The Ontario Superior Court of Justice recently dealt with an interesting question: When does an ultimate limitation period start to run on a third party claim for indemnity and contribution?
In Ontario, a general ultimate limitation period of 15 years applies to causes of action under s. 15(2) of the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B (the “Act”):
15(1) Even if the limitation period established by any other section of this Act in respect of a claim has not expired, no proceeding shall be commenced in respect of the claim after the expiry of a limitation period established by this section.
(2) No proceeding shall be commenced in respect of any claim after the 15th anniversary of the day on which the act or omission on which the claim is based took place. [Emphasis added]
Lower Williams Properties Ltd. v. Santaguida, 2025 ONSC 1132, was a motion brought by the third party to in eight different actions, which were each commenced against a common group of defendants in 2021. The actions arose out of a 2019 fire that occurred in an Ottawa neighbourhood, which was alleged in each action to have begun on the roof of the defendants’ business. The defendants commenced a third party claim in each action against the third party, an architect who was involved in a 2001 renovation at the property which allegedly contributed to the spread of the 2019 fire.
The third party sought orders in each action that the claims brought against him were statute-barred under the Act. It was argued that the third party actions were brought more than 15 years after the renovations were completed, which meant that s. 15(2) of the Act offered a total defence. The defendants, in response, argued that the date of alleged wrongdoing was the date on which they were served with the statements of claim giving rise to its claims for contribution and indemnity – which was in 2021, and not 2001.
The Ontario Superior Court of Justice, upon a review of the Act and its judicial commentary, agreed with the defendants. In doing so, the Court provided the following survey of authorities on limitation periods and third party contribution claims:
“[11] A claim for contribution and indemnity under s.1 of the Negligence Act, R.S.O. 1990, c. N.1 is not a damage claim arising out of a tort, but instead is a statutory claim, founded on principles of restitution and unjust enrichment. It follows that the “acts or omissions” on which the claim for contribution and indemnity is based are “the failures by the other concurrent tortfeasors to pay their fair share of the injured party’s damages before the contribution and indemnity claimant’s liability to the injured party has crystallized.”
[12] Prior to the enactment of the Act, the weight of authority in Ontario indicated that a cause of action for contribution and indemnity under s.1 of the Negligence Act did not accrue, and the limitation period did not begin to run, until the injured party obtained judgment against the person claiming contribution and indemnity.
[13] As Sharpe J.A. observed in Canaccord Capital Corp. v. Roscoe (2013), 2013 ONCA 378 (CanLII), 115 O.R. (3d) 641 (C.A.), at para. 17, the reform of the law of limitations in Ontario was “aimed at creating a clear and cohesive scheme for addressing limitation issues, one that balances the plaintiff’s right to sue with the defendant’s need for certainty and finality.” And, as described by Paciocco J.A. in Mega International, at para. 73, “[t]here is an element of injustice in using a limitation period to deny a claim that could not have been discovered with reasonable diligence”; “the court should be reluctant to adopt a legislative interpretation that effectively permits the possibility of such an injustice, unless that is the outcome clearly dictated by the legislation.”
The Court also drew attention to s. 18 of the Act, which addresses situations like the one at issue on the motion:
18 (1) For the purposes of subsection 5 (2) and section 15, in the case of a claim by one alleged wrongdoer against another for contribution and indemnity, the day on which the first alleged wrongdoer was served with the claim in respect of which contribution and indemnity is sought shall be deemed to be the day the act or omission on which that alleged wrongdoer’s claim is based took place
(2) Subsection (1) applies whether the right to contribution and indemnity arises in respect of a tort or otherwise.
The Court wrote:
“[17] Similarly, it would be unfair to bar a person’s right to make a claim for contribution and indemnity before they are in a position to pursue a third party claim, that is, before the statement of claim has even been served. That is the unfairness that s.18 guards against by expressly deeming the date of service of the statement of claim as the actual commencement date for the ultimate limitation period.”
If a party is served with a statement of claim and is worried that potential claims of contribution and indemnity they may have against other parties are time-barred, they should consult a lawyer to see whether an exception under the Act may apply.
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