In Collins Barrow Toronto LLP v. August Industries Inc., the Court of Appeal has held that the limitation period for a claim arising from an unpaid invoice does not run until a reasonable period of time has expired for payment of the invoice:
[5] The other two invoices in dispute are dated April 9, 2014 and April 11, 2014. The application judge pointed out that the engagement letters expressly provided that invoices only became delinquent once 45 days had expired from their delivery. The application judge concluded that the limitation period for these two invoices did not commence until 45 days after they were delivered. We agree with her conclusion in that regard. It is consistent with the express wording of the engagement letters and also with existing case law that provides that the limitation period on an invoice does not begin to run until a reasonable period of time has expired for payment of the invoice: see, for example, G.J. White Construction Ltd. v. Palermo, [1999] O.J. No. 5563 (S.C.J.).
The decision cited by the Court was decided under the former Limitations Act, in which the accrual of the cause of action determined the commencement of time. In contrast, time commences under the Limitations Act on discovery of the claim. It would have been more helpful had the Court explained what impact the passage of a reasonable amount of time has on the plaintiff’s discovery of the claim, and framed the analysis in the language of Limitations Act. In the absence of such a s. 5 analysis, I assume the principle is that a plaintiff cannot really know that she has suffered a loss until a period of time expires after payment became due.
