In Canadian National Railway Company v Town of Edgeley and RM of South Qu’Appelle No. 157, 2025 SKKB 202 [Edgeley], the Honourable Mr. Justice A.S. Davis ruled in favour of the municipality defendants, and struck the plaintiff’s claim in its entirety. In his decision, Justice Davis endorsed a broad interpretation of the limitation period in s. 344 of The Municipalities Act, SS 2005, c M-36.1, emphasizing the important public policy rationale underlying the shortened limitation period.
Background
On May 26, 2022, a train collided with a road grader operated by an employee of the Rural Municipality of Edgeley (the “Municipality”) at a level crossing. The collision caused a derailment, damage to multiple rail cars, and a discharge of hazardous materials, such as fuel.
Municipal employees, emergency services personnel, and representatives from the Canadian National Railway Company (“CN”) took immediate steps to contain the scene. By the end of the day, CN and its subcontractors had taken over remediation efforts. These efforts lasted for at least a month after the accident.
Approximately one year and one month later, on June 23, 2023, CN filed a Statement of Claim (the “Claim”) alleging that the Municipality should be responsible for damages in negligence and nuisance. The Municipality denied liability and applied to strike CN’s Claim on the basis that it was out of time. CN opposed the application to strike and made a further application to amend its Claim in an attempt to defeat the limitation period.
Decision
In Edgeley, Justice Davis heard both the Municipality’s application to strike and CN’s application to amend its Claim. The Municipality prevailed on all fronts and, as a result, Justice Davis disposed of the Claim in its entirety.
A. The Applicable Limitation Period
The Municipality asserted that CN’s Claim is statutorily barred by the one-year limitation period set out in s. 344(1) of The Municipalities Act which reads:
Limitation of actions against municipalities
344(1) Notwithstanding The Limitations Act, no action is to be brought against a municipality for the recovery of damages after the expiration of one year from the time when the damages were sustained, and no such action is to be continued unless service of the statement of claim is made within that one‑year period.
In reply, CN contended that it advanced an environmental claim within the ambit of The Environmental Management and Protection Act, 2010, SS 2010, c E-10.22 [EMPA]. Accordingly, CN argued that the longer six-year EMPA limitation period ought to apply and override the one-year limitation period in The Municipalities Act.
In assessing which limitation period governed CN’s Claim, Justice Davis engaged in an exercise of statutory interpretation. Firstly, following Platana v Saskatoon (City), 2006 SKCA 10, 2 DLR (4th) 603, Justice Davis found that the language utilized in The Municipalities Act was sufficiently broad to encompass all claims for damages arising out of every conceivable legal relationship between a plaintiff and a municipality.
Secondly, Justice Davis reiterated the valid policy rationale for affording public bodies, such as municipalities, special statutory limitation periods. Public authorities must receive timely notification of claims so that they may properly investigate and dispose of them in a manner consistent with the public interest.
Although the circumstances of the case may have constituted an environmental claim under EMPA, this was of no consequence. Justice Davis found that the Legislature intended The Municipalities Act to be a complete code concerning limitation periods applicable specifically to claims against a municipality for damages. Courts have no discretion to deviate from it, unless provided for by statute. Therefore, the one-year limitation period was applicable to all of CN’s claims against the Municipality.
B. The Municipality’s Application to Strike
Having determined the applicable limitation period, Justice Davis easily disposed of CN’s negligence claim. The incident occurred more than one year prior to CN filing its Claim. It was plain and obvious that the negligence claim was time-barred, so it was struck. Allowing it to proceed would constitute an abuse of process.
On the other hand, CN postulated that the alleged nuisance was a continuing cause of action which was repeated each day of the remediation efforts. Therefore, CN took the position that its nuisance claim was made within the one-year limitation period. The law in Saskatchewan is not settled on this point, and it is arguable that the alleged nuisance was a continuing tort. Accordingly, Justice Davis was not prepared to dispose of the nuisance claim for being time-barred.
Instead, Justice Davis struck the nuisance claim because it was plain and obvious that an essential element of the tort was lacking. A nuisance must originate outside the plaintiff’s property. In this case, the hazardous materials had been transported to the site of the incident by CN itself. The hazardous materials did not escape from elsewhere onto CN’s lands. Therefore, Justice Davis concluded that CN failed to disclose a reasonable cause of action in nuisance and struck the claim.
C. CN’s Application to Amend
CN applied to amend its Claim in a way that focussed on its remediation efforts, raising causes of action in unjust enrichment and trespass. Both proposed amendments were denied.
Although Justice Davis found a claim in unjust enrichment was reasonable, he refused to allow the amendment as a means of defeating the otherwise applicable municipal limitation period. CN argued that the one-year limitation period did not apply because it sought relief by way of restitution, not damages, for unjust enrichment. CN cited to the use of “damages” in s. 344 of The Municipalities Act and argued that it ought to be interpreted narrowly and precisely. Justice Davis disagreed, relying on a series of recent cases. He held that “damages” in s. 344 are not limited to the strictest construction the word may assume.
Notwithstanding CN’s characterization of the relief sought, Justice Davis determined that, in substance, it constituted a claim for damages. A new cause of action was advanced, but the substance of the claim remained the same. Therefore, the claim for unjust enrichment was captured by the one-year limitation period and bound to fail as being time-barred.
The proposed amendment to include trespass as a cause of action was also denied, but on a different basis. The claim in trespass was not reasonable because a fundamental element – intrusion onto lands occupied by the plaintiff – was absent. The site of the incident was at a location both parties shared. Moreover, the discharge of hazardous materials could not constitute a trespass because it was CN, not the Municipality, who transported the hazardous materials to the site of the incident. Justice Davis thus dismissed CN’s application to amend its Claim.
Commentary
Edgeley was not only a victory for the municipal defendants named in the Claim, but also for municipalities in Saskatchewan at large. This decision reinforced the broad applicability of the s. 344 limitation period, concluding that it applies to all forms of claim – no matter how the claim might be legally characterized – for monetary remedies against municipalities. The decision provides certainty and fairness for Saskatchewan municipalities. It is important for anyone who thinks that they might have a dispute against a municipality to ensure that their claim is brought within the one-year limitation period.
Lauren J. Wihak, K.C., of McDougall Gauley, acted as counsel for the municipalities in these applications. CN has appealed Justice Davis’s decision, and it is anticipated that it will be heard by the Court of Appeal sometime in 2026.
McDougall Gauley’s Municipal Law team has experience acting for cities, towns, villages, hamlets, rural municipalities and northern municipalities of all sizes across Saskatchewan, relating to any legal issues that they may encounter, including in defence of claims. Our lawyers have extensive experience appearing before the Saskatchewan Municipal Board and all levels of court in relation to municipal issues.
