When Does the Clock Start on a Lawyer Negligence Claim in Ontario?

When Does a Limitation Period Start in a Lawyer Negligence Case?

The two-year limitation period does not automatically begin the moment you realize something has gone wrong. Under Ontario’s Limitations Act, 2002, the clock starts only when a claim is legally ‘discovered’ — and the Court of Appeal’s decision in 2206747 Ontario Limited v. Webb, 2026 ONCA 709 (CanLII) is a useful illustration of how courts apply that test in real property and professional negligence disputes.

What Does ‘Discoverability’ Mean Under Ontario Law?

Discoverability means knowing enough to sue — not just knowing that something went wrong. Ontario’s Limitations Act, 2002 sets out a four-part test at section 5(1)(a). A person must know (or reasonably ought to know) that: they suffered an injury, loss, or damage; the loss was caused by an act or omission; the act or omission was that of the person they want to sue; and that a lawsuit would be an appropriate way to deal with the situation.

All four elements matter. A gap in one of them can delay the start of the limitation period. The court relied on Grant Thornton LLP v. New Brunswick, 2021 SCC 31, which holds that a claim is discovered when a person knows, or ought to know, the material facts from which a plausible inference of liability can be drawn. Because discoverability is a question of mixed fact and law, an appeal court defers to the trial judge’s findings on it unless there is a palpable and overriding error.

Is Knowing About a Problem the Same as Knowing You Have a Claim?

No — and this is the heart of the Webb decision. The lawyer argued that the client’s limitation period began when the client learned that the vendors were still registered as owners of the property, meaning the title transfer had not been completed. On that view, the client already knew something had gone wrong, so the clock should have started then.

The majority of the Court of Appeal rejected that argument. Knowing that title had not been transferred was not the same as knowing that real, irreversible damage had occurred. At that point in the transaction, there was still an ongoing professional relationship, no warning had been given that the deal was in serious trouble, and there was no clear reason to expect that litigation — rather than a correction — would be necessary. The situation was described as ‘some sort of problem,’ which the court confirmed is not enough to trigger the limitation period, consistent with the earlier decision in Gillham v. Lake of Bays (Township).

When Did the Court Find the Claim Was Actually Discovered?

The trial judge found — and the Court of Appeal agreed — that the claim was only discovered when the client received notice that the property had been sold to new purchasers. At that point, the loss was no longer theoretical. The property was gone. Recovery through the original transaction was no longer possible. That was the moment the client could reasonably be expected to understand that they had suffered actual damage and that suing the lawyer was the appropriate response.

This distinction between a procedural gap (not yet on title) and a concrete loss (property sold to someone else) was central to the outcome. The court acknowledged the difference between ‘damage’ and ‘damages’ as legal concepts but found that, on these specific facts, the knowledge of not being on title was not sufficient to establish known damage.

What Standard Did the Court of Appeal Apply?

The Court of Appeal applied the ‘palpable and overriding error’ standard when reviewing the trial judge’s factual findings. This is a high bar. It means the appellate court will not simply substitute its own view of the facts — it will only intervene if the trial judge made an obvious and significant error that affected the outcome.

No such error was found here. The trial judge’s analysis of when the client actually discovered the claim was grounded in the evidence, and the Court of Appeal saw no basis to disturb it. This outcome reinforces why discoverability findings are so fact-specific and why the trial record matters enormously in limitation period disputes.

The decision was not unanimous. One judge dissented and would have found that the claim was discovered in November 2009, when the client learned that the transaction had not closed and title had not been transferred, which would have made the claim out of time.

Does the Ongoing Lawyer-Client Relationship Affect When a Claim Is Discovered?

Yes, it can be a relevant factor. The court considered that the lawyer continued to represent the client and gave no warning that the situation was unresolvable. That context informed the analysis of whether litigation was a reasonable expectation at the earlier point in time.

This does not mean a professional relationship always delays discovery. But it is one of the circumstances courts weigh when asking what a reasonable person in the client’s position would have understood, and when they would have understood it. Our Ontario litigation lawyers regularly advise clients on how these kinds of contextual factors interact with limitation period rules.

Questions and Records to Discuss with a Lawyer

• When did you first become aware that something had gone wrong, and what exactly did you know at that time?
• Did you receive any communications from the professional or other party after the initial problem arose, and what did those communications say?
• Is there a written record — emails, letters, or notes — of when you learned the full extent of the loss?
• Were you still in an active professional or contractual relationship when the problem first came to your attention?
• Have you received any formal notice or documentation that made the loss final or irreversible?

If you have questions about a potential claim and are concerned about timing, reaching out to counsel promptly is important. Clients in the Hamilton and Burlington areas can connect with our team through our Burlington litigation page or our Hamilton litigation page.

If your situation involves questions about limitation periods, professional negligence, or a real property dispute, the team at UL Lawyers is available to discuss the specifics of your circumstances. You can reach us through our contact page.

---

This article is automated commentary on a public court decision and is for general information only — not legal advice. Decisions rely on facts unique to each case. If you are affected by a similar issue, contact a lawyer for advice specific to your situation.