Ontario: The oppression remedy and the limitation period

In Maurice v. Alles et al., Justice Patillo provides a helpful summary of the principles governing the commencement of the limitation period in an oppression claim. It commences on the date the oppression first arises; the fact that the oppression is continuing will not delay commencement:

[54]        In Fracassi v. Cascioli, 2011 ONSC 178 (CanLII), 2011 ONSC 178 (Ont. S.C.), Pepall J., as she then was, held that pursuant to the Limitations Act, the applicable limitation period for an oppression claim begins two years after the day on which the claim for oppression was discovered. In reaching that conclusion, the learned judge relied on the following passage from Professor Koehnen’s text at p. 57:


Ordinarily, limitation periods begin from the time the plaintiff knows or ought to know of his cause of action. The fact that certain types of oppression continue until they are rectified has given rise to unusual results with respect to limitation periods. In Hart Estate v. Legacy Farms Inc., [1999] B.C.J. No. 312, the plaintiff complained of oppression in respect of a share issue that was completed more than six years before the action was commenced. The plaintiff knew about the share issue when it occurred. The British Columbia Supreme Court held that the claim was not caught by the Limitations Act because oppression continues until it is rectified. Manitoba courts have reached the opposite conclusion and have held that limitation periods do apply even to continuing conduct. This is generally the preferable approach. The concept that the limitation period does not begin to run until the oppression is remedied is counter-intuitive. Limitation periods begin when the cause of action arises, not when it is remedied. A limitation period for a breach of contract begins when the contract is breached, not when the breach is corrected. The idea that limitation periods begin to run when the oppression stops makes even less sense given the requirement of some courts that the oppression continue until the action is commenced. The combination of these two rules would result in an absurd situation. In essence, the limitation period does not begin to run until the oppression stops. But once the oppression stops, the plaintiff has no cause of action.


[55]        While at first blush, the above two excerpts from Professor Koehnen’s text appear contradictory, in my view they are not. The examples in the excerpt relied upon by Robert presuppose that the aggrieved shareholder was not aware of the oppressive conduct giving rise to the damage until sometime later. In that regard, the conduct is continuing. While the act of oppression may be ongoing, I agree with Pepall J. that such continuation does not operate to extend the limitation period beyond the time of two years from discovery.

[56]        There is no question that there are cases where the court has referred to the “ongoing” or “continuing” nature of the conduct to defeat a limitation period argument. See: Waxman v. Waxman, 2004 ONCA 39040 (C.A.) at paras. 534-536; Metcalfe v. Anobile, 2010 ONSC 5087 (CanLII), 2010 ONSC 5087 (Ont. S.C.). When the facts of those cases are viewed closely, however, it is discoverability that is the key factor in determining when the limitation period begins to run.

[57]        A claim for oppression can arise from many different factual situations. It is not until the plaintiff becomes aware of the material facts upon which a claim for oppression can be based that the limitation period will begin to run in respect of that claim. Similarly, if at some later point the plaintiff learns of other oppressive conduct that he or she was not otherwise aware of, the limitation period in respect of a claim for oppression relating to that conduct would only begin to run from the time the material facts giving rise to that claim became known.