Legal Blog

Ultimate Limitation

We expect that everybody now knows about the basic limitation period: two years from the date that an aggrieved party (plaintiff) knew or ought to have known about a claim. Because the discovery or deemed discovery may not take place for many years, the basic limitation period, depending upon the circumstances, can be almost unlimited.

The discovery principle arises from the law’s reluctance to remove a right of action from a plaintiff before that plaintiff even knows that a right of action exists. For example, if a negligent motorist causes an accident that puts a pedestrian into a coma for two years, it would hardly be fair for the limitation period to eliminate the pedestrian’s right of action before the pedestrian even awakened.

However, when it enacted the Limitations Act, 2002, the legislature also understood that it had to reduce the possibility of a cause of action continuing indefinitely. It did so by way of s. 15(2) of the Act, which established an ultimate limitation period of 15 years. Accordingly, even though the basic limitation period may still be running, after 15 years the ultimate limitation period ends a plaintiff’s right of action for damages. The purpose of the ultimate limitation period is to balance a plaintiff’s right to sue with a defendant’s need for certainty and finality.

The legislature also recognised that the ultimate limitation period could be unfair under certain circumstances and therefore tempered it with limited exceptions. The Act, notwithstanding its name, was only proclaimed in force as of January 1, 2004. Accordingly, the ultimate limitation period only became relevant as of January 1, 2019. We are only now starting to see some judicial interpretations of the exceptions.

Who Cares

Who cares? Anyone whose actions or omissions could result in damage or a defect that does not become apparent until many years after the actions or omissions. Examples:

• Solicitors, such as (i) a real estate lawyer whose title opinion is wrong or (ii) a tax lawyer or estate planning lawyer whose plan runs afoul of legislation – if, in either case, the client does not discover the problem until after the expiry of the ultimate limitation period.
• Construction industry participants, such as architects and engineers for a design error or contractors for the failure of construction material.

Exceptions

Some ultimate limitation exceptions are set out in s. 15(4) of the Act:

a) The plaintiff is incapable or a minor or

b) The defendant (i) wilfully conceals from the plaintiff “the fact that injury, loss or damage has occurred, that it was caused by or contributed to by an act or omission or that the act or omission was that of” the defendant, or (ii) “wilfully misleads the (plaintiff) as to the appropriateness of a proceeding as a means of remedying the injury, loss or damage.”

In s. 15(6), the Act set out the start dates for the s. 15(2) limitation period, stating that the day an act or omission on which a claim is based takes place is,

a) “in the case of a continuous act or omission, the day on which the act or omission ceases;

b) in the case of a series of acts or omissions in respect of the same obligation, the day on which the last act or omission in the series occurs;

c) in the case of an act or omission in respect of a demand obligation, the first day on which there is a failure to perform the obligation, once a demand for the performance is made.”

In Huether v. Sharpe, (2025) 175 O.R. (3d) 653, the Court had to interpret s. 15(6) (a).

Damage

The contractor, probably long gone, built a residential house in 1987 and 1988. The plaintiffs purchased the house from successors in title in October 2021 and shortly thereafter discovered significant defects in the house’s foundation. The plaintiff sued several parties, including the municipality for negligent supervision of the construction and failure to conduct further inspections.

The municipality issued a building permit in 1987 and, in 1988, delivered a building and zoning response, which stated that the municipality did not issue occupancy permits and that there were no outstanding work orders against the property. There was no evidence that the contractor undertook any construction pursuant to the building permit after 1988, and no evidence whether, in 1988, the municipality actively closed building permits.

The municipality brought a motion for summary judgment relying on the ultimate limitation period. The motion judge dismissed the motion, finding that the municipality’s negligence was ongoing and continuous and, therefore, the ultimate limitation period had not yet expired by virtue of s. 15(6)(a) of the Act. The motion judge held that cessation of construction did not imply that the municipality had carried out all the inspections contemplated under the Ontario Building Code and that, because there was no evidence that the municipality had actually closed the building permit, it was therefore still open. The judge then held that the municipality had a duty to “continuously monitor its open permit file and to follow up with the permit holder regarding the state of construction.”

Duty to Monitor

The Court took issue with the motion judge’s finding that the municipality had a duty to monitor open building permit files. It held that, although a municipality has a duty of care to conduct inspections of buildings under construction in a non-negligent manner, there has never been a duty of care to “monitor” open building permits. The Court held that before a judge could recognise such a novel duty, the judge was required to undertake a duty of care analysis, something that she did not do.

Continuous

The Court noted that the purpose of the ultimate limitation period was to avoid a situation in which a plaintiff could bring a legal proceeding in respect of hidden defects that the plaintiff discovered many decades later. However, to avoid unfairness to plaintiffs with undiscovered claims, the legislature provided for exceptions, one of which was the postponement of the commencement of the limitation period due to a continuous act or omission.

The court noted that the concept of a “continuing cause of action” was not new. It describes causes of action that “accrue from repeating actionable conduct. Because each repetition of the actionable conduct is identical and occurs continuously, it founds a new and discrete cause of action.” Nuisance and trespass are the most common examples of a continuing cause of action because each day the nuisance or trespass occurs, a new and identical cause of action in nuisance or trespass accrues.

The court also noted that actionable conduct is not continuing merely because it can be rectified or because the harm it causes is either continuing or delayed. Rather, it requires a succession or repetition of separate acts of the same character.

Given this analysis, it was clear to the Court that the municipality had not engaged in a continuing act or omission; there was no repetition of actionable conduct. The Court held that the mere allegation that the municipality had some generalised ongoing duty to the plaintiff is insufficient to toll the running of the ultimate limitation period, “absent some successive or repeated actionable conduct on the part of the” municipality. The motion judge’s interpretation ran afoul of the central concern of the legislature leading to the enactment of s. 15(2), which was to avoid litigation over latent defects in buildings constructed decades in the past.

Two Strikes

The Court held that the motion judge erred about both the duty to monitor issue and the limitations issue, reversed the decision, and granted summary judgment in favour of the municipality. Municipalities will breathe a sigh of relief; solicitors and contractors should also breathe a sigh of relief.

Image courtesy of F1Digitals.

Written by Jonathan Speigel, the founding partner of Speigel Nichols Fox LLP, leads the litigation and construction practices.