Ontario: admitting liability on cross-examination doesn’t waive the limitation period

An admission of liability on a cross-examination is not a waiver of the limitation period that applies to the claim.

In Cross Bridges Inc. v. Z-Teca Foods Inc., the plaintiff moved for summary judgment for a declaration that it brought its claim in time. (Although not unprecedented, you’re in good company if this seems like an unusual tactic.  Justice Emery’s decision begins with this observation: “It is often said that the best defense is a good offense. The converse is seldom true. Rarely does a plaintiff in a civil action take defensive steps, particularly of a binding nature.”)

The defendant had admitted on cross-examination that it owed to the plaintiff an amount to be determined.  The plaintiff argued that this admission was a waiver of the limitation period. Justice Emery rejected this reasoning.  The admission came in the course of the motion, after the defendant had pleaded a limitations defence.   It could not resurrect the plaintiff’s right to its claim; otherwise, plaintiffs could resurrect statute-barred claims merely by asking the appropriate question of defendants on cross-examination (and receiving a truthful response). Actual waiver of the limitation period requires full knowledge of the legal rights a party holds, and an unequivocal intention to surrender those rights.

Update: the Court of Appeal upheld this decision.  Here are the key paragraphs:

[9]         Secondly, the appellant submits that the limitation defence should be unavailable because the respondent admitted his indebtedness in his cross-examination on his affidavit filed in the summary judgment proceedings.

[10]      We disagree.  Read in its totality, the admission of indebtedness by the respondent was qualified and stated to be subject to the limitation period defence.  In addition, under s. 13(9) of the Limitations Act, 2002, for an acknowledgement to reset the limitation clock, it must be made before the expiry of the limitation period applicable to the claim.  Here, the cross-examination occurred long after the expiry date.