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Key takeaways
- The Ontario Limitations Act, 2002 creates a two-year basic limitation period and a 15-year ultimate limitation period.
- The ultimate limitation period aims to provide certainty for defendants by preventing indefinite liability, particularly for latent defects.
- Litigation concerning the ultimate limitation period is expected to rise, highlighting the importance of understanding statutory exceptions.
The Ontario Limitations Act, 2002, S.O. 2002, c. 24 (the Act), creates two distinct limitation periods: the two-year “basic limitation period” and the 15-year “ultimate limitation period.” The two limitation periods operate based on different principles: the basic limitation period is predicated on the discoverability of the impugned act or omission, while the ultimate limitation period is predicated on the date on which the impugned act or omission occurs. Certain exceptions to the operation of the ultimate limitation period are provided for under the statute. One such exception is the “continuous act or omission” exception.
Though provided for by statute, a recent decision of the Ontario Court of Appeal in Huether v. Sharpe suggests that the applicability of this particular exception may be “uncommon” and reserved for situations of “repetition of actionable conduct on a continuous basis.”1
The evolution of limitation periods in Ontario
The Act came into force on January 1, 2004, introducing wholescale reforms to the law of limitation periods in Ontario with the goal of creating “a clear and cohesive scheme for addressing limitation issues, one that balances the plaintiff’s right to sue with the defendant’s need for certainty and finality.”2
Amongst the Act’s most important and wide-ranging reforms was the introduction of an ultimate limitation period into the law of Ontario. Prior to January 1, 2004, the limitation periods for claims in Ontario were subject to the common law rule of discoverability, exposing defendants to potential indefinite liability, particularly in cases of latent defects. The discoverability principle was maintained for the basic limitation period codified at section 4 of the Act. An ultimate limitation period predicated on the date on which the impugned act or omission occurred, not its discoverability by the plaintiff, was introduced at section 15(2):
No proceeding shall be commenced in respect of any claim after the 15th anniversary of the day on which the act or omission on which the claim is based took place.
The 15-year ultimate limitation period was, however, made subject to a number of exceptions, including the stipulation at section 15(6)(a) that in the case of a “continuous act or omission”, the act or omission takes place “on the day on which the act or omission ceases”.
The Act also contains transitional provisions at section 24, providing that where a claim is not discovered until after January 1, 2004, but the act or omission took place before that date, the ultimate limitation period of 15 years began to run as if the act or omission had taken place on January 1, 2004.3 Accordingly, the limitation period for all undiscovered claims expired on January 1, 2019 — unless saved by one of the exceptions. Unsurprisingly given this chronology, pronouncements from our courts concerning the ultimate limitation period and its exceptions have been somewhat limited but are becoming more frequent in recent years.
Huether v. Sharpe: exceptions to the ultimate limitation period
Recently in Huether v. Sharpe, the Ontario Court of Appeal considered the “continuous act or omission” exception to the ultimate limitation period in the context of latent building defects. At issue was the construction of a dwelling some 40 years previously, between 1986 and 1987, in the Township of McMurrich Monteith (the Township). The homeowner respondents purchased the dwelling in 2021, shortly thereafter discovered significant defects in the dwelling’s foundation and sued the Township, alleging negligence in supervising the construction of the dwelling and failing to conduct further inspections. The Township sought summary judgment, relying on the ultimate limitation period having expired.
At issue before the Court of Appeal was whether the Township’s alleged negligence constituted a “continuous act or omission” which had not yet ceased within the meaning of section 15(6)(a) of the Act. If yes, then the act or omission on which the respondents’ claim was based would not yet have occurred, and the ultimate limitation period in section 15(2) of the Act would not yet have begun running. If no, then pursuant to the transitional provisions, the ultimate limitation period in section 15(2) would have commenced running on January 1, 2004, and expired 15 years later, on January 1, 2019, rendering the respondents’ action statute barred. The Court of Appeal concluded that the action was barred by the ultimate limitation period, unanimously reversing the motion judge’s conclusion that the Township’s alleged negligence was ongoing and continuous.
Applying the modern approach to statutory interpretation, the Court first considered the purpose of the ultimate limitation period. Relying on the words of Attorney General Bryant when introducing the Act, the Court concluded that the ultimate limitation period had specifically been created to address the mischief of legal proceedings being brought in respect of hidden or latent defects discovered many decades later.4 More generally, the Court identified the following overall purposes of the ultimate limitation period:
- avoiding costs related to record-keeping and insurance due to continuous exposure to liability
- addressing evidentiary concerns arising from deceased or missing witnesses or records that might have been destroyed by fires, floods or other intervening events
- recognizing that memories fade and, even where a witness is available, their ability to recall events that took place many decades in the past will be limited
- serving the public interest in bringing an end to litigation and the revisiting of past errors5
Second, the Court considered the concept of a “continuous act or omission”, which was said to be a long-standing principle of procedural and limitations law in Ontario as well as other common law jurisdictions. Following a review of case law on that concept dating back to the 19th century, the Court concluded, “In essence, the term is used to describe 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.”6
The Court stated that the legislature had created the exception because in such a scenario, concerns over stale evidence are mitigated by the fact that the evidence will have continually renewed itself with the defendants’ repetitive conduct, and because there was no obligation to provide defendants with repose for wrongful conduct which just stopped.7 However, the Court noted that continuing causes of action “are uncommon.” Actionable conduct is not continuing merely because it can be rectified or because the harm it causes is either continuing or delayed. Rather, a continuous act or omission required a succession or repetition of separate acts of the same character.8
Finally, the Court concluded the motion judge had erred by characterizing the alleged negligence of the Township as a “continuing act or omission”, where no successive or repetitive conduct was pleaded or otherwise identified. The Court noted that, to the contrary, the record was clear that from at least 1988 onward, the Township ceased to have any role or involvement with the construction of the dwelling. Any alleged negligence on the part of the Township was accordingly complete by 1988 and “absolutely nothing happened” thereafter.9 The case was also not a situation of repeating actionable conduct mitigating concerns over stale evidence; to the contrary, the Court found that the action was a classic illustration of the difficulties associated with belated litigation, given that all the individuals directly involved in the construction of the dwelling were now deceased. The Court stated that the practical effect of the motion judge’s reasoning was to have no limitation period applicable to proceedings in respect of latent defects, a result directly contrary to Attorney General Bryant’s stated intention to preclude such litigation.10
Conclusion
Litigation on the ultimate limitation period is likely to become more prevalent, and Huether v. Sharpe serves as a reminder of the ultimate limitation period and its statutory exceptions. Unlike the basic limitation period, the ultimate limitation period is not predicated on concepts of discoverability by the plaintiff, but instead prioritizes the defendant’s need for certainty and finality.
As noted by the Court, by introducing ultimate limitation periods, the Ontario legislature sought to do away with the spectre of continuous exposure to liability for defendants, particularly in the case of latent defects which may not manifest for decades. In Huether v. Sharpe, the Court of Appeal for Ontario recognized the existence of certain exceptions and held that to extend the ultimate limitation period beyond 15 years based on a “continuous act or omission”, there must be repeating actionable conduct. In this case, no such actionable conduct was present.
Footnotes
1. 2025 ONCA 140, leave to appeal to SCC ref’d 2025 CarswellOnt 19173, at paras. 42 and 55 (Huether).
2. Canaccord Capital Corp. v. Roscoe, 2013 ONCA 378, 115 O.R. (3d) 641, at para. 17.
3. York Condominium Corporation No. 382 v. Jay-M Holdings Limited, 2007 ONCA 49, leave to appeal to SCC ref’d 2007 CanLII 37188.
4. Huether, para. 34.
5. Huether, para. 35.
6. Huether, para. 39.
7. Huether, para. 36.
8. Huether, paras. 42–43.
9. Huether, para. 46.
10. Huether, paras. 50–52.
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