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Most people who are dismissed know there is a deadline to sue. Far fewer know there is a second deadline afterwards, and that missing it can end a claim that was filed perfectly on time. In September 2026 the Superior Court dismissed a wrongful dismissal action for exactly that reason, and ordered the former employee to pay costs.
Updated September 2026
At a status hearing the claimant must satisfy a two-part test: an acceptable explanation for the delay, and no non-compensable prejudice to the defendant. The test is conjunctive, so failing either branch is fatal.
That is what makes this decision worth reading. The plaintiff largely won on prejudice. The documents still existed, no witness had died or moved, and the defendants admitted over-producing. He lost anyway, on the explanation.
What happened
Jeremy Wallace was dismissed on 22 February 2019 and issued a claim for wrongful dismissal and commissions on 1 October 2020. A defence followed within a month. The five-year deadline to set the action down expired on 1 October 2025.
A mediation was booked for June 2021 and cancelled the day before, because of serious personal circumstances. Over the following years the file moved only intermittently. The court recorded two long periods of near-dormancy, and in both cases the trigger that restarted the file was the defendants threatening a motion to dismiss.
There were later difficulties too. In November 2024 he entered a treatment facility and continued as an outpatient until February 2025, supported by a letter from the facility. Two mediations took place, in January 2024 and June 2025, and both failed. On 8 September 2025, weeks before the deadline, his counsel proposed a timetable setting the action down by September 2026. The defendants refused, noting the action had been pending five years.
What the court held
The explanation was mostly uncorroborated
Only the November 2024 to February 2025 treatment period was supported by evidence. The rest rested on assertion. Following Beshay v. Labib, 2024 ONCA 186, the Court held that bald assertions of illness or personal difficulty do not discharge the onus.
Working undercut incapacity
He obtained employment in July 2021 and again in January 2025 while in treatment. The Court took that as evidence he was not incapacitated, the same reasoning the Court of Appeal applied in Beshay.
Movement only when threatened
The defendants were the catalyst on both occasions. A plaintiff bears primary responsibility for advancing the action, and a defendant is not required to move a file that appears, in the Court of Appeal’s phrase, dead on the vine.
Prejudice was limited, and it did not save him
Documents survived, the defendants admitted over-producing, no witnesses had died or moved. The Court found only a risk of an incomplete record. Because the test is conjunctive, the failure on explanation was enough.
Two deadlines, not one
This is the practical confusion the decision exposes, and it catches people who did everything right at the start.
| Deadline | Period | What it governs |
|---|---|---|
| Limitation period | 2 years | From the dismissal, to issue a claim. Miss it and you cannot start. |
| Rule 48.14 | 5 years | From issuing the claim, to set the action down for trial. Miss it and the claim you properly started is dismissed. |
Five years sounds generous, and the Court described it as a generous guidepost. It stops feeling generous when a mediation falls through, a year passes, another mediation is booked, and the calendar quietly runs out in the background. See limitation periods in Ontario.
Settlement talks can excuse delay, but not this much of it
In Apotex Inc. v. Relle, 2012 ONSC 3291, the Court held that a party should not be penalised for declining to run up litigation costs while genuinely engaged in settlement discussions. The Court here agreed with that principle.
It did not help, because the facts were different. In Apotex there was continuous dialogue across the period. Here there were two mediations across five years, separated by long stretches of inactivity that nothing accounted for.
Mediation protects the time it actually occupies. It does not protect the year either side of it.
What employees should take from it
Document the hard period while you are in it
The one stretch that was accepted here was the one with a letter behind it. If illness, treatment or a family crisis stops you engaging with your case, ask for a note at the time. Reconstructing it years later is what fails.
Working does not mean you were fine, but a court may read it that way
Returning to work was treated as evidence against incapacity. If you are functioning in some areas and not others, that needs explaining with evidence rather than left to inference.
Ask your lawyer where the file is
Responsibility for moving an action forward sits with the claimant. A file that only moves when the other side threatens a motion is a file heading for this outcome.
Know your set-down date
Ask for the date the five years expires and keep it somewhere you will see it. It is not a date most people are told, and it is the one that ended this claim.
A failed mediation restarts nothing
After an unsuccessful mediation the clock keeps running. Agree the next steps and dates before leaving, rather than waiting to see whether anything comes of it.
Losing costs money
The dismissal came with $8,000 in costs. A claim lost on delay is not simply a claim abandoned, it can end with the claimant paying the employer.
The employer side
For employers defending a stale claim, the decision is a reminder that delay is a live defence and that the record matters. The defendants here twice put the plaintiff on notice that they would move to dismiss, and both warnings appear in the reasons as evidence that the plaintiff moved only when prompted.
The prejudice finding cuts the other way. The Court noted that documents listed in an affidavit of documents carry a preservation obligation, and that a corporate sale in December 2024 did not excuse any loss of access, because the defendants knew the material had to be safeguarded. Over-producing documents also weakened the prejudice argument. See how an employment claim proceeds.
Frequently asked questions
I filed on time. Can my case still be dismissed?
Yes. Rule 48.14 requires an action to be set down for trial within five years of being commenced. A claim issued well inside the two-year limitation period can still be dismissed if it is not set down in time, which is what happened in Wallace.
What is the test at a status hearing?
The claimant must show an acceptable explanation for the delay and that the defendant would suffer no non-compensable prejudice if the action proceeds. The test is conjunctive: failing either branch is enough for dismissal, even where the other is satisfied.
Do mental health difficulties excuse delay?
They can, but the evidence has to be there. Only the period covered by a letter from a treatment facility was accepted here. Following Beshay v. Labib, 2024 ONCA 186, general assertions of illness or personal hardship without corroboration do not discharge the onus.
Does working count against me?
It can. The Court noted employment obtained in July 2021 and again in January 2025 during treatment, and treated it as showing he was not incapacitated. Where you are managing some things and not others, that distinction needs evidence rather than inference.
Does mediation pause the clock?
No. Genuine settlement activity can explain the time it occupies, on the principle in Apotex Inc. v. Relle, but it does not stop the five years running and it does not account for the gaps around it. Two mediations across five years did not save this claim.
What if the employer also did nothing?
A defendant’s lack of urgency can undercut a claim of actual prejudice, and that is a recognised factor. But the primary responsibility to advance the action rests with the claimant, and a defendant is not obliged to move a file that appears abandoned.
What happens to the claim now?
The action was dismissed and costs of $8,000 were ordered against the plaintiff. A dismissal for delay ends the claim; it is not a finding about whether the dismissal from employment was wrongful, and that question is now never answered.
How Achkar Law helps
Achkar Law acts for employees and employers in wrongful dismissal claims across Ontario. Wallace is a difficult decision to read, because the circumstances behind the delay were real. What it demonstrates is that the court asks for evidence of them at the time, and that a claim can be lost on the calendar rather than on the merits.
See our wrongful dismissal lawyers, our severance pay lawyers, or our employment disputes practice.
This article summarises a single decision and is general information about Ontario law, not legal advice. Wallace v. Decisive Technologies Inc. et al, 2026 ONSC 5246 was a ruling on a motion about delay, not a determination of whether the dismissal from employment was wrongful. Outcomes under Rule 48.14 turn closely on the facts and the evidence filed. Limitation periods and set-down deadlines are strict. Information is current as of September 2026. An employment lawyer can advise on your specific situation.
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