What limitation periods apply to personal liability claims against Ontario corporate directors?

Limitation periods for director liability vary depending on the type of claim. Under Ontario's Limitations Act, the basic two-year limitation period applies to most civil claims, including claims by the corporation or shareholders against a director for breach of fiduciary duty or negligence. The two-year period generally begins when the claimant knew or ought to have known about the claim.

For statutory liabilities, specific limitation periods apply. For CRA assessments under the Income Tax Act or Excise Tax Act for unremitted source deductions or HST, the CRA has two years from the date the director ceased to hold office to assess the director personally. For wage liability under the Ontario Business Corporations Act, employees must bring their claim against the director within two years of the director ceasing to hold office.

The running of limitation periods can be complicated by when the cause of action arose, when it was discovered, and whether the potential plaintiff took reasonable steps to discover it. In some situations, limitation periods are tolled — paused — during periods when the claim was not discoverable. Directors who are concerned about past exposure should seek legal advice promptly, because limitation periods can work in their favour but must be raised properly in proceedings. Conversely, claimants must also be aware that delay can bar otherwise valid claims.