In Deloitte & Touche LLP v. Kuiper, Justice Hood provides a helpful summary of the jurisprudence considering section 13 of the Limitations Act.
Section 13 deems the date of an acknowledgement of liability in respect of certain types of claims to be the date from which the presumptive limitation period begins to run:
Acknowledgments
13. (1) If a person acknowledges liability in respect of a claim for payment of a liquidated sum, the recovery of personal property, the enforcement of a charge on personal property or relief from enforcement of a charge on personal property, the act or omission on which the claim is based shall be deemed to have taken place on the day on which the acknowledgment was made.
This is the summary:
[14] In Middleton v. Aboutown Enterprises Inc., [2008] O.J. No. 3608 (S.C.J.) there was a promisory note that had $412,500 outstanding on it. Prior to any claim being made, the defendants sent a letter and an unsigned release to the plaintiff purporting to offer $50,000 in exchange for an executed release. Justice Lederer stated at para. 11 of Middleton that in order to be an acknowledgment for the purposes of the Act, the acknowledgment must, at a minimum, have to demonstrate and confirm the amount of the debt that remained owing. Justice Lederer’s decision has been followed in a number of other decisions.
[15] In Montcap Financial Corp. v. Schyven, 2011 ONSC 4030 (CanLII) at para. 27, and in Skuy v. GreennoughCorporation, 2012 ONSC 6998 (CanLII) at para. 56, Justice Perell in both instances referred to Middleton and stated that an acknowledgment for the purposes of the Act of an indebtedness for a liquidated sum “must, at a minimum, confirm and concede the amount that remains owing”. In West York International Inc. v. Importanne Marketing Inc., 2012 ONSC 6476 (CanLII), Justice DiTomaso at paragraph 92 referenced Middleton and Montcap, and repeated Justice Perell’s wording that the acknowledgment “must, at a minimum, confirm and concede the amount that remains owing”.
[16] Justice Lederer’s decision in Middleton was appealed. While the appeal was dismissed in a four paragraph endorsement, see: Middleton v. Aboutown Enterprises Inc., 2009 ONCA 466 (CanLII), the Court stated in its endorsement that it did not accept the statement that to stand as an acknowledgment, the letter and Release would, at a minimum, have to demonstrate and confirm the amount of the debt that remained owing. It would seem that the appeal decision was not drawn to the attention of either Justices Perell or DiTomaso based upon their adoption of Justice Lederer’s wording in their decisions.
[17] Unfortunately, the Court of Appeal does not say what part of Justice Lederer’s statement it did not accept. However, the Court went on to say at para. 1 that with respect to the alleged acknowledgment documentation, it “did not constitute a clear and unequivocal acknowledgment of the debt claimed, with a proposal to satisfy it, as opposed to a mere offer to settle a claim, without acknowledging that $412,500, or indeed any amount, remained owing in respect of the promissory note”.
[18] Using the wording of the Court of Appeal, I cannot find that the letter herein of October 24, 2011, was a clear and unequivocal acknowledgment of the debt claimed. Nor does the letter contain a proposal to satisfy the debt. There is no acknowledgment of $143,620.84, or any amount owing in respect of the invoices. If anything, it was a letter of complaint addressed to the plaintiff complaining that the invoices were not in accordance with the initial estimate and that they lacked detail. The defendants also raised some tax issues which they said were not drawn to their attention by the plaintiff. Accordingly, I am unable to find that the defendants acknowledged the debt within the meaning of s. 13 of the Act, thereby extending the commencement of the limitation period.
If you’ll excuse a little pedantry, there’s one issue with the decision that bears noting. Justice Hood states that “Section 13 of the Act overrides s. 4 of the Act“. Not so. Section 4 provides that “a proceeding shall not be commenced in respect of a claim after the second anniversary of the day on which the claim was discovered”. Section 13 has no impact on section 4. Rather, section 13 relates to section 5(2), which contains the presumption that a person discovers her claim on the day the act or omission on which the claim is based took place. Section 13 deems this day to be day the acknowledgement of liability was made.
