The Time Limit For Making Claims

The Alberta Limitations Act1 sets time limits within which a party may commence an action. After a limitation period has expired, potential defendants need no longer be concerned about stale claims haunting them because the claim will be time-barred. Subject to a few exceptions, if a court action or arbitration proceeding is not initiated before the earlier of:

(a) two years after the claimant knew, or ought to have known, that: (i) an injury occurred; (ii) the injury was attributable to the conduct of the defendant; and (iii) the injury, assuming liability on the part of the defendant, warrants commencing an action; or

(b) ten years after the claim arose.

then the claim is likely time-barred.2

The first rule in point (a) can be described as the Discovery Rule, in the sense that the two-year clock starts ticking not when the claim arises but when the claimant discovers it. For example, in Penhold (Town) v Boulder Contracting Ltd,3 although the allegedly defective work had been completed in September 2001, Master Laycock found that the claim had only been discovered when the town's engineer found and reported on the problem in June 2005, and therefore the limitation period only expired in June of 2007.

The ten-year period in (b) can be described as the Drop Dead Rule because it is an absolute time period that bars a claim if it is not brought within ten years after it arose, regardless of discovery. This Drop Dead Rule suffers from no exceptions except those outlined at section 3.1(1) of the Limitations Act, which concern various claims for sexual assault, misconduct, or battery and those outlined in sections 4, 5 and 5.1, which may pause the limitation period if the claimant is disabled or a minor, or if the defendant fraudulently conceals the injury that they caused. A striking example of the powerful effect of the Drop Dead Rule is Bowes v Edmonton (City),4 where a claim regarding homes which suddenly collapsed into the riverbank 12 years after they had been built was found to have expired two years prior to the collapse occurring.

The Limitations Act also permits parties to agree in writing to extend a limitation period, as is commonly done through what are referred to as "tolling agreements". However, the limitation periods set out in the Limitations Act cannot be shortened.5

Third Party and Contribution Claims

A defendant named in an action may wish to claim against another party, either because they believe the new defendant is the...