Canada: When Does The Clock Start To Run? Contribution Claims Under Alberta’s Tort-Feasors Act

At common law, a plaintiff who has been injured as a result of the acts of two or more tort-feasors - the party committing the wrongdoing - can sue any one of them to recover 100 per cent of his or her damages that result from the wrongdoing. The tort-feasor held liable is then left without recourse against the other joint tort-feasor(s) who were not sued by the plaintiff.

Alberta, like most other common-law jurisdictions, has remedied this problem by enacting the Tort-feasors Act,¹ which provides a statutory right of action to a tort-feasor for contribution and indemnity against other joint tort-feasor(s). However, that right of action must be considered in light of the province's limitations period.

Consider the following two Court of Appeal decisions which have dealt with attempts by tort-feasors to bring a claim against joint tort-feasors.

In Howalta v. CDI,² the Alberta Court of Appeal addressed the issue of the ability of a tort-feasor (tort-feasor #1) to advance a claim for contribution against another (tort-feasor #2) who is protected from judgment vis-à-vis the plaintiff by a procedural bar (for example, when the plaintiff's claim against tort-feasor #2 is statute barred). In holding that tort-feasor #1's claim for contribution would also be barred, the Court recognised the potential unfairness to tort-feasor #1, but concluded that it was bound by the strict wording of the Tort-feasors Act.

Similarly, in CNRL v. Arcelormittal,³ the Court of Appeal followed Howalta, holding that the Tort-feasors Act imposes a condition precedent to a claim for contribution: A tort-feasor can claim contribution only from a tort-feasor "who is or would, if sued, have been liable in respect of the same damage". If tort-feasor #2 cannot be directly liable to the plaintiff, then tort-feasor #1 can have no right of contribution against tort-feasor #2, irrespective of the fact that tort-feasor #2 may have caused or contributed to the loss.

Essentially, a claim for contribution and indemnity, in the face of a procedural bar (such as a limitations defence), has been held to be derivative of the plaintiff's claim against tort-feasor #2. Accordingly, if a plaintiff cannot succeed against tort-feasor #2, then tort-feasor #1 can have no valid claim against tort-feasor #2 for contribution or indemnity.

As is evident, the current state of the law gives rise to a substantial problem in the event of the late-suing plaintiff. For example, if a plaintiff waits to commence proceedings against tort-feasor #1 until just before the expiry of the limitation period, and does not sue tort-feasor #2, who may have caused or contributed to the plaintiff's damages, it leads to an inherently unfair situation whereby tort-feasor #1 might be out of time to advance a claim for contribution against tort-feasor #2, as the limitation period governing the plaintiff's claim against tort-feasor #2 may have already expired. Due to the plaintiff's inaction, tort-feasor #1 may be significantly prejudiced because the plaintiff would then be able to recover 100 per cent of his/her damages from tort-feasor #1, despite the fact that tort-feasor #2 may have caused or contributed to the loss.

The Alberta's Limitations Act⁴does not expressly state when a claim for contribution arises. As a result, the problem of the late-suing plaintiff persists. Recognizing this unfairness, a potential amendment to the Alberta Limitations Act is being considered.

On May 20, 2014, Alberta Justice and the Solicitor General issued a paper inviting submissions on the issue of limitation periods for contribution claims under the Tort-feasors Act. In particular, members of the Alberta Bar were asked to comment on the current state of the law with respect to contribution claims and the problem of the late-suing plaintiff, in light of the decisions in Howalta and CNRL.

During this process, Alberta Justice and the Solicitor General noted that other common law jurisdictions in Canada have specifically addressed the issue of when the limitation period for contribution and indemnity claims begins to run by statute. Furthermore, they noted the earlier decision of Dean v. Kociniak,⁵ dating back to 2001, wherein the Alberta Court of Queen's Bench held that the limitation period applicable to a tort-feasor's claim for contribution and indemnity from a second tort-feasor does not start to run from the time that the plaintiff's limitation period begins to run (typically, the date of the injury) but rather from the date of the "injury suffered by the tort-feasor", which is the date on which the second tort-feasor failed to contribute to the first tort-feasor.

In Dean, the Court engaged in a comprehensive review of the legislation governing limitation periods for claims for contribution, and held that the general application of the 'discoverability' rule requires the limitation period to be construed from when the moving tort-feasor knew or ought to have known of his claim against the second tort-feasor.

While the analysis in Dean is certainly persuasive, it is an earlier, lower court decision, and runs contrary to the Court of Appeal's decisions in Howalta and CNRL, which are currently binding in Alberta. This means that, for now, under the current state of the law of Alberta, it is imperative that a careful assessment of the plaintiff's claim is undertaken, as soon as possible following a notice of a claim, to ensure that any actions for contribution are commenced within the limitation period applicable to the plaintiff's claim against the party from whom contribution is sought.

In the meantime, it will be interesting to see what changes the Ministry's review will generate. We will keep watching and updating you on developments in this area of the law.

Footnotes

[1] Tort-feasors Act, R.S.A. 1980, c. T-6.

[2] Howalta Electrical Services Inc. v. CDI Career Development Institutes Ltd., 2011 ABCA 234.

[3] Arcelormittal Tubular Products Roman S.A. v. Fluor Canada Ltd., 2013 ABCA 279.

[4] Limitations Act, R.S.A. 2000, c. L-12, as amended.

[5] Dean v. Kociniak, 2001 ABQB 412.

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