The Ontario Limitations Act has been amended effective January 1, 2004 after more than 30 years of debate and there has been a major reduction in the time to commence action in a Court. A missed limitation or notice period is a serious legal matter as it will forever bar recovery from the other side.
Ontario residents can now determine the applicable limitation period by reference to only two pieces of legislation – the new Ontario Limitations Act 2002 and Part 1 of the old Ontario Limitations Act. The effect has been to centralize and reduce the scores of notice and limitation periods scattered among various provincial statutes.For the Ontario businessperson, the fundamental change has been that the limitation period for bringing action to recover on almost any type of contract or for negligence has been reduced from 6 years to 2 years with a stroke of the legislative pen.The result will be new-found pressures in the commercial world to identify legal rights early and initiate formal claims sooner rather than later. Ontario residents may assume that, in many transactions, the second anniversary will be the critical date.Conversely, the time horizon for liability claims and counterclaims has now been compressed into the same 2-year period. There may be some new found opportunities here to avoid stale contractual or duty of care obligations.As in all legislation, a certain amount of compromise was called for in order to accommodate the claims of competing interests. Complete simplification of the law has been undermined in deference to the countervailing policy of fairness to potential claimants.For example, the time period does not begin to run until the plaintiff realizes that it has a cause of action. Fortunately, willful blindness in commerce has never been considered reasonable by our Court and should not be treated any differently under the new Act.Is complete peace of mind available in the goodness of time under the new legislation? Almost.The Act provides for an ultimate limitation period of 15 years with limited exceptions for groups such as minors. Perhaps the 15-year period might best be viewed as a guideline for document destruction.The 2-year and 15-year periods are the starting points for any consideration of the applicable limitation period. Nonetheless, there remain enough exceptions and interpretive issues that legal advice is usually recommended.