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: Client Update - Reminder New Brunswick Limitation of Actions Act

April 17, 2012

The purpose of this update is to serve as a reminder that in 2009, the New Brunswick Limitation of Actions Act was significantly amended. The "new" Act (the "Act") came into force on May 1, 2010. Under the Act, the general limitation period for bringing an action was shortened from six years to two years, while the ultimate limitation period was set at fifteen years. This simplified the old system by removing many of the cause specific limitation periods.

Application

The Act applies to any claim brought after May 1, 2010. As a result, some unexpired claims under the old limitations legislation would have expired immediately or shortly after this date. To prevent this harsh result, the Act incorporates some transition provisions. In particular, it provides that a claim which would have expired under the Act can still be brought if it would have been alive under the old limitations legislation, provided that the claim is brought within the earlier of April 30, 2012 or the expiry of the limitation period under the old legislation.

General Limitation Periods

The Act introduced some terminology into New Brunswick's limitation regime. Whereas under the old limitations legislation, limitation periods started to run based on when a "cause of action" arose or was discovered, under the Act, they generally start to run based on when a "claim" arises or is discovered. The term "claim" is defined as "a claim to remedy the injury, loss or damage that occurred as a result of an act or omission".

The most significant changes are found in sections 5 and 6 of the Act which effectively change (and shorten) various limitation periods. Under the old limitations legislation, the majority of actions were required to be commenced within six years after the "cause of action" arose. Section 5(1) provides that no claim may be brought after the earlier of two years from the date it is discovered, and fifteen years from the date on which the Act or omission on which the claim is based occurred.

Section 5(2) provides further guidance on when a claim is discovered, as follows: 

5(2)  A claim is discovered on the day on which the claimant first knew ought reasonably to have known:

(a)that the injury, loss or damage occurred,  

(b)that the injury, loss or damage was caused by or contributed to by an act or omission, and

(c)that the act or omission was that of the defendant.

Section 6 provides that if the Act or omission is continuous, it is considered a separate act or omission on each day it occurs.  This will reset the limitation period each day the Act or omission is continued.

Conflicts with Other Legislation 

Section 4 provides that if there is a conflict between the Act and any other public statute of New Brunswick, the other statute prevails. For example, the limitation periods contained in the Insurance Act for bringing legal proceedings under different kinds of insurance policies were not repealed by the Act. However, if there is a conflict between the Act and any private statute of New Brunswick, the limitation period set out in the Act will prevail. This was another significant change as many private statutes contained much shorter limitation periods than those established under the Act.

Transition Period

As indicated above, the Act provides for a transition period of two years for claims based on acts or omissions that took place before May 1, 2010. During this transition period, a claim could be brought after the new limitation period had expired if the former limitation period had not yet expired. The two year transition period will expire on April 30, 2012. Accordingly, we recommend that you to review any files that may contain pending claims to ensure that, to the extent necessary, all claims are initiated by April 30, 2012.

Feedback and Consultation

The foregoing is intended for general information only. It is not intended to be an exhaustive review of all the changes set out in the Limitation of Actions Act. If you have any questions, or for a detailed list and background of our Commercial Litigation & Insolvency practice group, please visit www.stewartmckelvey.com.

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