A corporate revival will not extend a limitation period that expired while the corporation was dissolved.
In 65519 Ontario Limited v. Sacks, the plaintiff corporation commenced an action after its corporate charter was revoked. This rendered its claim a nullity. The plaintiff revived its corporate status, but after the limitation period had expired. The defendant brought a motion under rule 21.01(b) to strike the claim on the basis of a limitations defence.
The motion judge accepted the defence and struck the claim. The Court of Appeal dismissed the appeal.
Writing for the Court, Justice Cronk held that the plaintiff must be taken to have known the material facts supporting its claim when it issued its statement of claim. The limitation period began running on this date at the latest, and expired before the plaintiff’s corporate revival.
There was more. The individual plaintiffs had moved before the Superior Court for leave under section 246 of the Business Corporations Act to pursue a derivative action on the plaintiff corporation’s behalf. They argued that if leave were granted on a nunc pro tunc basis, it would regularise the action commenced by the plaintiff corporation so that, as a matter of law, the action would no longer be statute-barred.
The Court rejected this rather fraught reasoning. Even assuming that leave would be granted on a nunc pro tunc basis, the leave order could not deprive the defendant of its limitations defence. The expiry of the limitation period is a legal right that accrued to the defendant while the plaintiff corporation was dissolved, and the defendant was entitled to use it to defeat the plaintiff corporation’s claim.
