May 14, 2014

The decision of the Ontario Divisional Court in Cerqueira Estate v Ontario provides a useful discussion of the differences between the limitation periods in the Limitation Act and in the Trustee Act.  Whereas limitation periods under the Limitations Act begin running as soon as the cause of the claim is discovered (the principle of discoverability), the limitation period under the Trustee Act begins running from the date of death of the deceased. The two year limitation period in the Trustee Act will be strictly enforced. As a result, trustees must keep in the limitation period in mind or risk running out of time to advance their claim.

Cerqueira Estate involved an attempt by estate trustees to bring a negligence action on behalf of the estate against the hospital where the deceased died.  The hospital brought a motion to dismiss the action as being statute barred. The motion judge reviewed s. 38(3) of the Trustee Act and agreed with the hospital.

Section 38(3) of the Trustee Act requires that any actions brought by or against an estate must be commenced within two years of the deceased’s death.  Section 38(3) reads:

  Actions by executors and administrators for torts

  38.  (1) Except in cases of libel and slander, the executor or administrator of any deceased person may maintain an action for all torts or injuries to the person or to the property of the deceased …

  Limitation of actions

(3) An action under this section shall not be brought after the expiration of two years from the death of the deceased.

The estate trustees tried to argue that the hospital had “fraudulently concealed” its actions from the estate trustees.  It was their position that because of the fraudulent concealment, the limitation period under the Trustee Act did not begin running until the date the estate trustees discovered the claim.

The court found that there was no evidence that the hospital engaged in any sort of fraudulent concealment, unconscionable behaviour, or attempt to withhold information from the estate trustees. Rather, the court held that the estate trustees were attempting to import the “discoverability” principle found in the Limitations Act under the guise of fraudulent concealment. Unlike the Limitations Act, there is no “discoverability” principle which can extend the two year limitation period set out in the Trustee Act.

Having failed to prove fraudulent concealment, the estate trustees were out of time to advance their negligence claim.

It is also worth noting that the court awarded very modest costs of the motion, suggesting that the courts are beginning to move away from generous cost awards in estate matters.