DLA Piper (Canada) LLP

DLA Piper (Canada) LLP

dlapiper.com
Billing & efficiencySector knowledge
Show options

Canada

News and developments

Important insight from the BC Court of Appeal on limitation periods applicable to contribution and indemnity claim

The British Columbia Court of Appeal has unequivocally held that a third party notice must be filed before the expiry of the limitation period for claim for contribution or indemnity, or else it will be set aside as being barred under the Limitation Act, regardless of when the application for leave to file a third party notice is filed.

On May 22, 2026, in Oldcastle Building Products Canada Inc. v. Division 8 Consulting Corp., 2026 BCCA 223, the Court of Appeal upheld the chamber judge’s decision to set aside a third-party notice for a claim for contribution or indemnity because it was filed after the expiry of the limitation period, even though the application for leave to file was filed months before the limitation period expired.

The Limitation Act, S.B.C. 2012, c. 13, treats contribution and indemnity claims differently than other third-party claims. While s. 22(1) allows third-party proceedings for a related claim to be brought in an ongoing court proceeding after the expiry of a limitation period, s. 22(2) specifically sets out that nothing in s. 22(1) gives a person a right to “commence a court proceeding” by bringing a third-party proceeding in relation to a claim for contribution or indemnity after expiry of the applicable limitation period.

In this case, the application for leave to file a third-party notice (Application) was filed before the limitation period had expired; however, the third-party notice itself was filed after the limitation period had expired. As s. 22(2) does not permit a person to “commence a court proceeding” for a claim for contribution or indemnity after the expiry of the limitation period, the pertinent issue before the Court was when the third-party claim for contribution or indemnity was commenced. If it was upon filing the Application, then the claim was not statute barred, but if was upon filing the third-party notice, then it was.

The Court of Appeal held that both the jurisprudence and the modern principle of statutory interpretation, which requires a contextual and purposive approach, supported the interpretation of “to commence a court proceeding” as being the filing of the third-party notice. Essentially, a third-party claim is considered a court proceeding, and a third-party notice commences the court proceeding. This interpretation was found to be consistent with the whole Limitation Act, and the definition of “originating pleading” in Rule 1-1 in the Supreme Court Civil Rules, B.C. Reg. 168/2009 [Rules].

The Court of Appeal determined that the purpose behind treating claims for contribution or indemnity in the Limitation Act differently than other third-party claims is to ensure that a defendant address claims for contribution or indemnity early in the litigation. For this reason, s. 16 of the Limitation Act sets one of the dates that a claim for contribution or indemnity is considered to be discovered as the date one is served with a pleading in respect of a claim on which the claim for contribution or indemnity is based. If filing an Application was sufficient to avoid the consequence of s. 22(2), then a party could take as long as it wished to file the third-party notice, which would not achieve the end of addressing claims for contribution or indemnity early in the litigation.

Based on these reasons, which were supported by the jurisprudence, the Court of Appeal upheld the chamber judge’s decision, and unequivocally held that a third-party notice for claim for contribution or indemnity must be filed before the expiry of the limitation period, or else it will be set aside as being barred under the Limitation Act.

We note that from the above, there are two important practice points:

  • The version of the Rules in this case provided for a third party notice to be filed as a right within 42 days of being served with a notice of civil claim or counterclaim, which would be within the two-year limitation period set out in the Limitation Act. However, the current version of the Rules, has changed and provides for a third-party notice to be filed as a right within 42 days after the filing of the response, which, depending on when a response is filed, could be after the limitation period expires. While the Rules may now allow the filing of the third-party notice after the limitation period, it is unlikely that the Rules will be considered to override the limitation period and other provisions set out in the Limitation Act.Therefore, a third-party notice should be filed before the expiry of the limitation period, regardless of whether it is permitted to be filed later under the Rules. While the Rules may effectively permit the filing of a third-party notice after expiry of the limitation period, the third-party notice may still be set aside, as is what occurred in this case. In this case, there was no dispute that the third-party notice was permitted to be filed, as it was filed in accordance with an order after application, but as it was filed after the limitation period, it was set aside.

  • If there is a risk that a third-party notice for a claim for contribution or indemnity cannot be filed before the limitation period expires because, for example, leave of the court is required, then a notice of civil claim seeking contribution or indemnity in a separate action can be filed before the limitation period expires. As set out in this case by the Court of Appeal, to avoid a multiplicity of proceedings, if the third-party notice is ultimately filed in time then the separate action can be discontinued, or an order can be obtained to have the two actions heard together.Therefore, the most important thing about a claim for contribution or indemnity is to file the originating pleading before the expiry of the limitation period.