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Labour & Employment Law Blog

Out of Time, Out of Luck

Zeilikman Law

Zeilikman Law

Case Summary

This dispute arose out of a loan agreement between Cross Bridges Inc. and Z-Teca Foods Inc. Cross Bridges lent money to Z-Teca, who was required to repay the full loan within 60 days of demand. Cross Bridges demanded repayment on October 21, 2009, Z-Teca made a series of payments. On January 10, 2011, Cross Bridges deposited a cheque from Z-Teca which did not clear due to insufficient funds. Cross bridges issued its statement of claim on January 17, 2013. On summary judgment, the motions judge held that the limitation period started to run on January 10, 2011, when the cheque was presented to the bank for payment. As a result, the claim was statute barred under the Limitations Act which sets out a 2-year time limit to initiate proceedings following the plaintiff’s discovery of the material facts substantiating a legal claim. The plaintiff’s appealed this decision on two grounds:

  1. that the motions judged erred in finding that the limitation period ran from the date of the presentation of the cheque rather than the date it bounced;
  2. that the limitation defence is unavailable to the defendant because they admitted to the indebtedness during their cross-examination.

The Appeal was dismissed.

REASONS

With respect to the first ground of appeal, the Court of Appeal found that the limitation period began to run 60 days after demand under the loan agreement, which was made on October 21, 2009. Therefore, the limitation period began to run on December 20, 2009. While acknowledgement extends the limitation period, the Court of Appeal found that it was the presentation of the cheque which could be properly characterized as acknowledgement rather than the date it was bounced.

With respect to the second ground of appeal, the Court of Appeal found the defendant’s admissions during cross-examination to be qualified and subject to the limitation period defence. Further, the Court of Appeal found that acknowledgement happened after the expiry of the limitation period, which renders it irrelevant to the extension of the limitation period in any event.

OUR THOUGHTS

What’s the moral of this story? Don’t sit on your rights. Limitations are strictly enforced by Ontario courts and two years isn’t a very long time. If you think you may have a claim, it’s always best to consult a lawyer as soon as possible to determine your rights.

The above article is for general information purposes only, does not constitute legal advice or create a solicitor-client relationship. Because each case is unique and factually driven, if you have concerns with regard to the foregoing issues, please make an appointment with one of our lawyers or a qualified legal practitioner elsewhere. We represent clients in the Greater Toronto Area including Toronto, North York, Markham, Vaughan, Thornhill, Newmarket, Aurora, Brampton, Mississauga, Barrie, Ajax, Whitby, Pickering and Oshawa.