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Buyers’ Claim Against Builder is Statute-Barred

The buyers had purchased a newly-built home from the builder, but had contracted with a third-party company to install stucco finish on its exterior. They took possession in December of 2005, but by Spring of 2006 had noticed leaking around certain windows. By Fall of that same year, there were leaks in four different places which had caused damage to the interior flooring.

When the buyers raised the matter in August 2007, the builder cast blame on the third-party company, and suggested the buyers should fix the flooring damage themselves. The buyers later conceded that at this point, they knew the matter would not be resolved except through lawyers or through a court action or new home warranty claim. In November 2007 they then wrote to the builder (copying the third-party company), asserting the leaks were caused by the builder’s “insufficient supervision.” The builder ignored that letter, as well as a similar one the buyers sent in January 2008.  

Eventually in November of 2009 – more than three years after the initial leak – the buyers sued the builder for breach of contract, breach of statutory warranty, and negligence. (The builder added the third-party company to the litigation). Since the Ontario Limitations Act specified a two-year deadline for bringing such actions, the issue was precisely when that time-limit began to run, and whether it had already expired when the buyers’ claim was commenced.

Overturning the prior motion court’s decision, the Court of Appeal found that the buyers’ action was indeed statute-barred. Here, by August of 2007 (or at the very latest by November 2007 when they wrote to the builder) the buyers knew that they had suffered damages and had a claim, even though they may not have known specifically against whom. In law, there was no requirement that the buyers be certain that there was responsibility specifically on the part of the builder or the third-party company (or both); they needed only to have prima facie grounds to infer that one or both had caused the acts or omissions complained of. Once that inference could be made, the two-year limitation period started to run; in this case it had already expired when the buyers’ action was commenced. See Kowal v. Shyiak, 2012 (ONCA).