Limitation Periods during the Coronavirus Pandemic

To protect health and safety and help contain the spread of the novel coronavirus (COVID-19), the Ontario Superior Court of Justice has suspended all regular operations effective March 17, 2020 and until further notice.

In a Notice to the Profession, the Public and the Media Regarding Civil and Family Proceedings released on March 15, 2020, the court provided the following important guidelines that will have consequences on parties approaching statutory limitation periods in Ontario during this unprecedented pandemic:

  1. Ontario courthouses will currently remain open. Regular filings that are not urgent may continue to occur at courthouses. In the event that it becomes impossible to file at the courthouse, or the courthouse is believed to be unsafe, parties can expect the court to grant extensions of time once the court’s normal operations resume.
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Court of Appeal holds that the duty to defend is an ongoing obligation to be applied on a “rolling” basis and insurers cannot contract out of the Limitations Act where policy holders are consumers

In Reeb v The Guarantee Company of North America, 2019 ONCA 862, the Court of Appeal for Ontario considered two matters regarding the duty of an insurance company to defend. In one of the matters, an insurance company brought an application against two other insurance companies for a declaration that they are obligated to pay for one-third of the ongoing defence costs of the applicant. The applicant was successful and the respondents appealed. In dismissing the appeal and concluding the respondents had a duty to defend and contribute to the applicant’s defence costs, the Court of Appeal considered two limitation period arguments.

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Hamilton (City) v. Metcalfe & Mansfield Capital Corp., 2012 ONCA 156 (Discoverability and Tolling Agreements)

In Hamilton (City) v. Metcalfe & Mansfield Capital Corp., 2012 ONCA 156, the Ontario Court of Appeal examined discoverability principles in the context of an action in tort for negligent misrepresentation, and the application of ss. 11 and 22 of the Limitations Act, 2002, which suspend the running of a limitations period in certain circumstances.

The City purchased $10 million in non-bank sponsored asset backed commercial paper (“ABCP”) from the defendants on July 24, 2007, three weeks before the collapse of the Canadian ABCP market. The investment was to mature about two months later but some three weeks after the purchase, the market for this form of investment collapsed.

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Boyce v. The Co-Operators Insurance Company, 2013 ONCA 298 (Agreement to Shorten, s. 22)

The Ontario Court of Appeal recently released its decision in Boyce v. The Co-Operators Insurance Company, 2013 ONCA 298, which highlights how important it is for contracts that shorten the relevant limitation period under section 22 of the Limitations Act, 2002 to have clear language.

This caseconcerned a contractual limitation period contained in an insurance policy; however, the case has general application to other types of business agreements that attempts to shorten a limitation period.  In Boyce, the owners of a fashion boutique suffered loss as a result of a foul odour in their business premises.  They sued their insurer more than a year after suffering the underlying loss, seeking indemnification for the loss. 

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