You Might Regret That Text: Text Messages And Limitation Periods In Ontario

• Published date: 14 July 2021
• Subject Matter: Litigation, Mediation & Arbitration, Coronavirus (COVID-19), Trials & Appeals & Compensation, Operational Impacts and Strategy
• Law Firm: WeirFoulds LLP
• Author: Gavin Fior, Student-at-law

While the legal profession is grounded in tradition and ceremony, COVID-19 has forced courts to acknowledge the reality of the increasingly virtual way that we do business.

In 1475182 Ontario Inc. o/a Edges Contracting v. Ghotbi, 2021 ONSC 3477, the Court held that text messages constituted an "acknowledgment of the debt owing" as required by s. 13 of the Limitations Act, 2002, S.O. 2002 c. 24., Sched. B (the "Act"). Accordingly, the two-year limitation period was extended, and the impugned debt was enforceable.

Section 13 the Act provides that the commencement of a limitation period may be delayed to the date on which a debtor acknowledges its indebtedness. The limitation clock begins running at the time of the acknowledgment. The acknowledgment must be in writing and signed for the exception to apply.

In this case, the appellant hired the respondent to carry out leasehold improvements to its place of business. The appellant was invoiced as work progressed; a total of three invoices were issued. The first and second invoices were paid in full, but after a partial payment was made on March 11, 2016, $24, 521 remained owing on the final invoice. On June 2, 2016, the debt was still owing. On that date, in a chain of text messages, the appellant recognized its indebtedness but refused to make payments until the job was completed to its satisfaction.

On May 30, 2018, the respondent brought a claim at the Small Claims Court for the outstanding balance. At trial, the appellant argued that the two-year limitation period had expired because the last payment was made in March 2016. The respondent argued that the text correspondence on June 2, 2016 constituted acknowledgment of the debt pursuant to s. 13 of the Act, which meant the limitation period began on that date and the claim was commenced within the two-year limitation period.

The trial judge agreed with the respondent and found that based on the plain wording of the text correspondence and the broader context in which they were sent, the appellant had acknowledged the debt and extended the limitation period. Although the texts were not signed, the trial judge found no reason to doubt their authenticity and...