emphasis added]
The debt collection letter then concludes with an easy-to-use detachment for Bank use or to return this portion with a cheque or money order payment. Responsible blogging requires due diligence and fact-checking. Background checks and a Google search yields some key information:
1. CRC is an Alberta corporation (but likely has an extra-provincial registration in Ontario), and is self-described as a “National Collection Agency”;
2. CRC is owned by one, Michael A. Cornale, Sr., of Mississauga, Ontario, Canada;
3. Mr. Cornale, Sr. is, coincidentally, a Past President, (1981-1982) of the International Association of Commercial Collectors, Inc.;
4. CRC is a popular topic of discussion on the Canadian Money Advisor forum: http://www.canadian-money-advisor.ca/company/2976.html;
5. Mr. Cornale, Sr. also operates another debt collection agency, Corporate Recovery Services Ltd. in Alberta;
6. In 1999, Mr. Cornale Sr., on behalf of his Alberta company, pleaded guilty to breaching the Alberta Fair Trading Act and provided an Undertaking to the Alberta Director of Fair Trading, which contained an agreed statement of facts that he used unlicensed collectors who also misrepresented their identities (including, in one instance, misleading a consumer that she was calling on behalf of Rogers Cantel legal department), both in writing and over the phone.
The Alberta Director of Fair Trading also issued a Cease and Desist Order against CRC on August 8, 2005 for misleading letters to debtors.
Here’s the bottom-line. This collection letter from Contact Resource Services Inc. is deceptive, misleading and likely constitutes unfair trading practice. If anyone receives such a notice they should immediately report it to the Ministry of Consumer Services.Here’s why. When an institutional creditor, such as a credit card company, writes off a credit card account debt (also known as a “charge-off”), it does so on the basis that it has determined the debt is uncollectible (i.e. a bad debt) and treats it as such for accounting and tax purposes.
If the credit card company then assigns this receivable/debt to a third party, such as a collection agency, the limitation period applicable to the original debt is not suspended or renewed. So, if the limitation period applicable to the original default has expired, then a subsequent demand by the same creditor or assignee of the debt is not lawful or legally enforceable.
Recall the wording of CRC’s collection letter above:
“UNLESS YOU NOTIFY THIS OFFICE WITHIN 30 DAYS AFTER RECEIVING THIS NOTICE THAT YOU DISPUTE THE VALIDITY OF THE DEBT OR ANY PORTION THEREOF, THIS OFFICE WILL ASSUME THIS DEBT IS VALID.”
This is simply a ruse to induce the consumer in responding to the debt collection letter, irrespective of the “validity of the debt”. In this example, the alleged debt dated back to the mid-1990’s and the original credit card supplier made its final demand in 2001 and then assigned it to CRC. (Ignore the fact that the credit card debt was originally around $300.00 and incurred by someone other than the alleged debtor).
This is the old “silence is an admission” trap. What happens then if the consumer does call CRC?
IF YOU NOTIFY THIS OFFICE IN WRITING WITHIN 30 DAYS FROM RECEIVING THIS NOTICE, THIS OFFICE WILL OBTAIN VERIFICATION OF THE DEBT OR OBTAIN A COPY OF A JUDGEMENT [sic] AND MAIL YOU COPY OF SUCH JUDGEMENT [sic] OR VERIFICATION.
The CAA and Regulation are explicit: collection agency notice letters are not to be used as fishing expeditions. Does calling the telephone number provided constitute consent to release of credit information? Not in the slightest, but, once they reel you in, good luck getting the hook out.
The subtle point is that CRC is trying to spring a trap on the unwary. Most non-lawyers are unfamiliar with limitation periods and how they work. Under the new Limitations Act, 2002, the former limitation of 6 years was repealed, subject to transitional provisions. The new Act specifies that no proceeding shall be commenced in respect of a claim, after the second anniversary of the day on which the claim was discovered. The fundamental issue is the meaning of the term ““acknowledgment” under s. 13.1 of the new Act, which reads:
S. 13(1) If a person acknowledges liability in respect of a claim for payment of a liquidated sum, … the act or omission on which the claim is based shall be deemed to have taken place on the day on which the acknowledgment was made.
(9) This section does not apply unless the acknowledgment is made to the person with the claim, the person’s agent … before the expiry of the limitation period applicable to the claim.[emphasis added]
In Hare v. Hare, 2006 CanLII 41650 (ON C.A.) , an appeal involving a claim made on a demand promissory note, the Court of Appeal for Ontario confirmed the well established rule that a demand notes matures as soon as it is delivered. The majority held (2:1) that that rule was not disturbed by the new Act. Thus, the limitation begins to run as soon as the money is advanced. However, the running of the limitation can be started afresh by an acknowledgment, such as a payment being made on account. (the Limitations Act was amended in response to the Hare decision)