Ontario Court of Appeal Holds That a Claim is Limitations-Barred for an Entire Class

Written By Ethan Schiff and Ana Nizharadze

In Fehr v Sun Life Assurance Company of Canada, 2024 ONCA 847 (Fehr), the Ontario Court of Appeal dismissed the representative plaintiffs’ appeal seeking post-certification leave to amend their statement of claim and to certify an additional common issue. The Court concluded that the proposed common issue arose out of a previously unpleaded cause of action, triggering limitations considerations, including for the entire class.

The class action, which began in 2010, involves universal life insurance policies that, aside from providing life insurance, act as an investment vehicle. The class members paid premiums into an accumulation fund from which the defendant insurer deducted monthly charges.

After being certified as a class action in 2020 based on allegations of certain misrepresentations and breaches, the plaintiffs proposed to amend to allege that the defendant improperly increased the difference between the returns that the defendant received and the interest credited by the defendant to the class members’ accounts in respect of their investments (the Investment Spread Claim). The plaintiffs argued that they only discovered the Investment Spread Claim in 2022.

The Court of Appeal upheld the motion judge’s conclusion that the representative plaintiffs discovered the Investment Spread Claim in 2016 from disclosure of a repricing report in the course of litigation. Accordingly, the applicable two-year limitation period expired before the plaintiffs brought their motion to amend.

But, like the court below, the Court of Appeal went even further, and ascribed to the entire class the representative plaintiffs’ discovery of the Investment Spread Claim in 2016. The Court concluded that the material facts relevant to the limitations issue, for all class members, depended on what was known by “the representative plaintiffs and their counsel”. Thus, because the representative plaintiffs sought to rely on 2022 events to extend the limitation period for the entire class, they could not “avoid the effect on the discoverability issue of the 2016 disclosure in the same litigation”.

Though discoverability and limitations issues in class actions are often deferred to the individual issues stage, Fehr establishes that a class-wide determination may be made if the representative plaintiff’s discovery of the claim can be imputed to the entire class.

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• The plaintiffs sought to distinguish between the representative plaintiffs’ roles before certification (when the relevant 2016 disclosure was made) and after certification as being relevant to the potential to make a class-wide determination. The Court disagreed because the Investment Spread Claim became discoverable during litigation. After certification, because the representative plaintiffs’ counsel became counsel for the entire class, the class members became fixed with the representative plaintiffs’ knowledge dating back to 2016.
• The Court also held that a rolling limitation period is not engaged. A rolling limitation period may apply to a breach of contract claim where each failure to make a periodic payment gives rise to a new cause of action. Here, the Court concluded that the Investment Spread Claim engaged a single decision about interest rates, and not ongoing breaches. 

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