Sunday, June 10, 2007

Limitation Periods in British Columbia

[The law discussed in this post is now outdated. On June 1, 2013, a new Limitation Act came into effect. I summarized some of the changes here.]

I sometimes get phone calls asking, “What is the limitation period for....” I politely decline to answer. Limitation periods for bringing lawsuits in British Columbia can be quite complex, technical and arbitrary. If you miss the applicable limitation period, you are out-of-luck.

The rationale for having limitation periods is straight forward enough. If someone has a claim against you, he or she should be required to file a lawsuit within a reasonable period of time. You should not have to spend the rest of your life looking over your shoulder because you think someone might sue you. If too much time is allowed to pass, it may be difficult to get all of the facts before the court. Memories fade, documents get lost, and witnesses even die.

The law must balance the interests of those who may have claims, with the interests of defendants. If limitations are too short, the result may be harsh to those with legitimate claims. The person making a claim might not realize he or she has a legal claim right away. Perhaps the person making the claim is still a minor, or has a mental disability. What if he or she does not know the identity of the defendant? Or, perhaps the the person knows he or she has a claim, but does not know the extent of the claim. What may seem like a small claim at first, may turn out to be more serious.

In British Columbia, many of the limitation periods are set out in the Limitation Act, RSBC 1996, 266. Section 3 of the Act sets out different limitation periods for different types of claims. The most common periods are two years, six years, and ten years. For example, section 3(2) (g) provides for a two year limitation for claims for wrongful death under the Family Compensation Act. Section 3(3)(a), sets out a ten year limitation for claims “against the personal representatives of a deceased person for a share of the estate....” If there is no specific provision for a claim in the Limitation Act, or in any other legislation, the limitation period is six years.

But you need to know more than the applicable period. You need to know when the time starts to run. The general rule is that the limitation period begins to run against you when you have the right to sue. But the Limitation Act postpones the time at which the limitation period begins to run is some circumstances. For example, section 6(1) says,

The running of time with respect to the limitation period set by this Act for an action
(a) based on fraud or fraudulent breach of trust to which a trustee was a party or privy, or
(b) to recover from a trustee trust
property, or the proceeds from it, in the possession of the trustee or previously received by the trustee and converted to the trustee's own use, is postponed and does not begin to run against a beneficiary until that beneficiary becomes fully aware of the fraud, fraudulent breach of trust, conversion or other act of the trustee on which the action is based.
The Limitation Act also provides for postponement if the person with the right to make a claim is a minor or incapable or substantially impeded in managing his or her affairs. This is set out in section 7.

Section 5 provides that if the defendant confirms that the person making the claim has a cause of action (the person's entitlement) within the limitation period, the defendant's confirmation may extend the time available to file the lawsuit.

But even these provisions extending the time for making a claim are subject to ultimate limitation periods. Section 8 of the Act says that the ultimate limitation period for claims based on negligence against hospitals, hospital employees, and medical professionals is six years. In other cases the ultimate limitation period is thirty years.

But (notice all of the “buts” in this article), section 3(4) of Limitation Act sets out some categories of claims for which there is no limitation period at all. These are not subject to the ultimate limitation periods. For example there is no limitation period “for possession of land by a life tenant or person entitled to the remainder of an estate....”

Are you still with me?

Once you have figured out all of the nuances of the Limitation Act, you still need to know about other legislation that may apply. For example, I have previously written about section 3 of the Wills Variation Act, which says that someone must start a claim to vary a will under that Act within six months of the date of probate (or resealing in B.C. if the will was probated elsewhere). Sections 5, 6 and 7 of the Limitation Act discussed above extending the time in certain circumstances, do not apply to the Wills Variation Act limitation.

In some cases, the limitation period may be governed by federal legislation, rather than provincial. For example, the time limits to object or appeal tax decisions under the federal Income Tax Act are governed by federal legislation.

If you wait too long to sue, it is possible that your claim could be dismissed on the basis of an inexcusable delay, even if your claim is not barred by legislation. Historically, the courts of equity developed certain defenses, such as “laches,” to prevent suits from proceeding if the claimant waited too long to bring the claim. Most modern cases deal with legislated limitation periods, rather than equitable principles of inexcusable delay. But in an appropriate case, where the person making the claim unfairly waits an unreasonable amount of time, the court might dismiss the claim, even if brought within the applicable legislated limitation period.

And that is why I cannot tell you in a short, casual telephone conversation what the limitation period is for your case.

1 comment:

Anonymous said...

I thought the equitable principle of undue delay was only applicable in the absence of statutory law. So it would only apply to causes of action which have no time limit under the act? Equity may trump the common law, but doesn't statutory law trump equity?

I realize I'm commenting on the old act.