Amendments to the Limitations Act, 2002 affect Demand Obligations
By Hull Hull LLP
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p style="margin-top: 0in; margin-right: 0in; margin-bottom: 12pt; margin-left: 0in; "I received an email from research counsel at LawPro yesterday advising that there have been amendments to thenbsp;ia href="http://www.canlii.org/eliisa/highlight.do?language=enamp;searchTitle=Ontarioamp;path=/on/laws/sta/2002c.24sch.b/20080821/whole.html"Limitations Act, 2002/a/ia href="http://www.canlii.org/eliisa/highlight.do?language=enamp;searchTitle=Ontarioamp;path=/on/laws/sta/2002c.24sch.b/20080821/whole.html"nbsp;/athat will affect the treatment of demand obligations created after January 1, 2004.spannbsp;/span/p
p style="margin-top: 0in; margin-right: 0in; margin-bottom: 12pt; margin-left: 0in; "The amendments have the affect of overturning the Court of Appealrsquo;s decision innbsp;ia href="http://www.canlii.org/eliisa/highlight.do?language=enamp;searchTitle=Search+all+CanLII+Databasesamp;path=/en/on/onca/doc/2006/2006canlii41650/2006canlii41650.html"Hare v. Hare/a/i, which addressed the issue of whether thenbsp;iLimitations Act, 2002/inbsp;changed the law with respect to demand promissory notes such that refusal to repay a loan triggered the commencement of the limitations period.spannbsp;/span/p
p style="margin-top: 0in; margin-right: 0in; margin-bottom: 12pt; margin-left: 0in; "Innbsp;iHare/inbsp;the court rejected an argument that the effect of thenbsp;iLimitations Act, 2002/inbsp;was that the limitation period for collecting a demand promissory note began to run on the date that the demand for repayment was made.spannbsp;nbsp;Instead, the court found that a demand promissory note becomes payable as soon as it is made (subject to payments on the loan), thus triggering the limitation period.nbsp;/span/p
p style="margin-top: 0in; margin-right: 0in; margin-bottom: 12pt; margin-left: 0in; "Thenbsp;iLimitations Act, 2002/inbsp;has now been amended to provided that, in determining when injury, loss, or damage with respect to a demand obligation occurs, under a href="http://www.canlii.org///on/laws/sta/2002c.24sch.b/20080821/whole.html#BK6"s. 5(1)(a)(i)/a of the Act, the relevant moment isnbsp;the first day on whichspannbsp;nbsp;therenbsp;isnbsp;nbsp;anbsp;nbsp;failurenbsp;nbsp;tonbsp;nbsp;perform the obligation, once a demand for performance is made/span./p
p style="margin-top: 0in; margin-right: 0in; margin-bottom: 12pt; margin-left: 0in; "With respect to a href="http://www.canlii.org///on/laws/sta/2002c.24sch.b/20080821/whole.html#BK17"s. 15/a (Ultimate Limitation Periods), the Act has also been amended to provide that,nbsp;spanspan style="color: black; "in the case of an act or omission in performing a demand obligation/span/span, the triggering date isnbsp;thespannbsp;nbsp;firstnbsp;nbsp;daynbsp;nbsp;onnbsp;nbsp;whichnbsp;nbsp;therenbsp;nbsp;is a failure to perform the obligation, once a demandnbsp;nbsp;for the performance is made/span.spannbsp;nbsp;/spanspannbsp;nbsp;/span/p
p style="margin-top: 0in; margin-right: 0in; margin-bottom: 12pt; margin-left: 0in; "The amendments only apply to demand obligations created on or before January 1, 2004.spannbsp;/span/p
p style="margin-top: 0in; margin-right: 0in; margin-bottom: 12pt; margin-left: 0in; "While the amendments were apparently effective on November 27, 2008 they are not yet reflected on any of the e-versions of the Act I checked./p
p style="margin-top: 0in; margin-right: 0in; margin-bottom: 12pt; margin-left: 0in; "Have a great day!/p
/spanMegan F. Connollynbsp;spannbsp;/spannbsp;/pimg src="http://feeds.feedburner.com/~r/TorontoEstateLawBlog/~4/488370391" height="1" width="1"/
