The Suspension of Limitation Periods Applies Only When a Cause of Action Exists
The Court of Appeal in Wong v. Lui, 2023 ONCA 272, considered the applicability of the 15 year ultimate limitation period to claims advanced by a plaintiff who was a minor, but did not yet have a cause of action, during the running of the 15 year limitation period.
In this case, the plaintiffs sought to bring a claim in negligence arising from building permits issued in 1987 and defective construction carried out on the plaintiffs’ home prior to their purchase of the home in August of 2019. At the time of the purchase, one of the plaintiffs, Ms. Wong, was 31 years old. The plaintiffs’ action was commenced on July 7, 2021.
At issue was the interpretation of sections 15(2) and 15(4) of the Limitations Act, which state, in part, as follows:
(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. 2002, c. 24, Sched. B, s. 15 (2).
[…]Period not to run
(4) The limitation period established by subsection (2) does not run during any time in which,
(b) the person with the claim is a minor and is not represented by a litigation guardian in relation to the claim;
In this case, the parties agreed that the ultimate limitation period, absent a consideration of s. 15(4) of the Act, would have expired on January 1, 2019, 15 years after the enactment of the Act in 2004.
The defendants brought a motion under Rule 21 for declaration that s. 15(4)(b) of the Act does not toll the ultimate 15-year limitation period where a plaintiff does not have a claim until he or she is an adult and, for s. 15(4)(b) to apply, a plaintiff must have a claim while the plaintiff is a minor. On this basis, they sought to strike the plaintiffs’ negligence claims relating to the 1987 permits.
The plaintiffs argued that, by operation of section 15(4) of the Act, the ultimate limitation period did not begin to run until Ms. Wong turned 18, in 2006, and accordingly the claims in negligence relating to the building permits were not statute barred.
The Motion Judge held that in order for s. 15(4)(b) to suspend the ultimate limitations period, 1) a plaintiff must be a minor during the ultimate limitation period, and 2) the plaintiff must not be represented by a litigation guardian with respect to the claim during the ultimate limitation period.
The Motions Judge noted that the former Limitations Act expressly required that a cause of action accrue to the plaintiff while a plaintiff is a minor in order for the limitation period to be suspended, and that no such express language was in the current version of the Act. She concluded that the current Act therefore required no similar condition. Ms. Wong was a minor from 2004-2006, the first two years of the default running of the ultimate limitation period and was not represented by a litigation guardian. Accordingly, the Motion Judge ordered that the claims in negligence in relation to the 1987 building permits were not statute barred.
On appeal, the Court of Appeal held that the Motion Judge erred in her interpretation of s. 15(4) of the Act in determining that no cause of action need accrue to a minor as a condition for the ultimate limitations period to be suspended.
The Court of Appeal noted that the purpose of the ultimate limitation period is
“to balance the concern for plaintiffs with undiscovered causes of action with the need to prevent the indefinite postponement of a limitation period and the associated costs relating to record-keeping and insurance resulting from continuous exposure to liability.”
The Court also noted that it is a well-established principle of limitations law that it would be unfair to bar a person’s right to make a claim while they are in a condition that renders them unable to take steps to pursue their rights. As a result, limitation periods are suspended by reason of incapacity and age.
The Court of Appeal held that interpreting s. 15 as a whole, including subsection (2) which indicates that the ultimate limitations period runs from the date that the act or omission on which the claim is based occurred, demonstrates the legislature’s clear intention to not make the ultimate limitation period subject to discoverability. The Court further held that the interpretation of the Motion Judge was inconsistent with this intention, and does not serve the goal of providing finality to litigants in rendering the suspension of the limitation period contingent on the plaintiff’s age absent any consideration of when the claim arose.
The Court of Appeal further held that, if the legislature intended that the suspension of the ultimate limitation period would apply to persons who were minors at any time during the running of the ultimate limitation period, they could have included language in s.15(4) to that effect. Instead, the legislature used the phrase “the person with the claim” in the present tense which indicates that the person with the claim must be a minor at the time of having a claim.
The Court further held that:
“Limitation periods only apply to claims; they do not apply to persons who do not have claims. Moreover, an adult with a claim who is not under a disability has no need of the kind of accommodation and protection that the postponement of limitation periods was historically designed to achieve.”
The Court of Appeal held that given that the plaintiff did not have a claim until she purchased the property in 2019, the ultimate limitation period was not suspended prior to this date. Moreover, the plaintiff was not under a disability at the time that she purchased the property and commenced her action.
The Court allowed the appeal and dismissed the plaintiffs’ claims in relation to the 1987 building permits.
The takeaway from this decision is that the suspension of limitations periods in circumstances where a party is a minor or under a disability will only apply when the person who is a minor or who is under a disability actually has a claim. As the Court of Appeal stated, “limitations periods apply to claims, not to persons who do not have claims.”
That the Act indicates that the ultimate limitations period begins to run, not on the date that a claim is discovered, but instead on the date on which the act or omission on which the claim is based took place, means that the plaintiffs’ claim in this case was barred. Notably, the Court of Appeal’s reasoning in Wong v. Lui, would likely also apply to s. 6 and s. 7 of the Act, which provide for the suspension of the two-year limitations period in circumstances where the plaintiff is a minor or under a disability, such that these suspensions will also not apply unless a cause of action has accrued. However, given that discoverability applies to the basic two-year limitations period, any plaintiffs relying on these provisions may be able to advance arguments regarding discoverability.