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Suspension by Concealment: The Tolling of a Limitation Period Clock Due to Misconduct
Question: What happens to the limitation period if a defendant hides facts that affect my legal claim?
Answer: The limitation period may be paused if a defendant’s fraudulent concealment prevents you from discovering a cause of action, safeguarding your legal rights and ensuring you can pursue justice effectively.
Limitation Periods May Be Paused Due to Fraudulent Concealment
Generally, where a potential defendant conceals facts that would reveal a cause of action to a potential plaintiff, the running of the limitation period is suspended. Similar to the rule in the discovery principle, if the potential plaintiff is unaware that a cause of action exists, the limitation period clock waits or is "tolled". However, the key difference between the Suspension by Concealment rule and the Discovery Principle rule is that where a potential plaintiff becomes somewhat aware that a cause of action has occurred yet is impaired by information concealment by the potential defendant, meaning impairment to the effort of fully gathering the facts necessary to commence legal proceedings, the applicable limitation periods are suspended. The reason for this rule is simply to prevent a potential defendant from using unjust concealment tactics to avoid, and eventually void, the legal rights of a victimized potential plaintiff.
The Law
The tolling, meaning pausing, of a limitation due to fraudulent concealment, and meaning fraudulent in the equitable sense, is addressed in many cases including the Supreme Court decision of Guerin v. The Queen, [1984] 2 S.C.R. 335, wherein it is said:
It is well established that where there has been a fraudulent concealment of the existence of a cause of action, the limitation period will not start to run until the plaintiff discovers the fraud, or until the time when, with reasonable diligence, he ought to have discovered it. The fraudulent concealment necessary to toll or suspend the operation of the statute need not amount to deceit or common law fraud. Equitable fraud, defined in Kitchen v. Royal Air Force Association, [1958] 1 W.L.R. 563, as "conduct which, having regard to some special relationship between the two parties concerned, is an unconscionable thing for the one to do towards the other", is sufficient.
Subsequent to the Guerin decision, many other cases further flesh out and refine the principles further. For example, the issue of what should be viewed as fraudulent conduct as well as the issue of what should be viewed as a special relationship, were addressed in the case of Pioneer Corp. v. Godfrey, [2019] 3 S.C.R. 295, where it is stated:
[52] Fraudulent concealment is an equitable doctrine that prevents limitation periods from being used “as an instrument of injustice” (M. (K.), at pp. 58-59). Where the defendant fraudulently conceals the existence of a cause of action, the limitation period is suspended until the plaintiff discovers the fraud or ought reasonably to have discovered the fraud (Guerin v. The Queen, 1984 CanLII 25 (SCC), [1984] 2 S.C.R. 335, at p. 390). It is a form of “equitable fraud” (Guerin, at p. 390; M. (K.), at pp. 56-57), which is not confined to the parameters of the common law action for fraud (M. (K.), at p. 57). As Lord Evershed, M.R. explained in Kitchen v. Royal Air Forces Association, [1958] 2 All E.R. 241 (C.A.), at p. 249, cited in M. (K.), at pp. 56-57:
It is now clear . . . that the word “fraud” in s. 26(b) of the Limitation Act, 1939, is by no means limited to common law fraud or deceit. Equally, it is clear, having regard to the decision in Beaman v. A.R.T.S., Ltd., [1949] 1 All E.R. 465, that no degree of moral turpitude is necessary to establish fraud within the section. What is covered by equitable fraud is a matter which Lord Hardwicke did not attempt to define two hundred years ago, and I certainly shall not attempt to do so now, but it is, I think, clear that the phrase covers conduct which, having regard to some special relationship between the two parties concerned, is an unconscionable thing for the one to do towards the other. [Emphasis added in M. (K.).]
...
[54] When, then, does fraudulent concealment arise so as to delay the running of a limitation period? Recalling that it is a form of equitable fraud, it becomes readily apparent that what matters is not whether there is a special relationship between the parties, but whether it would be, for any reason, unconscionable for the defendant to rely on the advantage gained by having concealed the existence of a cause of action. This was the Court’s point in Performance Industries Ltd. v. Sylvan Lake Golf & Tennis Club Ltd., 2002 SCC 19, [2002] 1 S.C.R. 678, at para. 39:
[Equitable fraud] “. . . refers to transactions falling short of deceit but where the Court is of the opinion that it is unconscientious for a person to avail himself of the advantage obtained” (p. 37). Fraud in the “wider sense” of a ground for equitable relief “is so infinite in its varieties that the Courts have not attempted to define it”, but “all kinds of unfair dealing and unconscionable conduct in matters of contract come within its ken” . . . . [Emphasis added.]
It follows that the concern which drives the application of the doctrine of equitable fraud is not limited to the unconscionability of taking advantage of a special relationship with the plaintiff. Nor is the doctrine’s application limited, as my colleague suggests, to cases where there is something “tantamount to or commensurate with” a special relationship between the plaintiff and the defendant (paras. 171 and 173-74). While a special relationship is a means by which a defendant might conceal the existence of a cause of action, equitable fraud may also be established by pointing to other forms of unconscionable behaviour, such as (for example) “some abuse of a confidential position, some intentional imposition, or some deliberate concealment of facts” (M. (K.), at p. 57, citing Halsbury’s Laws of England (4th ed. 1979), vol. 28, at para. 919). In short, the inquiry is not into the relationship within which the conduct occurred, but into the unconscionability of the conduct itself.
Conclusion
A limitation period may be suspended to prevent a person who may become a defendant within lawsuit, or other legal proceeding, from evading responsibility through unjust concealment tactics.
