Section 13(1) of the Limitations Act, 2002, SO 2002, c 24, Sch B (the “Act”) provides for the extension of the commencement date of a limitation period in relation to a claim for liquidated damages where an acknowledgment of the indebtedness is made. Under section 13(10) of the Act, however, an acknowledgment is not effective unless it is “in writing and signed by the person making it or the person’s agent.” Does an acknowledgment have to be “signed” in the traditional sense?
In 1475182 Ontario Inc. o/a Edges Contracting v. Ghotbi, 2021 ONSC 3477 (“Ghotbi”), the Divisional Court adopted a purposive approach to the signature requirement of section 13(10) of the Act based on concerns about authenticity. Justice Boswell determined that section 13(10) does not prescribe any particular type of signature and therefore the acknowledgment of a debt through a text message sent by a cellular telephone with a unique telephone number provides, in effect, a digital signature that is appropriate to meet the requirements of the Act.
According to Justice Boswell: “The world is changing. Everyone knows that. We live in a digital world now, much more than was the case when the Act came into force in 2002. It is incumbent upon the court to consider not just traditional means of affixing one’s signature to a document, but other, more modern means, including digital signatures.”
On the facts, there was no question about the authenticity of the text message acknowledging liability for payment of the liquidated sum. Accordingly, the underlying purpose of section 13(10) of the Act was satisfied. Justice Boswell went on to find that the signature requirement had been met through digital means:
I would also find that the express requirement of a signature is met in this case. Dr. Ghotbi used his cellular telephone to send and receive texts with Mr. Lupo. Dr. Ghotbi, like all other cellular telephone users, has a unique phone number linked with his phone. In fact, there will undoubtedly be other unique identifiers associated with Dr. Ghotbi’s phone including, without limitation, an International Mobile Equipment Identifier (IMEI) number. These unique identifiers provide, in effect, a digital signature on every message sent by the user of that particular device. Again, there is no dispute that the user of the device was Dr. Ghotbi and that he sent the texts in issue. In my view, that digital signature is sufficient to meet the requirements of s. 13(10) of the Act.
Ghotbi is an important decision recognizing the realities of the modern world and confirming that an acknowledgment of liability in respect of a claim for payment of a liquidated sum can be in a text message provided that there are no legitimate concerns about the authenticity of the debtor’s acknowledgment.