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Limitation Periods: When the Clock Starts, When It Stops, and When It's Too Late
Faculty of LawClaims, Defences, and Third-Party Claims
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A structural engineer's report, delivered to the board of a community services agency on a Thursday afternoon, used language that transformed scattered maintenance concerns into a coherent narrative of construction failure. The report documented foundation settlement, inadequate waterproofing membrane installation, and systemic failure of the drainage system surrounding the building. What had been dismissed as condensation, attributed to humidity, and managed with dehumidifiers was revealed to be progressive water infiltration caused by defects in renovation work completed 4 years earlier.

The agency, a non-profit serving at-risk youth and children through after-school programs and community services, had undertaken a substantial renovation of its facility to modernize the building and expand its programming capacity. The construction work included foundation repairs, waterproofing systems, and interior finishes designed to serve the community for another generation. A general contractor completed the renovation under a written contract with the agency. For approximately 2 years following substantial completion, the building appeared to function as intended.

The first indication of a problem appeared when the executive director noticed dampness in a basement storage corner approximately 6 months before the issue demanded serious attention. The facilities manager attributed the moisture to condensation and recommended running a dehumidifier. Several months later, an intake coordinator arriving early for a morning program discovered that hallway carpet had developed a ridge and felt damp beneath the surface. She mentioned it to maintenance staff and continued with her duties. Neither observation triggered investigation into the renovation work or communication with the contractor.

The situation progressed from subtle signs to undeniable damage. Water began actively infiltrating basement walls, laminate flooring warped, and the smell of mold became evident in program spaces. Ceiling tiles in the main program hall developed spreading water stains. By the time the board commissioned the structural engineering assessment, water damage had extended well beyond cosmetic concerns into the building's structural systems.

The agency's board of volunteer directors now confronted several interconnected questions. The renovation contract contained provisions addressing dispute resolution and notice requirements. Communications between the agency and the contractor following early moisture concerns existed in various forms. The 2-year limitation period under the provincial Limitations Act applied to claims arising from the renovation, but determining when that period began to run required analyzing what the agency knew, when it knew it, and when it ought to have known enough to commence legal proceedings. The board faced the possibility that the window for holding the contractor accountable had narrowed considerably, or had already closed, while they were still discovering the full scope of what had gone wrong.

Agreements That Extend the Clock — And Who They Bind

The executive director sat across from the board chair in the cramped office adjacent to the main program hall, both of them staring at the water stain spreading across the ceiling tiles above them. It was the third time in eighteen months that water had found its way into the building, and this time the damage extended beyond cosmetic concerns. The structural engineer's preliminary report, delivered just that morning, used words like "foundation settlement" and "inadequate waterproofing membrane" and "systemic failure of the drainage system." The renovation that the agency had completed four years earlier, the one that was supposed to modernize the facility and serve the community for another generation, had apparently been compromised from the start. The executive director asked the question that would consume the board's attention for months to come: could they still sue the contractor, and if so, how long did they have to make that decision?

The answer to that question would prove far more complicated than anyone at that initial meeting anticipated. The contractor had been responsive in the early days after the renovation, returning to address minor complaints and assuring the agency that the problems were superficial and easily remedied. When the issues persisted and worsened, the contractor's tone shifted. By the time the agency engaged a litigation lawyer to assess its options, the lawyer's first question was not about the nature of the defects but about timing. When did the agency first know, or when ought it reasonably to have known, that something was materially wrong with the work? The agency's records from the period were sparse, a consequence of staff turnover and the general chaos of operating programs for vulnerable populations while simultaneously managing a major construction project. The lawyer's second question was whether anyone had entered into any agreements that might affect the limitation period, and it was this question that would ultimately reveal the most consequential mistake the agency had made.

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More in this program

The Statement of Defence: Denials, Admissions, and What Gets Left Out
Defences: How Defendants Respond and What They Can Raise
Who Gets Sued and Why: Naming the Right Parties
How a Civil Claim Begins: Parties, Pleadings, and What Gets Alleged
Contribution and Indemnity: Why Defendants Sue Each Other
Third Party Claims: Bringing Someone Else Into the Fight