Business Transactions and the Limitations Act, 2002
| Author | Ruth I. Wahl |
| Profession | Partner at Ogilvy Renault. This paper is updated as of May 31, 2004 |
| Pages | 47-68 |
Business
Transactions
and
the
Act,
2002
A.
INTRODUCTION
The
Ontario
Act,
20021
came
into
force
on
January
1,
2004.
It
provides
a
comprehensive limitation period
for
most personal claims.
The
former
Ontario
Act2
created
a
myriad
of
limitation
periods based
on
arcane categories such
as
"action
for
simple contract
or
debt" (six years), "action upon
a
specialty" (twenty years), "action
upon
the
case other than
for
words" (six years),
and
"action upon
the
case
for
words" (two years).
The new Act
creates:
a
"basic" limitation period
of two
years
from
the day a
claim
is
dis-
covered
or
discoverable, subject
to
an
"ultimate" limitation period
of
fifteen
years
from
the day an act or
omission
on
which
a
claim
is
based takes place.
Reform
of
Ontario's limitations laws
was
long overdue.
In
1969,
the
Ontario
Law
Reform Commission described
the
laws
as
perplexing
and
hazardous
for
lawyers
and
beyond comprehension
for
members
of the
public.
The
original
Act was
drawn
from
English statutes enacted
between 1588
and
1888.
Its
meaning
was
obscure
and its
language
and
Partner
at
Ogilvy Renault. This paper
is
updated
as of May 31,
2004.
1
S.O.
2002,
c. 24
[Act].
2
R.S.O.
1990,
c.
L.15.
47
Ruth
Wahl
48
RUTH WAHL
substance archaic.
Furthermore,
the
existence
of
inconsistent limitation
periods
scattered throughout other
statutes
created chaos.
The
Commis-
sion concluded that
the
only solution
was to
rewrite entirely Ontario's
limitation
laws.3
More than three decades
of
consultations,
discussion
papers,
and
legislative bills followed
the
Commission's
report
and
cul-
minated
in the new
Act.
The Act
profoundly reforms Ontario's limitations laws,
but it
does
not
entirely rewrite them.
Nor
does
it
achieve
a
completely simple
and
standardized regime.
As is
described
below,
many proceedings
and
claims
are not
subject
to the new
limitation
periods:
The
Act
expressly
preserves
specified limitation
periods
contained
in
the
forty-two statutes listed
in the
Schedule. Many
of the
limitation
periods created
by
these other statutes apply
to
claims made
in
com-
mercial
litigation.4
While
the Act
applies
to
claims pursued
in
court
proceedings5
and
arbitrations falling
under
the
Ontario
Act,
1991,6
there
are
notable exceptions
to
this general rule.
The Act
does
not
apply
to
-
proceedings
to
which
the
applies;7
-
appeals
(if
the
time
for
commencing
the
appeal
is
governed
by an
Act
or
rule
of
court);
3
Ontario
Law
Reform
Commission,
Report
on
Limitation
of
Actions
(Toronto:
Department
of the
Attorney
General,
1969).
4
Section
19 of the
Act. These preserved limitation
periods
include specified pro-
visions
of
statutes such
as the
Assignments
and
Preferences
Act,
Bulk
Sales
Act,
Business
Corporations
Act,
Business
Practices
Act,
Commodity
Futures
Act, Com-
munity
Small
Business
Investment
Funds
Act,
Construction
Lien
Act,
Corporations
Act,
Creditors'
Relief
Act,
Environmental
Bill
of
Rights,
1993,
Environmental
Protec-
tion
Act,
Fuel
Tax
Act,
Gasoline
Tax
Act,
Income
Tax
Act,
Insurance
Act,
Mortgages
Act,
Personal
Property
Security
Act,
Reciprocal
Enforcement
of
Judgments
Act,
Reci-
procal
Enforcement
of
Judgments
(U.K.)
Act,
Securities
Act,
and
Trustee
Act.
5
Section 2(1)
of the
Act.
6
Section
52 of the
Act, 1991,
S.0.1991,
c. 17
incorporates
by
refer-
ence
any
limitation period that would
be
imposed
if the
arbitration
was an
action
and the
claim
was a
cause
of
action.
7
Part
I of the
original
Act was
continued
and
renamed
the
Real
Property
Limita-
tions
Act, R.S.O.
1990,
c.
L.15.
This real property limitations regime
is
beyond
the
scope
of
this paper.
See
Brian
Bucknall's
analysis
of the
scope
of the
real
property limitations regime
and its
interaction with
the new
limitations
regime
in
"Limitations
Act,
2002
and
Act: Some Notes
on
Interpretative
Issues"
(Toronto: L.S.U.C. Real Estate Summit, 2004) [forth-
coming].
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