Does the Discovery Principle Apply to Various Time Limits Within the Residential Tenancies Act, 2006?

Generally, Landlord Tenant Board Proceedings As Governed By the Residential Tenancies Act, 2006 and Involving Prescribed Limitation Periods, Being Time Limits, Must Be Started Within the Prescribed Limitation Period Even If the Time Limit Begins Before the Any Wrongdoing Is Yet Known.

Understanding When It Is Too Late to Start Legal Proceedings Due to An Express Limitation Period

Notice to Evict Document Typically, but with some exceptions, our laws contain limitation periods, being time limits, that restrict how long a person may wait before starting legal proceedings. If a person waits too long, the right to start legal matter is lost, or what is known legally as statute barred.  The reason for a time limit on starting a legal matter is to require that proceedings get addressed without delay and to ensure effectiveness of the justice system whereas findings of genuine truth is a priority and if matters are delayed too long, witness memories may fade, evidence may be lost, and injustice may result. Additionally, time limits provide a sense of relief to those who would otherwise endure an unending risk of legal proceedings.

The Law
How Long Are the Express Limitation Periods Within the Residential Tenancies Act, 2006?

For many legal issues that may arise between a landlord and tenant, and would be heard by the Landlord Tenant Board within the governance prescribed by the Residential Tenancies Act, 2006, S.O. 2006, Chapter 17, an express limitation period of one year is provided.  Examples include, among various others:

  • The one year limit per section 29(2) of the Residential Tenancies Act, 2006 within which a tenant may commence an Application for failure to maintain a rental unit, for harassment by a landlord, for interference by a landlord, or for the changing locks by a landlord;
  • The one year limit per section 57(2) of the Residential Tenancies Act, 2006 within which a tenant may commence an Application for a bad faith eviction by a landlord;
  • The one year limit per section 98(2) of the Residential Tenancies Act, 2006 within which a tenant may commence an Application for the failure by a landlord to reasonably provide consent to sublet a rental unit; and
  • The one year limit per section 136(2) of the Residential Tenancies Act, 2006 within which a tenant may commence an Application for an determination of the legality of a rent increase.
Does the Time Limit Start When the Wrongdoing Occurs or When the Wrongdoing Becomes Known?

Interestingly, and unlike the Limitations Act, 2002, S.O. 2002, Chapter 24, Schedule B which is the law that applies to most legal issues, the express limitation periods within the Residential Tenancies Act, 2006 begin when the triggering event occurred rather than when the triggering event becomes known or becomes what is legally referred to as "discovered".

The issue of whether the express limitation periods, being the time limits, within the Residential Tenancies Act, 2006 begin when the alleged wrongdoing was discovered, such as would be applicable for legal matters subject to the Limitations Act, 2002, or whether the time limits begin upon another event, such as when the alleged wrongdoing occurred, even unknowingly occurred, was recently addressed by the Divisional Court in the matter of Sharma v. Sandhu, 2020 ONSC 6536 wherein it was said:

[13]  The appellants determined that the respondent had leased the premises to another party in December of 2017. Their application to the LTB was commenced in June of 2018, several months after the one-year anniversary of their having vacated the premises. Their position is that the cause of action against the respondent was not discovered by them until December of 2017 and the one-year limitation provided by the RTA would only begin to run at that time.  In support of their position they rely on sections 4 and 5 of the Limitations Act, 2002, S.O. 2002, c. 24.

[14]  I agree with the LTB that the application was not brought within the applicable limitation period.

[15]  The appellants concede that their application was brought under s. 57(1)(b) of the RTA.  Section 57 (2) of the RTA provides that no application may be made under s. 57(1) more than one year after the former tenant vacated the rental unit.

[16]  Section 4 of the Limitations Act, 2002 provides generally that a proceeding shall not be commenced in respect of a claim after the second anniversary of the day on which the claim was discovered.  Section 5 of that Act provides, among other things, that a claim is discovered on the day which the person making the claim knew or ought reasonably to have known that the damage had occurred.

[17]  Clearly, the commencement of the limitation period in s. 57(2) of the RTA conflicts with the commencement of the limitation period in s. 4 and s. 5 of the Limitations Act, 2002.

[18]  Section 3(4) of the RTA provides that if a provision of the RTA conflicts with the provision of another Act, the RTA applies.  It follows that s. 57(2) of the RTA prevails over s. 4 and s. 5 of the Limitations Act, 2002.

[19]  I am also not persuaded that the common law principle of discoverability has any application when considering s. 57 of the RTA.

[20]  At para. 37 of Peixeiro v. Haberman 1997 CanLII 325 (SCC), [1997] S.C.J.  No. 31 the Supreme Court of Canada held that the discoverability rule is an interpretative tool for the construing of limitations statutes and ought to be considered each time a limitations provision is in issue. The court adopted the following passage from Fehr v. Jacob (1993) 1993 CanLII 4407 (MB CA), 14 C.C.L.T. (2d) 200 (Man. C.A.):

…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.

[21]  Section 57(2) sets the time from which the clock runs from a precise event, namely, the date the tenant vacates the rental unit. The starting of the clock is in no way dependent upon the state of the tenant’s knowledge. It follows that the discoverability rule cannot be used as proposed by the appellants to extend the one-year period prescribed by the legislature.

Accordingly, as per the Sharma case, the time limits begin when the triggering event occurs, even if the wrongful act is unknown.  To summarize the decision in Sharma, a case involving an alleged bad faith eviction upon which a former tenant may apply to the Landlord Tenant Board for compensation, it was said that whereas section 59(2) of the Residential Tenancies Act, 2006 requires that a tenant apply within one year of vacating the rental unit, the court ruled that indeed the time limit begins when the tenant vacates, meaning moves out, rather than when the tenant learns that the eviction was, allegedly, performed in bad faith.

Summary Comment

The express limitation periods within the Residential Tenancies Act, 2006, being time limits to initiate legal proceedings by applying to the Landlord Tenant Board for compensation or other legal remedies, begin when the triggering event occurs rather than when the issue becomes known whereas the prescribed limitation periods within the Residential Tenancies Act, 2006 oust, meaning overrule, the prescribed limitation periods within the Limitations Act, 2002, as well as the common law discovery principles.

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