**THIS DECISION OF JUSTICE KOKE WAS AFFIRMED BY THE ONTARIO COURT OF APPEAL ON JUNE 21, 2013, BUT THE COURT OF APPEAL DID NOT ENDORSE HOW BROADLY KOKE J. INTERPRETED SECTION 11(1). PLEASE CLICK HERE FOR BLOG POST OF THE COURT OF APPEAL’S DECISION**
In Sandro Steel Fabrication Ltd. v. Chisea, 2013 ONSC 658, Justice Koke held that a mediation agreement stops a limitation period from running by virtue of section 11 of the Limitations Act, 2002. That section provides that if a person with a claim and a person against whom the claim is made agree to have an independent third party resolve the claim or assist them in resolving it, the basic and ultimate limitation periods provided for in the Act are suspended as of the date the parties enter into the agreement.
The Court held that section 11 should be given a broad interpretation as its purpose is to encourage settlement. The Court explained that even in circumstances where there is ambiguity as to what issues are to be addressed in the mediation, section 11(1) should operate to suspend the running of the applicable limitation period, otherwise plaintiffs may be reluctant to engage in a mediation process. Furthermore, an agreement to mediate need not express that the limitation period is suspended until the conclusion of the mediation. Rather, all that is required to engage section 11 is an agreement between the parties to have an independent third party resolve the claim or assist them in resolving it.
The Court distinguished section 11 of the Act from section 22(3). The latter refers to an agreement which parties may enter into whereby the limitation period “may be suspended or extended”. The former does not refer to an agreement to suspend or extend a limitation period, rather it refers to an agreement whereby parties “agree to have an independent third party resolve the claim or assist them in resolving it”.
It should be noted that the ability of sections 11 and 22(3) to suspend or extend a limitation period only applies to limitation periods under the Act and not those limitation periods which are contained in other legislation referred to in the Schedule to the Act.
