Discovery Principle

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Date Retrieved:	2024-04-20
CLNP Page ID:	277
Page Categories:	Limitations, Section 5 (Limitations Act, 2002, S.O.)
Citation:	Discovery Principle, CLNP 277, <https://rvt.link/bd>, retrieved on 2024-04-20
Editor:	MKent
Last Updated:	2024/03/19

Pioneer Corp. v. Godfrey, 2019 SCC 42 (CanLII)

[31] This Court has recognized that limitation periods may be subject to a rule of discoverability, such that a cause of action will not accrue for the purposes of the running of a limitation period until “the material facts on which [the cause of action] is based have been discovered or ought to have been discovered by the plaintiff by the exercise of reasonable diligence” (Central Trust Co. v. Rafuse, 1986 CanLII 29 (SCC), (1986) 2 S.C.R. 147, at p. 224; Ryan, at paras. 2 and 22).

[32] This discoverability rule does not apply automatically to every limitation period. While a “rule”, it is not a universally applicable rule of limitations, but a rule of construction to aid in the interpretation of statutory limitation periods (Peixeiro v. Haberman, 1997 CanLII 325 (SCC), (1997) 3 S.C.R. 549, at para. 37]). It can therefore be displaced by clear legislative language (Ermineskin Indian Band and Nation v. Canada, 2006 FCA 415, (2007) 3 F.C.R. 245, at para. 333, aff’d 2009 SCC 9, (2009) 1 S.C.R. 222). In this regard, many provincial legislatures have chosen to enact statutory limitation periods that codify, limit or oust entirely discoverability’s application, particularly in connection with ultimate limitation periods (see e.g. Limitations Act, 2002, S.O. 2002, c. 24, Sch. B, ss. 4-5 and 15; Limitations Act, R.S.A. 2000, c. L-12, s. 3(1), Limitation Act, S.B.C. 2012, c. 13, ss. 6-8 and 21; The Limitations Act, S.S. 2004, c. L-16.1, ss. 5-7, Limitation of Actions Act, S.N.B. 2009, c. L-8.5, s. 5, Limitation of Actions Act, S.N.S. 2014 c. 35, s. 8; see also Bowes v. Edmonton (City), 2007 ABCA 347, 425 A.R. 123, at paras. 146-58).

[33] Further, absent legislative intervention, the discoverability rule applies only where the limitation period in question runs from the accrual of the cause of action, or from some other event that occurs when the plaintiff has knowledge of the injury sustained:

In my opinion, the judge-made discoverability rule is nothing more than a rule of construction. Whenever a statute requires an action to be commenced within a specified time from the happening of a specific event, the statutory language must be construed. When time runs from “the accrual of the cause of action” or from some other event which can be construed as occurring only when the injured party has knowledge of the injury sustained, the judge-made discoverability rule applies. But, when time runs from an event which clearly occurs without regard to the injured party’s knowledge, the judge-made discoverability rule may not extend the period the legislature has prescribed. [Emphasis added.]

(Fehr v. Jacob (1993), 1993 CanLII 4407 (MB CA), 14 C.C.L.T. (2d) 200 (Man. C.A.), at para. 22, cited in Peixeiro, at para. 37.)

[34] Two points flow from this statement. First, where the running of a limitation period is contingent upon the accrual of a cause of action or some other event that can occur only when the plaintiff has knowledge of his or her injury, the discoverability principle applies in order to ensure that the plaintiff had knowledge of the existence of his or her legal rights before such rights expire (Peixeiro, at para. 39).

[35] Secondly (and conversely), where a statutory limitation period runs from an event unrelated to the accrual of the cause of action or which does not require the plaintiff’s knowledge of his or her injury, the rule of discoverability will not apply. In Ryan, for example, this Court held that discoverability did not apply to s. 5 of the Survival of Actions Act, R.S.N.L. 1990, c. S-32, which stated that an action against a deceased could not be brought after one year from the date of death. As the Court explained (para. 24):

The law does not permit resort to the judge-made discoverability rule when the limitation period is explicitly linked by the governing legislation to a fixed event unrelated to the injured party’s knowledge or the basis of the cause of action. [Emphasis added; citation omitted.]

By tying, then, the limitation period to an event unrelated to the cause of action, and which did not necessitate the plaintiff’s knowledge of an injury, the legislature had clearly displaced the discoverability rule (Ryan, at para. 27).

[36] In determining whether a limitation period runs from the accrual of a cause of action or knowledge of the injury, such that discoverability applies, substance, not form, is to prevail: even where the statute does not explicitly state that the limitation period runs from “the accrual of the cause of action”, discoverability will apply if it is evident that the operation of a limitation period is, in substance, conditioned upon accrual of a cause of action or knowledge of an injury. Indeed, clear statutory text is necessary to oust its application. In Peixeiro, for example, this Court applied the discoverability rule to s. 206(1) of the Highway Traffic Act, R.S.O. 1990, c. H.8, which stated that an action must be commenced within two years of the time when “damages were sustained” (para. 2). The use of the phrase “damages were sustained” rather than “when the cause of action arose” was a “distinction without a difference”, as it was unlikely that the legislature intended that the limitation period should run without the plaintiff’s knowledge (para. 38).

(b) The Statutory Scheme, and the Objects of Statutory Limitation Periods

[47] The application of discoverability to the limitation period in s. 36(4)(a)(i) is also supported by the object of statutory limitation periods. This Court has recognized that three rationales underlie limitation periods (M. (K.), at pp. 29-31), which courts must consider in deciding whether the discoverability rule applies to a particular limitation period. The first is that limitation periods foster certainty, in that “[t]here comes a time . . . when a potential defendant should be secure in his reasonable expectation that he will not be held to account for ancient obligations”(M. (K.), at p. 29). This concern must be balanced against the unfairness of allowing a wrongdoer to escape liability while the victim of injury continues to suffer the consequences (M. (K.), at p. 29). The second rationale is evidentiary: limitation periods are intended to help prevent evidence from going stale, to the detriment of the plaintiff or the defendant (M. (K.), at p. 30). Finally, limitation periods serve to encourage diligence on the part of plaintiffs in pursuing their claims (M. (K.), at p. 30).

[48] Consideration of these rationales for limitation periods affirms discoverability’s application here. Even recognizing that shorter limitation periods indicate that Parliament put a premium on the certainty that comes with a limitation statute’s function of repose (Peixeiro, at para. 34), balancing all of the competing interests underlying s. 36(4)(a)(i) weighs in favour of applying discoverability. The ability of plaintiffs to advance claims for loss arising from conduct contrary to Part VI of the Competition Act outweighs defendants’ interests in barring them, especially where such conduct is, as I have already noted, concealed from plaintiffs (Fanshawe, at para. 46) (such that the evidentiary rationale — that is, the concern about evidence going “stale” — has no place in the analysis). To hold otherwise would create perverse incentives, encouraging continued concealment of anti-competitive behaviour until the two-year limitation period has elapsed. It would therefore not only bar plaintiffs from pursuing their claims, but reward concealment that has been “particularly effective” (Fanshawe, at para. 49).

[138] Limitation clauses are statutory provisions that place temporal limits on a claimant’s ability to institute legal proceedings. The expiry of a limitation period has the effect of “extinguish[ing] a party’s legal remedies and also, in some cases, a party’s legal rights” (G. Mew, D. Rolph and D. Zacks, The Law of Limitations (3rd ed. 2016) (“Mew et al.”), at p. 3). As this Court explained in M. (K.) v. M. (H.), 1992 CanLII 31 (SCC), (1992) 3 S.C.R. 6, statutory limitation clauses reflect the balance struck by the legislature between three distinct policy rationales: granting repose to defendants, avoiding evidentiary issues relating to the passage of time, and encouraging diligence on the part of plaintiffs.

Cullaton v. MDG Newmarket Inc., 2019 ONSC 6432 (CanLII)

[113] I note that the plaintiff has pleaded the doctrine of equitable fraud or fraudulent concealment. Since argument of this motion, the Supreme Court of Canada has released its decision in Pioneer Corp. v. Godfrey, 2019 SCC 42 in which the court addresses the doctrine of fraudulent concealment as it applies to limitation periods. The plaintiff has not sought to certify fraudulent concealment as a common issue. No submissions were made. Whether fraudulent concealment could or should be a common issue in this action is an open question. If it was a common issue, its resolution, if favourable to the plaintiff, might well permit the trial judge to proceed with an assessment of aggregate damages for the entire class.

[114] In any event, the appropriateness of aggregate damages will be determined by the trial judge whether or not certified and only after liability has been determined.

Tomec v. Economical Mutual Insurance Company, 2019 ONCA 882 (CanLII)

[2] The Licence Appeal Tribunal (“LAT”) and the Divisional Court concluded that discoverability did not apply to these sections. Instead, they found that the limitation period was a hard limitation period that proscribed the appellant from asserting her claim for certain statutory accident benefits before she was legally entitled to make that claim.

[3] After the Divisional Court’s decision in this case, the Supreme Court released Pioneer Corporation v. Godfrey, 2019 SCC 42, 26 B.C.L.R. (6th) 1, which provided guidance regarding when a limitation period should be construed as a hard limitation. Applying Pioneer and well established rules of statutory construction to this case make clear that the LAT’s and Divisional Court’s orders cannot stand. I would therefore allow the appeal.

[27] Our courts have recognized that the rule of discoverability may apply to limitation periods. Discoverability generally provides that a limitation period will not begin to run until the material facts on which the cause of action is based are known to the plaintiff or ought to have been known through the exercise of reasonable diligence. It is not a universal rule applicable to all limitation periods but a rule of construction to aid in interpreting limitation periods: Pioneer, at paras. 31 – 32.

[28] Both the LAT and the Divisional Court concluded that the applicable limitation period is a hard limitation period, i.e. a limitation to which the rule of discoverability does not apply.

[46] Statutes are to be interpreted in a manner that does not lead to absurd results. An interpretation is absurd if it “leads to ridiculous or frivolous consequences, if it is extremely unreasonable or inequitable, if it is illogical or incoherent, or if it is incompatible with other provisions or with the object of the legislative enactment”: Rizzo & Rizzo Shoes Ltd. (Re), 1998 CanLII 837 (SCC), [1998] 1 S.C.R. 27, 36 O.R. (3d) 418, at para. 27.

[47] Here, the decisions below thrust the appellant into a Kafkaesque regulatory regime. A hard limitation period would bar the appellant from claiming enhanced benefits, before she was even eligible for those benefits. However, if the appellant had not claimed any benefits until she obtained CAT status in 2015, she would not be caught by the limitation period: Machaj v. RBC General Insurance Company, 2016 ONCA 257, at para. 6. Alternatively, if the appellant had coincidentally obtained CAT status before 2012, the hard limitation period would not bar her claim for enhanced benefits.

[53] Finally, it is worth considering the three policy rationales that underlie limitation periods to determine whether they support the finding of a hard limitation period. Those rationales are that limitation periods: (i) foster certainty; (ii) are intended to help prevent evidence from going stale; and (iii) encourage plaintiffs to be diligent in pursuing their claims: Pioneer at para. 47.

[54] None of those rationales support a finding of a hard limitation period in this case. There is little certainty achieved, since there is no limitation period for initially bringing benefits claims resulting from CAT status: Machaj, at para. 6. There is no risk of evidence going stale. To the contrary, a hard limitation period bars potentially meritorious claims based on current evidence. A hard limitation period will also not ensure the insured’s diligence in pursuing a claim, because the insured has no claim to pursue until a CAT designation is made.

[55] In summary, it is unreasonable to construe the relevant limitation period as a hard limitation. There is a single reasonable interpretation of s. 281.1(1) of the Insurance Act and s. 51(1) of the SABS. The limitation period contained in those sections is subject to the rule of discoverability because it is directly tied to the cause of action that an insured can assert when denied benefits. A hard limitation period is contrary to the purposes of the SABS and the Supreme Court’s guidance in Pioneer. In addition, a hard limitation period in these circumstances would lead to absurd results and is not consistent with the policy rationales that underlie limitation periods.

[56] For the foregoing reasons, I would allow the appeal and set aside the orders of the Divisional Court and the LAT.

[57] I would make an order declaring that the limitation period regarding the appellant’s entitlement to attendant care benefits, and housekeeping and home maintenance benefits has not expired, and that accordingly, the appellant is entitled to proceed with her application for those benefits.

Cross Bridges Inc. v. Z-Teca Foods Inc., 2016 ONCA 27 (CanLII)

[9] Secondly, the appellant submits that the limitation defence should be unavailable because the respondent admitted his indebtedness in his cross-examination on his affidavit filed in the summary judgment proceedings.

[10] We disagree. Read in its totality, the admission of indebtedness by the respondent was qualified and stated to be subject to the limitation period defence. In addition, under s. 13(9) of the Limitations Act, 2002, for an acknowledgement to reset the limitation clock, it must be made before the expiry of the limitation period applicable to the claim. Here, the cross-examination occurred long after the expiry date.

Cooper v. Toronto (City), 2019 ONSC 7486 (CanLII)

[17] The first ground of appeal is that the Master erred by dismissing the Motion without making findings regarding: (1) the date on which the plaintiff first knew the requisite elements of her claim against Hydro; and (2) when “a reasonable person with the abilities and in the circumstances of [the plaintiff] first ought to have known of such claim.” Such findings are a requirement before any finding that claims against a proposed defendant are statute-barred: see Morrison v. Barzo at para. 30.

[18] I agree that the Master erred in law in dismissing the Motion without making either of these findings. Although the Master determined the Motion on the ground of a lack of a reasonable explanation, it is not clear whether the Master proceeded on the basis that Cooper had actual knowledge as of July 4, 2014, based on having obtained the Article on that date, or accepted that Cooper did not have actual knowledge until May 2017 but proceeded on the basis that she ought to have had knowledge on or about June 30, 2014 or July 4, 2014 as a result of receipt of one or both of the City’s statement of defence and the Article,. The reference to the delivery of the Article to her counsel may even suggest that the Master proceeded on the basis that she had neither until such time as her counsel received the Article. In any event, there is no finding regarding the date on which Cooper first had actual knowledge, and, more importantly, there is no finding regarding the date on which Cooper reasonably ought to have had knowledge of her cause of action against Hydro.

[19] In dismissing the Motion without making the necessary findings of fact set out above to ground her decision, the Master erred in law by failing to apply the test as set out in Morrison v. Barzo. Accordingly, the Order must be set aside.

...

[27] I pause to address the question of who has the onus of demonstrating that Cooper’s cause of action was actually discovered, or was reasonably discoverable, more than two years prior to the commencement of the Motion. While it is not made express in Fennell and Morrison, in circumstances such as the present where a plaintiff demonstrates a reasonable basis for concluding that a cause of action was discovered within the applicable limitation period, as a practical matter, a proposed defendant who asserts a limitation defence must demonstrate that the plaintiff had actual knowledge, or reasonably ought to have had knowledge, on an earlier date outside the limitation period.

...

[32] Hydro effectively argues that Cooper’s explanation is not reasonable in view of either or both of her receipt of the Article and the City’s denial of jurisdiction in its statement of defence. In my view, however, given the evidence before the Master and this Court, neither Cooper’s mere receipt of the Article, without evidence that she actually read it, nor the City’s denial of jurisdiction in its statement of defence were sufficient to fix her with knowledge that required a further investigation for the following reasons.

[33] The mere existence of the Article cannot be a basis for concluding that Cooper ought reasonably to have conducted a further investigation. This would require a finding, by inference or otherwise, that she read the Article such that she was aware, at a minimum, of the subject-matter of the Article even if she did not have knowledge of the specific facts set out therein. However, the Court’s conclusion above that a trial is required to determine whether Cooper read the Article precludes such a finding by this Court.

[34] Accordingly, Hydro’s second submission really turns on whether Cooper’s receipt of the City’s statement of defence was sufficient to require a further investigation. I accept that a specific denial of jurisdiction could, in some circumstances, have such a result. However, in this case, the denial was only one of at least ten alternative defences asserted by the City in its statement of defence. In addition, the denial was not accompanied by the assertion of any specific facts supporting this defence nor did it identify Hydro as the owner of the Pole. It is not reasonable to assume that a plaintiff would identify a potential issue of ownership from a bald denial of jurisdiction in such circumstances.

Rooplal v. Fodor, 2019 ONSC 7211 (CanLII)

[4] On the issue of discoverability, the parties relied on ostensibly conflicting lines of jurisprudence from the Court of Appeal for Ontario. On the one hand, were the cases decided before the Limitations Act had entered into force, finding that the limitation period begins to run when the material facts on which the claim is based have been discovered or ought to have been discovered by the plaintiff’s exercise of reasonable diligence (July v. Neal (1986), 1986 CanLII 149 (ON CA), 32 D.L.R. (4th) 463; Johnson v. Wunderlich (1986), 1986 CanLII 2618 (ON CA), 34 D.L.R. (4th) 120; Hier v. Allstate Insurance Co. of Canada (1988), 1988 CanLII 4741 (ON CA), 51 D.L.R. (4th) 1; and Chambo v. Musseau (1993), 1993 CanLII 8680 (ON CA), 15 O.R. (3d) 305. The other line of authority involves cases decided after the Limitations Act had entered into force, which, as explained in the Superior Court’s decision in Chahine v. Grybas, 2014 ONSC 4698 (CanLII), provided that the limitation period does not begin until the plaintiff makes an indemnification demand and the responding insurer fails to satisfy the claim (Markel Insurance Company of Canada v. ING Insurance Company of Canada, 2012 ONCA 218 (CanLII), 109 O.R. (3d) 652; and Schmitz v. Lombard General Insurance Company of Canada, 2014 ONCA 88 (CanLII), 118 O.R. (3d) 694, leave to appeal refused, [2014] S.C.C.A. No. 143). The defendants argued that the July line of cases sets out the proper discoverability analysis, while the plaintiff argued that the Markel line of cases sets out the proper analysis.

[5] The Motions judge ultimately determined that she was bound by the Markel line of authorities rather than the July line of cases because, while the latter is predicated on the common law principles of discoverability set out by the Supreme Court of Canada in Central Trust Co. v. Rafuse, 1986 CanLII 29 (SCC), (1986) 2 S.C.R. 147, the discoverability provisions in the Limitations Act govern the analysis in the present case rather than the common law principles before the Court of Appeal in the July line of cases.

[6] We agree with the reasoning of the Motions Judge and would dismiss the appeal.

Heidenreich v Snell, 2013 CanLII 82848 (ON SCSM)

19. The statutory limitation period is two years from discovery under s. 4 of the Limitations Act, 2002, S.O. 2002, c. 24, Sch. B. Discovery is defined by s. 5(1) and s. 5(2) creates a rebuttable presumption that discovery occurs on the date of the act or omission unless the contrary is proved. Discovery under s. 5(1) has both an objective and a subjective component: Northdurft v. Canroof Corp. Inc. (2013), 305 O.A.C. 27 (Div. Ct.), at para. 22.

23. It is well-established that for discovery of a claim to occur for limitation purposes, the precise nature and extent of the damages need not be ascertained or certain. All that is need is for the fact of some actionable damage to be known with reasonable certainty. See Peixeiro v. Haberman, 1997 CanLII 325 (SCC), [1997] 3 S.C.R. 549 at para. 18: “Neither the extent of damage nor the type of damage need be known. To hold otherwise would inject too much uncertainty into cases where the full scope of the damages may not be ascertained for an extended time beyond the general limitation period."

Fillo v Jaklic, 2016 CanLII 90739 (ON SCSM),

16. Discovery of a claim is a statutory concept defined under s. 5 of the Limitations Act, 2002, and contains both a subjective and an objective component: Northdurft v. Canroof Corp. Inc. (2013), 305 O.A.C. 27 (Div. Ct.), at para. 22. In each case the court must determine when the plaintiff had knowledge of the matters listed in s. 5(1)(a), and if necessary when the plaintiff ought to have had such knowledge under s. 5(1)(b), applying the rebuttable presumption under s. 5(2). Those matters include knowledge that a legal proceeding would be an appropriate means to seek a remedy, which in some scenarios may mean that an initial period of investigation and inquiry may be allowed before discovery is deemed in law to have occurred: Everding v. Skrijel (2010), 2010 ONCA 437 (CanLII), 100 O.R. (3d) 641 (C.A.). The duration of any such period, or in other words the delay from the events to discovery, is not subject to any specific fixed period but can vary significantly on the facts of each case.

PAPASTAMOS v JORDAN, 2013 CanLII 54060 (ON SCSM)

21. Limitations law is substantive in nature and the court is duty-bound to give effect to the statute-law enacted by the legislature. While it may be seen as tempting in a case like this to find for the plaintiff, I can see no legitimate way to avoid the effect of the Limitations Act, 2002 on this claim. As Maloney J. held some years ago, it is not open to the Small Claims Court to disregard the law of limitations: R. v. Bennett (1992), 1992 CanLII 7554 (ON SC), 8 O.R. (3d) 651 (Div. Ct.).

24. The two-year limitation period runs from discovery of the claim. Discovery is defined by s. 5(1) of the Act. One element of discovery, under s. 5(1)(a)(iv), is when the plaintiff first knew “than, having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it”. That aspect of discovery under s. 5(1) was addressed in Everding v. Skrijel (2010), 2010 ONCA 437 (CanLII), 100 O.R. (3d) 641 (C.A.).

25. Under s. 5(1)(b), discovery can occur earlier than actual discovery if “the day on which a reasonable person with the abilities and in the circumstances of the person with the claim first ought to have known of the matters referred to in clause (a)” is earlier than that date. In other words, discovery has both a subjective and an objective component: see Northdurft v. Canroof Corp. Inc. (2013), 305 O.A.C. 27 (Div. Ct.), at para. 22.

Bernard v Bravo Cement Contracting (Windsor) Inc, 2013 CanLII 72710 (ON SCSM)

28. The discoverability point in time is not based on the subjective feelings of the potential Plaintiff and when he or she comes to the realization that they have to sue for relief or remedy. To do so would create too much uncertainty and enable potential Plaintiffs to manipulate the time period that is intended to be objective and a standard that is capable of external determination. The test is when the Plaintiff ought to have been aware of the facts that give rise to a claim. Section 5.(1)(b) of the Limitations Act, 2002 includes the words, “a reasonable person” and “first ought to have known” thereby instilling and confirming an objective element. In this case, this occurred when the Defendant stopped working on the project and the Plaintiff was dissatisfied with the state of completion and quality. This did not occur in April of 2011 as the Plaintiff implies, but this was present and evident during October of 2010 and as I have found, at the latest, no later than November 6, 2010.

[59] Once a cause of action has occurred, the limitation period will run even if the plaintiff is discouraged from starting an action, providing that it is not prevented from starting an action: see Hamilton (City) v. Metcalfe & Mansfield Capital Corp., 2012 ONCA 156 (CanLII), [2012] O.J. No. 1099, 2012 ONCA 156, 290 O.A.C. 42, at para. 24. At para. 51, further, it is immaterial if the plaintiff did not appreciate the significance or legal consequences of the relevant facts. What is important is that the plaintiff understood relevant facts.

[61] In Kowall v. Shyiak, (2012) O.J. N0. 3420, 2012 ONCA 512 (CanLII), 2012 ONCA 512, a general contractor built a new house. The homeowners independently contracted with third parties for installation of exterior finishing. Water leakage and damage occurred. The motion judge dismissed the summary judgment motion based on the Limitation Act, 2002 defence on the basis that discoverability delayed the start of the two-year s.4 period until expert reports were in. He found that the plaintiffs did not have sufficient knowledge of the damage. The Court of Appeal found this decision in error since they held that no expert reports were required in order to advance a claim for damages. (The Limitation Act, 2002 was not enacted to be ignored.)

Clancy v 2228200 Ontario Inc., 2018 CanLII 64435 (ON SCSM)

14.As a matter of general principle, I see no contract law justification for a rigid common law rule that accountants or other professionals generally, or Mr. Clancy in particular, are obligated to issue invoices for ongoing matters at specific intervals such as 30 or 60 days or longer. There are many reasons why it might be more practical, more fair, better for professional-client relations, and better for the client not to have such a rule imposed on the parties by implication of the common law. In this case, the defence submits that Mr. Clancy ought to have issued his invoice within a month or two of the last services billed for, which were provided in mid-December 2013. Therefore, the defence submits that the limitation period started prior to the actual invoice date of June 30, 2014 and the claim issued two years less a day later is barred by limitation.

20. When an invoice is issued and delivered and is payable within 30 days, one might expect the failure of the customer to pay would trigger the start of the limitation period on the 31st day. However the inherent flexibility of the discovery concept under s. 5(1) has led some courts to conclude that for limitation purposes, failure to pay an invoice that is payable within 30 days does not start the limitation period until 60 days have passed: New Tec Building Envelopes Ltd. v. Deciantis Construction Ltd. (2015), 340 O.A.C. 127 (Div. Ct.), at para. 25. There is no absolute rule concerning when the limitation period for nonpayment of an invoice starts to run. When the common law implies a reasonable time, that is done on a case-by-case basis depending on the particular facts. That is consistent with the inherently subjective aspects that are built into the statutory concept of discovery. See Everding v. Skrijel (2010), 2010 ONCA 437 (CanLII), 100 O.R. (3d) 641 (C.A.), dealing with discovery under the Limitations Act, 2002; and Waschkowski v. Hopkinson Estate (2000),2000 CanLII 5646 (ON CA), 47 O.R. (3d) 370 (C.A.), discussing the “temporal elasticity” of the common law discoverability rule.

22. Mr. Clancy’s view was that invoicing was a matter within his discretion. There is certainly a discretion involved, assuming the retainer agreement is silent on the matter. The problem lies in identifying any limit on the professional’s discretion to defer billing. In Bougadis Chang LLP v. 1231238 Ontario Inc., supra, the file had been concluded but the invoice was not delivered until just over two years later and the action was not commenced until three years and eight months after the file was concluded. In those circumstances my colleague Prattas D.J. found the professional’s claim for services rendered to be barred by limitation. He concluded at para. 27:

Bain v Morton, 2014 CanLII 74053 (ON SCSM)

Cases dealing with the question [of promissory estoppel] in this Court include Conwest Exploration Company Limited v. Letain, 1963 CanLII 35 (SCC), [1964] S.C.R. 20, and John Burrows Ltd. v. Subsurface Surveys Ltd., 1968 CanLII 81 (SCC), [1968] S.C.R. 607, in which Ritchie J., at p. 615, speaking for the Court, cited the judgment of Lord Denning in Combe v. Combe, [1951] 1 All E.R. 767:

In the case of Combe v. Combe, Lord Denning recognized the fact that some people had treated his decision in the High Trees case as having extended the principle stated by Lord Cairns and he was careful to restate the matter in the following terms:

The principle, as I understand it, is that where one party has, by his words or conduct, made to the other a promise or assurance which was intended to affect the legal relations between them and to be acted on accordingly, then, once the other party has taken him at his word and acted on it, the one who gave the promise or assurance cannot afterwards be allowed to revert to the previous legal relations as if no such promise or assurance had been made by him, but he must accept their legal relations subject to the qualification which he himself has so introduced, even though it is not supported in point of law by any consideration, but only by his word.

It seems clear to me that this type of equitable defence cannot be invoked unless there is some evidence that one of the parties entered into a course of negotiation which had the effect of leading the other to suppose that the strict rights under the contract would not be enforced, and I think that this implies that there must be evidence from which it can be inferred that the first party intended that the legal relations created by the contract would be altered as a result of the negotiations.

In Ontario, promissory estoppel can operate as an answer to a limitation period defence and rebut this defence. See, for example, Whorpole Estate v. Echelon General Insurance Co., [2011] O.J. No. 1644 at par. 14.

In my view, the requirements of promissory estoppel have not been met by the plaintiff in this case. Assuming that the defendant made the promises to pay, I do not think that the habitual nature of the promises to pay over a period of three years changed the plaintiff’s legal relations with the defendant. In 2008, the plaintiff made 4 separate payments to the defendant ranging from $30 to $350. In 2009, the plaintiff made 21 separate payments to the defendant ranging from $40 to $475. In 2010, she made 19 separate payments to the defendant ranging from $50 to $1,000. I do not think that the plaintiff delayed suing the defendant because of the alleged repeated promises to pay. There was no suggestion in the plaintiff’s evidence that she intended to sue the defendant if he breached his promises to pay. She knew that he did not have the money to repay and she kept supplying the defendant with money despite the breached promises to pay. Taking into account the common sense guideline of Yanosik J. set out in Landry, supra, I conclude that this part of the claim is statute-barred.

Sections 13 (9) and 13 (10) referred to in section 13 (8) provide that the debt must be acknowledged in writing, signed by the debtor before the expiry of the limitation period, and given to the person with the claim or the person’s agent. See Lopez v. Bromley, [2012] O.J. No. 368 (S.C.J.) at par. 21. See also West York International Inc. v. Importanne Marketing Inc., (2012) O.J. No. 5395 (S.C.J.) at par. 92. The text messages may be viewed as being in writing. See Leoppky v. Meston, (2008) A.J. No. 55 (Q.B.) at par. 35-41. However, the acknowledgment is not signed and was made after the expiry of the limitation period. The acknowledgment, therefore, cannot revive the barred debt.

Pickering Square Inc. v. Trillium College Inc. 2016 ONCA 179, 2016 CarswellOnt 2929

23 Breaches of contract commonly involve a failure to perform a single obligation due at a specific time. This sort of breach is sometimes called a "once- and-for-all" breach: it occurs once and ordinarily gives rise to a claim from the date of the breach — the date performance of the obligation was due. Trillium's breach of s. 16.08 does not fall into this category because its obligation to operate its business was ongoing rather than single and time-specific.

24 A second form of breach of contract involves a failure to perform an obligation scheduled to be performed periodically — for example, a requirement to make quarterly deliveries or payments. A failure to perform any such obligation ordinarily gives rise to a breach and a claim as from the date of each individual breach: see e.g. Smith v. Empire Life Insurance Co. (1996), 19 C.C.E.L. (2d) 171 (Ont. Gen. Div.), leave to appeal refused, [1996] O.J. No. 3113 (Ont. C.A.). That is not this case.

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