How much time do I have to bring a lawsuit?

 

In most situations, but not all, you have two years to bring a lawsuit from when the event that gives rise to the lawsuit occurred.

 

INTRODUCTION

In the Province of Ontario, the statute that sets out the time limits to bring lawsuits, including those in the Small Claims Court, is called the Limitations Act, 2002.  Prior to its enactment in January 2004, there were a multitude of different statutes that set out time limits to bring different causes of action.  The current statute consolidated a lot, but not all, of these different time limits into one law and, in many cases, reduced the time to sue from six years to two years.

 

TWO-YEAR LIMITATION PERIOD

The basic two-year limitation period in the Act commences when a claim would have been reasonably discovered and litigation would be an appropriate remedy.  Section 5 reads as follows:

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).

While one of the criteria for the clock to start ticking is the realization that litigation would be an appropriate remedy it is sometimes safest to file strictly within the two years from when the event occurred.

 

EXCEPTIONS

Notwithstanding the basic two-year limitation period, there are over 40 exceptions to the Act which are listed in a schedule to the statute.  The vast majority of them would not arise in a Small Claims Court setting but some that could include the following:

One year to sue an insurance company under section 259.1 of the Insurance Act.

Three months to sue for libel in a newspaper or broadcast under section 6 of the Libel and Slander Act.

Six years to register a judgment under the Reciprocal Enforcement of Judgments Act.

In addition to the aforesaid exceptions, the are some causes of action that have no limitation period at all.  They include:

A proceeding to recover money owed to the Crown (e.g. taxes, fines and interest).

A proceeding to enforce an order of a court.

A proceeding to recover money owned in respect of a student loan.

Time to serve does not count, nor does completion of an action.

 

LIQUIDATED CLAIMS

Another exception to the Act, and one that is common in the Ontario Small Claims Court, is with respect to liquidated claims.  These are claims that involve unpaid debts such as loans, invoices, promissory notes, credit cards, etc.  Any time that a debtor makes a payment it has the effect of re-starting the basic two-year limitation period provided it has not already run out.  If a debtor makes a payment after the two-year limitation period, however, this does not have the effect of reviving an expired limitation period.  The payment must be made while the limitation period is still active.

 

ULTIMATE LIMITATION PERIOD

Lastly, if a limitation period applies pursuant to the Limitations Act then there is an ultimate limitation period established by section 15 of the Act which reads as follows:

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.