Canadian Underwriter

Limitation period for a third party indemnity action is the same as when plaintiff’s cause of action against the third party accrues: Nova Scotia court

February 9, 2012   by Canadian Underwriter

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The Supreme Court of Nova Scotia has found the limitation period for a third party indemnity action in the province starts to run at the same time as a plaintiff’s cause of action against the proposed third party accrues.
In doing so, the lower court deviated from caselaw established in the Nova Scotia Court of Appeal. It cited a Supreme Court of Canada ruling as its reason for doing so.
In Smith v. Atlantic Wholesalers Ltd., the plaintiff, Beverley Smith, suffered a fall in 1999 while shopping at the Super Valu store in Sydney, Nova Scotia. She commenced an action against the operator of the store, Atlantic Wholesalers Ltd., issuing her claim in October 2001.
Atlantic issued a third party statement of claim against APM Construction Services in January 2010. APM was involved in a construction project outside the Super Valu store at the time. Atlantic alleged that APM’s work was at least partly responsible for the fall.
APM made a motion for summary judgment to dismiss the third party claim against it. APM argued the statutory six-year limitation started to run when the plaintiff’s cause of action arose, which would have meant the limitation period expired in 2005.
Atlantic argued the six-year limitation period had not yet started to run because there had been no finding of liability in the plaintiff’s claim against the defendant Atlantic.
Deciding in favour of APM, the Nova Scotia Supreme Court departed from MacKenzie v. Vance, which appeared to support Atlantic. In doing so, the court cited the Supreme Court of Canada’s 1975 decision in Stetar v. Poirier as its authority to diverge from the Appeal Court’s ruling in MacKenzie.
The full Supreme Court of Nova Scotia decision can be found at: