Small Claims Court: Can I Still Sue?

My company sells supplies to another company. We have been doing so for many years. About 3 years ago, the payments began to become sporadic. We would get a payment, then the next cheque would bounce (NSF), then we’d get paid, then we wouldn’t and so on. I would now like to sue the company to get all my money back, Can I still Sue?

There are time limitations in Ontario, under the Limitations Act specifically Section 4, which states that one has until the second year after discovering a claim to commence a lawsuit. The important term is discovery… but that can be a troublesome concept. If you didn’t actually know that he wouldn’t pay until a much later date, or you believed that he would pay, then you may have a case. Additionally, this may be described as a running account, meaning that you thought that he would pay the whole time and that only after that 3 year period was over did you honestly believe that he wasn’t going to pay.

You aren’t allowed to ignore obvious signs, but you can also argue that the signs weren’t so obvious. IE… if he promised to pay you, and his wife sends you an email saying he will never pay, and he has told her, then you could be held to have discovered at that point. It’s important to know that they must file a defence under the limitations act! It’s not automatic.

The moment that you know that you have an outstanding account, you should hire a lawyer, or file a claim. You don’t want to miss it, and the clock will stop running once the claim is filed!

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