Sperling v. The Queen of Nanaimo

In Admiralty Practice, Parties on (Updated )

Pr├ęcis: The British Columbia Supreme Court held that a defendant could be added as a party to an existing action notwithstanding the expiry of the limitation period under s. 140 of the Marine Liability Act and where the court further held that the limitation period in s. 140 of the Marine Liability Act does not commence to run until the underlying material facts and the extent of the injury are known.

Facts: The plaintiff was injured when the ferry “Queen of Nanaimo” hit the dock at Village Bay Terminal on 3 August 2010. A malfunction in the propulsion equipment of the ferry was implicated in the cause of the accident. The plaintiff originally commenced proceedings on 2 August 2012 against the owner/operator of the ferry as well as “John Doe 1, ABC Company and John Doe 2”. The plaintiff now sought to add a number of additional companies alleging they were involved in the installation or repair of the malfunctioning equipment. The plaintiff argued the proposed parties could be substituted for “ABC Company” on the basis of correction of a misnomer in the pleading or, in the alternative, that the rules permitted the addition of the proposed parties in the circumstances. The proposed defendants challenged the motion on the basis, inter alia, that the limitation period had expired. The issues were:
1. Can the proposed parties be substituted for “ABC Company” on the basis of a misnomer in the pleading?
2. If this is not a case of misnomer, can the additional parties be added if a limitation period has intervened?
3. What is the applicable limitation period? Is it two years under the Athens Convention or three years under s. 140 of the Marine Liability Act?
4. If the Limitation period is under s. 140 of the Marine Liability Act, from what date does the limitation period commence to run and has it expired?

Decision: Motion allowed, in part.
Held:

(1) There is an important distinction between amendment applications to correct a misnomer in a pleading and applications to add a party. The correction of a misnomer is permitted notwithstanding the expiration of a limitation period after the action was originally commenced. On the other hand, where the application is to add a party, the expiration of a limitation period will be one of the factors taken into account in the court’s determination of whether it is “just and convenient” to add the new party.
The test for correcting a misnomer is whether the party is sufficiently described in the pleading as an identifiable and identified person by role, responsibility or involvement. In this case the plaintiff lumps defendants together and makes blanket allegations without meaningful distinctions. The activities described are so broad they could apply to many people. There is insufficient particularity in the pleading to point the finger at any distinct person. Therefore, this is not a case of misnomer.

(2) A new party may be added at any stage of a proceeding where it is just and convenient to do so. The existence of a limitation defence is a relevant but not a determinative factor. In this case the parties disagree as to whether a limitation defence has accrued. The proposed defendants argue that the court has no discretion to add them as parties, if the limitation period under the Marine Liability Act has accrued. The court does not agree. Even if a limitation period has accrued under the Marine Liability Act, the court still has a discretion to add parties.

(3) The limitation period of two years in art. 16 of the Athens Convention, enacted by the Marine Liability Act, applies only to “carriers” and has no application to the proposed defendants. The application of the three year limitation period in s. 140 of the Marine Liability Act is challenged by the plaintiff on the grounds that the negligent acts alleged against the proposed defendants have nothing to do with navigation and shipping. The proposed defendants, on the other hand, say that the subject matter of the claim is squarely in the domain of federal maritime negligence law and s. 140 of the Marine Liability Act therefore applies. This is a difficult issue but it need not be decided since, in any event, the discoverability issue is to be resolved in the plaintiff’s favour.

(4) The Marine Liability Act does not provide for the postponement or extension of the three year limitation period. However, the s. 140 limitation period commences on the day the cause of action arose which, pursuant to the discoverability principle, means it does not commence until the underlying material facts and the extent of injury are known. The plaintiff did not receive the investigation report identifying the malfunctioning equipment until 20 May 2011. This is the earliest date from which the limitation period could commence. Therefore, even if the three year period applies, it has not expired.