Date: October 2023
Section 4 of the Limitations Act sets out the commonly known basic two-year limitation period.
However, what is not so commonly known is that this two-year limitation period can be “refreshed” pursuant to s. 13(1) of the Limitations Act if “a person acknowledges liability in respect of a claim”.
A recent decision from Justice Lemay discussed, among other things, the test for whether an email sent by a debtor/defendant was an “acknowledgment”, therefore having the effect of refreshing the limitation period on a number of outstanding invoices pursuant to s. 13(1). Simply put, to satisfy the “acknowledgment” requirement, an email must contain a “clear and unequivocal acknowledgement of the debt claimed”.
Although s. 13(10) requires the acknowledgment to be in writing and signed by a person or their agent, courts have accepted that e-mails can satisfy the “acknowledgment” requirement, so long as the email is found to be authentic.
In this case, Justice Lemay provides an analysis of the language used in the email to conclude that the email was an “acknowledgment” and therefore “refreshed” the basic two-year limitation period, with respect to 2 out of the 5 outstanding invoices.
Due to the fact that payments by the debtor were made to specific invoices instead of to the outstanding accounts generally, the limitation period for the other 3 outstanding invoices were not refreshed because the email had been sent more than two years after each of those invoices were due.
Click here for a link to the decision.