The Limitations Act, 2002, SO 2002, c 24, Sch B, brought order and clarity to limitation periods in Ontario. However, the Limitations Act did not displace all existing limitation periods established by statute. Several carve-outs which are particularly relevant to estates litigators includes the Real Property Limitations Act, RSO 1990, c L.15 and s. 38(3) of the Trustee Act, RSO 1990, c T.23 (see ss. 2(1)(a) and 19(1) of the Limitation Act). Equitable principles may also apply to extend or delay the running of a limitation period, such as the doctrine of fraudulent concealment.
As a result, determining whether a claim is out of time is not as straightforward as it would appear at first blush. Ahead are three recent cases involving limitation disputes.
Round 1: Section 4 vs. Section 16 of the Limitations Act
Piekut v. Romoli, 2020 ONCA 26, involves a showdown between s. 4 of the Limitations Act (which establishes a general two-year limitation period) and s. 16(1) of the Limitations Act (which lists the types of proceedings which are exempt from any limitation period).
Mr. and Mrs. Wroblewski owned five properties in Toronto. In 2001, they executed wills confirming that their property would be divided equally between their three adult children (Helen, Krystyna, and Victor) on their deaths.
Mr. and Mrs. Wroblewski died within a few months of each other in 2008. Following their deaths, Krystyna asserted that her parents had executed codicils to their wills in July 2006 which gifted two of the five properties to her.
Seven years later, in 2015, Helen brought an application seeking a determination of whether the codicils were valid. In response, Krystyna brought a motion for summary judgment seeking to dismiss Helen’s application on the basis that it was statute-barred.
Helen admitted that she knew about the codicils by 2009. Krystyna argued that she “discovered” her claim at that time, such that the Helen had two years from that date to start her legal proceeding pursuant to s. 4 of the Limitations Act. Having waited at least six years, Krystyna argued that Helen’s application should be dismissed.
In response, Helen argued that s. 16 of the Limitations Act applied. Subsection 16(1)(a) states that there is no limitation period in respect of “a proceeding for a declaration if no consequential relief is sought.” In this case, no steps had yet been taken to administer their parents’ estates. As a result, Helen argued that she was simply seeking a declaration from the court as to whether or not the codicils were valid.
The motions judge agreed with Helen. The court held that Helen’s application was restricted to declaratory relief. While the determination of whether the codicils were valid had consequences (it would inform which documents could be submitted for probate), that was distinct from seeking consequential relief in the proceeding itself (for example, Helen was not seeking to remove Krystyna as estate trustee or to vest the properties in any particular individual).
Krystyna appealed. The Court of Appeal upheld the motion judge’s decision. Among other things, the Court of Appeal held that Helen was entitled to seek declaratory relief in these circumstances – no party had made any effort to propound the will or move forward with the administration of the estates since 2008. In these circumstances, the Court of Appeal held that it was appropriate for Helen to seek a declaration of the validity of the codicils so that the estate administration could, at long last, move forward.
Round 2: Real Property Limitations Act vs. Trustee Act
Next is the case of Wilkinson v. The Estate of Linda Robinson, 2020 ONSC 0091. At issue was whether the claim was subject to the 10 year limitation period established under s. 4 of the Real Property Limitations Act, or the two year limitation period established under s. 38(3) of the Trustee Act.
Mr. Wilkinson and Ms. Robinson were common law spouses. They lived together in Ms. Robinson’s house in Oshawa. Ms. Robinson passed away in 2015. In her will, she gifted Mr. Wilkinson the right to continuing living in her house for the next two years. After that time, the estate trustee was directed to sell the house and distribute the funds to the residual beneficiaries, being Ms. Robinson’s three children.
Mr. Wilkinson did not contest the will. However, when it came time for Mr. Wilkinson to move out of the house in 2017, he refused to leave. Instead, he commenced an application against Ms. Robinson’s estate for a declaration that he held an equal interest in the house by way of constructive trust.
The estate trustee brought a motion to dismiss Mr. Wilkinson’s application on the basis that it was out of time pursuant to s. 38 of the Trustee Act. In response, Mr. Wilkinson argued that the appropriate limitation period was s. 4 of the Real Property Limitations Act.
The question looked at by the court was whether the claim for a constructive trust was a claim to land (such that the Real Property Limitation Period applied), or a claim for a wrong against a person (such that the Trustee Act applied).
In reaching its decision, the court cited the Court of Appeal decision in McConnell v. Huxtable, 2014 ONCA 86 (at paragraph 15): “A claim for constructive trust … is a claim for a right to the land.” As a result, the court held that the 10 year limitation period set out in the Real Property Limitations Act applied. Mr. Wilkinson was free to move forward with his application.
Round 3: Trustee Act vs. Fraudulent Concealment
The final throw down takes place in Zachariadis Estate v. Giannopoulos, 2019 ONSC 6505. This case involved a dispute over whether there was fraudulent concealment (which would suspend the running of the limitation period until such time as the other party could reasonably discover the cause of action).
The deceased was a physician. After his divorce in the mid-1980s, he became estranged from his two daughters. The estrangement lasted over 20 years until his death; the deceased did not attend his daughters’ weddings or meet his grandchildren.
In or around 1996, the deceased began a romantic relationship with a pharmacist. In 2014, the deceased moved in with the pharmacist and they decided to marry. A few months later, the deceased gifted the pharmacist $700,000.
Unfortunately, the deceased was diagnosed with cancer at the end of 2014. The deceased died in February 2015, before he and the pharmacist could wed.
Because the deceased died without a will, his daughters inherited his estate. They were appointed as his estate trustees in December 2015.
In December 2017 (two years and 10 months after the deceased’s death), the deceased’s daughters commenced an action against the pharmacist to recover the $700,000 gift the deceased had made to her. In response, the pharmacist brought a motion for summary judgment on the basis that the daughters were out of time to commence the claim pursuant to the two-year limitations period imposed on estate trustees in s. 38(3) of the Trustee Act. Unlike the general limitations period established under s. 4 of the Limitations Act, the two-year limitation period established under s. 38(3) of the Trustee Act begins to run at the time of death, not from the time that the claim is discovered.
The parties did not dispute that the Trustee Act applied in this case. The daughters further admitted that they discovered the $700,000 gift in early 2016, leaving them approximately a year to commence an action within the limitation period. However, they argued that the equitable doctrine of fraudulent concealment applied in these circumstances, which would suspend or extend the limitation period.
In order for the doctrine of fraudulent concealment to apply, three elements had to be established:
- The daughters and the pharmacist had a special relationship to each other;
- The pharmacist’s actions were unconscionable in light of their special relationship; and
- The pharmacist actively concealed her wrongdoing.
The court held that the daughters were unable to establish any of these elements:
- The daughters and the pharmacist had no relationship with each other, let alone a special one. They met for the first time a few days before the deceased died;
- The pharmacist was under no obligation to disclose to the daughters that she had received a gift from her long-time boyfriend before he died; and
- The pharmacist did not actively conceal the gift from the daughters – when asked, she did not lie or mislead the daughters about the gift.
On this basis, the court held that the strict two-year limitation period imposed by s. 38(3) of the Trustee Act applied and the daughters were out of time to bring their claim. As a result, the pharmacist’s motion for summary judgment was granted.
The battle between limitation periods is a winner-takes-all scenario – at stake is the opportunity to move the lawsuit forward. Failing to understand which limitation period applies means risking having the lawsuit summarily dismissed. Litigators take heed – make the time to familiarize yourself with the Limitations Act and its carve outs.