[ 27] The next issue is whether Manulife can rely on s. 16( 1)(a)
of the Limitations Act, which provides that there is no limitation
period in respect of “a proceeding for a declaration if no consequential relief is sought”.
[ 28] In the context of a limitation period analysis, declaratory
relief should be narrowly construed so as to ensure that
s. 16( 1)(a) is not used as a means to circumvent applicable limitation periods: Joarcam, LLC v. Plains Midstream Canada ULC,
 A.J. No. 282, 2013 ABCA 118, 90 Alta. L.R. (5th) 208,
at para. 7.
[ 29] I conclude that this subsection is unavailable to Manulife
in the circumstances of this case, as it is seeking consequential
relief. The remedy of rectification sought in this case has significant consequences for the parties and goes beyond clarifying the
nature of a particular obligation. Mr. Alguire stands to receive
significantly less money as a result of the rectification compared
to what he argued he was entitled to on the policy’s face.
[ 30] The foregoing leads to the critical issue of when the limitation period for the rectification claim began to run. A claim is
not discovered until a party knows, or reasonably ought to have
known, that injury, loss, or damage caused or contributed to by
an act or omission by the person against whom the claim is
made has occurred: Limitations Act, s. 5( 1)(a)( i)-( iii) and ( 2).
In this case, Manulife’s internal discovery of the error in the
policy occurred in 2007. Manulife, however, did not seek to rectify
the policy until after Mr. Alguire filed his application in 2012.
The question thus arises as to when the injury, loss or damage
for the rectification claim occurred.
[ 31] To answer this question, regard must be had to the
grounds asserted for rectification. In the present case, the trial
judge determined that rectification was appropriate to remedy a
common mistake. On the evidence accepted by the trial judge
that the mistake was common, when Manulife discovered the
error in 2007, it did not know that Mr. Alguire would seek to
resile from the parties’ common understanding that the paid-up
values were per $5,000 of the face amount coverage, not per
$1,000 as mistakenly indicated in the policy. In other words,
until Mr. Alguire instituted his claim and sought to change what
the parties had actually agreed to, he had not committed an act
or omission causing or contributing to Manulife’s injury, loss or
damage for purposes of the rectification claim.
[ 32] As Manulife only knew that injury, loss or damage
occurred when Mr. Alguire sought a declaration that the erroneous paid-up values were correct, the claim for rectification was