I received an email from research counsel at LawPro yesterday advising that there have been amendments to the Limitations Act, 2002 that will affect the treatment of demand obligations created after January 1, 2004.
The amendments have the affect of overturning the Court of Appeal’s decision in Hare v. Hare, which addressed the issue of whether the Limitations Act, 2002 changed the law with respect to demand promissory notes such that refusal to repay a loan triggered the commencement of the limitations period.
In Hare the court rejected an argument that the effect of the Limitations Act, 2002 was that the limitation period for collecting a demand promissory note began to run on the date that the demand for repayment was made. Instead, the court found that a demand promissory note becomes payable as soon as it is made (subject to payments on the loan), thus triggering the limitation period.
The Limitations Act, 2002 has now been amended to provided that, in determining when injury, loss, or damage with respect to a demand obligation occurs, under s. 5(1)(a)(i) of the Act, the relevant moment is the first day on which there is a failure to perform the obligation, once a demand for performance is made.
With respect to s. 15 (Ultimate Limitation Periods), the Act has also been amended to provide that, in the case of an act or omission in performing a demand obligation, the triggering date is the first day on which there is a failure to perform the obligation, once a demand for the performance is made.
The amendments only apply to demand obligations created on or after January 1, 2004.
While the amendments were apparently effective on November 27, 2008 they are not yet reflected on any of the e-versions of the Act I checked.
Have a great day!
Megan F. Connolly