INTRODUCTION

In July 2012 British Columbia approved a new Limitation Act in the form of Bill 34, SBC 2012, to replace the old Limitation Act, RSBC, 1996, c. 266. Recently, the Legislature announced that the new Act will come into force and govern limitation periods in British Columbia beginning on June 1, 2013.

The new Act came about as a result of a number of individuals and organizations calling for a modernization of the limitation regime in the Province. The current Act has been in place for more than 35 years and, after much consultation, the limitation laws in British Columbia have been modernized and brought more in line with many other jurisdictions in Canada.

The Attorney General of British Columbia published a white paper regarding the new Act which provides some guidance on their intent behind various changes to the Act. While this paper does not have the force of law, it is possible that the Courts will consult the paper in interpreting the new Act. It is also possible that the Courts will consult Hansard records when interpreting the new Act. Hansard is the official report of debates in the British Columbia Legislature and records the discussions among the Members of Parliament leading to the passing of new legislation.1 Hansard provides valuable insight into the rationale behind the Legislature’s choice of language used in new legislation.

Both Acts contain basic and ultimate limitation periods. Generally speaking, the basic limitation period applies to all claims unless specific circumstances exist to justify stopping the running of time. A basic limitation period cannot be extended beyond the ultimate limitation period. The White Paper analogizes the basic limitation period to a stop watch counting down a set amount of time. The watch begins to count down when a claim is discovered. However, the count down can be stopped in specific instances, for example the claimant’s disability. The stop watch, or basic limitation period, can start and stop a number of times.

The ultimate limitation period is more akin to an hour glass. The hour glass turns over and begins to run on the day the claim takes place and is meant to continue running uninterrupted. The only time the ultimate limitation period is postponed is if the claimant is a minor at the time of the occurrence.

BASIC LIMITATION PERIOD

The basic limitation period under the new Act is 2 years:

a court proceeding in respect of a claim must not be commenced more than 2 years after the day on which the claim is discovered

There is also a 10 year limitation period for court proceeding to enforce or sue on a judgment, which remains unchanged from the current version of the Act.

Under the old Act, there were a number of basic limitation periods depending on the nature of the wrong, including the following more common causes of action:

Click here to view table.

Under the new Act the basic limitation period begins to run on the first day a person knew or reasonably out to have known:

  1. that the injury, loss occurred;
  2. was caused by or contributed to by an act or omission;
  3. the id of the wrong doer; and
  4. that or a court proceeding would be an appropriate means to seek to remedy the loss.

Under the old Act, time does not begin to run until the identity of the defendant is known to the claimant and those facts within the claimant’s means of knowledge are such that a reasonable person, knowing those facts and having taken the appropriate advice a reasonable person would seek on those facts, would regard those facts as showing that an action would have a reasonable prospect of success.

It is unclear whether there will be any practical difference between these two definitions. However, the White Paper suggests that the purpose of the new discoverability rules is to simplify or codify the common law interpretation of the current act, yet leave a considerable amount of discretion to the Courts. Consequently, we do not anticipate that there will be a marked difference between the two regimes.

ULTIMATE LIMITATION PERIOD

There was also a significant change to the ultimate limitation period, in terms of both length and commencement. The new ultimate limitation period is “15 years after the day on which the act or omission on which the claim is based took place.”

The old Act provided a 30 year ultimate limitation period from the time that all the individual elements of the legal claim are present. Essentially, both a negligent act and the resulting damages must be present before the ultimate limitation period begins to run: knowledge that both elements are present is not required.

Under the new Act, it does not matter when the damage occurs, the ultimate limitation period begins to run as soon as the negligent act occurred. For example, consider a professional negligence scenario, where negligent advice is given in 2005 and damage occurs as a result in 2021. Under the old regime, the ultimate limitation period would not begin to run until the damage occurred in 2021. Under the new regime, the limitation period begins to run in 2005.

The new regime provides certainty for defendants, particularly in design claims. For Plaintiffs, however, it is possible that latent defects could go undiscovered until the ultimate limitation period has expired. In the above noted example, the ultimate limitation period would expire 15 years after the negligent advice was given, or 2020; even though the damage did not occur until 2021. The shorter ultimate limitation period could also hinder subrogation efforts, for instance, on large building losses attributable to design if the loss occurs after the 15 year ultimate limitation period expires.

We also note that the 6 year ultimate limitation period for hospitals, hospital employees and doctors has been eliminated, such that the 15 year ultimate limitation period applies to these categories of defendants as well.

CONTRIBUTION AND INDEMNITY

The new regime imposes a 2 year limitation period on a claim for contribution and indemnity. The time begins to run form the later of the date a party is served with pleadings or reasonably ought to have known of the contribution or indemnity claim. The current Act is silent with respect to claims for contribution and indemnity such that the only limitation is that imposed by the Third Party rule in the Supreme Court Rules.

We note that the time to file Third Party proceedings under the Supreme Court Rules expires much sooner than the limitation period imposed by the new Act, such that the Act’s limitation period may be redundant in many instances. However, the new Act’s limitation period may come into play if a Party is seeking leave from the Court to commence late Third Party proceedings.

SUSPENSION OF LIMITATION PERIOD

Under the old Act confirming a cause of action restarted the basic limitation period, but not the ultimate limitation period. Under the new Act, confirming a cause of action restarts both limitation periods of acknowledged before both the basic and ultimate limitation periods expire.

Acknowledgment must be done in writing to the claimant by the alleged wrongful party and signed by hand or by electronic signature. Consequently, it may be possible to acknowledge liability by way of e-mail, whereas previously only paper mail or facsimile could confirm a cause of action. Partial payment of a claim remains an acknowledgment of a claim and will act to restart both limitation periods.

TRANSITION PERIOD

The following provisions will be used to determine which regime applies to limitation defences once the new Act comes into force on June 1, 2013:

  • If the limitation period under the old Act expires before the new Act comes into force, noproceeding is permitted;
  • If the act/omission occurred and was discovered before the new Act comes into force the former act applies; and
  • If the act/omission occurred before the new Act, but is not discovered until after the newAct comes into force, the new Act applies.

INSURANCE ACT

The new Insurance Act, which came into force on July 1, 2012 also provides for a new limitation period for actions commenced against an insurer: an action against an insurer in relation to a contract of insurance must be commenced within 2 years of the date the Insured knew or ought to have known that loss or damage occurred to the insured property or within 2 years from the date that the cause of action against the insurer arose.

Under the old Insurance Act, the limitation period for a multi-peril policy was 1 year commencing when “reasonably sufficient proof of a loss or claim” was furnished. The Courts’ interpretations of “reasonably sufficient proof of loss” left considerable uncertainty with respect to when the 1-year limitation period began to run. The new Insurance Act is designed to reduce or eliminate this uncertainty and bring insurance limitation periods more in line with the general limitation period that governs other civil matters in the Province.