Time - Is it on your side?
- Kenneth Wolfson
In Ontario, the Limitations Act prevents bringing an action on a debt that is more than two years old. Except if the time is extended by an instrument in writing and signed.
In Fleisher Ridout Partnership Inc. V Tai Foong International Ltd.  O.J. No. 4229 an action was commenced more than two years after invoices were sent. There was an exchange of emails after two years passed.
The defendant claimed that
1. The Claim was statute barred [S. 4 & 5 of Limitations Act] as the debt was more than two years old;
2. The email did not extend the time as it was not a valid acknowledgment in writing [S. 13 (10)] as it was not signed;
3. Even if the email was a valid acknowledgment the emails would have to be within the two year period [S. 13(9)]
The judge stated that the crux of the case is the email:
1. Is the email an acknowledgment or an agreement to pay the debt?
2. Is the limitations period extended or reset?
3. If yes, when did the limitation period start to run?
The email from the defendant, after the two year period read “Sorry to learn payment NOT effected. Kindly forward the invoice to me for action.”
The defendant stated that as the email did not have handwritten or scanned signature or an information block containing the particulars of the sender thereforet the email was not “signed”.
The defendant admitted that the email was sent by an authorized representative of the defendant.
The judge then finds that the email constituted a written and signed document pursuant to the Electronic Commerce Act, the Evidence Act and s. 13(10) of the Limitations Act.
Further, the emails are not a mere acknowledgment of the debt but there is an expression of regret and surprise that the invoice was not paid. The email indicates that the invoices should have been paid and there is an agreement to take “action”.
Thus the emails are an agreement to pay the debt, S. 13(9) re: acknowledgment does not apply and the time begins to run from the date of the email and the action is not statute barred.
The reasoning in this Small Claims Court case has been followed in Superior Court cases.
If you have a debt which is beyond the two year period it still may be collectable.