Is a Defendant Required to State An Intent to Use a Limitations Period Expiry As a Defence Strategy?

A Defendant Must Plead the Particulars of a Limitations Defence Strategy. If a Defendant Fails to Properly Plead a Limitations Defence the Defendant Should Be Barred From Relying Upon Allegations of an Expired Limitations Period.

A Helpful Guide For How to Determine and Understand When a Defence Pleading Must Allege Expiry of a Limitation Period

Infinity Clock In Ontario, whereas, generally with a few exceptions, the Limitations Act, 2002, S.O. 2002, Chapter 24, Schedule B, restricts a Plaintiff from bring a lawsuit more than two years after discovery of the cause of action (reason for suing), a Defendant to a lawsuit that is brought too late will certainly seek dismissal of the lawsuit for being too late.  However, where a Defendant seeks to raise the issue of an expired limitation period, the Defendant must include statements containing allegations of an expired limitation period and of an intent to rely upon the applicable statute within the pleading documents of the Defendant.

The Law

The requirement that a Defendant plead an intent to rely upon a limitations defence was stated by the Court of Appeal in the case of Singh v. Trump, 2016 ONCA 747, which was a case involving multiple Plaintiffs alleging improprieties against Donald Trump (yes, the President of the United States), among others, and involving transactions related to real estate dealings.  Specifically, the Court of Appeal said:

[130]  The motions judge found that Mrs. Lee’s negligent misrepresentation claim was barred by the Limitations Act. He did so despite the fact that the defendants had not pled the Limitations Act and had not sought to amend their pleading to include such a plea. Although they raised the issue in oral submissions, the defendants had not raised it in the factum filed on the summary judgment motions.

[131]  In his reasons the motions judge neither refers to the fact that it was not pleaded nor does he explain why, in the absence of such a plea, he should nonetheless invoke the Act.

[132]  This court has consistently held that “[t]he expiry of a limitation period is a defence to an action that must be pleaded in a statement of defence”: Collins v. Cortez, 2014 ONCA 685, [2014] O.J. No. 4753, at para. 10, per van Rensburg J.A. (citing S. (W.E.) v. P. (M.M.) (2000), 2000 CanLII 16831 (ON CA), 50 O.R. (3d) 70 (C.A.), at paras. 37-38, leave to appeal to S.C.C. refused, [2001] 149 O.A.C. 397). This requirement is embodied in rule 25.07(4) of the Rules of Civil Procedure, which Ontario courts have consistently held “applies to pleadings relating to limitations that might bar an action”: S. (W.E.) v. P. (M.M.), at para. 37Rule 25.07(4) provides as follows:

In a defence, a party shall plead any matter on which the party intends to rely to defeat the claim of the opposite party and which, if not specifically pleaded, might take the opposite party by surprise or raise an issue that has not been raised in the opposite party’s pleading.

[133]  Justice Cronk explained the rationale behind the requirement that a party specifically plead a limitation period defence in Hav-A-Kar Leasing Ltd. v. Vekselshtein, 2012 ONCA 826, 225 A.C.W.S. (3d) 237, at para. 69:

The failure to raise substantive responses to a plaintiff's claims until trial or, worse, until the close of trial, is contrary to the spirit and requirements of the Rules of Civil Procedure and the goal of fair contest that underlies those Rules. Such a failure also undermines the important principle that the parties to a civil lawsuit are entitled to have their differences resolved on the basis of the issues joined in the pleadings.

[134]  In S. (W.E.) v. P. (M.M.), MacPherson J.A. confirmed that Ontario courts “have consistently held that rule 25.07(4) applies to pleadings relating to limitations that might bar an action”: at para. 37. He went on to explain that even though in that case the trial judge had given counsel time to prepare submissions on the issue after he raised it during closing arguments, it did not remove the potential prejudice to P:

If S had raised the issue in his pleadings, P might have tried to settle, or even have abandoned, her counterclaim. Either decision might have had costs consequences. Another potential source of prejudice arises from the fact that counsel for P might have adopted different tactics at trial. In particular, counsel might have called different or additional evidence to support an argument that the discoverability principle applied (at para. 38).

[135]  MacPherson J.A. also noted that at no time during trial, including during closing arguments when the trial judge raised the limitation issue, did S seek to amend his pleadings. Nor did he seek such an amendment during the appeal hearing.

[136]  In my view, the defendants’ failure, in this case, to plead a Limitations Act defence or even to seek an amendment to their pleading to do so is, as it was in S. (W.E.) v. P. (M.M.), fatal.

As clearly shown in Singh, a Defendant is required to plead a limitations defence by alleging the material facts regarding when the Plaintiff discovered the cause of action, when the Plaintiff was required to commence litigation, and the failure of the Plaintiff to do so in accordance to the Limitations Act, 2002, or other applicable limitations statute.

Summary Comment

A Defendant seeking to rely upon a defence strategy that includes expiry of a limitation period is required to plead the relevant material facts such as discovery of the cause of action, expiry of the limitation period, and the statute within which the applicable limitation period may be found.


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