In Hayward v. Hayward, 2021 ONCA 175 (“Hayward”), the Court of Appeal for Ontario provided a reminder of the established principle that limitations defences must be pleaded and argued.
Hayward is an estate matter. It involves the late Jeanne Hayward (“Jeanne”), her former husband, Alexander Hayward (“Alex”), and their five children, including Leslie Hayward (“Leslie”). Alex appealed from the trial judge’s decision regarding his claims to repayment of a loan he made to Jeanne, which she used to buy a car, and to ownership of a tractor. Alex also sought leave to appeal the costs award.
The trial judge found, among other things, that Alex had made a down payment of $1,000 and owned the tractor. However, the trial judge went on to determine that Leslie had paid the remaining $12,560, which was most of the purchase price. There was no evidence that Alex ever repaid Leslie. Accordingly, the trial judge held that Alex owed Leslie the amount of $12,560.
On appeal, Alex argued that repayment of the loan was time-barred. The Court of Appeal dismissed this ground of appeal because it was not raised before the trial judge:
The appellant argues that the trial judge erred in failing to find that repayment of the loan was time-barred under the Limitations Act, 2002, S.O. 2002, c. 24. This proceeding was started as an application and did not have full pleadings, but it was open to counsel to raise the application of the Limitations Act as a defence to Leslie’s claim. The trial judge cannot be criticized for failing to respond to a defence that was not raised by counsel. This ground of appeal is dismissed.
Counsel should be aware that the expiry of a limitation period is an affirmative defence. As Hayward demonstrates, an appellate court will not consider a limitations defence that is not pleaded or raised at first instance.
