Legal Blog:

15-Yr Limitation and Wills

Tessaro v. Gora 2025 Ont SCJ

A lawyer drafted a will that had an ambiguous residual clause. The beneficiaries under each interpretation settled the issue between themselves and both sued the lawyer for the damages that they incurred because of the ambiguity causing the settlement. The lawyer drafted the will in 1991. The beneficiaries commenced their actions in 2019 and 2020. The beneficiaries had no problem meeting the basic two-year rule under the Limitations Act, 2002 because they did not know of the problem until after the testator died in 2018 and, indeed, until their settlement in 2024. However, the motion judge decided that s.15(2) of the Act precluded their actions because the 15-year absolute limitation period, which started January 1, 2004, had expired.

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Personal Liability

Business people use corporations for many reasons, the most important of which relate to tax (paying as little of it as possible) and liability (having as little of it as possible). Because tax is not our area of expertise, we will only discuss liability.

A corporation has a separate existence quite apart from the people who own or control it (i.e. shareholders, officers, and directors). A corporation that enters into a contract may be liable if it breaches that contract, but, unless the other contracting party can demonstrate unusual circumstances, the corporation’s shareholders, officers, and directors are not personally liable for the breach. Of course, there are exceptions to the rule and, consequently, the other contracting party often joins the principal(s), who run and own a corporation, as defendants in an action against the corporation. In many cases, it is not necessary to do this because the corporation is viable and will have sufficient assets to pay a judgment; in other cases, when it is apparent that the corporation either does not, or is unlikely to, have sufficient assets to pay a damages award, it is crucial to join its principals if there is any evidence to support personal liability.

Examples

We will discuss two 2024 Ontario Superior Court of Justice cases in which one contracting party joined, in its action against the other corporate contracting party, that party’s sole shareholder, officer, and director: To v. Psonic Inc. and Forefront Electric v. Dutchies.

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