Limitation Periods and Singular Discrete Oppressive Acts

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In Zhao v Li, 2020 ONCA 121, the Court of Appeal for Ontario considered how the two-year basic limitation period under section 4 of the Limitations Act, 2002, SO 2002, c 24, Sched B applies to oppression remedy claims under the Ontario Business Corporations Act, RSO 1990, c B.16 when the claims arise from a series of oppressive acts alleged to have occurred at different times.

The appellant was a shareholder in a dry cleaning business. She commenced a lawsuit against the respondent based on three alleged acts or omissions: (1) the respondent unilaterally dissolved the business without the approval, authority, or knowledge of the appellant; (2) the respondent failed to pay the proceeds of the sale or transfer of the business; and (3) the respondent failed to account for the profits of the business.

The Court of Appeal confirmed the principles in Maurice v Alles, 2016 ONCA 287, which provide as follows:

[28]         […] where what is complained of is a series of singular discrete acts of oppression over a period of time, claims arising from the acts committed or discoverable within two years of the action are not statute barred, even if the series of acts commenced, and claims for earlier oppressive acts in the series were discoverable, more than two years prior to the commencement of the action. A later oppressive act, even if based on or in furtherance of earlier oppressive acts, gives rise to a new cause of action because it is new oppressive conduct: at paras. 3 and 50-54.

[29]         Although not expressly stated in Maurice, it follows that claims arising from singular discrete acts of oppression (in a series of such acts) that are discoverable more than two years before an action are statute barred. As a result, a series of singular discrete acts of oppression that stretches over a period of time may result in some claims for oppression arising from earlier acts in the series being statute barred while claims arising from later acts in the series are not.

According to the Court of Appeal, each of the alleged acts or omissions at issue constitute singular discrete oppressive acts as they are different acts or omissions that took place at different times and none of them is dependent upon either of the others taking place for oppression to have occurred.

Therefore, although the appellant’s claims related to the sale of the business and the distribution of profits were statute barred, the Court of Appeal determined that the corporate dissolution claim was allowed to proceed because it was a singular discrete oppressive act that occurred or was discoverable within two years of the commencement of the action.