Financial Statements Can Inadvertently Extend Limitation Periods

There is a deadline for suing someone. In Alberta, the deadline is generally the earlier of two years from when you knew or ought to have known of the claim, or 10 years from the date of the claim (in Ontario: two and 15 years). This general rule is subject to a number of exceptions. One such exception is for claims for a debt, rent or other specific amount of money (an accrued liquidated pecuniary sum). For such a claim, the deadline can be extended if the person liable acknowledges the claim before the expiry of the normal deadline. Recently, the BC Court of Appeal held that by referring to a debt in its financial statements, a company can be found to have acknowledged the claim for the debt and thereby to have extended the deadline for others to sue it for the debt. The decision could have implications for Alberta and Ontario corporations, since the Alberta and Ontario limitations acts contain similar wording to the BC act.