September 6, 2017
A recent article on limitation periods found here set out the limitation periods applicable in British Columbia (two years for most types of claims, including debt, breach of contract and personal injury claims). In British Columbia, the right to sue a debtor for failure to repay a loan is limited to two years from the date the debt becomes due or the debtor defaults on the loan.
Section 24(6) of the Limitation Act also provides that a limitation period can be extended if the debt is acknowledged “in writing” and signed “by hand or by electronic signature within the meaning of the Electronic Transactions Act”.
The recent Supreme Court of British Columbia decision in Johal v. Nordio clarifies some of the ambiguity that existed with respect to what constitutes an electronic signature for the purposes of extending a limitation period.
In Johal v. Nordio, the plaintiff Jatinder Johal loaned the sum of $250,000 by way of a promissory note signed by Mr. Johal’s wife, the plaintiff Sonia Kaur Johal. Mr. Nordio was to use the loan to purchase real property and the $250,000 plus a 20% lending fee was to be repaid by April 25, 2014. The two year limitation period would ordinarily begin running as of that date, meaning that, absent an acknowledgment pursuant to section 24(6) of the Limitation Act, the last day for Mr. Johal to sue on the debt would be April 25, 2016.
However, after Mr. Nordio failed to repay the loan on April 25, 2014, several emails were exchanged between Mr. Johal and Mr. Nordio concerning Mr. Nordio’s default. On August 31, 2014, Mr. Nordio sent an email to Mr. Johal, stating:
… That mean[s] that I am selling HR … I will pay back capital and interest for the one time deal out of my profit from the HR transaction and close the note …
Mr. Nordio acknowledged sending the email but did not agree that it constituted an acknowledgment of the debt. The Johals argued that Mr. Nordio’s email of August 31, 2014 constituted a written and signed acknowledgement of the debt, therefore extending the limitation period to August 31, 2016.
The court agreed with the Johals. The Electronic Transactions Act defines “electronic signature” as:
Information in electronic form that a person has created or adopted in order to sign a record and that is in, attached to or associated with the record.
The court found that a digital signature is not required and that the intent of the legislation is to focus on whether the email’s sender intended to create a signature to identify himself/herself as its composer and sender.
The court noted that Mr. Nordio did not deny sending the email and that the email contained his name, position and contact information. It is not clear to what extent the result of this case would have been different had Mr. Nordio’s email not attached his name, position and contact information. The court noted that, “Nordio could have refrained from attaching his name, position and contact information to the emails. However, if he had failed to do so, Mr. Johal may have doubted that the emails originated with Nordio. From the beginning of their transactions, Nordio attached his name and accompanying information to his emails.” Based on these facts, the court found that the “Nordio emails are in writing, identify Nordio as their composer, and meet the requirement of bearing Nordio’s ‘electronic signature’ for the purposes of satisfying s. 24(6)(a), (b), and (c) of the Act.”
Author: Wanda Simek