Hamilton (City) v. Metcalfe & Mansfield Capital Corporation, 2012 ONCA 156

Limitation in Misrepresentation Cases: Damage v. Damages


Last week, the Ontario Court of Appeal addressed the important distinction between damage and damages with respect to the limitation issue in misrepresentation cases. In Hamilton (City) v. Metcalfe & Mansfield Capital Corporation, 2012 ONCA 156, the City purchased $10 million in non-bank sponsored asset backed commercial paper ("ABCP") from the defendants on July 24, 2007, three weeks before the collapse of the Canadian ABCP market. On September 26, 2007, the notes matured and the City was not paid. On September 25, 2009, the City commenced the action against the defendants with multiple causes of action including negligent misrepresentation. The City argued on appeal that, for the misrepresentation claim, the two-year limitation period did not begin to run until it suffered damages on September 26, 2007 when the City received no payment upon the maturity of the ABCP notes. The Court disagreed and held that all that the City had to discover to start the limitation period was damage, instead of damages. These are two different legal concepts: damage is the condition of being worse off than before as a result of the misrepresentation, while damages is the monetary measure of the extent of that loss. In this case, damage occurred when the City purchased the ABCP notes in reliance on the defendants' representation, damages became clear when the notes were mature but no payment was advanced. Based on the pleadings and the City's own evidence, it became aware of the damage before August 23, 2007. Accordingly, the Court held that the City's negligent misrepresentation claim was statute-barred.

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Reference Info:Decision | Canada

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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