Beasy Nicoll Engineering Limited v. GEM Health Care Group Limited, 2022 NSCA 44

Nova Scotia Court of Appeal Citation: Beasy Nicoll Engineering Limited v. GEM Health Care Group Limited , 2022 NSCA 44 Date: 20220530 Docket: CA 507097 Registry: Halifax Between: Beasy Nicoll Engineering Limited Appellant v. GEM Health Care Group Limited, the Town of Amherst, Mahon Architects Limited, Denis Mahon, Booth Engineering Limited, James Theakston, J.R. Maskell, John Doe No. 1 and John Doe No. 2 Respondents Judge: The Honourable Justice David P. S. Farrar Appeal Heard: January 20, 2022, in Halifax, Nova Scotia Subject:

Interpretation of Limitation of Actions Act , claims for contribution and indemnity after the limitation period has expired, amendments to pleadings to add third parties

Summary: On June 22, 2015, GEM Health Care Group Limited suffered damages as a result of a flood at its seniors’ complex in Amherst, Nova Scotia. It commenced action against the Town of Amherst on June 30, 2016. On April 18, 2017, the Town of Amherst added the appellant, Beasy Nicoll Engineering Limited, as a third party to the action. On November 20, 2020, GEM filed a motion to add Beasy Nicoll as a defendant. Beasy Nicoll objected to the motion, arguing that the limitation period for commencing action against it had expired, precluding GEM as adding it as a party.

On December 7, 2020, the motion was heard before Justice Heather Robertson. Robertson J. died prior to being able to render a decision. Justice Gerald R. P. Moir was assigned to review Robertson J.’s notes, the records and submissions of parties, and render a decision. By decision dated June 3, 2021, Moir J. allowed the motion and GEM was permitted to amend its action to add Beasy Nicoll as a party defendant. In doing so he relied on the Limitation of Actions Act , R.S.N.S. 1989, c. 258 , the former limitations Act .

He found that the Limitation of Actions Act , S.N.S. 2014, c. 35 , the new limitations Act , did not apply. Moir J. extended the limitation period pursuant to s. 3 of the former Limitation of Actions Act to allow GEM to file the amended action. Beasy Nicoll appealed, and GEM filed a Notice of Contention. Issues: 1. Should leave to appeal be granted? 2. What is the limitation period applicable to GEM’s claim against Beasy Nicoll? 3. If the limitation period has expired, does s. 22(

a) of the new Limitation of Actions Act permit GEM to add a claim against Beasy Nicoll?

Result: Leave to appeal granted; appeal allowed; and Notice of Contention dismissed. Justice Moir erred in finding that the former Limitation of Actions Act applied and then exercising his discretion to extend the limitation period under that Act . Both GEM and Beasy Nicoll submitted the new Limitation of Actions Act should have applied. Applying the provisions of the new Limitation of Actions Act , the limitation period against Beasy Nicoll expired, at the latest, in 2004. The question, therefore, became whether pursuant to s. 22(

a) of the new Limitation of Actions Act Beasy Nicoll could be added as a defendant even though the limitation period had expired. GEM could not rely on s. 22(

a) to add Beasy Nicoll as a party for two reasons: 1) GEM and Beasy Nicoll are not parties to the same proceeding; 2) Adding Beasy Nicoll as a party defendant would change the capacity in which it was sued. Both of these were pre-conditions to adding Beasy Nicoll under s. 22(a). Costs were awarded to Beasy Nicoll in the amount of $5,000, inclusive of disbursements. This information sheet does not form part of the court’s judgment. Quotes must be from the judgment, not this cover sheet. The full court judgment consists of 22 pages. Nova Scotia Court of Appeal Citation: Beasy Nicoll Engineering Limited v.

GEM Health Care Group Limited , 2022 NSCA 44 Date: 20220530 Docket: CA 507097 Registry: Halifax Between: Beasy Nicoll Engineering Limited Appellant v. GEM Health Care Group Limited, the Town of Amherst, Mahon Architects Limited, Denis Mahon, Booth Engineering Limited, James Theakston, J.R. Maskell, John Doe No. 1 and John Doe No. 2 Respondents Judges: Farrar, Bryson and Scanlan JJ.A. Appeal Heard: January 20, 2022, in Halifax, Nova Scotia Held: Appeal allowed with costs to the appellant, per reasons for judgment of Farrar J.A.; Bryson and Scanlan JJ.A. concurring

Counsel: James Boudreau and Selina Bath, for the appellant Andrew Sowerby, for the respondent GEM Health Care Group Limited Ian Dunbar, for the respondent Town of Amherst (not participating) Denis Mahon, respondent in person (not participating) Maurice Chiasson, for the respondent Booth Engineering (not participating) John O’Neill, for the respondent James Theakston (not participating) J.R.

Maskell, respondent in person (not participating) Reasons for judgment: [ 1 ] On June 20, 2016, by Notice of Action and Statement of Claim (the Action), the respondent, GEM Health Care Group Limited (GEM), sued the Town of Amherst for damages resulting from a flood on June 22, 2015 at a multi-unit seniors’ residential care facility which GEM owned and operated at 258 Church Street, Amherst (the Property). [ 2 ] GEM alleged that the Town of Amherst was negligent in the design, construction, operation, maintenance and repair of its storm water system which caused the flood. [ 3 ] Amherst defended the Action, and on April 18, 2017 commenced a third party proceeding against, among others, the appellant, Beasy Nicoll Engineering Limited (Beasy Nicoll).

Amherst claimed that Beasy Nicoll was negligent in providing engineering services for the construction of the Property and, in particular, in the design of a culvert placed adjacent to the Property to divert storm water. [ 4 ] On December 29, 2019, a representative of Beasy Nicoll was examined and confirmed that it was Beasy Nicoll’s decision that the culvert adjacent to the Property should be 24 inches in diameter. [ 5 ] There is no dispute Beasy Nicoll’s involvement in the design and construction of the culvert was completed, at the latest, by 1989.

The flood occurred more than 25 years later. [ 6 ] On December 7, 2020, Justice M. Heather Robertson heard a motion by GEM to amend the Action to add Beasy Nicoll as a defendant and to particularize its claim against it. On February 11, 2021, Justice Robertson died before she could issue a decision. On March 2, 2021, Chief Justice Deborah K. Smith appointed Justice Gerald R. P.

Moir to review the written submissions, recording, and Justice Robertson’s notes and render a decision. [1] [ 7 ] Beasy Nicoll opposed GEM’s motion on the basis that it was outside the limitation period provided in the Limitation of Actions Act , S.N.S. 2014, c. 35 (the new Limitation of Actions Act ). [ 8 ] By decision dated June 3, 202l, Justice Moir found that the new Limitation of Actions Act did not apply and that the Limitation of Actions Act , R.S.N.S. 1989, c. 258 (the former Limitation of Actions Act ) governed the motion. [ 9 ] Justice Moir then found he would exercise the court’s discretion under the former Limitation of Actions Act to allow the amendments, even if the motion to amend was made after the expiry of the limitation period.

Justice Moir made no determination of when the limitation period expired. [ 10 ] In the end, he allowed GEM’s motion to add Beasy Nicoll as a defendant and to particularize the claim against it. [ 11 ] Beasy Nicoll seeks leave to appeal, and if granted, appeals the decision of Justice Moir. [ 12 ] GEM has filed a Notice of Contention seeking to uphold the decision, albeit for different reasons. [ 13 ] For the reasons that follow I would grant leave to appeal, allow the appeal, and dismiss the Notice of Contention with costs to Beasy Nicoll in the amount of $5,000 inclusive of disbursements.

Issues [ 14 ] The issues arising from the Notice of Appeal and Notice of Contention have evolved as a result of the submissions of the parties. I would summarize them as follows: 1. Should leave to appeal be granted? (Notice of Appeal) It is not necessary to discuss this issue in any detail. GEM concedes leave should be granted; for reasons that will become apparent, I agree. 2. What is the limitation period applicable to GEM’s claim against Beasy Nicoll? (Notice of Appeal)

3. If the limitation period has expired, does s. 22(

a) of the new Limitation of Actions Act permit GEM to add a claim against Beasy Nicoll? (Notice of Contention) Standard of Review [ 15 ] Both parties submit, for different reasons, Justice Moir erred in law in applying the former Limitation of Actions Act . I agree. As a result of his failure to apply the new Limitation of Actions Act , Justice Moir did not address issues 2 and 3 above. As a result, I will be addressing those issues in the first instance and no standard of review applies.

Analysis Issue 2: What is the limitation period applicable to GEM’s claim against Beasy Nicoll? [ 16 ] Justice Robertson correctly identified the first issue to be determined on the motion to add Beasy Nicoll as a party was the applicable limitation period. At the outset of her reasons, she cites Rule 35.08 which provides that a judge may not join a party to a proceeding if the limitation period has expired on the claim to be advanced against that party: 35.08 Judge joining party

(1) A judge may join a person as a party in a proceeding at any stage of the proceeding. […]

(5) Despite Rule 35.08(1), a judge may not join a party if a limitation period, or an extended limitation period, has expired on the claim that would be advanced by or against the party , the expiry precludes the claim, and the person protected by the limitation period is entitled to enforce it. [Emphasis added] [ 17 ] Rule 35.08 must be read in conjunction with Rule 83.04 which provides: 83.04 Amendment to add or remove party

(1) A notice that starts a proceeding, or a third party notice, may be amended to add a party, except in the circumstances described in Rule 83.04(2).

(2) A judge must set aside an amendment, or part of an amendment, that makes a claim against a new party and to which all of the following apply: (

a) a legislated limitation period, or extended limitation period, applicable to the claim has expired ; (

b) the expiry precludes the claim ; (

c) the person protected by the limitation period is entitled to enforce it . (Emphasis added) […] 83.11 Amendment by judge

(2) An amendment cannot be made that has the effect of joining a person as a party who cannot be joined under Rule 35 - Parties, including Rule 35.08(5) about the expiry of a limitation period. [ 18 ] In Automattic Inc. v. Trout Point Lodge Ltd. , 2017 NSCA 52 , this Court made it clear that a party cannot be added to a proceeding when a limitation period has expired. Motion judges must, therefore, first determine the applicable limitation period.

There is no residual discretion for a motion judge to add defendants without making that inquiry ( Automattic , ¶38-42). [ 19 ] I therefore begin by determining the applicable limitation period for GEM’s claim against Beasy Nicoll. [ 20 ] The new Limitation of Actions Act came into force on September 1,

Section 23 provides: Transitional 23

(1) In this Section, (a) “effective date” means the day on which this Act comes into force; (b) “former limitation period” means, in respect of a claim, the limitation period that applied to the claim before the effective date. (2) Subsection (3) applies to claims that are based on acts or omissions that took place before the effective date, other than

claims referred to in

Section 11, and in respect of which no proceeding has been commenced before the effective date.

(3) Where a claim was discovered before the effective date, the claim may not be brought after the earlier of (

a) two years from the effective date; and (

b) the day on which the former limitation period expired or would have expired. [ 21 ] No action was started against Beasy Nicoll before the coming into force of the new Limitation of Actions Act on September 1, 2015. [ 22 ] The latest date that Beasy Nicoll could have provided engineering services in the design of the culvert is 1989. [ 23 ] Before Justice Robertson, and on appeal, GEM argued that the limitation period for commencing an action against Beasy Nicoll started to run on December 29, 2019, the date of the admission by Beasy Nicoll’s representative at discovery. [2] [ 24 ] It is apparent from its pre-hearing memorandum that GEM found itself in a difficult predicament.

If it argued the claim was discovered on June 22, 2015, the date of the flood, before the effective date of the new Limitation of Actions Act , the transitional provisions in s. 23 would have the limitation period expire on September 1, 2017. GEM had not commenced its action against Beasy Nicoll by that date. GEM argued the transitional provision did not apply. It had to take the position the claim was discovered at a later date to avoid the operation of s. 23(3). [ 25 ] In its pre-hearing memorandum, GEM relied on ss. 8(1)(

a) and 8(2) of the new Limitation of Actions Act as providing a two- year limitation period from the date of Beasy Nicoll’s admission: 36. Gem’s claim against Beasy Nicoll was not discovered until after the effective date of the LAA . Accordingly, the transitional limitation date of September 1, 2017 does not apply. 37. The LAA sets out the relevant timelines for when a party must bring a claim. Section 8(1)(

a) of the Act provides a two-year limitation period from “the day on which the claim is discovered.” The criteria that determine when a claim is discovered are set out in section 8(2) 8(2) A claim is discovered on the day on which the claimant first knew or ought reasonably to have known (

a) that the injury, loss or damage had occurred; (

b) that the injury, loss or damage was caused by or contributed to by

an act or omission; (

c) that the act or omission was that of the defendant ; and (

d) that the injury, loss or damage is sufficiently serious to warrant a proceeding. (emphasis added by GEM) Section 8(2)(

c) requires that not only must the claimant know (or ought reasonably to have known) that the damages occurred and were caused by

an act or omission, but the claim is not discovered until the claimant knows (or ought reasonably to have known) the identity of the party that committed the act or omission that caused the loss. Before a claim is discovered, it is necessary that the claimant know who committed the act or omission. 38. At the time it filed its Notice of Action against Amherst, Gem did not know and had no basis on which to believe that Beasy Nicoll designed, determined or specified the size, location, and diameter of the culvert adjacent to Centennial Villa. This fact was not discovered until Mr.

Nicoll admitted as much in his December 2019 discovery. Up to this point, it was Gem’s understanding that it was Amherst’s engineer who dictated what size culverts were to be used, consistent with Amherst’s culvert policy. This understanding was consistent with Amherst’s witnesses’ discovery evidence. 39. Accordingly, under section 8(2)(

c) of the LAA , Gem’s claim against Beasy Nicoll was not discovered until Mr. Nicolls’ admission at discovery on December 29, 2019. The limitation period for amending its Notice of Action to name Beasy Nicoll as a Defendant does not expire until December 29, 2021. [ 26 ] GEM’s argument focused on s. 8(2) of the new Limitation of Actions Act and seemingly ignored s. 8(1). I will set out s. 8 of the new Limitation of Actions Act in its entirety: General rules 8

(1) Unless otherwise provided in this Act, a claim may not be brought after the earlier of (

a) two years from the day on which the claim is discovered; and (

b) fifteen years from the day on which the act or omission on which the claim is based occurred.

(2) A claim is discovered on the day on which the claimant first knew or ought reasonably to have known (

a) that the injury, loss or damage had occurred; (

b) that the injury, loss or damage was caused by or contributed to by

an act or omission; (

c) that the act or omission was that of the defendant; and

(

d) that the injury, loss or damage is sufficiently serious to warrant a proceeding.

(3) For the purpose of clause (1)(b), the day

an act or omission on which a claim is based occurred is (

a) in the case of a continuous act or omission, the day on which the act or omission ceases; and (

b) in the case of a series of acts or omissions concerning the same obligation, the day on which the last act or omission in the series occurs. [Emphasis added] [ 27 ] For the purposes of s. 8, the legislation defines “claim”, “claimant” and “defendant” as follows:

Interpretation 2

(1) In this Act, (a) “claim” means a claim to remedy the injury, loss or damage that occurred as a result of

an act or omission; (b) “claimant” means a person who has a claim, regardless of whether the claim has been brought; (c) “defendant” means a person against whom a claimant has a claim, regardless of whether the claim has been brought. [ 28 ] When determining the applicable limitation period, Beasy Nicoll is a defendant and GEM is a claimant. [ 29 ] GEM’s argument that the “claim” was only discovered on December 29, 2019 does not assist it in avoiding the limitation periods in s. 8(1). The plain wording in s. 8(1) makes clear that a claim cannot be brought after the expiration of the earlier of (

a) two years from the day on which the claim is discovered; and (b) 15 years from the day on which the act or omission on which the claim is based occurred. [ 30 ] The effect of s. 8(1) was not lost on Justice Robertson.

She found after reviewing and hearing the arguments of the parties there were two possible limitation periods: [30] There are two possible limitation periods; two years from the date the claim was discovered or 15 years from the day on which the act or omission on which the claim is based occurred. [ 31 ] Beasy Nicoll’s work relating to this culvert was completed with its design in 1987 and certainly by 1989, when its designed culvert was installed and constructed.

Fifteen years from that date would be no later than 2004. [ 32 ] Logically “the earlier of” the two dates means when the first of the two limitations expires, whichever happens first or earliest the claim expires and with it the claimant’s opportunity to pursue the claim. [ 33 ] The flood occurred in 2015, more than 25 years after Beasy Nicoll’s involvement in the design and construction of the culvert at Centennial Villa. [ 34 ] [2004] is well before the claim was “discovered” and is the earlier of the two dates. [31] Paragraph 34 is the final paragraph written by Justice Robertson.

It is apparent she was of the view that the limitation period expired in 2004, being the earlier of the two dates. [32] The provisions of the new Limitation of Actions Act are not difficult to follow. Simply put, the limitation period against Beasy Nicoll expired on the earlier of two years following discoverability of the claim against it or 15 years from the date of the act or omission complained of.

As Justice Robertson found, and I agree, the latest the limitation period could have expired was 2004. [33] Justice Moir recognized that Justice Robertson was suggesting a different conclusion than what he was going to decide: [45] […] Justice Robertson suggested a different conclusion when she wrote para. 30 above: the limitations in the new statute apply in the absence of a transitional provision to the contrary. [34] Justice Moir did not determine the applicable limitation period and whether it had expired.

Instead, he relied on the discretion given to courts in s. 3(2) of the old Limitation of Actions Act to extend the limitation period. He concluded: [46] Subsection 3(2) of the old limitations [statute] gave the court a discretion to permit an action to proceed even if it was started after expiry of a limitation period. The judge must have “regard to the degree to which” (

a) the time limitation prejudices the plaintiff or any person whom he represents; and (

b) any decision of the court under this

Section would prejudice the defendant or any person whom he represents, or any other person. […] [49] Gem Health Care established the threshold in s.3(2)(

a) and (b). Without my exercise of the discretion, Gem would lose a right to claim against Beasy Nicoll on the very same basis as the parties will go to trial on the municipality’s third party claim. Factors in s.3(4) (a), (c), and (

f) are applicable. They support joining Beasy Nicoll. As regards (a), Beasy Nicoll’s involvement was brought to Gem’s

knowledge in 2017 and earlier knowledge is not proved. As regards (c), the length of time between the construction and the flood makes evidence “likely to be less cogent”. However, that evidence is going to be advanced in any event under the third party claim, and the trial judge will have to assess its cogency.

As regards (f), Gem acted promptly once Beasy Nicoll’s involvement became clear. [ 35 ] To understand Justice Moir’s reasoning, I will set out the applicable provisions of the old Limitation of Actions Act : Disallowance or invocation of time limitation 3(2) Where an action is commenced without regard to a time limitation, and an order has not been made pursuant to subsection (3), the court in which it is brought, upon application, may disallow a defence based on the time limitation and allow the action to proceed if it appears to the court to be equitable having regard to the degree to which (

a) the time limitation prejudices the plaintiff or any person whom he represents; and (

b) any decision of the court under this

Section would prejudice the defendant or any person whom he represents, or any other person.

(3) Where a time limitation has expired, a party who wishes to invoke the time limitation, on giving at least thirty days notice to any person who may have a cause of action, may apply to the court for an order terminating the right of the person to whom such notice was given from commencing the action and the court may issue such order or may authorize the commencement of an action only if it is commenced on or before a day determined by the court.

(4) In making a determination pursuant to subsection (2), the court shall have regard to all the circumstances of the case and in particular to (

a) the length of and the reasons for the delay on the part of the plaintiff; […] (

c) the extent to which, having regard to the delay, the evidence adduced or likely to be adduced by the plaintiff or the defendant is or is likely to be less cogent than if the action had been brought or notice had been given within the time limitation; […] (

f) the extent to which the plaintiff acted promptly and reasonably once he knew whether or not the act or omission of the defendant, to which the injury was attributable, might be capable at that time of giving rise to an action for damages;

(6) A court shall not exercise the jurisdiction conferred by this

Section where the action is commenced or notice given more than four years after the time limitation therefor expired. [ 36 ] There are a number of problems with Justice Moir’s reliance on the discretion provided to courts in the former Limitation of Actions Act including: 1. No action was started without regard to a time limitation as required by s. 3(2). 2. There was no motion by Beasy Nicoll before Justice Moir to terminate the right of GEM to commence an action as required by s. 3(3). 3. Neither party sought a remedy under the former Limitation of Actions Act , nor was it argued before Justice Robertson. 4.

Justice Moir did not determine when the limitation period expired but somehow formed the view that it could be extended. [ 37 ] There was no basis for Justice Moir to apply s. 3(2) to the facts of this case. His decision to extend the limitation period pursuant to the former Limitation of Actions Act is wrong in law.

GEM, appropriately, acknowledged this. [ 38 ] For these reasons, I would allow this ground of appeal and find that the limitation period for GEM to claim against Beasy Nicoll expired, at the latest, in 2004. [ 39 ] I would point out, on appeal, GEM shifted its focus from the discoverability argument it made on the motion and emphasized its alternative argument made before Justice Robertson, relying on s. 22 of the new Limitation of Actions Act . [ 40 ] I will now turn to that issue. Issue 3: If the limitation period has expired, does s. 22(

a) of the new Limitation of Actions Act permit GEM to add a claim against Beasy Nicoll? [ 41 ] GEM argues that even if the limitation period has expired, Beasy Nicoll may be added as a party defendant under s. 22(

a) of the new Limitation of Actions Act .

Section 22 provides: Claims added to proceedings

Notwithstanding the expiry of the relevant limitation period established by this Act, a claim may be added, through a new oramended pleading, to a proceeding previously commenced if the added claim is related to the conduct, transaction or events described inthe original pleadings and if the added claim (

a) is made by a party to the proceeding against another party to the proceeding and does not change the capacity in whicheither party sues or is sued; (

b) adds or substitutes a defendant or changes the capacity in which a defendant is sued, but the defendant has received,before or within the limitation period applicable to the added claim plus the time provided by law for the service of process, sufficientknowledge of the added claim that the defendant will not be prejudiced in defending against the added claim on the merits; or (

c) adds or substitutes a claimant or changes the capacity in which a claimant sues, but the defendant has received, before orwithin the limitation period applicable to the added claim plus the time provided by law for the service of process, sufficient knowledgeof the added claim that the defendant will not be prejudiced in defending against the added claim on the merits, and the addition of theclaim is necessary or desirable to ensure the effective determination or enforcement of the claims asserted or intended to be asserted inthe original pleadings. [Emphasis added] [42] This issue was addressed by the parties in their submissions before Justice Robertson but not explored by Justice Moir givenhis finding that the former Limitation of Actions Act applied. [43] GEM argues that the requirements of s. 22(

a) are met because the claim against Beasy Nicoll relates to the same series ofevents described in the original pleadings and the amendment would not change the capacity in which it is sued. There is a thirdrequirement as set out in s. 22(

a) that both the plaintiff and the proposed defendant must be parties to the same proceeding. [44] GEM’s argument fails for two reasons: 1. GEM and Beasy Nicoll are not parties to the same proceeding; 2. Adding Beasy Nicoll as a party defendant would change the capacity in which it is sued. [45] I will address each of these in turn. GEM and Beasy Nicoll are not Parties to the Same Proceeding [46] Beasy Nicoll is a third party.

Third party proceedings are separate proceedings which have a distinct identity even though theyproceed alongside the main action. [47] A main action and a third party claim have different procedural steps. Rule 4.11 of the Nova Scotia Civil Procedure Rules setsout the distinct procedural requirements of a third party claim. For example, a new notice of claim is issued and given by the defendant tothe third party. Rule 5.12 permits a respondent in an application to start an “independent proceeding” against a third party.

Moreover, athird party action may proceed even after the main action has been discontinued under Rule 9.02(5). [48] A third party who wishes to defend the main action must file two statements of defence: 1. In answer to the third party claim; and 2. In answer to the claim in the main action (Rule 4.12(3)(

a) and (b)). [49] In Scaffidi-Argentina v. Tega Homes Developments Inc., 2018 ONSC 4274, the Ontario Superior Court explained theprocedural differences between a main action and a third party action while recognizing the connection between them: [27] Strictly speaking a third party action is treated as a separate action. It must be issued in the same manner as a statement of claim.It is given a separate file number (the main action number with a letter suffix) and it must be separately set down for trial.

It ispresumptively to be tried at or immediately after the trial of the main action but the court may order a separate trial. It is intrinsicallylinked to the main action, however, because the third party will be bound by the findings made in the main action. Importantly, the thirdparty has the right to defend the main action and to raise any defence that would be open to the original defendant. [50] The case authorities also demonstrate that third party claims constitute separate proceedings. [51] In MacKenzie v.

Vance (1977), (NS CA), 19 N.S.R. (2d) 381 (SC AD), this Court was considering the claimfor contribution and indemnity under the Tortfeasors Act, R.S.N.S. 1967, c. 307. In that case, the defendant doctor sought to add as thirdparties the Colchester County Hospital and an employee of the hospital claiming contribution and indemnity for any damages the doctormay have been found liable to the plaintiff. [52] The proposed third parties argued that the limitation period against them had expired, and, therefore, they could not be addedas third parties.

This Court concluded that claims for contribution and indemnity are sui generis (of its own kind or class; unique orparticular (Black’s Law Dictionary (10th ed.)). In reaching this conclusion, Macdonald J.A. expressly adopted Cassels J.’s explanation ofthe nature of third party claims for contribution and indemnity in Hordern-Richmond Ltd. v.

Duncan, [1947] K.B. 545, which found thatthird party proceedings are separate actions, independent of the main proceeding: [24] […] That defendant is entitled by what is known as third-party procedure, upon leave being granted to him by the court, to bringin somebody else, not as a second defendant, but as a third party, in order that if he, the defendant, should turn out to be liable to theplaintiff he may pass on all or some of that liability to the third party by claiming from that third party an indemnity or contribution […] One has to bear in mind that third-party proceedings are proceedings in the nature of a separate action brought by a defendant against a

third party, in which the cause of action is by no means necessarily the same as the cause of action which brings the plaintiff and thedefendant before the court. The cause of action which brings a plaintiff and a defendant before the court in such a case as may arise outof this accident is negligence.

The cause of action which entitles a defendant to bring a third party before the court is the liability of thethird party to make contribution or to pay an indemnity […] The proceedings by the defendant against the third party are independent of and separate from the proceedings by the plaintiff against thedefendant, except that, when the defendant is made liable to the plaintiff, he then has his right open against the third party to establish, ifhe can, that he possesses a right to indemnity and contribution from that third party. [Emphasis added] [53] It appears that s. 15 of the new Limitation of Actions Act was enacted to address the situation which arose in MacKenzie v.Vance.

It creates a separate and distinct limitation period for claims of contribution and indemnity: Contribution and indemnity 15 In the case of a claim by one alleged wrongdoer against another for contribution and indemnity, the day on which the firstalleged wrongdoer is served with the claim in respect of which contribution and indemnity is sought, or incurs a liability through thesettlement of the claim, is, for the purpose of clause 8(1)(b), the day on which the act or omission on which the claim for contributionand indemnity is based occurs. [54] I will have more to say about s. 15 later in these reasons. [55] This Court again stressed the independent nature of third party proceedings in Burry et al. v.

Centennial Properties Ltd. (1979), (NS CA), 38 N.S.R. (2d) 450, where Hart J.A. held: [16] In my opinion, however, this contention cannot succeed. Third party procedures were developed in this province, as well as theother provinces of Canada and in England, for the purpose of determining at one hearing issues which were common to a determinationof matters between a plaintiff and a defendant, as well as between the defendant and some other person.

Although the issues werecommon and it was convenient to try them at the same time, it was never intended that any right of recovery would pass directly fromthe plaintiff to the third party, but only that the rights of the plaintiff qua the defendant, and the defendant qua the third party would bedetermined at the same time. That this is so is firmly established by the authorities referred to by MacDonald, J.A., in Vance v.MacKenzie (1977), (NS CA), 19 N.S.R.(2d) 381; 24 A.P.R. 381.

Should a plaintiff wish to recover directly against aperson other than the defendant that person should be joined as a party defendant. The plaintiff would then be free to establish whateverright it has to claim against that other person. [Emphasis added] [56] The Supreme Court of Canada reached a similar conclusion in R. v. Thomas Fuller Construction Co.

(1958) Ltd. et al., (SCC), [1980] 1 S.C.R. 695, finding that third party proceedings are separate proceedings. In that case, the plaintiff filed aclaim against the federal government for breach of contract and negligence in respect of blasting operations undertaken by a contractor.The federal Crown brought a third party claim against the contractor. The courts below struck the third party notice on the basis that nofederal law had been invoked to support the courts’ jurisdiction over the claim.

In deciding that federal law did not apply to the issuesraised in the third party notice, the Court affirmed the ruling of the Federal Court of Appeal that an action and a third party proceedingare distinct. The Federal Court of Appeal held: In my view, for purposes of

section 101 [of the Constitution Act, 1867], an action and a third party proceeding are two separateproceedings; and, for the Federal Court to have jurisdiction in either proceeding, that proceeding must be to enforce a right conferred by a“federal law”. R. v. Thomas Fuller Construction Co.

(1958) Ltd. et al., (FCA), [1979] 1 F.C. 877, at p. 879 [57] At p. 709, the Court referred to its earlier decision in The Bank of Montreal v. The Royal Bank of Canada, (SCC), [1933] S.C.R. 311, to support this conclusion: […] In The Bank of Montreal v. The Royal Bank of Canada, the Crown was claiming from the Bank of Montreal in the Exchequer Courtthe reimbursement of cheques drawn on it and paid on forged endorsements. By third party notice, the Bank was claiming indemnityfrom the Royal Bank of Canada as a prior endorser.

Duff C.J. said, giving the unanimous judgment of the Court (at pp. 315-316): … The Supreme Court of Ontario has jurisdiction, by virtue of the statutes and rules by which it is governed, to entertain and dispose ofclaims in what are known as third party proceedings. Claims for indemnity, for example, from a third party, by a defendant in respect ofthe claim in the principal action against him, can be preferred and dealt with in the principal action.

But there can be no doubt that theproceedings against the third party is a substantive proceeding and not a mere incident of the principal action. [58] Although GEM’s claim against Beasy Nicoll is related to its action against the Town of Amherst, it is a third party claim and,therefore, a separate proceeding from the main action, both substantively and procedurally. Accordingly, GEM cannot rely on s. 22(

a) ofthe Limitation of Actions Act to add Beasy Nicoll as a party defendant, because Beasy Nicoll is not a party to the original proceedingbetween GEM and Amherst. Adding Beasy Nicoll as a Defendant Would Change the Capacity in Which it is Sued [59] This issue is closely related to consideration of whether a third party is a party to the original proceeding. As I have foundabove, Beasy Nicoll is not a party to that proceeding.

In my view, it follows if GEM were permitted to amend its Notice of Action to addBeasy Nicoll as a party defendant Beasy Nicoll would be sued in a different capacity, i.e., as a defendant, not a third party. [60] In the oft-cited passage from Rizzo & Rizzo Shoes Ltd. (Re), (SCC), [1998] 1 S.C.R. 27, the Supreme Courtconfirmed a court’s role in statutory

interpretation was to read the Act in its entire context and in its grammatical and ordinary senseharmoniously with the scheme of the Act, the object of the Act, and the intention of the legislature:

[21] Although much has been written about the

interpretation of legislation (see, e.g., Ruth Sullivan, Statutory

Interpretation (1997);Ruth Sullivan, Driedger on the Construction of Statutes (3rd ed. 1994) (hereinafter “Construction of Statutes”); Pierre-André Côté, TheInterpretation of Legislation in Canada (2nd ed. 1991)), Elmer Driedger in Construction of Statutes (2nd ed. 1983) best encapsulates theapproach upon which I prefer to rely. He recognizes that statutory

interpretation cannot be founded on the wording of the legislationalone. At p. 87 he states: Today there is only one principle or approach, namely, the words of

an Act are to be read in their entire context and in theirgrammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament. Recent cases which have cited the above passage with approval include: R. v. Hydro-Québec, (SCC), [1997] 3 S.C.R.213; Royal Bank of Canada v. Sparrow Electric Corp., (SCC), [1997] 1 S.C.R. 411; Verdun v. Toronto-DominionBank, (SCC), [1996] 3 S.C.R. 550; Friesen v. Canada, (SCC), [1995] 3 S.C.R. 103. [61] As I will explain, to accept GEM’s argument would defeat the object of the Act and the intention of the legislature.

As notedearlier, claims for contribution and indemnity have a separate limitation period in the new Limitation of Actions Act: Contribution and indemnity 15 In the case of a claim by one alleged wrongdoer against another for contribution and indemnity, the day on which the firstalleged wrongdoer is served with the claim in respect of which contribution and indemnity is sought, or incurs a liability through thesettlement of the claim, is, for the purpose of clause 8(1)(b), the day on which the act or omission on which the claim for contributionand indemnity is based occurs. [62] Applying s. 15 to the facts of this case, the first alleged wrongdoer is Amherst.

The other alleged wrongdoer is Beasy Nicoll.The limitation period for any claim Amherst had against any other party for contribution and indemnity began to run on the day it wasserved with the claim by GEM. [63]

Section 15 appears to have been drafted to address the issue that arose in MacKenzie v. Vance, where a defendant’s claim forcontribution and indemnity may be barred before it accrues. I, again, refer to that case, at p. 395: In my opinion, to hold that the proposed third parties can rely on the one-year limitation period would lead to the absurd result that thecause of action given by the Tortfeasors Act to the appellant would be barred before it accrued, not by anything done by the appellantDr.

MacKenzie but by the whim of the plaintiff in the conduct of his proceedings. [64] To illustrate by way of example, a plaintiff in a motor vehicle accident waits until the last day of the two-year limitation periodto commence action against a defendant and does not serve the Notice of Action for a number of months. The defendant in that actionwants to allege that someone else is at fault for the collision.

If the two-year limitation period were to apply, the defendant’s actionagainst the third party would have been statute barred before it accrued through no fault of the defendant. [65] As a result, the legislature enacted s. 15 for the purpose of allowing claims for contribution and indemnity to proceed. Section15 does not open the door for the plaintiff to sue third parties directly when the limitation period against them has expired.

Section 15 isconsistent with third party proceedings being separate proceedings and being limited to contribution and indemnity for damages thedefendant might otherwise have to pay to the plaintiff. [66] To allow the conversion of third parties to party defendants would effectively make the limitation period in s. 15 the limitationperiod for all defendants. If GEM were permitted to add Beasy Nicoll as a defendant under s. 22(a), it would be able to proceed directlyagainst Beasy Nicoll, something it could not have done in the main action.

This outcome is inconsistent with the three purposes oflimitation statutes as articulated by the Supreme Court of Canada in M.(K.) v. M.(H.), (SCC), [1992] 3 S.C.R. 6:providing potential defendants with certainty, ensuring claims have an adequate evidentiary foundation, and requiring plaintiffs toexercise due diligence in bringing a claim (pp. 28-31). [67] These purposes were highlighted in the comments of the Honourable Lena Diab when she spoke to the proposed bill. JusticeRobertson set out and highlighted those comments in her reasons: [27] […] HON.

LENA DIAB: Madam Speaker, I move that Bill No. 64, Limitation of Actions Act be now read a second time. It is mypleasure to rise this afternoon and give the honourable members of this House as well as the general public a few of the reasons why thisAct needs to be amended at this time. The current legislation is not only archaic, it is outdated and it is confusing. It hasn’t been amendedprobably since its inception, so we are talking over 100-plus years ago. It sets out various time limits to bring actions forward, depending on the basis of the claim.

I am not going to bore everybody inthe House with various time limits that are set out for each and every claim, but there are a number of them, depending on which action aperson wishes to launch. The current legislation is creating uncertainty and confusion on both sides and can lead to complex and costly litigation. This istrue for lawyers. It’s true for self-represented litigants, so these are people who are representing themselves in court, and for companiesthat are operating in multiple jurisdictions where the legislation may be different across various provinces in Canada.

Madam Speaker, the new bill proposes standard limitation periods for all claims. Specifically, it establishes a two-year, basiclimitation period for most civil claims, such as those that involve personal injury, breach of contract, et cetera. What that means is youhave got two years to start an action from the date a person discovers that they have a legal action. It also creates an ultimatelimitation period of 15 years for legal claims which may not be discovered right away. What that means is, 15 years from the dayon which the act or the omission, which the act is based upon, has occurred.

That is the ultimate limitation period. [Original

emphasis] This is in line with what is happening in many other jurisdictions. It’s also in line with the model put forward by a national lawreform body called The Uniform Law Conference of Canada, that proposes a more modern model for all jurisdictions. New Brunswick,Ontario, Manitoba, Saskatchewan, Alberta and British Columbia have already adopted modern limitation legislation. We want todevelop a consistent approach to limitations law across the country. Perhaps most importantly, Madam Speaker, this bill does not impose time limits for victims of sexual assault and domesticviolence who want to file law suits.

There is one exception in the bill where time limits will not apply. The existing Act gives a one-yearlimitation period for sexual assault claims. There are a variety of exceptions that could suspend the limitation period, but they aredifficult to understand and to apply. So I’m pleased that we are able to put forward a bill that better protects and respects the rights ofvictims in this case. In addition to eliminating time limits for victims of sexual assault and domestic violence, the bill also does not set limits forassaults involving dependants or people in intimate relationships.

As in the current Act, there will be no time limits for any claimsinvolving children. This means limitation periods are suspended until children turn the age of 19. Time periods also don’t run while aclaimant is incapacitated, so the ultimate limitation period is suspended if there is willful concealment of a wrong. That is the case at themoment, as well. Finally, Madam Speaker, I want to highlight the benefits for small businesses and professionals who may be involved in lawsuits.I want to say that if someone has done something wrong, they should be held accountable.

However, the law should also set limits sothat people cannot be sued into infinity. That is where the 15-year ultimate limitation period comes in. This will allow businessesand professionals to have more certainty and long-term stability. [Original emphasis] The new bill strikes a fair balance that respects the rights of everyone involved. It will also support internal trade and labourmobility among provinces by making our laws similar to other jurisdictions. Again, as I said, our closest neighbour, New Brunswick, hasalready adopted this more modern legislation.

To summarize, this legislation is about creating laws that are more consistent and clear. These are laws that will better supportvulnerable Nova Scotians, small business owners and professionals. Thank you very much, Madam Speaker. I look forward to commentsfrom my colleagues in the House. [68] If I were to allow the amendments sought by GEM pursuant to s. 22(

a) of the new Limitation of Actions Act, I would beinterpreting the new Limitation of Actions Act in a manner contrary to the scheme of the Act and the intention of the legislature. [69] In Burry v. Centennial Properties Ltd., this Court made the distinction between a party’s status as a defendant and as a thirdparty. In that case, the court refused to order that funds payable from the third party to the defendant be paid directly to the plaintiff,finding there was no right of recovery directly between the plaintiff and third party.

The Rules did not create a new relationship betweena plaintiff and a third party when a third party proceeding is commenced: [16] […] Although the issues were common and it was convenient to try them at the same time, it was never intended that any right ofrecovery would pass directly from the plaintiff to the third party, but only that the rights of the plaintiff qua the defendant, and thedefendant qua the third party would be determined at the same time. That this is so is firmly established by the authorities referred to byMacDonald, J.A., in Vance v.

MacKenzie (1977), (NS CA), 19 N.S.R.(2d) 381; 24 A.P.R. 381. Should a plaintiff wishto recover directly against a person other than the defendant that person should be joined as a party defendant. The plaintiff would thenbe free to establish whatever right it has to claim against that other person. [17] The third party procedure simply avoids the necessity of establishing twice the plaintiff's right against the defendant, firstly, inthe original action and, secondly, in the second action by the defendant against the third party.

This can be seen clearly by the plainmeaning of the words in the Civil Procedure Rules, Rule 17. The Rule does not create any new relationship directly between the plaintiffand the third party. [Emphasis added] [70] Adding a third party as a party defendant fundamentally changes a party’s position in the litigation. A third party is only liableto the plaintiff if the party defendant that brought the third party claim is found liable to the plaintiff in the main action. Being added as adefendant changes the capacity in which the third party is sued and increases its exposure to liability. [71] In MacDonald v.

Sun Life Assurance Co. of Canada, [2005] O.J. No. 4468 (Sup Ct), the court distinguished between a person’scapacity as a third party and as a defendant in limiting the amount of costs the plaintiff could recover against the defendant corporation,previously a third party in the proceeding. The plaintiff had initially sued Sun Life following a slip-and-fall accident at a plaza owned bySun Life. In turn, Sun Life commenced a third party proceeding against Cameron Landscaping, which defended both the main action andthe third party action.

More than four years later, the plaintiff amended her claim to add the landscaping company as a defendant andlater discontinued her action against Sun Life. Following a verdict in her favour, the plaintiff sought to recover her costs of the actionfrom the defendant company, including the costs she had incurred before Cameron was added as a defendant.

The plaintiff relied on Rule29.05(2) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, which provides that a third party who has defended the main action hasthe same rights and obligations in that action as a defendant. [72] The court disallowed the costs claimed for services rendered prior to Cameron being added as a party defendant, holding that“there is generally no basis for costs being awarded against a defendant who was not a party to the action at the time the costs wereincurred and particularly when another party was the defendant” (¶32).

Applying this principle to the facts, the court concluded: [34] […] Assuming that rule 29.05 (2)(

a) imposes upon a third party who has entered a defence to the main action an obligation topay the costs incurred by the plaintiff as a result of that defence, it does not assist the plaintiff. The costs award made against Cameronwas solely in its capacity as a defendant, the third party proceeding having fallen by the wayside once Cameron was added as adefendant.

[ 73 ] Cameron’s capacity as a third party was viewed as distinct from its capacity as a defendant. This distinction was material to the court’s conclusion that the plaintiff could only recover from Cameron the costs she had incurred after Cameron was made a defendant in the proceeding and not earlier. [ 74 ] Beasy Nicoll is a party to the third party action, which is distinct both substantively and procedurally from the main action against Amherst.

Similar to Sun Life , where the date on which Cameron’s role in the proceeding was changed from that of a third party to a defendant was relevant to the calculation of the plaintiff’s recoverable costs, adding Beasy Nicoll as a defendant would change its role in the proceeding and attendant liabilities. It would therefore “change the capacity” in which Beasy Nicoll is sued. [ 75 ] GEM argues “capacity in

section 22 (

a) refers to legal capacity, not party’s nominal status as a defendant or a third party defendant” (GEM’s factum, ¶62). [ 76 ] I would point out the characterization of Beasy Nicoll’s third party status as being “nominal” is inaccurate. As I have set out in some detail, the distinction between a defendant and a third party is far from nominal; it is procedurally and substantively different. [ 77 ] In support of its argument, GEM relies on a decision from the Queen’s Bench of New Brunswick, Fowler v. Croteau, 2012 NBQB 239 .

Like GEM, the plaintiff had filed and moved to add existing third parties as defendants by way of an amended pleading. The third parties opposed the motion on the ground the applicable limitation period had expired. In Fowler , the court concluded that “capacity” in a similar provision in the New Brunswick Limitation of Actions Act referred to legal capacity rather than its capacity as a party in the litigation: [21]

Section 21 (

a) of the Limitation of Actions Act , supra ., speaks of “the capacity in which either party sues or is sued”. In my view, since the term “capacity” in this

section is used in reference to a party to a legal proceeding there is no distinction between it and the term “legal capacity”, the definition of which is set out in the Morgentaler case, supra . In other words it refers, not to the role of a party in the proceeding but to the party’s personal characteristics such as age, mental capacity etc. [22] As I read sub-

section 21 (

a) it is not available to a person who wishes to amend their pleadings by introducing either themselves or another party to the proceedings in a representative capacity. Similarly, if they were initially a party in a representative capacity, they cannot use this

section to become a party in their personal capacity. What the sub-section does not permit, in my opinion, is the introduction of new parties with different personal characteristics after the expiry of the limitation period; it does not, however, prevent existing parties from being given additional roles in the litigation. [23] In this case the proposed amendment would not introduce new parties or change the capacity of existing parties. I therefore find that the proposed amendment meets all the requirements of

section 21 (

a) of the Limitation of Actions Act , supra . [ 78 ] With respect, for the reasons which I have outlined above, I disagree with the analysis in Fowler . There is nothing in the new Limitation of Actions Act which suggests that capacity should be limited in this manner.

In my view, Fowler , and cases which may be seen to have reached a similar conclusion, fail to take into consideration the distinction between the role of a defendant and a third party, the procedural and substantive differences between the two proceedings, the differences in potential liability between them, and the objects of limitation legislation. I choose not to follow them. [ 79 ] I would dismiss GEM’s Notice of Contention. Conclusion [ 80 ] I would grant leave to appeal, allow the appeal, dismiss the Notice of Contention, and award costs to Beasy Nicoll in the amount of $5,000. Farrar J.A.

Concurred in: Bryson J.A. Scanlan J.A.