Thursday, October 11, 2012

New Limitation Act to Come Into Effect on June 1, 2013

British Columbia’s new Limitation Act, Bill 34, will come into effect on June1, 2013, according to a news release from the Ministry of Justice.

Limitations legislation sets out time periods in which a person making a claim must start a lawsuit, or lose their right to sue.

The new Act will set a two-year limitation for most types of claims. This replaces the current legislation which replaces the current legislation which sets different periods for different types of claims, often 2, 6 or 10 years.

The two year limitation period will usually start when the claim is “discovered.” Section 8 sets out a general rule of when a claim is discovered as follows:

8  Except for those special situations referred to in sections 9 to 11, a claim is discovered by a person on the first day on which the person knew or reasonably ought to have known all of the following: 
(a) that injury, loss or damage had occurred; 
(b) that the injury, loss or damage was caused by or contributed to by an act or omission; 
(c) that the act or omission was that of the person against whom the claim is or may be made; 
(d) 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.

The new legislation may be simpler than the old Limitation Act, but it is by no means simple.

First, although most claims are subject to a two-year limitation period, this does not cover all types of claims. For example, a claim based on a judgment of a B.C. court has a ten-year limitation period. Some claims, including claims based on a sexual assault or certain claims for possession of land do not have any limitation period.

Secondly, there are special rules for when certain kinds of claims are discovered, such as claims based on fraudulent or breach of trust.

Thirdly, there is an ultimate limitation period for most claims of “15 years after the day on which the act or omission on which the claim is based took place.” This means that some claims could be barred under the new Limitation Act even before they are discovered, but there are exceptions to that for certain types of claims where the ultimate limitation period does not run until discovered, such as a claim for a demand loan which does not begin until the creditor demands payment.

Fourthly, if the person who has a claim is a minor, the limitation period will not begin to run until the minor attains the age of 19, unless the person against whom the claim is made gives notice to proceed to both the minor’s caregiver and the Public Guardian and Trustee, in which case the limitation period begins to run when the notice is given. There are analogous provisions extending the limitation period, and for a notice to proceed, for an adult person who is “incapable or substantially impeded in managing his or her affairs.” If a person loses capacity after the claim is discovered, the running of the limitation clock is suspended while that person is incapable, unless there is a notice to proceed.

Fifthly, the limitation period may also be extended if the person against whom a claim is made acknowledges liability in writing within the limitation period, or in the case of a claim for a debt makes a payment within the limitation period.

Sixthly, there are transition rules for determining whether a claim is governed under the old Limitation Act or the new Act.

If that is not enough, there are many claims that are not governed by the Limitation Act, but are governed by limitation periods set out in other legislation. For example the time limit for bringing a claim under the Wills Variation Act is set out in that Act.

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