Canada: New Limitation Act (Bill 34) Proposed In British Columbia

The British Columbia government recently introduced Bill 34, the Limitation Act (the 2012 Limitation Act), into the legislature for first reading. Assuming the 2012 Limitation Act is adopted as proposed, all civil claims in B.C. will be subject to a two-year basic limitation period, and a 15-year ultimate limitation period. These changes follow those made in other provinces with modernized limitation statutes, such as Ontario, Alberta, Saskatchewan, and New Brunswick. This bulletin summarizes the key changes.

The previous B.C. Limitation Act (the 1975 Limitation Act) imposed limitation periods of two, six, or 10 years depending on the legal nature of the claim. Under the 1975 Limitation Act, the limitation period ran from the time the cause of action arose or, in certain cases, from when it ought reasonably to have been discovered.

Under the 2012 Limitation Act, a two-year period will apply to all types of claims and runs from the time when the cause of action ought reasonably to have been discovered. The 2012 Limitation Act also simplifies the calculation of the ultimate limitation period, that is, the period until the final date by which claims must be made. The 2012 Limitation Act also shortens this period, even if a potential claimant has not discovered the cause of an action. Under the 1975 Limitation Act, the ultimate limitation period was 30 years after an action became available to a potential plaintiff. Since many claims require damage to have occurred, and damage does not always happen at the same moment as the act or omission on which the claim was based, the limitation period might extend for more than 30 years after the initial action or omission. Under the 2012 Limitation Act, the ultimate limitation period will expire 15 years from the date on which the act or omission on which the claim is based took place. This method simplifies the calculation of the period for potential liability and greatly reduces its duration.

The 2012 Limitation Act still includes the possibility for the extension of the ultimate limitation period in special circumstances, including instances of wilful concealment, fraud, and the acknowledgment of liability. Additionally, the limitation periods are not applicable to some claims, including some counterclaims and some third-party proceedings where the initial claim was brought within its own limitation period.

The 2012 Limitation Act also provides a more rational scheme for parties who grant obligations payable on demand, such as a demand loan with no fixed date for repayment. Under the 1975 Limitation Act, the six‑year limitation period to collect on a demand obligation was interpreted by the courts to begin at the time the loan was made. This meant that the limitation period to collect on any demand obligation expired if it was left outstanding for longer than six years. While under the 2012 Limitation Act the general limitation period is shortened to two years, the limitation period for demand obligations will not begin until the first day that there is a failure to perform an obligation after a demand is made. This provides greater certainty and fairness for parties granting demand obligations.

The 2012 Limitation Act has transitional provisions to address situations where the act or omission providing the basis of the claim took place under the 1975 Limitation Act, but a claim is not made until after the 2012 Limitation Act comes into force. Where a potential claimant has discovered the cause of a claim before the 2012 Limitation Act comes into force, the tiered limitation periods under the 1975 Limitation Act will apply whether or not the claim has already expired. Where a potential claimant has not discovered the cause of a claim when the 2012 Limitation Act comes into force, the ultimate limitation period will be the earlier of expiration of the 30-year final claim period under the 1975 Limitation Act or 15 years after the coming into force of the 2012 Limitation Act, subject to any extensions to the 15-year period provided therein. The 2012 Limitation Act also contains special transition provisions applicable to hospitals and medical practitioners.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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