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.
The Courts in England and Wales are gradually adapting to relatively new substitute decisions legislation (somewhat analogous to, but in many ways different from Ontario’s Substitute Decisions Act).
In particular, the concept of "statutory wills" provides for a mechanism (in certain circumstances) where testamentary dispositions may be directed by a special court for incapable persons. Under the Mental Capacity Act 2005, which came into force in England and Wales in 2007, the Court of Protection must decide what would be in the person’s “best interests”. And some judges have decided that this includes how they would want to be remembered by their family: “For many people it is in their best interests that they be remembered with affection by their family and as having done ‘the right thing’ by their will.”
As recently reported on-line in the Telegraph, this somewhat controversial application of the concept of "best interests" may inadvertently give rise to opportunistic relatives benefiting from an estate in which the now incapable testator would never have wanted such person to share.
David M. Smith – Click here for more information on David Smith.