[DaveGo2]

Good afternoon,

I live in Ontario, Canada, and my question pertains to the Statute of Limitations law on debt collection applicable in this province.

On April 15, 2003, I was given a Post-Dated cheque as payment for a debt. The cheque was Post-Dated for April 15, 2004.

Approximately six weeks prior to the cashable date, I was informed by the person who wrote the cheque that she had closed the account on which the cheque was written and that she had no intention of issuing another cheque or repaying the debt.

I made no attempt to cash the cheque after receiving this information.

My question is this: Does this debt fall under the 2 year or the 6 year Statute of Limitations for legal purposes?

Thanks very much for your time,

Dave

[Justice Matters]

Significant changes came into effect for limitation periods in Ontario on January 1, 2004.

The limitation period for most causes of action before this date is 6 years.

The limitation period for most causes of action after this date is 2 years.

Therefore, if you plan to file an action based on the "stop payment" cheque you are clearly statute barred. If, however, you file an action based on the loan you should be able to proceed provided any loan document you may have does not explicitly state a repayment date after January 1, 2004.

Be warned, if your debtor is savy, or well represented, or a trial judge scrutinizes the limitation aspect very closely, there could be possible issues as to when the cause of action actually arose.

With that being said, the only guarantee we can ever make with respect to the outcome of a matter is that if you do nothing you are guaranteed to get nothing. It may be worth taking a chance filing a lawsuit and seeing what happens (ie. The debtor may settle).

[DaveGo2]

Thank you very much for your time and expertise in this regard... I surely appreciate your response.

...snipped...

With that being said, the only guarantee we can ever make with respect to the outcome of a matter is that if you do nothing you are guaranteed to get nothing. It may be worth taking a chance filing a lawsuit and seeing what happens (ie. the debtor may settle).

Amen to that... ;)

Again, many thanks,

Dave

[CaptainForest]

I agree with Justice Matters.

Just want to add if the loan is for a small amount, it might not be worth it to sue.

Best advice is to sue on the loan, because if you sue on the posted dated cheque, that SOL ran out in April 2006.

[DaveGo2]

Hi CaptainForest,

Thank you for your input. The amount in question is just shy of $10,000.00 (ten thousand dollars), so I think I'll arrange for a day in court... if only to inconvenience the debtor in some small way.. ;)

I appreciate your time and keystrokes on my behalf,

Dave

I agree with Justice Matters.

Just want to add if the loan is for a small amount, it might not be worth it to sue.

Best advice is to sue on the loan, b/c if you sue on the posted dated cheque, that SOL ran out in April 2006.

[Iknowalotofstuff]

I just happened to see this issue and wondered how it turned out?

At the time the others, responded, I would have posed the following question.

Was there a promissory note or some form of contract setting out the terms of the debt?
Was the loan in default at the time the post dated cheque was tendered?

If the loan was in default at the time the post dated cheque was given, the default cured by the cheque occurs when the post dated cheque is cashed. As the cheque was not cashed, the last date of acknowledgment of the debt was the date you received the post dated cheque. It could be argued that the post dated cheque induced you not to proceed on that date. This was prior to the change from 6 years to 2 years on January 1, 2004. It would be my view that the limitation period is 6 years. April 2003 to April 2009.

A different perspective.