Before 2004, a person in Ontario who suffered a loss typically had six years within which to commence a civil lawsuit to seek compensation or recover damages for the loss. With the enactment of the Limitations Act, 2002 (“the Act”), the old six-year limitation period was reduced to two years for losses (or "claims") discovered on or after January 1, 2004.
Under the old limitations law, the courts exercised significant discretion as to when the limitation period began to run and whether it could be extended in order to achieve fairness in appropriate cases, such as where a plaintiff’s lawyer failed to issue the lawsuit on time due to a miscalculation or an oversight. This discretion is known as the doctrine of “special circumstances.” While the enactment of the new Act significantly changed the law of limitations, the courts continued to apply the “special circumstances” doctrine in a number of cases. An important June 2008 ruling of the Ontario Court of Appeal has now put an end to that.
In Joseph v. Paramount Canada’s Wonderland, 2008 ONCA 469, a case where the plaintiff’s lawyer issued the lawsuit almost two months after the expiry of the limitation period because of an oversight, the Court of Appeal washed away the old doctrine of special circumstances for most claims arising after January 2004 and confirmed the principle that the two-year limit is a firm two-year limit, subject to any specific exceptions in the Act. The Court found that the aim of the new Act is “to balance the right of claimants to sue with the right of defendants to have some certainty and finality in managing their affairs.”
The result of this decision is that where a plaintiff commences a lawsuit after the expiry of the applicable limitation period, regardless of the reason, the lawsuit will most likely be statute-barred and dismissed. It appears that certainty for defendants has prevailed over fairness for plaintiffs.
While some pre-2004 claims are still subject to the old six-year limitation period, most claims discovered between January 2004 and October 2006 are now (as of October 2008) probably already statute-barred. Parties with claims discovered in 2006 and 2007 are in serious danger of losing their right to sue, as is anyone that does not understand that a lawsuit must be commenced within two years of discovering a claim.
The lesson: Carefully consider whether your condo might have claims that need to be dealt with and move them forward promptly. Incoming condo boards or managers need to get up to speed immediately upon taking office and determine whether any claims need to be acted upon and to do so quickly.
The limitations clock is ticking.