In Browne v Meunier, 2023 ONCA 223,[1] the Court of Appeal for Ontario recently confirmed that the doctrine of discoverability applies to the Real Property Limitations Act (RPLA).[2]
Background
By way of brief background, the appellants purchased a cottage in 2017 situated on an inlet of the St. Lawrence River known as Grass Creek, and the respondents owned the neighbouring property, which they had purchased in 2015. When the appellants purchased their property, they believed that the property included a dilapidated boat house along the shore, which they wanted to demolish. However, they were surprised to discover that the boat house, which was built in 1969 by the respondents’ predecessors in title, belonged to the respondents. The appellants brought an action seeking, among other relief, a declaration that the boat house interfered with their riparian rights of access to the St. Lawrence River.[3]
What is Discoverability?
The Supreme Court of Canada has recognized that limitation periods may be subject to a rule of “discoverability,” which dictates that a cause of action will not accrue for the purposes of the running of a limitation period until “the material facts on which [the cause of action] is based have been discovered or ought to have been discovered by the plaintiff by the exercise of reasonable diligence.”[4]
Trial Judge Found Discoverability Does Not Apply
At trial, the trial judge found that the appellants’ riparian rights were violated. The trial judge also found that the common law discoverability concept should not be read into the RPLA, noting that the legislatures’ choice to omit reference to discoverability in the RPLA (except in specific sections) indicates that discoverability as a general concept was not intended to apply in real property matters.[5] As such, the trial judge concluded that the appellants were time-barred from pursuing an action to enforce their rights, as the limitation period for bringing an action began to run from the time the boat house was constructed in 1969. Accordingly, the appellant’s riparian rights were extinguished by operation of ss. 4 and 15 of the RPLA.
The appellants appealed, primarily arguing that the trial judge misapprehended the application of the discoverability rule to the RPLA (in particular, s. 4 of the RPLA). The respondents cross-appealed on the basis that the trial judge erred in their assessment of the infringement of the appellants’ riparian rights. For the purposes of this blog, we will be focusing on the appeal court’s decision with respect to the applicability of the discovery rule to the RPLA.
The Court of Appeal for Ontario Confirms That the Doctrine of Discoverability Applies to the RPLA
As noted above, the appellants argued, among other things, that the trial judge erred in finding that the discoverability rule does not apply to s. 4 of the RPLA. For ease of reference, s. 4 of the RPLA is reproduced below:
No person shall make an entry or distress, or bring an action to recover any land or rent, but within ten years next after the time at which the right to make such entry or distress, or to bring such action, first accrued to some person through whom the person making or bringing it claims, or if the right did not accrue to any person through whom that person claims, then within ten years next after the time at which the right to make such entry or distress, or to bring such action, first accrued to the person making or bringing it.
The Court of Appeal for Ontario disagreed with the trial judge’s finding in relation to the applicability of the discovery rule, noting that the trial judge failed to consider how the common law rule of discoverability interacts with the provisions of the RPLA. The appeal court referred to Pioneer Corp. v. Godfrey, 2019 SCC 42 (CanLII), [2019] 3 SCR 295, in which the Supreme Court clarified that the applicability of the discoverability rule to a statutory limitation period provision is a matter of statutory interpretation (i.e. ascertaining how the legislature intended to change the law through the statutory text it enacted) and the discoverability rule can be understood to apply even where it is not expressly referenced in the provision.[6] Additionally, the Court of Appeal reiterated the proposition set out in Pioneer Corp., namely that the interpretive presumption that a statutory limitation period premised on the accrual of an action begins to run when the facts establishing the cause of action were known or ought to have been known by a reasonably diligent person.
The Court of Appeal found that, when applying the proposition articulated in Pioneer Corp. to the interpretation of s. 4 of the RPLA, the logical conclusion is that discoverability must apply to that section. In this regard, the court noted that s. 4 of the RPLA expressly references the accrual of the action and not some external event. Accordingly, the court concluded that the running of the limitation period under s. 4 would be tolled until the material facts constituting the infringement of the riparian rights of access to the river were discovered or were discoverable by a reasonably diligent person in the circumstances of the rights holder.[7]
Although the Court of Appeal disagreed with the trial judge’s reasoning with respect to the rule of discoverability and its application to s. 4 of the RPLA, it agreed that the appellants’ right of action was extinguished. The appeal court reached this conclusion as the infringement to the riparian rights of the appellants’ predecessors in title would have been obvious as soon as the boat house was built in 1969, and the transfer of title to the appellants could not revive the extinguished cause of action.
What is the Importance of This?
The Court of Appeal in Browne provides important guidance on the applicability of the common law rule of discoverability to the RPLA. As noted above, the court confirmed that the discoverability rule applies to s. 4, meaning the limitation period begins to run when the facts establishing a cause of action have been discovered or ought to have been discovered by the rights holder by the exercise of reasonable diligence. With the transfer of title not reviving actions, this may eliminate many actions for real property claims and make it even more important that prospective purchasers carefully investigate the property before purchase.
[1] Browne v Meunier, 2023 ONCA 223 (CanLII) [Browne].
[2] Real Property Limitations Act, RSO 1990, c L 15 [RPLA].
[3] Browne v Meunier, 2023 ONCA 223 (CanLII) at para 2-4.
[4] Pioneer Corp. v. Godfrey, 2019 SCC 42, [2019] 3 S.C.R. 295, at para 31; Central Trust Co. v. Rafuse, 1986 CanLII 29 (SCC), [1986] 2 S.C.R. 147, at p. 224; Ryan v Moore, 2005 SCC 38 (CanLII), [2005] 2 S.C.R. 53, at paras 2 and 22.
[5] Browne et al. v. Meunier et al., 2022 ONSC 3118 at para 26.
[6] Pioneer Corp. v. Godfrey, 2019 SCC 42, [2019] 3 S.C.R. 295, at para 36.
