Is there a time limit to sue for money owed? Ontario

[great bear]

i am talking from experience i sued a scam company got a default judgement against them because they decided not to file a defense claim and after this they disappeared.

You should have threatened to play plane take off videos.

 

[buttercup]

Visit the Ministry of the Attorney General of Ontario's website for the section on Small Claims Court which includes guides and forms (assuming the jurisdiction is Ontario).
The statutory claim limit is now $20,000.

Typo. It's $25,000.

 

[mandrill]

Tried that once and it was thrown out of court. The loan was unsecured.

Yup. It's called "trying to get execution before judgment". To get the lien on, you at least have to show an attempt to fraudulently transfer the real estate to avoid litigation.

 

[mandrill]

You speak with great authority... but you know zilch.

You have two years from the time you serve a demand for payment.

And the Small Claims Court is the perfect place to pursue it if he does not pay after demand.

p.s. I know what a "fromage" is, but what is a "formage"?

Perry

Didn't the Court of Appeal deal with this very issue about a year ago? I've forgotten exactly what they wrote, but I vaguely remember being surprised that they felt the 2-year Limitation ran from the date the loan was made and not from the date of the demand in that case.

 

[mailman]

Private investigators are cost effective when comparing the cost of a lawyer. Or a Paralegal would even be a less costly option. If he is that financially lacking, there is always Legal Aid he can use for assistance, not representation but consulting and asking for a general 'point me in the right direction' discussion. Genuinely, I think most lawyers offer a free hour consult, I don't think they would shy away from mild advice.

I do not believe that Legal Aid will help in civil matters. The Law Society of Upper Canada does have a lawyer referral service where you can get a free consultation with a lawyer.

 

[afterhours]

Didn't the Court of Appeal deal with this very issue about a year ago? I've forgotten exactly what they wrote, but I vaguely remember being surprised that they felt the 2-year Limitation ran from the date the loan was made and not from the date of the demand in that case.

and the prize goes to Oagre.

Debt Obligations that Are Due on Demand
Hare v. Hare, a December 2006 decision of the Ontario Court of Appeal, has important implications for the use of demand promissory notes generally and, in particular in tax planning. Legal and tax planners should be aware that standard drafting language used in promissory notes may bring about unintended consequences.

In Hare, the taxpayer loaned a sum of money to her son and secured the loan with a promissory note. Although some interest payments were made under the note, the son did not respond to a demand for payment of the loan and the taxpayer brought an action for recovery.

At trial and on appeal, the defendant claimed the action was barred because it was made after the statutory limitation period had expired. The issue was whether the two-year basic limitation period under the Limitations Act 2002 had started to run at the time the note was issued, or on the demand for payment under the note. If the former, the action was statute-barred; if the latter, the action could proceed.

The Limitations Act 2002 provides that the two-year limitation period begins to run on the discovery of the claim. The Court of Appeal emphasized that the law that a creditor has the right to immediate repayment of a demand loan is well-settled. As the creditor under a demand note has the right to immediate payment, there is nothing to be discovered by the creditor before he or she becomes aware of their claim, which is established immediately on receipt of the demand promissory note. The Court of Appeal, therefore, found that the discovery of the claim occurred at the time the note was issued, as the creditor was in a position to enforce the note as of that date. The action was, therefore, statute-barred because it was commenced more than two years after discovery of the claim.

 

[mailman]

and the prize goes to Oagre.

Debt Obligations that Are Due on Demand
Hare v. Hare, a December 2006 decision of the Ontario Court of Appeal, has important implications for the use of demand promissory notes generally and, in particular in tax planning. Legal and tax planners should be aware that standard drafting language used in promissory notes may bring about unintended consequences.

In Hare, the taxpayer loaned a sum of money to her son and secured the loan with a promissory note. Although some interest payments were made under the note, the son did not respond to a demand for payment of the loan and the taxpayer brought an action for recovery.

At trial and on appeal, the defendant claimed the action was barred because it was made after the statutory limitation period had expired. The issue was whether the two-year basic limitation period under the Limitations Act 2002 had started to run at the time the note was issued, or on the demand for payment under the note. If the former, the action was statute-barred; if the latter, the action could proceed.

The Limitations Act 2002 provides that the two-year limitation period begins to run on the discovery of the claim. The Court of Appeal emphasized that the law that a creditor has the right to immediate repayment of a demand loan is well-settled. As the creditor under a demand note has the right to immediate payment, there is nothing to be discovered by the creditor before he or she becomes aware of their claim, which is established immediately on receipt of the demand promissory note. The Court of Appeal, therefore, found that the discovery of the claim occurred at the time the note was issued, as the creditor was in a position to enforce the note as of that date. The action was, therefore, statute-barred because it was commenced more than two years after discovery of the claim.

I wonder, though, if the courts applied the statue of limitations to this case because there had been some payments made on the loan whereas with the OP there have been no payments made to date????

 

[Perry Mason]

Just for clarification in view of the many opinions expressed here...

A demand note without any stipulation or qualification as to when it is due, is due immediately upon issue, and the period of limitations begins to run upon its being delivered.

A loan made under a note or agreement that stipulates when it becomes due, namely, on demand, is not due until demand is made and the limitation period begins to run when demand is made.

I usually charge for this type of advise!! :eyebrows:

Perry

 

[Bobzilla]

I wonder, though, if the courts applied the statue of limitations to this case because there had been some payments made on the loan whereas with the OP there have been no payments made to date????

Technically speaking, the court didn't apply it, and they generally don't. The defendant raised it as part of his defence. The op could sue the guy & get default judgment if the guy doesn't file a defence. However, it's likely the defendant would be able to move to set aside default based on the limitation issue, especially if the op starts seizing his assets.

It's not well known that the limitation period is renewed through acknowledgment (ie, payment, even minimal partial payments) of the debt. However, the acknowledgment must come within the limitation period to accomplish this. For example, if you had a credit card debt, & the date of the last charge or payment was May 2010. For whatever reason, you don't make a payment, but decide to send them $20 today. You've just renewed the Statute of Limitation & they've got another 2 years from the date of your last payment to come after you.

 

[Grand Formage]

Does the "breach" occur on the service of demand or the repudiation of the agreement? Couldn't the borrower argue that the lender knew or ought to have know about the breach when he was told to shove the contract up his ass?

Shoving a contract up your ass does not affect its enforceability or have any impact on the collectability of the loan.

 

[Grand Formage]

It's dyslexic!

It's dsleyxci

 

[Grand Formage]

Just for clarification in view of the many opinions expressed here...

A demand note without any stipulation or qualification as to when it is due, is due immediately upon issue, and the period of limitations begins to run upon its being delivered.

A loan made under a note or agreement that stipulates when it becomes due, namely, on demand, is not due until demand is made and the limitation period begins to run when demand is made.

I usually charge for this type of advise!! :eyebrows:

Perry

Knob that is correct. As I stated, the OP specified that the loan was expressly payable on demand so the 2 year statute of limitations only begins to run after demand is made.

Oh and it should be "advice" not "advise".

 

[mandrill]

Just for clarification in view of the many opinions expressed here...

A demand note without any stipulation or qualification as to when it is due, is due immediately upon issue, and the period of limitations begins to run upon its being delivered.

A loan made under a note or agreement that stipulates when it becomes due, namely, on demand, is not due until demand is made and the limitation period begins to run when demand is made.

I usually charge for this type of advise!! :eyebrows:

Perry

The Limitations Act 2002 provides that the two-year limitation period begins to run on the discovery of the claim. The Court of Appeal emphasized that the law that a creditor has the right to immediate repayment of a demand loan is well-settled. As the creditor under a demand note has the right to immediate payment, there is nothing to be discovered by the creditor before he or she becomes aware of their claim, which is established immediately on receipt of the demand promissory note. The Court of Appeal, therefore, found that the discovery of the claim occurred at the time the note was issued, as the creditor was in a position to enforce the note as of that date. The action was, therefore, statute-barred because it was commenced more than two years after discovery of the claim.

But the Court of Appeal said that the creditor had the right to demand IMMEDIATE PAYMENT and therefore, the limitation period ran out 2 years after the point at which the creditor could have enforced payment - which was right exactly when the loan was made!

 

[Grand Formage]

and the prize goes to Oagre.

Debt Obligations that Are Due on Demand
Hare v. Hare, a December 2006 decision of the Ontario Court of Appeal, has important implications for the use of demand promissory notes generally and, in particular in tax planning. Legal and tax planners should be aware that standard drafting language used in promissory notes may bring about unintended consequences.

In Hare, the taxpayer loaned a sum of money to her son and secured the loan with a promissory note. Although some interest payments were made under the note, the son did not respond to a demand for payment of the loan and the taxpayer brought an action for recovery.

At trial and on appeal, the defendant claimed the action was barred because it was made after the statutory limitation period had expired. The issue was whether the two-year basic limitation period under the Limitations Act 2002 had started to run at the time the note was issued, or on the demand for payment under the note. If the former, the action was statute-barred; if the latter, the action could proceed.

The Limitations Act 2002 provides that the two-year limitation period begins to run on the discovery of the claim. The Court of Appeal emphasized that the law that a creditor has the right to immediate repayment of a demand loan is well-settled. As the creditor under a demand note has the right to immediate payment, there is nothing to be discovered by the creditor before he or she becomes aware of their claim, which is established immediately on receipt of the demand promissory note. The Court of Appeal, therefore, found that the discovery of the claim occurred at the time the note was issued, as the creditor was in a position to enforce the note as of that date. The action was, therefore, statute-barred because it was commenced more than two years after discovery of the claim.

You knobs are all wrong. Oagre hand back your prize. Perry Mason your LLB must have come out of a cracker jack box. The Legislature amended the SOLA following the Hare decision.

The Hare decision was justifiably widely criticized. Of course the Court of Appeals ruling was poorly thought through and needed to be addressed. It stood against reason that the 2 year limitation period on a demand note would begin to run from the date the note was issued, prior to their even being a demand . In order to avoid demand notes becoming inadvertently unenforceable after Hare, lawyers were forced to revise their demand note precedents to draft around the decision. Revisions included providing that a note only became due a certain period after demand, that the limitation periods didn’t start to run until after a default following a demand, or contracting out of limitation periods altogether.

Various groups, including the Ontario Bar Association, drew the problem to the attention of officials in the Ministry of the Attorney General in the first half of 2007. They took note and amendments to the Act were attached as Schedule L to Bill 114, Budget Measures and Interim Appropriation Act, 2008 (No. 2). The amendments took effect on Nov. 27, 2008, when they received royal assent.

Now the SOLA provides that the 2 year statute of limitations starts to run from “the first day on which there is a failure to perform the obligation, once a demand for the performance is made” for demand obligations.


The law is now in accord with the expectations held by most practitioners prior to Hare.

 

[nottyboi]

Send a demand letter stating that interest going forward from that date will be 22.5% (similar to a credit card) Stating your reasons (he has the means to repay and has reneged on the contract.) When you sue him the court will rule and set whatever interest rate they deem fit. So you may as well ask for as much as possible and tell the judge you wanted the defendant to have some incentive to repay the loan and he could have borrowed money for less and repayed you..I say SUE THE MOTHER FUCKER!!!

 

[mandrill]

Thanks, GF. Being mainly a divorce lawyer, I didn't follow up on the case and I'm glad you told me about the legislative amendment.

 

[ricflairjuniour]

No problem. Is Perry Mason a family law lawyer too lol ?

 

[Grand Formage]

Thanks, GF. Being mainly a divorce lawyer, I didn't follow up on the case and I'm glad you told me about the legislative amendment.

No problem. Respect. Is Perry Mason a family law lawyer too ?

 

[GPIDEAL]

You knobs are all wrong. Oagre hand back your prize. Perry Mason your LLB must have come out of a cracker jack box. The Legislature amended the SOLA following the Hare decision.

The Hare decision was justifiably widely criticized. Of course the Court of Appeals ruling was poorly thought through and needed to be addressed. It stood against reason that the 2 year limitation period on a demand note would begin to run from the date the note was issued, prior to their even being a demand . In order to avoid demand notes becoming inadvertently unenforceable after Hare, lawyers were forced to revise their demand note precedents to draft around the decision. Revisions included providing that a note only became due a certain period after demand, that the limitation periods didn’t start to run until after a default following a demand, or contracting out of limitation periods altogether.

Various groups, including the Ontario Bar Association, drew the problem to the attention of officials in the Ministry of the Attorney General in the first half of 2007. They took note and amendments to the Act were attached as Schedule L to Bill 114, Budget Measures and Interim Appropriation Act, 2008 (No. 2). The amendments took effect on Nov. 27, 2008, when they received royal assent.

Now the SOLA provides that the 2 year statute of limitations starts to run from “the first day on which there is a failure to perform the obligation, once a demand for the performance is made” for demand obligations.


The law is now in accord with the expectations held by most practitioners prior to Hare.

I'm not a lawyer but my job requires that I'm well-informed. I believe I read this somewhere but also was told by a lawyer well after 2006 that it only became due after demand.

This is another reason why people should see their lawyer for the right information rather than trying to look it up on the internet but I'm sure there's an article by some law firm that's downloadable on this exact point.

 

[GPIDEAL]

Send a demand letter stating that interest going forward from that date will be 22.5% (similar to a credit card) Stating your reasons (he has the means to repay and has reneged on the contract.) When you sue him the court will rule and set whatever interest rate they deem fit. So you may as well ask for as much as possible and tell the judge you wanted the defendant to have some incentive to repay the loan and he could have borrowed money for less and repayed you..I say SUE THE MOTHER FUCKER!!!

If the interest is not stated in the contract (and expressed also as an annual/annualized rate), I believe he can only collect pre-judgment and post-judgment interest according to the Courts of Justice Act.

But I agree with you. He should SUE THE MOFO!!!!!