JANUARY Calendar

Section 15 of Ontario’s Limitations Act, 2002, often referred to as the “ultimate limitation period,” provides a final deadline for initiating legal proceedings, subject to a few exceptions.
Section 15(2) of the Act states:

“15 (2) No proceeding shall be commenced in respect of any claim after the 15th anniversary of the day on which the act or omission on which the claim is based took place.”

The provision prevents the indefinite postponement of the basic two-year limitation period by the Act’s discovery provisions. It responds to a problem that arose under the former limitations scheme in the mid-1990s when the courts began recognizing discoverability as a rule of general application. With no ultimate limitation period under the former scheme, defendants were never safe from ancient claims. The solution was to impose an ultimate limitation period, running always from the date of the actionable conduct without regard to discoverability.

Until January 1, 2019, s. 15(2) had no practical effect. This is because York Condominium No. 382 v. Jay-M Holdings Limited held that acts or omissions which occurred before January 1, 2004, and were discovered after that date, were deemed to have taken place on January 1, 2004. For instance, legal services rendered in 1981 are deemed to have been rendered on January 1, 2004. Therefore, the ultimate limitation period for those claims could not expire before January 3, 2019. However, as of January 3, 2019 (since January 1 was a holiday, claims could therefore be issued on January 2), the ultimate limitation period captured claims for acts or omission that took place on or before January 1, 2004.

15 Years from what date?

Ontario jurisprudence has clarified that the words “day on which the act or omission on which the claim is based took place” in the context of s.15(2) refers to the date of the alleged wrongful act or omission forming the basis for the claim 1. Under s.15(1), this 15-year limitation applies even in instances where the limitation period established by another section of this Act (e.g. two-year limitation period) in respect of a claim has not expired. 2,3

Cases interpreting the Alberta and British Columbia ultimate limitation periods also provide guidance. They indicate the courts’ willingness to enforce the ultimate limitation period even where the result may appear unfair to the plaintiff. As the Alberta Court of Appeal observed in Bowes v. Edmonton (City), “the danger of long-hidden losses must land on someone’s shoulders” (at para 157).

In Byrn v. Farris, Vaughan, Wills & Murphy LLP, legal services in an estate matter were rendered in 1981. The action against the lawyer commenced in 2016. The British Columbia Court of Appeal had no difficulty in deciding that the action was barred by British Columbia’s then 30-year ultimate limitation period. The ultimate limitation period ran from the date that legal services were provided, and it therefore expired in 2011.

Section 15(6)(a) of the Act provides that for the purposes of s. 15, the day an act or omission on which a claim is based takes place is, in the case of a continuous act or omission, the day on which the act or omission ceases. The Alberta Limitations Act has a similar provision relative to its 10-year ultimate limitation period. In a case interpreting that provision, the plaintiff/client argued that although his claim was brought more than 10 years after legal services were provided, the claim was not barred, because the lawyer’s obligation to provide proper advice and disclosure was “continuous.” The court rejected this argument. It held that this provision is intended to capture situations where damages are caused by a series of wrongs that occur over a period of time, such as continuous torts (e.g., ongoing nuisance or trespass) or successive contractual breaches. The plaintiffs could not avoid Alberta’s 10-year ultimate limitation period by characterizing an error or omission that occurred more than 10 years previously as a “continuing course of conduct.” This argument, if accepted, would defeat the ultimate limitation period in nearly all solicitors’ negligence claims.4 Similarly, in Tyszko v St. Catharines the plaintiff argued that every time it rained, further damage was caused to her property and therefore s 15(6) was applicable even though the city had completed their work in 2002 and the claim was not issued until July 2021. The court rejected this argument stating that the issue in the action is a “singular act of negligence” which is the work done by the city in 2002. Further “the failure to rectify an alleged act of negligence does not create a continuing or series of acts of negligence”. The action was dismissed as being statute barred.

Holes in defendants’ s.15 protection

Since nearly all actions are governed by the Act, the instances in which defendants will not be protected by the ultimate limitation period, once 15 years have elapsed since the date of the defendant’s act or omission, will be rare. Some claims, such as those involving sexual assault, are not governed by any limitation period, as per s.16 of the Act. Furthermore, according to s. 15(4) of the Act, the limitation period does not run in certain circumstances. Three most common are situations involving willful concealment, minors, and incapacity due to disability.

As one would expect, a defendant cannot rely on s.15 during any period of time in which he or she willfully conceals the facts of the claim from the plaintiff, or misleads the plaintiff about the appropriateness of a claim.5 In the case of Taylor v. David, the plaintiff underwent jaw surgery and argued that the defendants failed to disclose x-rays and provide copies of medical records, charts and x-ray images. Since the plaintiff failed to demonstrate that a request for such documentation was made and the defendants had no obligation to provide such without a request, the court rejected the plaintiff’s allegation of willful concealment of information or documentation. 6

Both section 6 and 15(4) of the Act states that the limitation periods are suspended when the claimant is incapable or a minor and is not represented by a litigation guardian in relation to the claim. In Wong v. Lui, the court states that in order for section 15(4) to apply to minors, the plaintiff’s claim must arise when the plaintiff is a minor7. Section 7(2) of the Limitations Act 2002 presumes an adult individual has capacity. The Courts will require adequate evidence to rebut this presumption.8 Simply asserting incapacity is insufficient.

The majority of case law, which allows for the limitation period to be paused in situations involving minors or other incapable parties, tends to focus on the meaning of “represented by a litigation guardian in relation to the claim”.9 Ontario case law has demonstrated that failing to file an affidavit of litigation guardian in the context of commencing a lawsuit does not extend the limitation period. Failing to file an affidavit of litigation guardian simply renders a proceeding an irregularity not a nullity. The courts have emphasized that it would be nonsensical for a limitation period to be tolled simply because the person holding themselves out as a litigation guardian has not filed the required affidavit under the Rules of Civil Procedure.10

Contribution and Indemnity versus Damages

A third-party defendant could conceivably be liable for a claim for contribution and indemnity, more than 15 years after the act or omission occurred, by virtue of the wording of ss.15 and 18 of the Act.

Suppose a purchaser discovers a negligence claim against her surveyor 14 1/2 years after the survey was done and the purchase closed. Legal proceedings against the surveyor are commenced five months later. The surveyor is served two months after that. The surveyor waits one year, and then serves a claim for contribution and indemnity on the purchaser’s lawyer, alleging that she negligently failed to advise the purchaser of the problems with the legal description. The claim for contribution and indemnity will be timely. The lawyer’s negligence will be deemed to have taken place on the day that the surveyor was served with the statement of claim, not on the date that the purchaser’s lawyer closed the transaction.

To put it more simply, a claim for contribution and indemnity is timely if brought within two years of service of the statement of claim on the defendant. Section 18 provides that a claim for contribution and indemnity cannot be brought 15 years after the defendant was served with the statement of claim, NOT 15 years after the legal services were rendered. Because this timing is improbable, such claims will be rare.

Some purported claims for “contribution and indemnity” are not in fact true claims for contribution and indemnity, but instead merely claims for damages. Usually, this distinction is academic, but it becomes important when assessing the date upon which the ultimate limitation period begins to run.

The Alberta Court of Appeal thoroughly addressed this distinction in Addison & Leyen Ltd. v. Fraser Milner Casgrain LLP, 2014 ABCA 230, Fraser Milner gave tax advice to Addison & Leyen. The CRA reassessed Addison & Leyen more than 10 years after the advice was given. Addison & Leyen settled with the CRA, and then sued Fraser Milner, claiming contribution and indemnity for its payment to the CRA. If the claim was properly for contribution and indemnity, the claim was timely, because it was brought within two years of the settlement with the CRA. If the claim was for damages, it was barred by Alberta’s 10-year ultimate limitation period, which ran from the date that the advice was given.

The Alberta Court of Appeal held that Addison & Leyen’s claim was not for contribution and indemnity, because Fraser Milner owed no duty to the CRA, and caused no damage to it. The claim was therefore for damages, and was statute barred.

Covid-19 Suspension Period

During the COVID-19 pandemic, the Ontario government enacted emergency orders that temporarily suspended limitation periods and procedural time limits, including those under the Limitations Act, 2002. This suspension, effective from March 16, 2020, to September 14, 2020, paused the running of limitation periods for 182 days, thereby extending both the basic and ultimate limitation periods by that duration. For further guidance on factoring in this suspension period, refer to the article “Tips for calculating limitations deadlines accounting for the Covid-19 emergency suspension period”.

Conclusion

Since January 3, 2019, s. 15 of the Act has provided a defence to a number of claims, which would not otherwise be barred by the Act’s basic “two years from discoverability” provisions. Practitioners should review their files and determine whether any actions must be commenced before the passing of an ultimate limitation period.

Original article, by Debra Rolph, previous Research Director at LAWPRO. Daniel Zack is at Zacks Law, December 18, 2018. Updated August 20, 2024 by LAWPRO (originals authors were not involved).

Summary and Key Learnings

Section 15, Limitations Act, 2002 provides for an ultimate 15-year claim period, subject to:

  • 6 months for service of any claim within the 15-year period;
  • 182 days (6 months – March 16, 2020, to September 13, 2020) for the COVID suspension period;
    S.16 exemptions (sexual assaults etc.);
  • S. 18: Claims for contribution and indemnity by third parties;
  • S. 15(4): Situations when the limitation period does not run (minors, incapacity, willful concealment); and
  • S. 15(6): Continuous acts or omissions giving rise to a claim.

1 Parravano v. St. Paul Fire and Marine Insurance 2023, ONSC 3480, 2023 CarswellOnt 8794
2 Ibid at paras 29 to 30.
3 Tyszko v. St. Catherines (City), 2023 ONSC 2892 (CanLII)
4 Misterly v. Nowicki, 2017 BCSC 2358. Although this action was brought in BC, Alberta legislation applied.
5 s.15(4)(c).
6 Taylor v. David, 2022 ONCA 200 (CanLII)
7 Wong v. Lui, 2023, ONCA 272 (CanLII) at para 43.
8 Taylor, Supra note 6
9 Mallory Hendry. “The impact of a litigation guardian on limitation periods” (Mar 27, 2024) Canadian Lawyer Magazine
10 Azzeh v. Legendre, 2017 ONCA 385 (CanLII) at para 34