Canada: NS Proposes New Limitation Of Actions Act – The Top 3 Benefits & The 10 Key Changes

Last Updated: November 6 2014
Article by Danielle Kershaw

On October 29, 2014, the NS Government introduced Bill 64. When passed into law, Bill 64 will replace the current NS Limitation of Actions Act – the legislation that determines the limitation period (time limit) in which a lawsuit must be started in relation to an NS claim – and significantly change the landscape for NS litigants.

Bill 64 is in 2nd reading only, but given its impact on litigants, it's one to keep a close eye on. Here are the top 3 benefits of Bill 64 – and the 10 key changes it will make to the time limits to start a lawsuit in NS.

IMPACT

Bill 64 will take effect on a date the Government will set later, although it will likely allow a period of time so people can plan for the transition. When it does take effect, it will have an impact on existing claims and deliver some benefits to all litigants, particularly to those in the kinds of businesses frequently involved in litigation.

Existing Claims. The limitation period for claims based on acts or omissions that occurred before Bill 64 takes effect will be the earlier of:

  • two years after the date Bill 64 takes effect, or
  • the date on which the old limitation period would have otherwise expired.

Bill 64 doesn't apply to claims made by parties within an ongoing legal proceeding as long as the claim is sufficiently related to it. Those with – or facing – an existing or potential claim should keep an eye on whether and how the proposed changes will affect those existing claims. People should promptly review the effect of the proposed changes on any existing or potential claims and take appropriate action.

Top 3 Benefits. If passed into law, Bill 64 also has the potential to deliver some benefits to litigants. Here are the top three:

  1. Simplicity. Consolidation of varying limitation periods based on the type of claim into a single, standard limitation period for most claims will make it simpler for everyone to figure out whether the time limit to start a lawsuit has expired – and to save the money and time associated with arguing about it.
  2. Certainty. Reduction of the time people have to start most kinds of lawsuits means the time in which businesses have potential liabilities hanging around is also shorter. And the addition of an ultimate limitation period and elimination of the power to extend a missed limitation period means that when it's over, it's over. Bill 64 also clarifies some of the language in the current Limitation of Actions Act and expressly deals with some matters the current Act does not. These changes mean legal – and business – certainty for everyone.
  3. Consistency. Bill 64 will make the NS Limitation of Actions Act much more consistent with similar laws elsewhere in Canada. For example, similar changes to NB's limitations legislation took full effect in May 2012. Read McInnes Cooper's April 27, 2012 Legal Update: NB's New Limitation Periods Effective May 1, 2012 here. This should make it easier – and thus cheaper – for businesses that operate in multiple provinces to monitor and administer legal claims.

10 KEY CHANGES

Here are the 10 key changes Bill 64 will make:

  1. Consolidated Limitation Period. Under the current Act, there are many different time limits depending on the kind of lawsuit involved. For example, a lawsuit based on assault or defamation must be started within one year, one based on negligence or breach of contract must be started within six years and one based on a personal injury caused by a car accident must be started within three years. This could confuse people who want to start a legal action – especially those without legal training or experience. There will be a few exceptions, but Bill 64 will consolidate the limitation period and create a single, standard limitation period for almost all lawsuits – no matter what kind it is – simplifying the determination of the applicable limitation period.
  2. Shortened General Limitation Period. Under the current Act, the time to start a lawsuit for many common claims is three to six years from the date it's discovered. With a few exceptions, Bill 64 sets the limitation period to start almost all types of claims at two years from the "date of discovery". This reduces the time for many kinds of claims. The only limitation period Bill 64 will increase is for claims grounded in "assault, menace, battery, wounding, imprisonment or slander", which is currently only one year.
  3. New Ultimate Limitation Period. Under the current Act, the time limit to start a lawsuit runs from the date a claim is discovered – but there is no "ultimate" end to it. This is to allow lawsuits for claims that typically take a long time to be discovered, like those caused by medical procedures – but effectively means a lawsuit could surface at any time after the act or omission that caused it. Again with a few exceptions, Bill 64 will bar a claim after 15 years from the day of the act or omission that caused it – regardless of when it's discovered. The ultimate limitation period doesn't run for any time during which the defendant wilfully conceals that a loss or injury occurred, that the defendant caused that loss or injury, or misleads the claimant as to whether the injury is sufficient to warrant starting a proceeding.
  4. "Sudden Death" Limitation. Under the current Act, a claimant who misses the applicable limitation period can apply to a judge to extend it for up to four additional years, and judges have the authority to do so. Bill 64 will eliminate this opportunity and authority to extend the limitation period – so when the limitation period is over, it's really over.
  5. New Definition of "Discoverability". The current Act does not define when a claim is "discovered"; the definition has been developed in court decisions.Bill 64 will add a definition to the Act expressly describing when a claim is "discovered", enumerating four prerequisites.
  6. Elimination of Some Time Limits. Under the current Act, the only type of claim without any limitation period is for breach of fiduciary duty. Bill 64 will eliminate the limitation period for claims based on sexual assault, domestic violence and assaults involving dependents (including people who are financially, emotionally or physically dependent on others, or are in intimate relationships) – and eliminates the ongoing issue of determining when these kinds of claims were "discovered". All other types of claims, including for breach of fiduciary duty, will have a time limit.
  7. Proving Limitation Period for Continuous & Serial Acts. Bill 64 expressly provides that with a continuing act or omission, the limitation period begins on the day on which the act or omission stops, and the claimant must prove she started the claim within the limitation period. With a series of acts or omissions, the limitation period begins on the day of the last act or omission and the defendant must prove the claimant did not start the claim within the limitation period.
  8. Claims for Contribution and Indemnity from Third Parties. The current Act also does not expressly deal with the limitation period for claims for contribution and indemnity. Bill 64 expressly deals with them. The two year general limitation period will apply if a defendant wants to claim for contribution or indemnity against a third party, and starts running on the day the plaintiff served the claim on the defendant. If a defendant has settled a claim, the limitation period for that defendant to seek contribution or indemnity from a third party is the settlement date. However, the effect that settlement after a claim is filed has on the limitation period to seek contribution or indemnity against a third party isn't clear.
  9. Acknowledgement Resets Limitation Period. The current Act provides that when a party acknowledges liability of certain kinds of debt claims, the limitation period is reset to start on the date of that acknowledgement – but the wording is difficult to understand. Bill 64 does not change the resetting of the limitation period, but does clarify both the types of claims to which it applies and the requirements of the acknowledgement: it only applies to claims on debt and related personal property security (including payment of a liquidated sum, recovery of personal property, and enforcement or relief from a charge on personal property) and the acknowledgment must be made before the limitation period would have otherwise expired, in writing, and signed by the defendant (or his agent). Partial payment of a debt will also reset the limitation period; Bill 64 does not change this but does simplify the wording.
  10. Applicable Limitations Law. The current Act does not expressly deal with the limitations law that applies when there is a loss in one province but a lawsuit is started in another. Bill 64 codifies the existing legal principle that limitations periods are determined based on where the loss occurred – not where the lawsuit is started. For example, if a person is injured in a car accident in NS but started a lawsuit based on it in Ontario, the NS Limitations of Actions Act applies.

EXCEPTIONS

Bill 64 does have some exceptions; the main ones are:

Minors and Incapacity. Under the current Act, there are no time limits for any claims involving children (people under 19) and the limitation periods only start to run when a claimant reaches 19; similarly, they donot run while a claimant is incapable of bringing a claim due to incapacity. Bill 64 does not change these, but simplifies the language. However, under the current Act, the limitation period in these circumstances is five years; Bill 64 will reduce this to the general two year limitation period.

Government Claims. The two year general limitation period does not apply to certain claims by the Province, although it does apply to all claims against the Province.

Other Laws. Limitation periods contained in other laws (such as the NS Insurance Act) will prevail over the new Limitation of Actions Act. So, for example, the three-year limitation period for claims against an insurer for indemnification of an insured for loss, damage, or injury to a third party arising from a motor vehicle accident will remain intact.

Land. Bill 64 will not apply in respect of claims involving interests in land. The Bill amends the current Limitations of Actions Act to the "Limitations of Actions in Respect of Real Property Act" and repeals all sections not dealing with land. Therefore, the current 20-year limitation period respecting land or rent also remains intact.

McInnes Cooper prepared this article for information; it is not legal advice. Consult McInnes Cooper before acting on it. McInnes Cooper excludes all liability for anything contained in or any use of this article. © McInnes Cooper, 2014. All rights reserved.

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