CITATION: A & A Flooring Supplies Inc. v. Gardideh, 2025 ONSC 5937
DIVISIONAL COURT FILE NO.: DC-24-00000332-0000 DATE: 20251022
ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT
BETWEEN:
A & A Flooring Supplies Inc.
Appellant
– and –
Iraj Gardideh
Respondent
Lenard Kotylo, for the Appellant
Jonathan L. Frustaglio, for the Respondent
HEARD at Toronto: April 28, 2025
Shore J.
REASONS FOR DECISION
Introduction:
[1] The Appellant, A&A Flooring Supplies Inc. is appealing the Small Claims Court order of Deputy Judge Schwartz ("the Judge"), dated May 2, 2024, dismissing the claim against the Respondent, Iraj Gardideh, in the amount of $34,156.38 for alleged unpaid invoices, because the claim was statute barred under the Limitations Act, 2002, S.O. 2002, c. 24, Sch B.
[2] The parties attended a settlement conference before the Judge on February 2, 2024, wherein the issue arose as to whether the claim was statute barred under the Limitations Act. The Judge ordered the parties to deliver written submissions on the limitation period issues, and any further documentary evidence they wanted to rely on.
[3] After receiving the submissions, the Judge rendered a final order, dated May 2, 2024, dismissing the action, finding that the action was commenced after the expiry of the limitation period.
[4] The Appellant is appealing this order.
Background:
[5] The Appellant is a corporation that carries on business providing flooring materials and services.
[6] On March 21, 2020, the Respondent asked the Appellant to install flooring in his home. A quote of $62,195.20 was delivered to the Respondent and shortly thereafter, on March 24, 2020, an invoice in the same amount was submitted to the Respondent.
[7] By June 2020, the Respondent had paid $32,600.
[8] The Appellant alleges that extra costs were added to the project, including customization, repairs and add-ons, and the overall cost therefore increased.
[9] On November 27, 2020, a final invoice was submitted by the Appellants, in the sum of $10,271.70.
[10] In December 2020, the Respondent paid a further $10,000, for total payments of $42,600.
[11] On September 23, 2023, the Appellant commenced a claim, acknowledging the Respondent paid $42,600, but had a balance owing of $34,156.38.
[12] On February 2, 2024, the matter came before the Court for a settlement conference. The issue arose as to whether the claim was statute barred because of the two-year limitation period under the Limitations Act. The Judge directed the parties to provide written submissions on the issue. The Judge also ordered that when serving and filing their written submissions the parties may provide additional documents that related to the limitation issue.
[13] Both parties filed submissions.
[14] The Respondent submitted that the two-year limitation period was triggered on the day the last invoice was rendered, December 3, 2020, so that the limitation period expired on December 3, 2022. The claim was commenced on September 5, 2023, nine months too late.
[15] The Appellant submitted that the limitation period started running on May 30, 2022, when an alleged request was made for payment, and therefore they commenced their claim on time. The Appellant also submitted that there was an ongoing relationship, and the limitation period began to run on the date that the Appellant determined or discovered that the Respondent was not going to make the final payment. The invoices were part of an ongoing contract between the parties, for goods, services, and payment.
The Judge's Decision:
[16] The Judge found that the Appellant's position that there was an ongoing contract was not supported by the evidence or the law.
[17] The Judge found that the Appellant's evidence lacked specifics, with respect to dates, and specifically with respect to dates to support the position that they only discovered the money owing would not be paid less than two years before the claim was commenced. There was no evidence to support their date of May 30, 2022.
[18] The Judge relied on the Divisional Court decision of PLB International Inc. v. All Pets Distributing, 2013 ONSC 1027 (Div. Ct.), for the proposition that where a demand obligation is involved, the statutory two-year period begins on the first day on which the obligation is not performed. The judge determined that in this case, that date is December 3, 2020, the date of the last invoice, and therefore the claim was statute barred.
[19] The Judge rejected the Appellant's submission that the discoverability principle should apply in this case. The Judge held that the discoverability principle does not apply to demand obligations. If a debtor must advise of its refusal to pay before the limitation period begins to run, and no such refusal is made, liability would exist indefinitely: Hare v. Hare, 2006 41650 (ON CA), 83 O.R. (3d) 766, at para. 41.
[20] The Judge also rejected the argument that there was an acknowledgement that money was owing, relying on s.13(10) of the Limitations Act, which provides that the acknowledgement must be in writing, and signed by the person making the acknowledgement. No such acknowledgement existed in this case.
[21] For the reasons above, the Judge concluded that the claim was statute barred and the claim was dismissed.
Grounds for Appeal:
[22] The Appellant submits that the Judge erred by:
(a) failing to find that there was a construction contract between the parties and therefore failed to apply the limitation period for construction contracts;
(b) relying on Hare v. Hare, which has been amended by legislation;
(c) finding that the invoices were demand obligations; and
(d) failing to determine when the demand for payment began.
Standard of Review:
[23] If an appeal is based upon an error of law, the standard of review is that of correctness. With respect to findings of fact, the standard of review is palpable and overriding error. With respect to errors of mixed fact and law, the standard of review is palpable and overriding error: Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235, at paras 8, 10 and 37.
Was there a contract, and if so, which limitation period applies?
[24] The Appellant submits that the Judge erred by failing to consider whether there was a construction contract between the parties, or in the alternative, in finding that there was no contract between the parties. The Appellant submits that there was a construction contract between the parties that created an ongoing obligation to make payment. The Appellant submits there was an offer, acceptance of the offer and consideration at the outset and the invoices submitted did not create a contract between the parties. They were not demand documents. Under construction contracts, the limitation period begins to run after a reasonable period of time has elapsed.
[25] The Judge turned his mind to whether there was a contract, starting at paragraph 30 of the decision. The Judge found that the Appellant's position that there was an ongoing contract was not supported by the written submissions, the evidence, or the law. If there was a contract, the terms were not set out or clear. Ultimately, the Judge found that the Appellant failed to meet their onus of proving that there was a contract or the terms of the contract.
[26] Starting at paragraph 41, the decision provides:
As to A & A's submissions that "the relationship between the parties was a contract, not a demand letter", a significant problem is that no written contract is provided in support and no affidavit evidence or further particulars are provided to even suggest that the parties had a meeting of minds in which they agreed on a different payment schedule.
In the Court's view, the approach advanced by A & A in its submission that it had some form of ongoing contract with Mr. Gardideh, in addition to not being supported by its written submissions (even when those submissions are treated as a form of evidence), it is also not supported as a matter of law.
The argument that a series of invoices can be inferred to create an ongoing contract or a type of running account, in which those invoices are not treated as creating a demand obligation, has been rejected by the Divisional Court, on an appeal from this Court.
[27] I find no error in law and no palpable or overriding error of fact by the Judge, in finding that there was no contract between the parties. Because the Judge concluded that there was no contract between the parties, it follows that there was also no construction contract.
[28] The Judge carried on, to find that the invoices were demand obligations, as discussed in more detail below.
[29] With respect to the applicable limitation period, the Limitations Act provides as follows:
- Unless this Act provides otherwise, a proceeding shall not be commenced in respect of a claim after the second anniversary of the day on which the claim was discovered.
5 (1) A claim is discovered on the earlier of,
(a) the day on which the person with the claim first knew,
(i) that the injury, loss or damage had occurred,
(3) For the purposes of subclause (1) (a) (i), the day on which injury, loss or damage occurs in relation to a demand obligation is the first day on which there is a failure to perform the obligation, once a demand for the performance is made.
[30] The Judge properly relied on the Limitations Act, and specifically s. 5(3) of the Limitations Act which provides that the day on which the loss occurs in relation to a demand obligation is the first day on which there is a failure to perform the obligation, once a demand for the performance is made. In this case, the last demand for payment was made in December 2020. A debt obligation that does not specify a date for payment is a demand obligation: see Uni Select Eastern Inc. v. 2067195 Ontario Inc., 2018 ONSC 2345, at para. 21.
[31] The appeal cannot succeed on this ground.
Did the Judge err by relying on Hare v. Hare?
[32] The Appellant submits that it was an error for the Judge to rely on Hare v. Hare. The legislation was amended in 2008 to provide that for demand obligations, the first day of failure to perform commences once a demand for performance is made. The Appellant submits that the Judge did not determine when the demand for payment was made.
[33] I disagree that the Judge erred by referring to the law in Hare v Hare. In Artisan Developments Inc. v. Navarretta, 2011 ONSC 6054, 288 O.A.C. 336, (Div. Ct.), the Divisional Court cited and followed the reasoning of the Ontario Court of Appeal in Hare v. Hare, and emphasized:
[10] First of all, the law is clear that s. 5(3) applies to demand obligations: see Hare v. Hare. Time starts to run from the time that the demand is made, and the discoverability principle has no application. The new Limitations Act does not change the former law (Limitations Act, R.S.O. 1990, c. L.15) with respect to limitation periods applicable to demand obligations. [Emphasis added].
[11] Second, s. 5(3) precludes the application of the discoverability principle as far as demand obligations are concerned.
[34] I find no error by the motion Judge. Further, the Judge correctly concluded that for demand obligations, the time starts to run from the time that the demand is made. As set out below, the Judge found that the invoices were demand obligations and the time began to run on the date of the last invoice, being December 3, 2020.
Were the invoices demand obligations?
[35] The Appellant submits that the invoices were not demand obligations because they were not signed, and therefore the discoverability principle applies, that is, the limitation period only begins to run when the Appellant discovered that the Respondent would not pay his obligation under the contract.
[36] I find the Judge correctly construed the invoices rendered as demand obligations.
[37] In Uni-Select Eastern Inc. at paras 21 and 22, the Court held that a debt obligation that does not specify a date for payment is a demand obligation, as contemplated by section 5(3) of the Limitations Act, and that this is in keeping with section 22(1) of the Bills of Exchange Act. Section 22(1) of the Bills of Exchange Act, RSC 1085, c.B-4, provides that a bill is payable on demand when no time for payment is expressed.
[38] The Appellant relies on three invoices, dated March 24, 2020, November 27, 2020, and December 3, 2020. The invoices did not specify a date for payment. As such, the money is due on the date of the invoice. The Appellant failed to show that there was an alternative payment agreement. Therefore, the Judge correctly concluded that the limitation period begins to run on the date the invoices were issued.
Disposition:
[39] For the reasons above, the appeal is dismissed.
“Shore J.”
Released: October 22, 2025
CITATION: A & A Flooring Supplies Inc. v. Gardideh, 2025 ONSC 5937
DIVISIONAL COURT FILE NO.: DC-24-00000332-0000 DATE: 20251022
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
BETWEEN:
A & A Flooring Supplies Inc.
Appellant
– and –
Iraj Gardideh
Respondent
REASONS FOR JUDGMENT
Shore J.
Released: October 22, 2025