June 3, 2014

McConnell v Huxtable (ON CA) is a family law dispute with implications for estates and trust law.

The parties were in a relationship from 1993 to 2007 – they were not married and did not have children together.

The common law husband bought and sold two houses during the relationship and owned a third home at the time the relationship ended in 2007 (he and his common law wife lived in the home together). All the money used to purchase the home was provided by the husband and all the properties were held in the husband’s name alone.

At the time of their separation in 2007, the wife claimed to be joint owner of the home in which they lived. However, the separation moved forward without the matter of the ownership of the home being settled.

In 2012, five years after their separation, the ex-wife again raised the issue of her ownership of the home when her ex-husband attempted to sell the home.

The ex-wife registered a certificate of pending litigation (CPL) on the property and brought a claim for unjust enrichment against her ex-husband. She sought an order imposing a constructive trust over the home or, in the alternative, monetary damages.

The ex-husband brought a motion to dismiss his ex-wife’s claim, arguing that his ex-wife was out of time to bring the claim under s. 4 of the Limitations Act. That section requires all proceedings to be commenced within 2 years from the date the claim arose or was discovered.

The Court of Appeal upheld the finding of the trial judge that the Real Property Limitations Act (“RPLA”) applied, not the Limitations Act. The RPLA imposes a 10 year limitations period to commence any action involving an interest in land. Section 4 of the RPLA reads:

Limitation where the subject interested

4.  No person shall … bring an action to recover any land or rent, but within ten years next after the time at which the right to … bring such action, first accrued to some person through whom the person making or bringing it claims…

The Court held that just because the ex-wife might be awarded her alternative claim for monetary damages, the nature of her claim was not changed; it was still an action “to recover land.” In addition, the Court held that a constructive trust over land is a viable remedy for a claim of unjust enrichment. As a result, this was an “action to recover land,” meaning the 10 year limitation period applied.

This decision suggests that anytime a constructive trust over land is sought, even as an alternative ground of relief, the 10 year limitation period applies (as opposed to the shorter 2 year limitation period).

This case will have an impact in the estates context, where claims for unjust enrichment and constructive trusts are common. By linking claims of unjust enrichment and constructive trusts to land, the limitation period is stretched out to 10 years, regardless of whether the claim arises in the context of a business or domestic relationship.