Case Reporter

Written by Xiyuan Feng, supervised by Professor Bruce Curran

Can a defendant’s remedial conduct delay the start point for the running of a limitation period? GHC Swift Current Realty Inc. v BACZ Engineering (2004) Ltd. decided by the Saskatchewan Court of Appeal suggests that it might.[1]

The plaintiff in the case, GHC Swift Current Realty Inc. (“GHC”), contracted with Lesmeister Construction ’97 Ltd. (“LCL”) to construct a care home, who in turn retained BACZ Engineering (2004) Ltd. (“BACZ”) for mechanical drawings and engineering services and Starks Plumbing and Heating Ltd. (“Starks”) to install the heating, ventilation, air conditioning and plumbing systems.[2] (LCL, BACZ and Starks are collectively referred as “Defendants”.) The construction was completed in 2014, yet in July of 2015, GHC identified 29 deficiencies and requested that LCL remedied them.[3] Although denying their responsibility, LCL and Starks worked with GHC to ameliorate the situation until June 2017, but BACZ was not involved in the remedial work.[4] However, it was not until February 2016, based on emails exchanged by the parties, that the CEO of GHC became confident that legal action would be necessary to get LCL and Starks to fully remedy the deficiencies.[5] In 2017 and early 2018, GHC identified additional deficiencies, and on January 12, 2018, GHC commenced an action against the Defendants claiming breach of contract and negligence.[6] The Defendants took the position that GHC’s claim was statute-barred because the limitation period had expired, and all Defendants brought applications to strike GHC’s claim.[7] In granting these applications, the Chambers judge found that GHC’s claim was discovered when GHC first identified the deficiencies in July of  2015, and that LCL and Starks efforts towards remediation did not serve to delay the running of the limitation period.[8]

On appeal of the application ruling, the Saskatchewan Court of Appeal set aside the decision to strike the claim against LCL and Starks, and remitted the proceedings against them back to the Saskatchewan Court of Queen’s Bench. (The Court of Appeal upheld the striking of the claim against BACZ, because that defendant was not involved in the remediation attempts.)  Justice Kalmakoff found the remedial activity of LCL and Starks, which could have led the CEO of GHC to believe that deficiencies might be resolved and that the proceeding would not be necessary, might have postponed GHC’s discovery of the claim pursuant to section 6(1)(d) of the Limitations Act.[9] On this basis, it was not “plain and obvious” that the GHC’s claim against LCL and Starks should be struck, and the limitation period issue required further evidence to be adduced before the Queen’s Bench.

Despite this case leaving open the possibility that ongoing attempts to remedy defects might delay the running of limitation periods in certain circumstances, the prudent course of action for legal counsel is to assume the earliest possible start date for any potential limitation period. The issue of whether a limitation period has been delayed due to ongoing attempts at remediation (or due to a myriad of other factors) is often complex, highly fact-based, and unpredictable.[10] Therefore, closely monitoring limitation periods and making conservative assumptions about potential start dates will assist counsel to advise clients properly and protect their interests.  

[1] GHC Swift Current Realty Inc. v BACZ Engineering (2004) Ltd., 2022 SKCA 38.

[2] Ibid, at para 3.

[3] Ibid, at paras 4-5.

[4] Ibid, at para 7.

[5] Ibid, at para 40.

[6] Ibid, at paras 8-9.

[7] Ibid, at para 13.

[8] Ibid, at para 14.

[9] The Limitations Act, SS 2004, c L-16.1, s 6.

[10] Ibid, at para 35.

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