A decision from the Ontario Court of Appeal in T.M.S. Inc. v. G.I., 2025 ONCA 321 confirms that limitation periods are strictly enforced. Even where misconduct is proven, claims brought too late can be reduced or barred entirely.
In this case, a damages award of $750,000 was reduced by more than $230,000 because part of the claim was filed after the two-year limitation period had expired.
What Happened
The case involved an employee who worked as a software developer and manager. After leaving employment, the employee continued working for the same business as an independent contractor for several months and retained access to confidential information.
The employer later sued the employee and a related company, alleging misuse of confidential information and breaches of legal duties.
At trial, the court accepted the employer’s claims and awarded $750,000 in damages based on two separate categories of alleged lost business opportunities.
The Key Issue: Timing
The appeal turned on when the employer knew, or ought to have known, that it had a claim.
Under Ontario’s Limitations Act, 2002, a lawsuit must be started within two years of discovering a claim.
The Court of Appeal found that the employer knew about one category of alleged loss by November 2013. The deadline to sue for that claim expired in November 2015.
The lawsuit was not started until June 2016, after the limitation period had passed.
The Result
Because the claim was filed late, the Court of Appeal ruled that damages tied to that portion of the claim could not be awarded.
The Court deducted $231,340.74 from the original award.
The final damages award was reduced from $750,000 to $518,659.26.
Key Takeaways for Employees
- Limitation periods protect employees from delayed lawsuits.
- Courts apply limitation deadlines strictly, even where wrongdoing is alleged.
- Late claims can significantly reduce or eliminate damages.
- Legal outcomes depend on timing as much as on the facts.
This decision reinforces that once a limitation period expires, claims for that loss are no longer available, providing employees with certainty and finality.
If you are facing a potential claim or legal dispute related to your employment, speaking with an employment lawyer can help you understand your rights, timelines, and options. Monkhouse Law Employment Lawyers offer a complimentary 30-minute phone consultation for employees.