The Provincial Court of Alberta has denied an application from TD Bank Financial Group to dismiss a lawsuit against the bank by a numbered company, 1070070 Alberta Ltd., because the clock on the two-year limitation period was paused while the bank’s ombudsman considered the case.

The bank is being sued in connection with allegations that a mistaken disclosure about the company’s finances led to a client cancelling its contract with the firm, according to the judgment. Those allegations have not been proven.

The bank sought to have the case dismissed on the basis that the lawsuit came more than two years after the company learned of the disclosure in question.

According to the judgment, on Jan. 21, 2012, a subcontractor seeking to cash a cheque from the company was mistakenly told there were insufficient funds in the company’s account to cover the cheque. In an affidavit, the company claims that it suffered losses after the subcontractor failed to properly service a client amid concerns about the company’s ability to pay.

The company’s CEO, Jason Smith, first complained to the bank, and then to the TD Ombudsman on Mar. 23, 2012, complaining of the mistaken disclosure, the alleged improper refusal to honour the cheque, and the loss the firm allegedly suffered as a result. Ultimately, in September 2012, the TD Ombudsman declined the claim, concluding that there was no evidence that the company suffered any losses due to the disclosure.

The company filed its civil claim on Aug. 6, 2014. Depending on when the limitation period began to run, this may have meant that the claim came too late. However, the court ruled that: “An objective review of the evidence on this application is that [Jason] Smith learned of a financial loss arising from the disclosure on March 5, 2012, and not earlier.”

As a result, factoring in the 172 day pause in the limitation period while the ombudsman reviewed the case, the court concluded that the limitation period expired on Aug. 24, 2014. “As this claim was filed on Aug. 6, 2014, I find that the evidence on this application does not establish that the claim was filed beyond the agreed upon extended limitation period,” Judge G.W. Sharek said in the judgment