The email that saves the debt: how acknowledgment really works under section 13

Every Ontario creditor knows the headline: the two-year limitation period restarts if the debtor acknowledges the debt.

It is true, and it has saved a great many accounts. It is also, as usually stated, missing most of the rule. Section 13 of the Limitations Act, 2002 has eleven subsections, and four of them are conditions. A creditor holding an email that satisfies three of the four has an expired claim and no idea.

What section 13 actually does

Start with the mechanism, because even this is usually described loosely. Section 13(1) provides that if a person acknowledges liability in respect of a claim for payment of a liquidated sum, the recovery of personal property, the enforcement of a charge on personal property or relief from enforcement of a charge on personal property, the act or omission on which the claim is based is deemed to have taken place on the day the acknowledgment was made.

Section 13 does not “restart the limitation period”. It deems the act or omission on which the claim is based to have occurred on the day of the acknowledgment. Because section 5(2) presumes discovery on the day of the act or omission, the practical effect is usually a fresh two years from the acknowledgment — but discoverability under section 5(1) still governs, and the distinction can matter in an argument.

The four conditions

1. It has to be a liquidated sum

Section 13(1) applies to four kinds of claim, and for a creditor only one of them matters: a claim for payment of a liquidated sum.

An invoice for goods delivered or services rendered at an agreed price is a liquidated sum. A damages claim — lost profit, the cost of fixing someone else's defective work, a quantum meruit claim where no price was agreed — is not, and section 13 does nothing for it. If your claim has both components, the acknowledgment helps the liquidated part and not the rest.

2. It has to be in writing and signed

Section 13(10) provides that subsections (1), (2), (3), (6) and (7) do not apply unless the acknowledgment is in writing and signed by the person making it or the person's agent.

Writing and signed. For the ordinary unpaid-invoice case, which runs on section 13(1), both are required. A phone call in which the controller says “yes, we owe it, we're just tight this quarter” does nothing — which is the opposite of the position in Quebec, where an oral acknowledgment counts.

Two softeners. The signature may be that of the person's agent, which is broader than it sounds. And section 13(11) makes part payment of a liquidated sum, by the debtor or the debtor's agent, do the same work as the signed writing — a cheque for $2,000 on a $30,000 account is an acknowledgment of the balance.

3. It has to be made to the right person

This is the condition nobody mentions, and it is a genuine trap. Section 13(9) provides that the section does not apply unless the acknowledgment is made to the person with the claim, the person's agent or an official receiver or trustee acting under the Bankruptcy and Insolvency Act (Canada).

An acknowledgment made to a third party does not count. The debtor who tells your mutual customer, or writes it in a financing application, or says it in a document filed somewhere, has not acknowledged anything for section 13 purposes. It has to come to you, or to your agent.

4. It has to be before the period expires

Section 13(9) continues: the acknowledgment must be made before the expiry of the limitation period applicable to the claim. Section 13 cannot revive a claim that is already dead. An acknowledgment obtained in month 25 is a nice piece of paper and nothing more. This is the condition that converts limitation management from a legal task into a diary task.

What counts is broader than creditors assume

Having set out the conditions, the good news. Within them, Ontario courts read acknowledgment generously.

The debtor does not have to promise to pay. Section 13(8) is explicit: the section applies even though the person making the acknowledgment refuses or does not promise to pay the sum or the balance still owing. An email that admits the debt while disputing when or whether it will be paid is still an acknowledgment.

The amount does not have to be stated. In Perks v. Hetti Group Inc., 2024 ONCA 709, the Court of Appeal held that the submission that the amount owing must be specified for section 13 purposes has been rejected by that court, citing Middleton v. Aboutown Enterprises Inc., 2009 ONCA 466; the email in question was a clear and unequivocal acknowledgment of the debt notwithstanding that it did not refer to the specific amount owing.

An agent's email can bind the debtor. In the same case, the email came not from the debtor but from a financial intermediary communicating on its behalf, attaching a memo advising that principal and accrued interest would be paid on the sale of a project. That was held sufficient. Note what that finding rests on — the intermediary was acting as the debtor's agent. It is a fact-dependent conclusion, not a rule that any third party's email binds a debtor.

Conduct on a running arrangement can acknowledge continuously. In Bank of Nova Scotia v. Reed, 2025 ONCA 445, the Court of Appeal declined to disturb a finding that the debtor had signed and dated the relevant documents and made ongoing monthly payments, which established acknowledgment of the debts on an ongoing basis.

The standard running through all of it is “clear and unequivocal”. That is worth remembering when drafting the email you want back. “We'll look into it” is not it.

The discoverability side: do not count on the relationship

Section 13 is the rescue. The question of when the clock started is the harder one, and the trend is unfavourable to creditors.

Section 5(1)(a)(iv) delays discovery until the claimant knew that a proceeding would be an appropriate means to seek to remedy the loss. Creditors have long leaned on this: the customer was still buying, the project was still running, suing would have been premature.

In Thermal Exchange Service Inc. v. Metropolitan Toronto Condominium Corporation No. 1289, 2022 ONCA 186, that argument succeeded — but read how narrowly. The Court of Appeal found the motion judge had picked the wrong start date and substituted a later one: the day the condominium corporation first communicated that it would not pay. The result turned on a finding of a running account and on the particular communications; the motion judge had found the first three discovery elements satisfied thirty days after the invoices were rendered, with only the “appropriate means” element in play.

More bluntly, in Normar Drywall v. 4241258 Canada Inc. o/a Laurin General Contractor, 2023 ONSC 3106, the Superior Court granted summary judgment dismissing a $361,674.19 unpaid-invoice claim as statute-barred, on a framework of: a reasonable time to deliver an invoice after completing the work (described as one or two months), then a reasonable time to pay (thirty days from receipt), after which the clock runs. The court added that a plaintiff cannot rely on assurances that payment is coming, because the tolling of a limitation period is not suspended while a party waits to see what may happen.

That is one Superior Court judge on a summary judgment motion, not a binding appellate rule, and the framework was articulated in a construction context. But it is the direction of travel, and a creditor planning its diary around the optimistic reading is planning around the exception.

One thing Ontario allows that Quebec does not

Section 22 of the Limitations Act, 2002 makes limitation periods apply despite any agreement — with exceptions. Under section 22(5), in a business agreement (one where none of the parties is a consumer), the basic limitation period may be varied or excluded by agreement made on or after 19 October 2006. Under section 22(3), any party, business or not, may suspend or extend it.

This is a genuine and underused tool. Where a debtor asks for time and you would rather not issue a claim to protect the clock, a short written agreement extending the limitation period does the job — and in a B2B file you have the statutory room to make it. In Quebec, by contrast, prescription periods cannot be contracted out of at all. One drafting note: the fifteen-year ultimate period under section 15 can only be suspended or extended once the claim has been discovered.

The practice, in four lines

1. Diary two years from thirty days after each invoice. Not from the last conversation.
2. After every call where the debtor admits the debt, send a confirming email and ask them to confirm. You need writing, a signature or its electronic equivalent, and it must come to you. “Confirming our call today — you've confirmed the outstanding balance on account 4417 and expect to address it by 30 November. Please reply to confirm.” Their reply is the asset.
3. Treat a partial payment as a legal event, not just a deposit. Note the date. It did the same work as a signed acknowledgment.
4. If the file is approaching the line and the debtor wants more time, consider a written extension agreement under section 22(5) rather than hoping for an acknowledgment that meets all four conditions.