The Saskatchewan Court of King's Bench recently ruled that the one-year limitation period for a claim against a municipality starts running when the claimant knows they have suffered some damage, and that the municipality likely caused it. Unlike claims against other types of defendants, the limitation period does not wait for the claimant to realize that a lawsuit would be appropriate. In some cases, the limitation period for a claim against a municipality begins running earlier than it would for a claim against another type of defendant.

Summary of Baran

In Baran v Rural Municipality of Dundurn No. 314, 2025 SKKB 56 (Baran), the Plaintiffs were former Councillors of the Rural Municipality. They had been removed from their positions by a resolution to vacate their seats passed on December 20, 2021, because they had allegedly failed to declare a conflict of interest.

The Plaintiffs challenged their removal in several ways:

• Judicial review application to have the Court set the resolution aside – which was dismissed on August 3, 2022 (2022 SKQB 182).
• Ethics complaints against the Councillor who made the motion to vacate their seats – which were filed on December 21 and 22, 2022 and were found partially well-founded in reports released on April 23, 2023.
• Statement of Claim against the Rural Municipality, Councillors who voted for their removal, and Administrator, for misfeasance in public office.

The Plaintiffs served their Statement of Claim on March 21, 2024. The Defendants applied to strike it, arguing the limitation period had expired. Justice Gerecke agreed and struck the claim.

The limitation period for the Plaintiffs’ claim is in section 344(1) of The Municipalities Act, SS 2005, c M-36.1, which provides that “no action is to be brought against a municipality for the recovery of damages after the expiration of one year from the time when the damages were sustained[.]” The Plaintiffs argued this period began running only when the ethics reports were released, because that is when the Plaintiffs would have realized a lawsuit was appropriate. Justice Gerecke found instead the limitation period began running as soon as the Plaintiffs learned they had been removed from Council.

In deciding the limitation period started when the Plaintiffs learned they had suffered some damage (removal from Council) and that the Rural Municipality, Councillors who voted for their removal, and Administrator caused it, and not when the Plaintiffs realized a lawsuit was appropriate, Justice Gerecke held that the limitation period in The Municipalities Act is different from the limitation period in The Limitations Act, SS 2004, c L-16.1. The Limitations Act applies to most claims filed in the Saskatchewan Court of King’s Bench. Under The Limitations Act, the limitation period begins only when the claimant knows they have suffered some damage, that the defendant likely caused it, and that a lawsuit would be appropriate. Justice Gerecke ruled that under The Municipalities Act, the limitation period does not wait for the claimant to learn a lawsuit would be appropriate.

Key Takeaways

The first and most important point to take from Baran is that for claims against municipalities (including cities and northern municipalities, since there are equivalent provisions in The Cities Act, SS 2002, c C-11.1, s. 307(1) and The Northern Municipalities Act, 2010, SS 2010, c N-5.2, s. 364(1)), the limitation period will begin running as soon as the claimant knows they have suffered some damage caused by the municipality. It does not wait for the claimant to learn that a lawsuit would be appropriate.

Another important implication of this decision relates to defence strategy. This decision may make it easier for municipalities to have limitations-barred claims struck or dismissed at an early stage. This is because Baran confirms there is no need to determine when the claimant would have learned a lawsuit was appropriate – an issue that can be more difficult to decide based on the pleadings or affidavits alone.

Conclusion

This decision underscores the importance of engaging experienced counsel as soon as a loss or dispute involving a municipality arises. This is important not only for claimants, to ensure they file their claim within the limitation period, but also for municipalities, who may have an opportunity to have a claim against them struck or dismissed.

About the Author:

Caroline J. Smith is a partner in the McKercher LLP Saskatoon office and practices in the areas of commercial litigation and insurance defence. She handles disputes involving, among other things, contracts, construction, real estate, debts, shareholders, property damage, and professional liability. Caroline has experience with class actions, plans of arrangement, and insolvency matters.

Thank you to legal summer student, Hannah E. Wark for assistance in researching and compiling information for this post.

About McKercher LLP:

For nearly 100 years, McKercher LLP has grown deep roots across Saskatchewan, serving the community from offices in Saskatoon and Regina. Now, as one of the province’s largest and most established full-service law firms, we proudly carry on this legacy – following a client-first philosophy as we provide legal services and real solutions for the people who rely on us.

This post is for information purposes only and should not be taken as legal opinions on any specific facts or circumstances. Counsel should be consulted concerning your own situation and any specific legal questions you may have.