When is a Lawsuit an Appropriate Means to Resolve a Wrongful Dismissal Claim?

November 23, 2020

By Brian Babcock

Generally, in Ontario, a person suffering a loss must sue within two years of suffering the loss. There are, however, circumstances that extend this time limit.

Discoverability is at the heart of calculating the time limit to sue in Ontario. It simply is common sense that you cannot be expected to sue before you know that a lawsuit is the appropriate remedy for your problem.

In a recent Court of Appeal case, Sosnowski v. MacEwen Petroleum Inc., the employee had delayed starting his action for wrongful dismissal until more than two years after his dismissal, while criminal proceedings for theft from his employer were pending against him.  The court considered section 5(1)(a)(iv) of the Limitations Act, 2002 which states that a claim is discovered when a reasonable person in the injured person’s position would realize:

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

Determining whether a lawsuit is the appropriate means is fact specific, but this case gives new guidance as to how judges will interpret the facts.

The “means provision” extends the time to sue in two general categories:

  • where the Plaintiff delayed because the Defendant was taking steps to ameliorate the loss; and
  • where there is an alternative dispute resolution process attempted which would provide an adequate alternative remedy.

A prior case, Winmill v. Woodstock (Police Services Board),  involving a different sort of lawsuit (a claim against the police for damages for battery and negligent investigation) had allowed the claim to proceed, ruling that the Plaintiff could not know that the lawsuit was appropriate until he was acquitted of his criminal charges. The two issues – his charges and his potential claim – were “two sides of the same coin”. If he was convicted, a civil claim would be pointless, thus not appropriate. Winmill therefore suggests that there may be a third category of reasons to delay.

Sosnowski argued that his charges for theft of fuel from his employer, being the grounds for dismissal, were subject to this exception. The court disagreed, because in Winmill, the conduct of the police was the issue that linked the cases. The conduct of the employer was not an issue in Sosnowski’s case, so even if he was convicted, his wrongful dismissal case, while more difficult, could still proceed. Just because he did not know the likelihood of success did not extend his time to sue.

“Appropriate” does not refer to whether the claim will succeed, but rather means that the injured party knows, or should know, that a law suit is the correct avenue for relief.

The court determined that allowing Sosnowski to proceed would open up too many new questions that might arise in future cases. Limitation periods exist for a purpose – so that potential defendants can go on with their life with some peace of mind as to whether or not they may be exposed to the time, expense and stress of a law suit.

It does not however solve the problem that in the wrongful dismissal action, the employee can be compelled to testify, where in the criminal case, he has a right to remain silent. Although the evidence given in the civil action cannot by law be used in the criminal case, the risk of compelled disclosure remains problematic. Hopefully, future cases will address this issue.

There are many reasons why an employee who is terminated ought to seek legal advice. This case highlights the importance of doing so in a timely fashion.