Some lawyers are celebrating the 10-year anniversary of the Ontario Limitations Act as the cases continue to pile up in the Ontario courts. Everyone knew back in 2004 that reducing the general limitation period for bringing civil litigation from 6 years to 2 years was going to cause complications. The policy decision was made by the legislature to encourage litigants to bring their claims on quickly and not sit on their rights.
The result has been that uninformed suppliers have allowed invoices to remain unpaid well after the 2- year period. Whether or not “slow to sue” or lenient suppliers have now lost their legal rights is the central issue.
On the present case law, the critical dates appear to be (1) the dates of the invoices (2) the date of last payment.
In what I believe to be latest review of the law in 1535323 Ontario Ltd. v. Allen Van Raven’s Way, the court has taken a liberal approach and set the beginning of the limitation period on the later of the 2 critical dates – the date of last payment. Some good news for suppliers.
For suppliers, the lesson learned is that when the first default in payment occurs, diarize 18 months forward to issue an action in court, or face serious risk of write-offs.
The law of limitations continues to represent the ultimate technical legal defence in civil litigation and must be taken seriously. It spans all areas of practice including commercial, contracts, estates and equity. Beware.
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