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College files claim, battles with province over limitation period

|Written By Gabrielle Giroday
College files claim, battles with province over limitation period
Yehuda Levinson says a recent judgment shows that in ‘an administrative law situation, it’s reasonable that you pursue that avenue before you consider civil action.’

A recent Ontario Superior Court of Justice decision focuses on a battle between a vocational college and the provincial government of Ontario, after the college alleged they were victims of an “excessively protracted regulatory compliance process imposed on them by the province,” and launched an action to claim damages.

The judgment in Career Blazers Learning Centre v. Ontario, 2019 ONSC 240 centres on whether the plaintiffs had launched their claim within a two-year limitation period, which is a requirement if the claim is to proceed.

The plaintiffs — listed as the college, and its owners Norine Roussain and Peter Roussain — took the position that the claim had indeed been launched within the two-year window that is required under the Limitations Act, and brought a motion for summary judgment on the matter.

However, the province — which was named as defendants in the matter — disagreed.

Ultimately, Justice Edward Morgan sided with the plaintiff, and ruled “the action was commenced within the two-year time period.”

The ruling indicates that in February 2010, the province’s Ministry of Training, Colleges, and Universities did a compliance inspection at the college, and then issued a restraining order that stopped the college from operating in March 2010.

Shortly after, the province rescinded it, in order “to give the plaintiffs a chance to bring their business into compliance,” said the ruling. However, in June 2010, the province re-issued the order and posted it on the provincial website.

“It is this second restraining order that is the subject of the damages claim. The plaintiffs allege that once the restraining order was in place, the ministry’s involvement with them diminished and its response times became excessively slow,” said the ruling.

In December 2010 the ministry responded. “In this correspondence, the ministry finally outlined its position with respect to the plaintiffs’ non-compliance. The matter then came to a near halt," the ruling stated.

“During the course of the next [nine] months there was occasional correspondence between the parties, but the plaintiffs allege that the ministry failed to seriously address the matter or allow it to move ahead. On August 18, 2011, counsel for the plaintiffs informed the ministry that the restraining order and the ministry’s actions (or, perhaps, its inaction) in dealing with the plaintiffs was ‘effectively killing’ the Plaintiffs’ business.”

By September 2011, the plaintiffs went to the Ontario Ombudsman for help.

“Counsel for both parties here acknowledge that it was the involvement of the Ombudsman that finally resulted in the matter being addressed and the plaintiffs being declared to be in compliance. On December 21, 2011, the plaintiffs achieved full compliance with the regulations under the Private Career Colleges Act. A month later, on January 12, 2012, the ministry finally acknowledged and confirmed this compliance and changed the restraining order to reflect a compliance date of December 21, 2011,” said the ruling.

But the matter wasn’t finished.

Discussions continued with the Ombudsman about potential compensation for the plaintiffs over the closure, before the Ombudsman closed its file in June 2013 and a final offer was made by the province, in July 2013. No agreement was reached.

In June 2015, the plaintiffs launched their claim.

“The parties differ. . .in their view of when the limitation period actually began. According to defendant’s counsel, the limitation period started running from the date the restraining order was re-issued, since as of that date the plaintiffs understood that they were incurring the losses that they now claim,” said the ruling.

“Defendant’s counsel concedes, however, that the limitation period was tolled from March 12, 2012 (the earliest date in which monetary compensation was without a doubt discussed) until June 24, 2013 (the date on which the Ombudsman’s file was closed). It is the defendant’s view that compensation for monetary losses was on the table all along as far as the plaintiffs were concerned, and that counsel for the plaintiffs had threatened litigation well before the ombudsman was engaged,” added the ruling.

Justice Morgan sided with the plaintiffs, and ultimately concluded that the start date for the limitation period on the claim was when the Ombudsman closed its file, in June 2013.

“[P]laintiffs’ counsel correctly identifies that date as the starting date for the running of the limitation period. It would have been appropriate to bring an action any time after June 24, 2013, so long as the plaintiffs did not receive compensation for their business losses. These losses could potentially include losses incurred prior to January 12, 2012, when the plaintiffs were not in compliance due, allegedly, to delay by the defendant in engaging the compliance process,” said the ruling.

Yehuda Levinson, principal of Levinson & Associates Barristers and Solicitors in Toronto, who represented the plaintiffs in the matter, says the “really nice point that comes out of this is that there’s now been a clear importation into the civil law limitation period issue of the administrative law principle of prematurity.”

“In this particular case, the obvious remedy for Career Blazers was not to bring a civil action at all, the obvious issue when you’re faced with decisions of an administrative tribunal on a compliance issue — and that’s what this had to do with — is that you work with the tribunal to solve them,” he says.

“Until there is compliance, even if there was no internal administrative law procedure to follow, you could never successfully bring a civil action. . .how can you have damages when you’re not in compliance?”

Levinson says the issue that presented in the case are delays his clients had to deal with.
“This started in March of 2010. There was not a final resolution until the Ombudsman got involved in January 2012, which is really, by then, a school is basically dead,” he says.

“So, the real point that comes out of this is that if you’re in an administrative law situation, it’s reasonable that you pursue that avenue before you consider civil action.”

Levinson says there are important takeaways for civil litigators, and other lawyers.

“What you take away from this, is that if you have a case where a client is considering damages arising out of the conduct of a tribunal, your limitation period doesn’t start to run until you’ve exhausted the administrative law process,” he says. “That’s the bottom line.”

Christopher Wirth, a partner at Keel Cottrelle LLP, says the ruling “reinforces the difficulty of successfully establishing the limitations defence on a summary judgment. . .that it will be the rare case where things are clear enough that a court will make such a finding.”

“It also reinforces the fact that from the administrative law point of view that, as the court pointed out, if you do bring administrative law proceedings, the court generally requires those to run their course before letting you take the other remedy,” he says.