Can a text message be tantamount to a signed acknowledgment?
Yes, according to the recent Ontario Divisional Court decision in 1475182 Ontario Inc. o/a Edges Contracting v. Ghotbi.
There, the court considered the application of certain provisions of the Limitations Act, 2002. Essentially, under the Act, a claim must be started within two years of the act or omission giving rise to the claim. However, under s. 13 of the Act, the date for a claim for payment can be extended where the debtor acknowledges the debt to a creditor IN WRITING and SIGNED BY THE PERSON MAKING IT OR THE PERSON’S AGENT.
In Edges, a contractor sued for money owing for renovation work. The last payment under the contract was made in March 2016. The claim was not commenced until May, 2018, and the defendant argued that the claim was statute-barred. However, the defendant texted the contractor in June, 2016, saying “The balance will be paid once everything is completed as per your agreement. No payment will be made until everything is clear. I’m going to hire a third-party inspector and their fees will be deducted from your payments too.”
The contractor argued that this was an acknowledgment of the debt, and therefore extended the limitation period. The defendant countered by arguing that the text was not signed, and therefore did not have that effect. The Small Claims Court judge and the Divisional Court disagreed.
On the issue of whether the text satisfied the statutory requirement that the acknowledgement be “signed”, the Divisional Court noted that there was no issue as to whether the text was authentic, or sent by the defendant. The Divisional Court held:
- The requirement of a signature is grounded in concerns of authenticity. As there was no issue with respect to the authenticity of the text, the underlying purpose of the signature requirement was satisfied.
- In any event, the Divisional Court concluded that the text was “signed”, albeit not in the traditional sense. The text was sent from the defendant’s cell phone. The phone had a unique phone number, and “other unique identifiers associated with … [the defendant’s] phone, including, without limitation, an International Mobile Equipment Identifier (IMEI) number. These unique identifiers provide, in effect, a digital signature on every message sent by the user of that particular device.”
The Divisional Court observed that “The world is changing. Everyone knows that. We live in a digital world now, much more than was the case when the Act came into force in 2002. It is incumbent upon the court to consider not just traditional means of affixing one’s signature to a document, but other, more modern means, including digital signatures.”
The world is indeed changing. Text with caution.
Have a great weekend.