Summary of Facts
In recent years, the Province of Ontario has made several important decisions regarding limitation periods in civil litigation. These decisions have important implications for individuals and businesses involved in legal disputes in the province, and may impact the strategies that lawyers use to defend their clients.
A limitation period is the time period within which a legal action must be commenced in order to be valid. Once the prescribed limitation period expires, a party may be barred from bringing a claim.
Limitation periods are designed to balance the interests of plaintiffs, who need to seek legal redress for their grievances, and defendants, who need to be able to move on from potential legal liability after a certain period of time.
One recent decision is Clarke v. Sun Life Assurance Company, 2020 ONCA 11; The plaintiff was an employee of Canada Post. Sunlife as insurer provided the group disability insurance plan (the “Plan”) for Canada Post’s employees. Sunlife denied the employee’s claim for disability under “any occupation” but allowed a claim for “ Owner’s occupation” which compensation ended in April 2013.
The employee wrote in February 2014 that the matter would be appealed but did not take any action then. The employee only submitted further medical information and asked for compensation again in 2017 and was denied. The employee did not start any proceedings until 2018.
The lower court denied Sunlife’s claim to halt the litigation based on the Limitation Period, and the matter went to the Court of Appeal which partially reversed the decision on the basis of an analysis of section 5 of the Limitations Act and the section provides:
5 (1) A claim is discovered on the earlier of,
(a) the day on which the person with the claim first knew,
(i) that the injury, loss or damage had occurred,
(ii) that the injury, loss or damage was caused by or contributed to by an act or omission,
(iii) that the act or omission was that of the person against whom the claim is made, and
(iv) that, having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it; and
(b) the day on which a reasonable person with the abilities and in the circumstances of the person with the claim first ought to have known of the matters referred to in clause (a).
(2) A person with a claim shall be presumed to have known of the matters referred to in clause (1) (a) on the day the act or omission on which the claim is based took place, unless the contrary is proved. 2002, c. 24, Sched. B, s. 5 (2).
The Court held that applying the presumption under section 5(2) requires the Court to consider whether the plaintiff acted with “due diligence” in determining if she had a claim; and the Court must further determine “the day on which a reasonable person with the abilities and in the circumstances of the person with the claim first ought to have known” of the four factors set out in section 5(1)(a).
The matter was referred back to a trial. It is likely that the assessment by the Court of trial will be based on the employee’s reasonable state of mind in 2014 when the matter ought to be pursued at that moment.
Ultimate Limitation Period
Section 15 of the Limitations Act provides that no lawsuit can be commenced in respect of any claim after the fifteenth anniversary of the day on which the act or omission on which the claim is based took place. For the purposes of the ultimate limitation period, it does not matter when you discover the injury, loss or damage. In the above case, the right of the employee would have been lost after 15 years even if the first limitation period of 2 years is held not to apply.
Overall, the recent decisions in Ontario regarding limitation periods in civil litigation represent significant developments in the law in this area. It is important for individuals and businesses involved in legal disputes to be aware of these changes, in order to ensure that they are able to protect their legal rights and interests.
Promissory Note or demand loans
Demand loans including a promissory note have been a hot issue prior to the enactment of the current Limitations Act. It is not uncommon in family affairs or closely held corporations for loans to be made on demand. A demand loan is one where a sum of money is lent, but there is no repayment schedule but is said to be payable on demand. The Limitations Act in 2002 specifically provides that the day on which the injury, loss or damage occurs is the first day on which there is a failure to repay, once a demand for payment is made. This means that the time starts to run as soon as a demand for payment is made.
In conclusion, you can expect to have no more than two years to start a lawsuit after you discover that you have suffered an injury, loss or damage. To ensure that your rights are preserved, you should speak with a lawyer as soon as you suffer an injury, loss or damage to obtain advice on your rights, and the period after which the limitation period will apply.
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