Key Takeaways
- Under the Limitations Act, 2002, an action is not “continuous” merely because it can be rectified or because the harm it causes is either continuing or delayed. A continuing act or omission requires a succession or repetition of actionable conduct on the part of the defendant.
- There is not yet any authority establishing that a municipality has a “duty to monitor” open building permit files. In an appropriate case, the duty to monitor will have to be established by the Anns/Cooper test.
Introduction
Section 15(2) of the Ontario Limitations Act, 2002, establishes an “ultimate limitation period” for civil claims in Ontario. It bars plaintiffs from commencing a claim after the 15th anniversary of the day on which the act or omission on which the claim is based took place, even if the plaintiff did not know of the claim. In the case of a continuous act or omission, section 15(6)(a) defines the “day an act or omission takes place” as the day on which the act or omission ceases.
In Huether v Sharpe, 2025 ONCA 140, the Court of Appeal for Ontario clarified the scope of a “continuous act or omission” under section 15(6)(a) of the Limitations Act, 2002. A continuing act or omission requires a succession or repetition of actionable conduct on the part of the defendant, it is not continuing merely because it can be rectified or because the harm it causes is either continuing or delayed.
Additionally, while the court affirmed that a municipality had a duty of care to conduct inspections of buildings under construction in a non-negligent manner, the court held that a “duty to monitor” open building permits was a novel duty that could only be recognized after the court undertakes a duty of care analysis in accordance with the Anns/Cooper framework. The Court of Appeal for Ontario did not rule out recognizing a “duty to monitor” in a future case, but the motion judge erred in recognizing such a novel duty without regard to the Anns/Cooper framework.
Background Facts
In February 2022, William and Emily Huether commenced an action alleging that defects in the property they purchased, were a result of the Corporation of the Township of McMurrich Montieth’s negligence in their supervision of the House’s construction between 1986 and 1987. Upon an inspection of the house during its initial build in 1986, the municipal inspector issued a notice to comply over some violations. At an unknown time after, there was an anonymous note placed on the house’s building permit file stating “all complied with.”
It is unclear whether the note was intended to close the file officially. The amount of time that had passed between the build in 1987 and the action in 2022, caused several difficulties in retrieving evidence to determine whether the file was deemed closed by the municipal inspector. Both the municipal inspector and the original owner of the house are deceased, so they could not attest to what the official status of the file was once construction was completed. The Township did not issue any document or formal declaration that a building permit was closed.
The house transferred owners, and in 1988, a Treasurer’s Certificate was issued. Following this issuance in 1988, the Township treated the file as closed. The house was then bought and sold multiple times over the years. In October 2021, the homeowners bought the house and found defects in the house’s foundation shortly thereafter. The homeowners then commenced their action.
Township’s Motion for Summary Judgement
In 2024, the Township moved for summary judgment, arguing that the homeowners’ claim was barred by the ultimate limitation period, as the alleged negligence occurred over three decades ago.
This motion was dismissed. The motion judge held that the Township’s negligence constituted “a continuous act or omission,” and so the ultimate limitation period had not yet expired. This was because the motion judge found that the permit file for the house was not properly closed, and the Township has a “duty to monitor” open construction files until they are closed. In finding this duty to monitor, the motion judge relied on Breen v. Lake of Bays (Township) 2022 ONCA 626, stating that when a “municipality makes a policy decision to inspect construction projects, it owed a duty of care to persons who might be injured by the negligent exercise of its inspection powers.” The motion judge also relied on the Oxford Dictionary’s definition of “monitor” as “maintaining regular surveillance over.” The motion judge concluded that since the Township did not cease its breach of the “duty to monitor,“ this constituted a “continuous act or omission” that barred the ultimate limitation period from running.
Issues and Holding on Appeal
The Township appealed the motion judgment. The Court of Appeal for Ontario dealt with two issues: what counts as a “continuous act” that pauses the ultimate limitation period, and whether municipalities have an ongoing duty to monitor open construction files. Respectively, the appeal judge held that the Township’s alleged negligence was not a continuous act, and that municipalities currently have no legal duty to monitor open construction files. The Court of Appeal allowed the appeal and set aside the motion judge’s order dismissing the Township’s summary judgment motion, thereby dismissing the homeowner’s case.
Township’s Alleged Negligence is Not a Continuous Act or Omission
The appeal judge determined that the motion judge erred by misinterpreting the meaning of the “continuous act or omission” in section 15(6)(a), as including any negligence that causes continuing or delayed harm. This was problematic, because it would mean there is no applicable limitation period for actions about hidden building defects. The Court of Appeal applied the modern principles of statutory interpretation to conclude that a “continuous act or omission” requires repeating actionable conduct over time. Whether the file was open or closed, there was no evidence of repeated negligence by the Township after the house’s construction was completed, and the file was treated as dormant. The appeals judge noted that this interpretation fulfils the ultimate limitation period’s purpose of avoiding delayed litigation over hidden building defects.
The Court of Appeal relied on two cases in support of its interpretation. In Sunset Inns Inc. v. Sioux Lookout (Municipality) 2012 ONSC 437, the court rejected the argument that a municipality’s negligence in breaching a ”duty to repair” a deficient sewer line counts as a ”continuous act or omission”. In Bowes v. Edmonton (City of), 2007 ABCA 347, the court rejected the argument that a municipality’s negligence in breaching a ”duty to warn” homeowners against construction on a bordering riverbank counted as a ”continuous act or omission”.
No Recognized “Duty to Monitor” Open Files
This issue was not necessary to resolve whether the action is barred by the ultimate limitations period, but the Court of Appeal addressed it to provide clarity. The Court of Appeal held that the motion judge erred in recognizing a novel “duty to monitor” beyond the general duty of care owed by inspectors in Breen. The motion judge erred in not applying a proper Anns/Cooper duty of care analysis. The Court of Appeal made no finding on whether this duty should be recognized, and left this question open for future courts.
Conclusion
The broader takeaway from Huether v. Sharpe is that a continuing act or omission under section 15(6)(a) of the Limitations Act, 2002, requires a succession or repetition of actionable conduct on the part of the defendant. Homeowners will still, of course, be able to recover damages from a municipality for negligently conducting inspections or failing to regulate building construction, but will have difficulty in getting around the 15-year time limit for doing so.