Docket: CACV2386 & CACV2099 Bruce Hopkins, operating as Surbiton Plumbing v. Heating, 2013 SKCA 118

THE COURT OF APPEAL FOR SASKATCHEWAN Citation: 2013 SKCA 118 Date: 2013-11-07 Between: Docket: CACV2386 & CACV2099 Bruce Hopkins, operating as Surbiton Plumbing and Heating (Plaintiff/Respondent) Appellant - and – Dean Stockman and Maureen Stockman (Defendants/Appellants) Respondents Coram: Richards C.J.S., Lane and Caldwell JJ.A. Counsel: Jessie C. Buydens for the appellant Lindsay A. Gates for the respondents Appeal: From: 2011 SKQB 133 Heard: October 8, 2013 Disposition: Appeal Dismissed

Written Reasons: November 7, 2013 By: The Honourable Mr. Justice Caldwell In Concurrence: The Honourable Chief Justice Richards The Honourable Mr. Justice Lane Caldwell J.A. [ 1 ] In this appeal the appellant asks us to find error in the decision of the Queen’s Bench Chambers judge, sitting on an appeal from a small claims judgment of the Provincial Court ((24 August 2010), Saskatoon S.C. No. 189 of 2009 [unreported]), where the appeal judge found that the appellant’s claim was barred under The Limitations Act , S.S. 2004, c. L-16.1, s. 5 (see: 2011 SKQB 133 ).

However, I conclude that the appeal judge did not err and I would dismiss the appeal. [ 2 ] By way of background, the appellant and the respondents entered into a verbal agreement under which the appellant agreed to provide plumbing and heating services to the respondents and the respondents agreed to pay him at the rate of $30 per hour for his services. The respondents also agreed to acquire plumbing materials through the appellant. As farming is the primary occupation of all of the parties, they agreed that the appellant would not provide his services during spring seeding.

Work progressed and the appellant rendered invoices to the respondents which were reflective of the work he had completed and the materials the respondents had acquired. The trial judge found the agreement between the parties was vague as to payment terms and that they had not reached a consensus as to the manner of payment.

Nevertheless, the trial judge found the “parties [had] established a pattern whereby the [appellant] would periodically submit an invoice and the [respondents] would make a payment.” [ 3 ] In this manner, on April 27, 2005, the appellant issued an invoice for $19,052.03 of services and materials, including GST. The invoice also recorded an additional sum of $1,652.55 under the “> 90 days” in arrears column which had been carried forward from a January 2005 invoice. The respondents received this April 2005 invoice sometime in May 2005 and they paid $15,000 toward it on June 6, 2005.

The appellant then issued a new invoice dated June 13, 2005 for the balance owing of $5,704.58, which invoice also recorded that sum under the “31 – 60 days” in arrears column. [ 4 ] As agreed, the parties put the work on hold in spring 2005 to allow them to attend to their respective farming operations. While the respondents said they wanted the appellant to return to do some work that summer, the appellant understood that the respondents wanted the work done on an “all or nothing” basis that summer.

Regardless, when the appellant had not resumed the work after eight to ten calls to do so, the respondents hired a different plumber in August 2005 to complete the work. The trial judge found this action by the respondents had terminated the contract between the parties. The appellant picked up his tools from the work site in December 2005. [ 5 ] Over two years later, on April 25, 2008, the appellant issued an invoice to the respondents in the amount of $157.64 for materials which he had not previously billed to the respondents.

The April 2008 invoice also recorded the sum of $5,704.58 under the “> 90 days” in arrears column. The total amount owing under the invoice was $5,862.22. The respondents did not pay it. [ 6 ] On May 6, 2009, the appellant issued a claim for the amount owing to him under the agreement. In their statement of defence, the respondents asserted the appellant’s claim was barred pursuant to s. 5 of The Limitations A ct as it had been brought more than two years after the appellant had discovered or ought to have discovered his claim.

Although they unsuccessfully counterclaimed on other grounds, the respondents did not dispute the amount owing and put forward no other defence to the appellant’s claim on the unpaid invoice.

In reply to the respondents’ limitations defence, the appellant has asserted throughout the proceedings below and in this Court that his claim arose upon completion of the work he had performed for the respondents, which he says occurred before The Limitations Act came into force on May 1, 2005. [ 7 ] For ease of reference, the relevant provisions of The Limitations Act , including the relevant transitional provision, are: 2 In this Act: (a) “claim” means a claim to remedy an injury, loss or damage that occurred as a result of

an act or omission; … 5 Unless otherwise provided in this Act, no proceedings shall be commenced with respect to a claim after two years from the day on which the claim is discovered. … 6(1) Unless otherwise provided in this Act and subject to subsection (2), a claim is discovered on the day on which the claimant first knew or in the circumstances ought to have known: (

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

b) that the injury, loss or damage appeared to have been caused by or contributed to by

an act or omission that is the subject of the claim;

(

c) that the act or omission that is the subject of the claim appeared to be that of the person against whom the claim is made; and (

d) that, having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it.

(2) A claimant is presumed to have known of the matters mentioned in clauses (1)(

a) to (

d) on the day on which the act or omission on which the claim is based took place, unless the contrary is proved. … 19 If, after the commencement of a proceeding, it is established that a limitation period applicable to the claim had expired before the commencement of the proceeding, the claim is barred and the proceeding shall not be maintained. … 31(1) In this section: (a) “effective date” means the day on which this Act comes into force; (b) “former limitation period” means, with respect to a claim, a limitation period that applied with respect to the claim before the effective date; (c) “new limitation period” means, with respect to a claim, a limitation period established by this Act that would apply if the claim were based on

an act or omission that took place on or after the effective date.

(2) This

section applies to claims: (

a) that are based on acts or omissions that took place before the effective date; and (

b) with respect to which no proceeding has been commenced before the effective date. …

(5) If there is a new limitation period with respect to a claim and the former limitation period did not expire before the effective date: (

a) if the claim was not discovered before the effective date, this Act applies as if the act or omission had taken place on the effective date; and (

b) if the claim was discovered before the effective date, the former limitation period applies. [ 8 ] At trial, the judge found that the appellant’s claim was not statute-barred because, under her analysis, his claim had arisen before May 1, 2005 and was not therefore governed by the two-year limitation period set out in The Limitations Act . In this respect, the trial judge said: [34] It is undisputed that the defendant received a bill dated April 27, 2005 and paid a portion of the amount owing. It is the remainder which is the subject of the plaintiff’s claim.

Clearly, the entire debt arose prior to the change in the limitation period on May 1, 2005; therefore, the plaintiff would be governed by the legislation as it stood in April 2005 [ i.e. , it would be governed by The Limitation of Actions Act , R.S.S. 1978, c. L-15] and would be entitled to bring the action within six years. The fact that a portion was paid does not alter the fact that the entire amount was due and owing prior to the change in the limitation period, nor does that partial payment create a new debt subject to different rules.

The respondents appealed from this part of the trial judge’s judgment. [ 9 ] When the matter came before the Court of Queen’s Bench on appeal, the appeal judge implicitly found that the trial judge had erred in law and he set aside the trial judgment. In particular, the appeal judge found the appellant did not have a claim against the respondents before May 1, 2005 and thus he could not have discovered his claim prior to the coming into force of The Limitations Act .

The appeal judge therefore concluded that the appellant’s claim was governed by the two-year limitation period in s. 5 of that Act and was statute-barred. He said: [12] On the facts in this matter, the invoice of April 27, 2005 was not received by the appellants until after the effective date of the new Act of May 1, 2005, and until the respondent knew or the law deemed he ought to have known the invoice would not be paid in full, the respondent did not suffer any injury, loss or damage, and therefore did not have a claim.

If the respondent did not have a claim before the effective date of May 1, 2005, the claim was not discovered before the effective date, and the new Act applied.

Section 5 of the new Act states, no proceeding shall be commenced with respect to a claim after two years from the day on which the claim is discovered. [13] It is not necessary to decide on the facts in this case when exactly the law would hold the respondent ought to have known he had a claim, and therefore discovered it, beyond saying he ought to have known prior to May 6, 2007, a period of almost two years after the unpaid balance was outstanding following the $15,000.00 payment made by the appellants on June 6, 2005.

The statement of claim was issued on May 6, 2009 which is in excess of two years after the respondent ought to have known he had a claim. The respondent’s claim was brought after two years from the day on which the claim was discovered, and pursuant to s. 5 no proceeding should have been commenced. [ 10 ] The appellant has now asked this Court to review the findings of the appeal judge for error. With respect, however, I find no

reversible error in the appeal judge’s analysis or in his conclusion that the appellant’s claim is statute-barred by s. 5 of The Limitations Act . Like the appeal judge, I cannot accept the appellant’s characterisation of his claim, or his cause of action, as arising upon completion of the work in April 2005. In G. Mew, The Law of Limitations , (2d ed.) (Markham: LexisNexis, 2004) at 169-170, the author notes: Traditionally, in contract cases, the cause of action accrues and the limitation period begins running on the date of the breach of the contract rather than the date upon which the contract was made.

An action will be barred by the appropriate provision of a province’s statute of limitations after the expiration of the prescribed time following accrual of the cause of action: … that is to say from the occurrence of every fact which it would be necessary to prove, if traversed, in order to support his right to the judgment of the court.

It is perhaps a truism to say that what those facts are can be ascertained only by reference to the right asserted, or, to put it another way, in the case of an action for breach of contract, by reference to the particular contractual duty the breach of which is asserted as the ground for the claim. [Footnotes omitted.] [ 11 ] On this basis, the mere fact that the appellant had completed the work required of him to April 2005 and had issued the April 2005 invoice in respect thereof discloses no cause of action because it cannot be said, on those facts and the vague terms of the agreement, that the respondents had breached the agreement.

Rather, as the trial judge found, the respondents in fact paid the appellant in accordance with past practice for the bulk of the work he had invoiced to them in April 2005, and they apparently did so within about 30 days of their receipt of the invoice therefor. Tellingly, in his invoices the appellant provides for interest at “10% per annum charged monthly”.

While the trial judge made no findings as to whether the parties had agreed to terms of interest, the reference to interest in the appellant’s invoices must be indicative of his expectation that payment would be rendered sometime after he had issued the invoice and it belies an expectation of immediate payment on his part. But, irrespective of this, the trial judge’s findings of fact simply do not support a conclusion that the respondents had somehow breached the parties’ agreement before May 1, 2005.

In sum, I find no error in the appeal judge’s conclusions that s. 5 of The Limitations Act governs in this case and that the appellant had brought his claim in excess of two years after he ought to have known he had a claim. [ 12 ] I find additional support for the appeal judge’s conclusions in s. 10 of The Limitations Act . The trial judge found there were no clear terms of payment between the parties ( i.e. the debt arising was not a term debt obligation). As such, the respondents’ obligation to pay the appellant must be characterised as a demand obligation.

Section 10 provides that “in the case of a default in performing a demand obligation, the day on which

an act or omission on which a claim is based takes place is the day on which the default occurs.” On the facts as found by the trial judge, the respondents’ default in this case would have occurred sometime between June 6, 2005, when the respondents last made payment towards the amounts owing under the agreement, and the date the respondents terminated the agreement by hiring a different plumber, or, at the latest, the date in December 2005 on which the appellant picked up his tools and thereby accepted the respondents’ repudiation of the parties’ agreement.

But, as the appeal judge noted, regardless of the exact date of the respondents’ default, the appellant has clearly issued his claim at least two years after the expiry of the two-year limitation period imposed under s. 5 of The Limitations Act . [ 13 ] In the result, as I have found no reversible error in the appeal judge’s reasons and found that his judgment is thoroughly supported by the facts and the law, I would dismiss this appeal, with costs in the amount of $2,400 payable forthwith to the respondents.

DATED at the City of Regina, in the Province of Saskatchewan, this 7 th day of November, A.D. 2013. “Caldwell J.A.” _____________________ Caldwell J.A. I concur. “Richards C.J.S.” Richards C.J.S. I concur. “Lane J.A.” Lane J.A.