In Ontario, the ability to sue or bring a civil claim against a person or other party is subject to a statutory limitation period, which is essentially a time limit for a party to commence, or bring forth, a claim against another party.

Though subject to some exceptions, the statutory limitation period in Ontario is typically two years from the date the claimant discovers the claim. This general rule is outlined in sections 4 and 5 of Ontario Limitations Act (the "Act") which provides the following:

Basic Limitation Period

4 Unless this Act provides otherwise, a proceeding shall not be commenced in respect of a claim after the second anniversary of the day on which the claim was discovered.

Discovery

5 (1) A claim is discovered on the earlier of,

(a) the day on which the person with the claim first knew,

(i) that the injury, loss or damage had occurred,

(ii) that the injury, loss or damage was caused by or contributed to by an act or omission,

(iii) that the act or omission was that of the person against whom the claim is made, and

(iv) that, having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it; and

(b) the day on which a reasonable person with the abilities and in the circumstances of the person with the claim first ought to have known of the matters referred to in clause (a).

An exception to the standard two year limitation period is found in instances where there is a reoccurring breach of a contractual obligation such that it creates a 'rolling limitation period'. This common law exception was established by the Ontario Court of Appeal in Pickering Square Inc. v. Trillium College Inc. ("Pickering Square v Trillium College").1

The court in Pickering Square v Trillium College held that where an ongoing obligation is owed by one party to another under a contract, the limitation period will 'reset' each time there is a breach. Due to the ongoing nature of the obligation, each instance of a failure to perform one's duties under a contract will be considered a separate breach for the purpose of determining the limitation period. In Pickering Square v Trillium College, the commercial tenant was deemed to have committed a breach each day it failed to operate its business in the rented premises pursuant to the lease agreement. Therefore, the limitation period would reset every day the unit was vacant until the end of the lease term. Rather than treating the breach as a singular event which occurred on the date the unit was vacated and thus statute barred, the Landlord was able to claim damages for each day a breach occurred in the two years prior to the claim being brought.

The common law rolling limitation period was revisited and clarified in Marvelous Mario's Inc. v. St. Paul Fire and Marine Insurance Co., 2019 ONCA 635 ("Marvelous Mario's v St. Paul").2 In this case, the insured plaintiff suffered business interruption losses for which it sought insurance coverage. The defendant insurer's commercial insurance policy provided a contractual limitation period of one year, and because over one year had elapsed since the initial loss was discovered, the insurer attempted to argue the claim was statute barred. The trial judge found that a rolling limitation period applied and that each day the insurer failed to pay the limitation period renewed. The Ontario Court of Appeal clarified the basis of a rolling limitation period as follows:

The jurisprudence suggests that a rolling limitation period may apply in a breach-of-contract case in circumstances where the defendant has a recurring contractual obligation. The question is not whether the plaintiff is continuing to suffer a loss or damage, but whether the defendant has engaged in another breach of contract beyond the original breach by failing to comply with an ongoing obligation. In cases where there have been multiple breaches of ongoing obligations, it is equitable to impose a rolling limitation period.3

Determining when a limitation period has begun and whether a dispute will be subject to rolling limitation period will ultimately depend on the facts.

Footnotes

1 Pickering Square Inc. v. Trillium College Inc., 2016 ONCA 179 (CanLII).

2 Marvelous Mario's Inc. v. St. Paul Fire and Marine Insurance Co., 2019 ONCA 635 (CanLII).

3 Ibid at para 35.

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