Focus- Ontario government passes Limitations Act, 2002

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On December 9, 2002, Bill 213, which enacts the Limitations Act, 2002, received Royal Assent. The Act will not be proclaimed for another year, in order to give Ontarians time to become familiar with the new legislation.

The legislation is an attempt to modernize a regime which consists of the current Limitations Act – a collection of some 13 English statutes enacted between 1588 and 1888 – and many special limitation periods contained in other pieces of Ontario legislation. This system, which involves literally hundreds of limitation periods running from six months to 20 years, has often been described as a “trap for the unwary”.

TWO-YEAR LIMITATION FROM TIME DAMAGE DISCOVERED

The principal feature of the new Act is the replacement of this multiplicity of limitation periods with a basic limitation period of two years for most legal actions. The other main feature is the codification of the “discoverability” rule, a rule developed by courts to modify the harshness and inflexibility of the current regime. Under this rule, the limitation period starts running from the day on which the person with the claim first knew, or with reasonable diligence ought to have known, that:

  • the injury, loss or damage had occurred,
  • the injury, loss or damage was caused by or contributed to by an act or omission,
  • the act or omission was that of the person against whom the claim is made, and
  • a proceeding would be an appropriate means to seek to remedy the injury, loss or damage.

INCAPACITY

If a person is incapable of commencing a proceeding due to a physical or psychological condition, and the person is not represented by a litigation guardian, the two-year period does not run during the time in which the person is incapable. The claimant has the onus of proving that he or she was incapable of commencing the proceeding. There are also special rules in connection with claims of assault and sexual assault.

ATTEMPTED RESOLUTIONS

If the parties in a claim have agreed to have an independent third party help resolve the claim, the limitation period does not run during the period of the resolution process.

ULTIMATE LIMITATION PERIOD, NO LIMITATION PERIOD, WILLFUL CONCEALMENT

The Act also establishes an “ultimate limitation period” of 15 years for most actions, regardless of whether the claim on which the action is based has been “discovered” as discussed above. Despite this provision, there are a number of actions in connection with which there is no limitation period, such as undiscovered environmental claims and proceedings to enforce court orders or orders that are enforced in the same way as court orders. As well, the 15 year period does not run during any time in which the person against whom the claim is made willfully conceals from the person with the claim any of the four elements set out above under the discoverability rule.

PRESERVATION OF SPECIFIC LIMITATION PERIODS

On proclamation of the Act, limitation periods in other legislation will no longer have effect. However, the Act contains a schedule in which over 40 other statutory limitation periods are preserved. If there is a conflict between any statutory limitation period in the schedule and one elsewhere in the Act, the statutory limitation period in the schedule will prevail.

NO CONTRACTING OUT

Parties cannot contract out of a limitation period provided under the Act.

TRANSITIONAL RULES

There are detailed rules for claims that arise before the Act comes into force. For example, if a limitation period has expired before the Act comes into force, no proceeding in respect of the claim may be commenced.

If a limitation period in connection with a claim has not expired before the day the Act comes into force, and the claim was not discovered before that date, the limitation period under the new Act will apply to the claim and the act or omission on which the claim is based will be deemed to have occurred on the day the Act comes into force. However, if the claim was discovered before that date, the old period will apply. Under this rule, if a claim is based on tort, a plaintiff who discovered the claim before the Act came into force would still have the benefit of the old six-year limitation period, while an undiscovered claim would be subject to the new rules.

For types of claims in connection with which there were previously no limitation periods, but which would be subject to a limitation period under the new Act, no limitation period will apply if the claim was discovered before the Act comes into force. However, if the claim is discovered after the Act comes into force, the Act will apply, and the act or omission on which the claim is based will be deemed to have occurred on the day the Act comes into force.

OTHER EXCEPTIONS

The Act does not apply to judicial review proceedings, appeal proceedings where the limitation period is governed by an Act or court rules, or proceedings to which the Provincial Offences Act applies.

For questions on how the Act will apply to potential claims against your business, please contact André Champagne at (613) 940-2735.