Ontario’s Limitations Act, 2002, creates an ultimate limitation period in Ontario of 15 years for a party to bring a claim, stating that: “[n]o proceeding shall be commenced in respect of any claim after the 15th anniversary of the day on which the act or omission on which the claim is based took place.”
For the determination of when the ultimate limitation period for a claim starts to run, the Limitations Act provides that “in the case of a series of acts or omissions in respect of the same obligation, the day on which the last act or omission in the series occurs”.
In the 2025 decision of Huether v Sharpe (2025 ONCA 140), the Ontario Court of Appeal considered what constituted “a continuous act or omission” under this section.
Background
This case involved a house that was built in the Township of McMurrich Monteith between 1986 and 1987. The Township had issued a building permit in 1986 and conducted several inspections, issuing an Order to Comply for certain deficiencies.
A handwritten note on the Order to Comply later stated “all complied with,” and in 1988, a treasurer’s certificate was issued by the Township’s then-clerk stating there were no outstanding work orders against the property or building.
There was some question of whether the building permit had ever been closed, though after the issuance of the treasurer’s certificate, the evidence of the Township’s then-Clerk and Treasurer was the Township had regarded the building permit as being closed and it was no longer concerned with the construction of the house.
The Plaintiff’s purchased the house in October 2021 and shortly they purchased the house, they discovered significant defects in the house’s foundation.
In February 2022, the Plaintiffs commenced an action against the Township, alleging among other things, that these defects had resulted from the Township’s negligence in supervising the construction of the house, and in the Township failing to conduct further inspections.
In the litigation, the Township moved for summary judgement on the basis that the Plaintiffs’ action was barred by the ultimate limitation period, due to the Township having issued the building permit in 1986 and construction having been completed in 1987. The Township argued that any alleged negligence on its part occurred more than three decades ago and was therefore statute-barred.
The Motion Judge’s Decision
The Motion Judge dismissed the Township’s motion for summary judgment and found that the Township’s negligence was ongoing and continuous and, therefore, the ultimate limitation period had not yet expired.
In the Motion Judge’s decision, the focus was on whether the building permit had ever been properly closed, and the Motion Judge found that the building permit could not have been closed and was, in fact, still open.
The Motion Judge held that a municipality has a to “continuously monitor its open permit file and to follow up with the permit holder regarding the state of construction.” As the Township had not taken steps to monitor the building of the house and as the building permit had never been closed, the Motion Judge held that the Township’s duty to monitor remained in effect.
In respect of the ultimate limitation period, the Motion Judge concluded that due to the Township continuing to be under a duty to monitor the building permit, the Township’s negligence had never ceased, and the ultimate limitation period had not yet expired.
Accordingly, the Motion Judge dismissed the Township’s motion for summary judgment.
Appeal to the Court of Appeal
The Township appealed the Motion Judge’s decision to the Ontario Court of Appeal.
In its analysis, the Court of Appeal noted that the term of a “continuous cause of action” is used to describe causes of action that accrue from repeating actionable conduct.
The logic for that is that as each repetition of the actionable conduct is identical and occurs continuously, it founds a new cause of action. However, actionable conduct is not continuing merely because it can be rectified or because the harm it causes is either continuing or delayed.
On appeal, the Court of Appeal held that in order for there to be a “continuing act or omission”, there would need to be “a succession or repetition of actionable conduct on the part of a defendant”.
However, there was no evidence of a repetition of actionable conduct, as in this case, the evidence showed that from around 1988 onwards, the Township treated the building permit as if it were closed and the Township had no further role or involvement with the construction of the house.
The Court of Appeal concluded that any alleged negligence on the part of the Township “had already occurred and was complete by that date”. Accordingly, the Court of Appeal allowed the Township’s appeal and dismissed the Plaintiffs’ action, concluding that the Plaintiffs’ action was barred by the ultimate limitation period.
In its decision, the Court of Appeal also considered the practical implications of the Motion Judge’s decision and reasoning, which the Court of Appeal noted would have effectively meant there would have been no limitation period that was applicable to latent defects in the house, and would have meant that even if future owners had discovered defects in the house in 50 or 100 years, that there would have still been the ability to proceed with a claim because the Township’s alleged omissions were still continuing.
The Court of Appeal stated that such a result would be directly contrary to the intention of the Ontario Legislature to preclude such litigation, and for the limitation period to provide a defendant with some certainty and finality.
Appeal to the Supreme Court of Canada
The Plaintiffs subsequently applied to the Supreme Court of Canada for leave to appeal the decision of the Ontario Court of Appeal, but the application for leave was dismissed.
Takeaways
By the strict application of the ultimate limitation period in this matter, even when the purchasers only discovered the defects in 2022, this case demonstrates that even if a defect is only discovered decades later, the ultimate limitation period can prevent a new purchaser of a house from bringing a claim.
For purchasers, this decision emphasizes the importance of proper due diligence and home inspections when purchasing a house, as this decision shows that a purchaser cannot simply rely on decades-old permits or inspections as a form of “insurance” or guarantee against there being any structural issues, or else they may be left without a remedy if there are any undiscovered issues.
For municipalities, this case provides them with certainty that they are not acting as “indefinite insurers” of construction quality of a house, and that the application of the ultimate limitation period will prevent them be held liable for any negligence arising from decades-old inspections, even if a building permit was never formally closed.
This blog post was written by Alex Bissonnette, Practice Lead of the Commercial Litigation team. Alex can be reached at 613-369-0358 or at [email protected].
