The decision in Krates Keswick Inc. v Brian Miller, 2016 ONSC 6467 speaks to the inability of a plaintiff to toll the discoverability of a potential action as a result of its own inaction.
A receiver for Crate Marine Sales Limited was appointed under the Bankruptcy and Insolvency Act. The receiver subsequently commenced this action (which was subsequently transferred to its affiliates Krates Keswick Inc. “KKI“) in respect of arrears for the payments of goods and services provided by the plaintiff to the defendant from 2007 to 2014. The defenant brought a motion for partial summary judgment on the basis that KKI is barred by the application of the two-year limitation period in the Limitations Act, 2002 from bringing this action for payment of invoices issued before March 30, 2013 (i.e. more than two years before the commencement of this action).
An accounts receivevable statement was provided by the receiver to the defendant. The A/R statement showed that no payments were made towards any of the 2007-2012 invoices, except for two invoices in respect of which part payments were made. KKI argued that the claims against the defendant were not discoverable because the company’s accounting records were kept in “an extreme state of disarray” and thus, the limitations period should be tolled. There was no case law to support this position. The motions judge held that keeping poor accounting records is no justification for tolling the limitation period. Further, the motions judge stated that if the plaintiff company was unaware of the payments being made to it, then it should have acted on collecting what it believed to be unpaid invoices. The motions judge granted the defendant partial summary judgment had found that the plaintiffknew or ought to have known that the requirements of s. 5(1)(a) of the Limitations Act had been satisfied at the end of 2012.
