August 5 2015

In litigation, deadlines are everything. They ensure parties act in a reasonably quick and efficient manner, and make sure that court resources are not wasted. In many cases, they also prevent people from making a case so far down the road, that the defendant simply cannot defend itself due to insufficient memory or lack of resources.

If you are thinking about starting a court case against someone in Ontario, the Limitations Act, 2002 says that you have 2 years to do so.

But, 2 years from what?

According to the Limitations Act, 2002, you have 2 years from either:

    1. The day you suffered an injury, loss or damage due to someone else’s actions; OR
    1. The day a “reasonable person” ought to have known that there was some injury, loss or damage suffered due to someone else’s actions.

The first point is pretty clear – for example, you have a commercial lease and in the lease your landlord must give you the first month’s rent for free. But they refuse. The day that your landlord refuses to give you the first month’s rent for free is the day you have suffered a loss, and the clock starts ticking from that point.

The second point, however, is a bit trickier. A situation might happen, but you might not know, at the time that it happened, that you have suffered an injury, loss or damage due to someone else’s actions until 3 months, 6 months, or maybe even a 1 year later. You now want to start a case and sue the Defendant, but it is well past the 2 years when the event happened. The Defendant is now trying to stop you, saying that you knew or ought to have known, at the time the event happened, that you had to sue them and now it’s too late.

For example, let’s say you bought a house from Mr. A. Mr. A tells you that everything is ok, hiding the fact that there are cracks in the foundation. Three years later, you find out that there are cracks in the foundation, that these cracks have been there for 10 years, and that Mr. A knew, but never told you about these cracks. You bring a claim against Mr. A, but he says “too late – you had 2 years after you bought the house to sue me, and you didn’t.” But in your defence, how would you have known that the cracks were there? A reasonable person in your shoes wouldn’t have known until they actually found out about the cracks. So, the limitation period starts when you find out there’s a problem.

Not all examples are as clear-cut as this one, and parties on both sides will argue for whether or not it is too late to start a claim.

Recently, the Ontario Superior Court of Justice considered this very issue in the context of an insurance claim. Among other things, the court said:

    • Determining whether a person has a claim is a fact-based analysis
    • The question we have to ask is whether the prospective plaintiff knows enough facts on which to base an allegation against the defendant
    • If the answer to that question is “yes”, then the timer starts its count-down, the clock starts ticking, and the limitation period begins to run

At the end of the day, the Plaintiff is responsible to show that its claim is not statute-barred, by proving to the court that it behaved like a reasonable person, using reasonable diligence in discovering the facts related to the limitation issues.

This article is for informational purposes only and does not constitute legal advice. If you wish to seek legal advice, contact us today.  613-747-2459