Recently, the Divisional Court examined whether a text message is a “signature” for the purposes of section 13 of the Limitations Act (the “Act”).

In 1475182 Ontario Inc. o/a Edges Contracting v Ghotbi, 2021 ONSC 3477 (“Edges”), Edges Contracting was hired by Dr. Ghotbi to conduct leasehold improvements at his new dental practice.

The last payment made by Dr. Ghotbi occurred on March 11, 2016, leaving an outstanding balance of over $24,000. On June 2, 2016, the parties exchanged text messages regarding the outstanding invoice. Dr. Ghotbi, by text message, acknowledged the outstanding balance and indicated that no payment would be made until the work had been completed and a third-party inspector had reviewed the work conducted by Edges Contracting.

No further payments were made by Dr. Ghotbi, and Edges Contracting commenced a claim in Small Claims Court for damages. Dr. Ghotbi defended the action by asserting that Edges’ claim was out of time, calculating the start date of the relevant limitation period as the date of the last payment, being March 11, 2016. Edges, however, argued that the June 2, 2016 text exchange included an acknowledgment of the indebtedness by Dr. Ghotbi, such that the correct start date for the purposes of calculating the limitation period began on June 2, 2016.

In conducting its analysis, the Divisional Court turned to the relevant provisions of the Limitations Act.

Section 4 of the Act provides for a basic two-year limitation period, such that no proceeding shall be commenced after the second anniversary of the day on which the claim was discovered. Section 5 establishes the framework for discoverability. Section 13, provides for, in effect, the extension of the commencement date of a limitation period in relation to a claim for liquidated damages where an acknowledgment of the indebtedness is made. Section 13 further sets out that the acknowledgment must be in writing and signed by the person making it, or the person’s agent.

The trial judge found that the content of the text exchange constituted an acknowledgment of the debt owing. The judge looked to the plain wording of the texts as well as the broader context of the exchanges. While the texts were not signed in the traditional sense, the trial judge found that there was no dispute as to their authenticity.

The Divisional Court agreed with the trial judge’s findings. In finding that there was no question of authenticity regarding the text exchange, the trial judge had relied on the decision of Lev v Serebrennikov, 2016 ONSC 2093, where The Honourable Justice Pattillo, sitting for the Divisional Court, concluded that an email with the debtor’s name had satisfied the requirement of section 13 of the Act, noting that “the issue in every case will be one of fact concerning authenticity”.

The Divisional Court in Edges further held that while the text messages were obviously not “signed” in the traditional sense, section 13(10) does not prescribe any particular form of signature. The Divisional Court agreed that there was no question of authenticity, and, found that the express requirement of a signature had been met, pointing to the fact that there are unique identifiers associated with cell phones, including an International Mobile Equipment Identifier (IMEI) number, which provide in effect a digital signature on every text message sent by the user of the particular device.

The Divisional Court provided additional commentary, noting that the “world is changing…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.”

While we have yet to reach the point where a text message could be found to be a valid last Will and Testament in Ontario, the ever evolving digital world remains a relevant consideration for Estate and Trust practitioners and their clients alike, particularly as it relates to possible extensions to the tolling of limitation periods.

Thanks for reading!

Sydney Osmar