Tuesday, May 15, 2012

Limitation Periods a Shield and not a Sword

Radonna Investments Ltd. v. Rubin, 2012 ONCA 321 expressly upholds an earlier decision of the Superior Court which is a useful statement that a limitation period is a shield and not a sword:



22          The defendants advance the doctrine of fundamental breach and rely on cases where the court looks at the actions of the defendant to determine whether those actions amounted to fundamental breaches and cases where the court is asked to determine whether the party who brought an end to the contract was justified by the other party's actions in doing so. In those cases the party against whom the breach was alleged sought to resist a finding they breached the contract. [For instance, Shelanu Inc. v. Print Three Franchising Corp. (2003), 64 O.R. (3d) 533 (Ont. C.A.); and 1193430 Ontario Inc. v. Boa-Franc (1983) Ltée (2005), 78 O.R. (3d) 81 (Ont. C.A.)]. That is not the position the defendants take in the case before me.

23          The defendants before me embrace their wrong doing as they now admit to breaching the Letter Agreement. The defendants are in effect standing in the present and looking back over three years ago at their wrongful conduct, belatedly admitting to the wrong doing and then attempting to use the wrong doing as a weapon to bring the limitation period to bear against the plaintiff's, the innocent party's claims. This is I find to be a rather unorthodox way to use a limitation period. The intended purpose of a limitation period is to provide a possible defence for a defendant against allegations based on "ancient obligations" and a source of protection from the responsibility to answer "stale" claims brought long after the event upon which the plaintiff's allegations rest has occurred. [Findlay v. Holmes
, [1998] O.J. No. 2796 (Ont. C.A.), at p. 327, citing M. (K.) v. M. (H.), [1992] 3 S.C.R. 6, 96 D.L.R. (4th) 289 (S.C.C.)]. A defendant would typically deny the breach of contract and alternatively plead the limitation period as an affirmative defence.

24          The court is not in the least disposed to accept the defendants' position as a viable strategy to defeat the plaintiff's claims.

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