Canada: When Does The Clock Start To Run In A Wrongful Termination Case?

On June 28, 2019, the Divisional Court denied leave to appeal the decision of Justice Perrell in Iluyomade v. Toronto Community Housing Corp., 2018 ONSC 7727 (CanLII)("Iluyomade").

The case was a rule 21 motion to dismiss, inter alia, the Plaintiff's claim as against three of his former co-workers ("the moving defendants"). The question before the motion judge was whether to strike out Mr. Iluyomade's claim on the ground that it had no chance of success at trial. Specifically, the moving defendants argued that the claim was brought more than two years after it was discovered.

The Plaintiff, Mr. Iluyomade, was terminated from his employment on February 25, 2014 and, on February 5, 2016, brought a wrongful dismissal action against his employer that included a claim for intentional infliction of mental suffering against the moving defendants.

The moving defendants argued that the alleged tortious actions, which began in 2013, took place more than two years before Mr. Iluyomade brought his claim.

In consideration was whether Mr. Iluyomade was required to bring a claim against his co-workers while he still had the hope of continuing his career with the employer. The Court accepted the Plaintiff's argument that there was a reasonable prospect of success to the Plaintiff's claim. Specifically, the Court accepted the Plaintiff's submission that a lawsuit against his co-workers was not an appropriate means of dealing with his issues at work while he was still employed and seeking to advance in the company.

The appropriate means requirement at section 5(1)(a)(iv) of the Limitations Act, 2002 reads:

A claim is discovered on the earlier of the day on which the person with the claim first knew that, having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it; and the day on which a reasonable person with the abilities and in the circumstances of the person with the claim first ought to have known...

The Facts

Mr. Iluyomade began working for his employer, the Toronto Community Housing Corporation, in 2011 as a Mental Health Liaison. In June 2013, according to the statement of claim, he was a witness in an Ombudsman investigation into discriminatory practices at the TCHC.

After the report was released, Mr. Iluyomade alleges that he was immediately subjected to company-wide blame, isolation, bullying and harassment led by the moving defendants – all of whom were his superiors and one of whom was the CEO of the company. Several months later, in February 2014, Mr. Iluyomade alleges he was fired.

The Decision

Justice Perell determined that Mr. Iluyomade's cause of action against the moving defendants had crystalized by the end of 2013; however, a legal proceeding would not have been the "appropriate means" to seek a remedy until after he lost his job.

As Justice Perell stated in paragraph 128 of the decision:

In January 2014, Mr. Illuyomade was attempting to preserve and advance his place at TCHC, and he certainly would have killed his prospects by suing the CEO....a proceeding did not become an appropriate means to seek a remedy until February 25, 2016, when it was no longer nobler to suffer the slings and arrows of outrageous fortune and it was time for Ms. Iluyomade to arm against his sea of troubles.

The decision acknowledges the inherent power imbalance that exists between employees and employers. Employees who are wronged in the workplace cannot, practically speaking, immediately file a lawsuit against their employer and superiors if they are also trying to preserve their employment and remedy their situation at work. As the Supreme Court of Canada has pronounced, work is one of the most fundamental aspects in a person's life and an essential component of his or her sense of identity, self-worth and emotional well-being. Employment cases have been distinguished from commercial cases by the Supreme Court of Canada through the Court's recognition of the power imbalance and the centrality of work to personal purpose.

Having said that, Justice Perell did not make a final order about the availability of a limitations period defence and held that the moving defendants could reassert their limitations defence at trial.

Is there an Appropriate Means Test?

While cases so far have dealt "most often" with appropriate means in two circumstances (i.e., where the defendant was undertaking steps to ameliorate the loss; and where an alternative dispute resolution process had not run its course), the Ontario Court of Appeal has found that those two circumstances are by no means an exhaustive list see Nasr Hospitality Inc. v. Intact Insurance, 2018 ONCA 725 at paras 50-51.

In Gillham v. Lake of Bays (Township), 2018 ONCA 667 ("Gillham"), the Ontario Court of Appeal solidified the well-known principle that when it comes to s. 5(1)(a)(iv) of the Limitations Act (appropriate means), each case must be decided on its own facts and there is no single list for what constitutes appropriate means (see para 35).

The appropriate means criterion will require a fact-specific and contextual inquiry. Whether an action is appropriate will depend on the specific factual or statutory setting of each individual case and there are many factual issues that will influence the outcome (See Presidential MSH Corporations v. Marr Foster & Co. LLP, 2017 ONCA 325 ("Presidential") at para 18; Brown v. Baum, 2016 ONCA 325 at para 21).

The court in Gillham, which dealt with a construction action, found that it was appropriate for the plaintiffs to "wait and see" before commencing a proceeding:

37 Here, the motion judge failed to consider "the specific factual or statutory setting" of the case before him and determine whether it was reasonable for the appellants not to immediately commence litigation but to "wait and see" if the 1 ¼ inch sinking of the deck pier observed in 2009 would worsen over time or if the issue would resolve once the stone retaining wall had settled, as had been suggested to the appellants by Mr. MacKay. Neither Royal Homes nor Mr. MacKay believed the problem was serious, or due to the manner of construction. This evidence does not support the conclusion that the appellants knew or ought to have known in 2009 that their loss was not trivial and initiating legal proceedings was the appropriate means to remedy their loss.

(Emphasis added)

The case law demonstrates that the statutory appropriate means requirement is broader than the common law principle of discoverability. Indeed, the appropriate means requirement was not an element of the former limitations statute or the common law discoverability rule. It was added by the Limitations Act, 2002 to deter needless litigation (see Presidential at para 48).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.