Major Amendments to Ontario's Limitations Legislation

On January 1, 2004, the new Limitations Act, 2002 was proclaimed in force, resulting in significant changes to Ontario's law of limitations. Although the entire statute deserves a close review by those in the legal profession, there are several changes worth noting here. The most significant change is to the time period within which a claimant must commence an action. The limitation period was formerly six years; however, the new Act prescribes a basic limitation period of two years running from the day the act or omission forming the basis of a claim is discovered. There is a rebuttable presumption that a claimant was aware of the act or omission forming the basis of the claim on the day it took place. Limitation periods which vary from this standard two-year limitation period are listed in a Schedule to the Act. Limitation periods set out in other Ontario legislation for claims that fall under this new Act are of no effect unless they are listed in the Schedule or incorporated by reference in another provision listed in the Schedule. The Act also introduces an Ultimate Limitation Period, providing that no proceeding shall be commenced in respect of any claim after 15 years has elapsed since the original act or omission. A limitation period is temporarily halted if the parties have agreed to have an independent third party resolve the claim or assist in resolving the claim. The period resumes running once the claim is either resolved, the resolution process is terminated, or a party withdraws from the agreement. In a significant change to the existing law of limitations, parties will no longer be able to contract out of the prescribed limitation periods. For claims that arose before January 1, 2004, the Act provides specific transitional provisions. These provisions are complex and require careful analysis. If the impugned act or omission took place wholly within Ontario, the Act may also have implications for claims under a federal intellectual property statute. For instance, for claims under one of the federal intellectual property statutes with no prescribed limitation period (such as the Trade-marks Act), if infringement took place wholly within the province of Ontario, the limitation periods under the Limitations Act, 2002 may apply, regardless whether the proceeding is before the Federal or the Ontario court. If the act of trade-mark infringement took place in multiple jurisdictions and the action is pursued in the Federal Court, by virtue of section 39 of the Federal Court Act, a six-year limitation period would apply to the claim. For the full text of the new Ontario Limitations Act, 2002, visit: http://www.e-laws.gov.on.ca/DBLaws/Statutes/English/02l24b_e.htm. Summary by: Lenni Carreiro For assistance in determining how the new Limitations Act may affect you, contact Tina Nanov.