In Tarion Warranty Corporation and New Millennium Homes Inc., 2013 ONSC 4339, the Ontario Superior Court of Justice considered when a claim for indemnity is discovered. Generally speaking a limitation period commences as soon as the plaintiff has discovered that the defendant has caused loss or injury, and that neither the extent of the damages nor even the type of damage needs to be known in order for time to begin to run. Furthermore, the limitation period begins to run notwithstanding the fact that certainty of the defendant’s responsibility for the act or omission that caused or contributed to the loss is not present. It is enough for the plaintiff to have prima facie grounds to infer that the acts or omissions were caused by the defendant.
In the context of an indemnification claim, the limitation period does not begin to run until the plaintiff actually suffers the loss. That is, the limitation period does not begin to run until the plaintiff pays out money to a third party, and not from the time when the even which causes the loss happens. Each payment made to a third party has its own limitation period.
