Section 18 of the Limitations Act – Resetting the Ultimate Limitation Period for Contribution Claims
In Lower Williams Properties Ltd. v. Santaguida, 2025 ONSC 1132, the third party brought a Rule 21 motion in multiple related actions on the grounds that the third party action was barred by the 15-year ultimate limitation period.
Background
The actions all arose from a 2019 fire that damaged multiple properties on William Street in Ottawa, Ontario, and the fire was alleged to have started on the roof of the defendant’s restaurant, Vittoria Trattoria. As a result of this fire, there were eight different actions commenced. In each action, Mr. Maurizio Martignano was named as a third party claimant.
The third party is an architect who was involved in a renovation at 37 William Street back in 2001. The defendants alleged in their third party claims that the third party’s architectural work contributed to the spread of the 2019 fire.
Justice Bell of the Ottawa Superior Court ultimately dismissed the third party’s motion.
Analysis
Section 15 of the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B (“the Act”), establishes an ultimate limitation period of 15 years:
15(1) Even if the limitation period established by any other section of this Act in respect of a claim has not expired, no proceeding shall be commenced in respect of the claim after the expiry of a limitation period established by this section.
(2) 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.
Section 18 of the Act, outlines the limitation period applicable to claims for contribution and indemnity:
18(1) For the purposes of subsection 5(2) and section 15, in the case of a claim by one alleged wrongdoer against another for contribution and indemnity, the day on which the first alleged wrongdoer was served with the claim in respect of which contribution and indemnity is sought shall be deemed to be the day the act or omission on which the alleged wrongdoer’s claim is based took place.
(2) Subsection (1) applies whether the right to contribution and indemnity arises in respect of a tort or otherwise.
During the motion, the third party argued that the architectural work was completed 18 years before the date of the fire. The third party argued that as the 15-year limitation period had lapsed, this should result in a dismissal of the third party claim.
The defendants argued that the third party claims were not statute barred, as section 18 of the Act deems the date of the alleged wrongdoing to be the date on which the defendant was served with the plaintiff’s statement of claim giving rise to its claims for contribution and indemnity which occurred in 2021 not the date on which the third party’s underlying act or omission occurred.
Justice Bell held that although the roof renovation work took place more than 15 years since the third party claim was issued, Section 18(1) of the Act prescribes the applicable limitation period to contribution and indemnity claims. Justice Bell relied on the Ontario Court of Appeal case Placzek v. Green, 2009 ONCA 83, which determined that when it comes to provisions relating to contribution and indemnity claims, the Court reads section 18 of the Act in combination with the basic two-year limitation period and the ultimate limitation period[1].
Section 18 establishes the date of service of the injured party’s statement of claim as the presumed commencement date for the basic two-year limitation period and the actual commencement date for the ultimate 15-year limitation period with respect to contribution and indemnity claims.
The Court further discussed that the reform of the law of limitations in Ontario was aimed at creating a clear scheme for addressing limitations issues, balancing the plaintiff’s right to sue and a defendant’s need for certainty and finality. Justice Bell expanded on this idea by referencing Mega International Commercial Bank (Canada) v. Yung, 2018 ONCA 429, where Paciocco J.A. found an element of injustice in using a limitation period to deny a claim that could not have been discovered with reasonable diligence, the court should be reluctant to adopt a legislative interpretation that effectively permits the possibility of such an injustice, unless that is the outcome clearly dictated by the legislation[2].
In the case at bar, Justice Bell found it would be unfair to deny the defendants’ right to make a claim for contribution and indemnity before they were in a position to pursue a third party claim, which was before the statement of claim was ever served. This is the type of unfairness that s. 18 protects.
Conclusion
Section 18 dictates that in the case of contribution and indemnity claims, the 2-year limitation period presumptively commences on the date of service of the statement of claim, but the 15-year ultimate limitation period actuallycommences on the date of service of the statement of claim. Based on this interpretation, the court found that the third party claims are not statute barred by the 15-year ultimate limitation period, and the third party’s Rule 21 motion was accordingly dismissed.
Take Away
Overall, section 18 of the Act protects the interests of defendants in seeking contribution and indemnity from parties whose involvement in the matters at issue may have occurred much earlier.
This case is a good reminder that when defendants wish to commence an action against a third party for contribution and indemnity, parties must be mindful of the deadline for contribution and indemnity based on the service date of the plaintiff’s statement of claim.
[1] Placzek v. Green, 2009 ONCA 83 at para 23.
[2] Mega International Commercial Bank (Canada) v. Yung, 2018 ONCA 429, at para. 73.