Limitation Periods in Third Party Claims
The BC Supreme Court recently held that the filing of an application for leave to bring a third party claim for contribution and indemnity, and further, that an order granting leave for same, does not stop the running of the applicable limitation period.
In the recent 2025 decision The Owners, Strata Plan EPS 677 v. ASPAC Developments Ltd., 2025 BCSC 694 [The Owners, Strata Plan EPS 677], Justice Hamilton of the BC Supreme Court provided clarity to this area of law.
What are third party claims and limitation periods?
A third party claim for contribution or indemnity is a claim brought by a defendant in a lawsuit to assert that another party is partly or fully responsible for the plaintiff’s loss. When a defendant claims contribution or indemnity against a third party, the defendant is asserting that the third party must contribute, in part or in full, to payment of the plaintiff’s damages.
Third party claims for contribution or indemnity are subject to limitation periods set in the Limitation Act, S.B.C. 2012, c. 13. Under ss. 6 and 16 of the Act, the period for filing a third party claim expires on the later of 2 years from: (1) the date the defendant was served with a pleading on which the third party claim is based; or (2) the first day on which the defendant knew or reasonably ought to have known they could have made their third party claim. Once the limitation period expires, the Court has no discretion to grant leave to file a third party claim.1
If a defendant intends to bring a third party claim 42 days after the filing of their response to civil claim, the defendant must seek leave from the Court to do so via an application.2 The question is whether the filing of the notice of application for leave stops the running of the limitation period. Prior decisions have said that it does.3
In The Owners, Strata Plan EPS 677, the Court held that these previous decisions have now been overruled by recent case authorities from the Court of Appeal.4
The Decision
The Court in The Owners, Strata Plan EPS 677 stated that s. 16 of the Act governs the expiration of the limitation period for third party claims. Section 22(2) of the Act operates to preclude any third party claims once the limitation period has expired.5
In The Owners, Strata Plan EPS 677, Division 8 Consulting Corp. (“Division 8”) applied to have the third party notice filed by Oldcastle Building Envelope Canada Inc. (“Oldcastle”) set aside on the basis that this third party claim was barred by the limitation period.
In this action, Oldcastle was facing a limitation date of August 12, 2021 to bring its third party claim against Division 8.6
Oldcastle had filed its notice of application seeking leave to file its third party notice against Division 8 on March 2, 2021. Due to scheduling issues, the parties entered into a tolling agreement to extend the limitation period from August 12, 2021 to the earliest of (1) the date of the application hearing; or (2) September 30, 2021.7
The hearing of this application was ultimately scheduled for September 9, 2021 before Justice Francis. Leave was granted to Oldcastle to file its third party notice against Division 8.8
Oldcastle neglected to have the order of Justice Francis entered and failed to file its third party notice within the month of September 2021. Oldcastle then filed its third party notice against Division 8 on June 14, 2022, past the limitation period.
Justice Hamilton held that a defendant will effectively be barred from filing a third party claim if they miss the limitation period – even if the defendant had filed their leave application or was granted an order for leave within the limitation period. Justice Hamilton ordered that the third party notice filed by Oldcastle be set aside.
Conclusion
If a defendant misses the limitation period for bringing a third party claim, they will have no recourse and be completely prohibited from pursuing a third party for the third party’s responsibilities for the plaintiff’s damages.
It is recommended that a defendant seek legal advice as soon as possible to avoid such a result.
1Sohal v. Lezama, 2021 BCCA 40 at para. 105
2Supreme Court Civil Rules, Rule 3-5(4)
3The Owners, Strata Plan EPS 677, supra, at paras. 33-34
4Ibid, at paras. 35-37
5Ibid at para. 38
6Ibid at para. 16
7Ibid at paras. 7-9
8Ibid at para. 10-11
9Ibid at paras. 40, and 44-45