Limitations Act: Time Begins To Run When 'Legally Appropriate' Proceeding Has Run Its Course

In Presidential MSH Corporation v. Marr Foster & Co. LLP, the Ontario Court of Appeal found that the Corporation's claim against its accountants, who had filed corporate tax returns after their due date, was discoverable when the Canada Revenue Agency responded to the Notice of Objection and confirmed its initial assessment, not when the Corporation initially received the CRA's Notice of Assessment disallowing its tax credits. In applying s.5(1)(a)(iv) of the Limitations Act, the Court of Appeal held that time begins to run when the alternative resolution process has run its course or is exhausted, which must be reasonably certain or ascertainable by a court.

In this case, the accountants' late filing resulted in damages of approximately $550,000 in unpaid taxes, interests and penalties. The Court went through the case law on limitations which stands for the proposition that a legal proceeding against an expert professional may not be appropriate if the claim arose