Trillium College Inc. (“Trillium”) rented shopping centre space from Pickering Square Inc. (“Pickering”) for a five-year term. Pursuant to the lease, Trillium was obligated to pay rent, continuously occupy the space, and perform repairs at the end of the term. Although Trillium did pay rent throughout the tenancy, it failed to continuously occupy the space and restore the premises. Trillium ceased operating its vocational college business and occupying the premises on October 1, 2008.
In Pickering Square Inc. v. Trillium College Inc., 2016 ONCA 179, the Court of Appeal clarified when a claim is discovered for limitation purposes in the context of a continuing breach of contract. The Court held that a fresh cause of action arose every day that the breach continued, repeatedly re-activating the two-year limitation period.
In February 2012, Pickering brought an action against Trillium for failing to repair and continuously operating the space. Trillium unsuccessfully argued that the limitation period began to run on October 1, 2008 when it ceased occupying the premises and therefore the 2 year limitation period expired by October 1, 2010 and the action was time barred.
The Court held that as Trillium’s obligation to operate its business was ongoing rather than single or specific, Trillium was in a continuous breach. As a result, a fresh cause of action accrued every day that Trillium’s breach continued. In other words, the two year limitation period commenced each day a fresh cause of action accrued and ran two years from that date. In the end, Pickering was entitled to claim damages for breach of the obligation to continuously operate and occupy the vocational business and the premises for the period going back two years from the commencement of the action – that is from February 2010 to May 2011 (the expiry of the lease). Those damages for breach of the covenant to operate and occupy that accrued prior to February 2010 were statute barred.
