On June 1, 2013, British Columbia's new Limitation Act will come into force ("new Limitation Act").1 Once in force, the new Limitation Act will repeal and replace British Columbia's current Limitation Act ("former Limitation Act"),2 and will establish a new "default regime" for limitations periods in the province.3 The new Limitation Act is intended to be easier to understand and is meant to bring the province's limitations laws in harmony with the laws in other provinces.4
Important changes resulting from the new Limitation Act include:
- A single 2 year limitation period for all civil claims - this is a marked shift from the various limitation periods prescribed under the former Limitation Act.5 There will be certain exceptions to the 2 year limitation period, including: civil claims to enforce a monetary judgment, exempted claims enumerated within the statute, and claims that have limitation periods prescribed by other statutes.6
- A 15 year ultimate limitation period based on the date the act or omission occurred, which has been reduced from the previous 30 year ultimate limitation period.7
As a result of the significantly shortened time periods for commencing a claim in British Columbia, claimants will need to be even more mindful of the date on which a potential claim is discovered. Indeed, many claimants will now need to make the decision to commence a lawsuit much sooner than was typically required before. Claims as arising out of breaches of contract or demand loans, for example, which typically had a six year limitation period under the former Limitation Act, must now be commenced within two years from the date of discovering the claim.8 If a limitation period lapses before a lawsuit is commenced, a claim may be statute barred thereby preventing most remedies that would have otherwise been available to the claimant, including "non-judicial remed[ies]".9
The new Limitation Act sets out specific conditions for when a claim is "discovered".10 Due consideration should be given to these sections as well. In general, a claim is discovered "on the first day on which the person knew or reasonably ought to have known all of the following:
- that injury, loss or damage had occurred;
- that the injury, loss or damage was caused by or contributed to by an act or omission;
- that the act or omission was that of the person against whom the claim is or may be made; and
- that, having regard to the nature of the injury, loss or damage, a court proceeding would be an appropriate means to seek to remedy the injury, loss or damage."
All four of the criteria set out above must be met before a claim is deemed to have been "discovered." Additionally, the new Limitation Act outlines Special Discovery Rules for certain types of enumerated claims. For example, claims for "demand obligations,"11 and claims to "realize or redeem security,"12 have specific discoverability rules outlined within the statute.
The former Limitation Act will apply to most claims discovered before June 1, 2013.13 That is, the new Limitation Act will not operate retroactively in most situations. There are, however, certain exceptions to this, which are necessarily fact-dependent. We anticipate that the courts will be called upon to interpret and clarify the finer points of the new Limitation Act once it comes into force. In the days that remain before June 1st, companies and individuals may want to take stock of disputes they are involved in – particularly where court proceedings have not yet been commenced – and seek advice on how the new Limitation Act may impact such disputes moving forward.