As Justice S. Nakatsuru observed in the Ontario Superior Court of Justice’s decision in Sinclair v. Harris, 2018 ONSC 5718, “[n]o one likes to see a limitation period applied to dismiss a case”. That being said, and as we will soon learn, even if they result in less than satisfactory conclusions, there are good reasons for having limitation periods, as this case aptly illustrates.
Virginia Jeanne Rock (the “Deceased”) passed away on November 17, 2015. In her will, the Deceased appointed Neil Sinclair and Lien Chao to be her estate trustees (the “Estate Trustees”).
While living, the Deceased was a professor at York University and came to mentor Frederick Harris and his wife, Merilyn. Before passing away, and on July 12, 2000, the Deceased advanced $137,333.34 to the Harrises so that they could purchase Merilyn’s mother’s house at 253 Centre Street, Beeton, Ontario (the “Beeton property”). The Deceased obtained the funds to advance to the Harrises by way of a mortgage secured against her Toronto home. The Harrises were registered on title as joint tenants and lived at the Beeton property while the Deceased occasionally visited.
On August 5, 2003, the Harrises sold the Beeton property for $225,000.00 and moved to, of all places, Hawaii. No monies were paid to the Deceased from this sale, but the Deceased and the Harrises remained in constant contact over the years.
When the Deceased passed away, the matter of the advanced $137,333.34 came to the attention of the Estate Trustees. The Estate Trustees proceeded to issue a Statement of Claim in the Ontario Superior Court of Justice on February 24, 2017 and sought the repayment of what they argued was the Deceased’s equitable interest in the Beeton property as they claimed that such funds were held by the Harrises on a resulting trust in favour of the Deceased’s estate.
For their part, the Harrises argued that the advanced funds were a loan and that the funds were applied to the Deceased’s investment in a corporation that was to manage the Beeton property and that was, interestingly, never incorporated. Regardless, the Harrises argued that in doing so the Deceased had released any further interest in the Beeton property. Moreover, the Harrises argued that since that time the Deceased had never made comments or suggestions that she should receive any money from the sale of the Beeton property, nor that she had any interest in the Harrises’ Hawaii home. Lastly, they claimed that the Estate Trustees’ claim was statute barred.
Both parties sought summary judgement.
Saving the test for summary judgement for another day, it is enough to say that Justice S. Nakatsuru did indeed find that there was no genuine issue here that would require a trial. Consequently, he proceeded to grant a summary judgement on the record as there was sufficient evidence to fairly and justly adjudicate the dispute. Such a judgement would also be a timely, affordable, and proportionate procedure for the court to undertake.
The Harrises rested their argument on the position that even if the Estate Trustees were successful in establishing a resulting trust (again, a test best saved for another day), their claim was well beyond the limitation period and was thus statute barred. They relied on the 10-year limitation period found in s. 4 of the Real Property Limitations Act, R.S.O. 1990, c. L.15 (the “RPLA”):
No person shall make an entry or distress, or bring an action to recover any land or rent, but within ten years next after the time at which the right to make such entry of distress, or to bring such action, first accrued to some person through whom the person making or bringing it claims, or if the right did not accrue to any person through whom the person claims, then within ten years next after the time at which the right to make such entry or distress, or to bring such action, first accrued to the person making or bringing it.
The Estate Trustees submitted that no limitation was applicable to a resulting trust in equity.
In canvassing the relevant authorities, his Honour placed emphasis on the Ontario Court of Appeal’s reasons in Waterstone Properties Corp. v. Caledon (Town), 2017 ONCA 623 where the court made it clear that the 10-year limitation period in s. 4 of the RPLA did not just apply to claims for the possession of land but would also encompass claims of ownership of land advanced by way of a resulting trust. As a result, his Honour held that the Estate Trustees’ claim was an action to recover land and as such fell within s. 4 of the RPLA.
Regarding the issue of when the Estate Trustees’ right to recover the land first accrued, or in other words when the clock started ticking, no matter how his Honour applied the discoverability principle to the facts of this case he could not escape the conclusion that the claim was indeed statute barred. For example, if the Estate Trustees’ right to bring the action accrued on the date that the resulting trust was created (i.e. July 12, 2000), then their claim would clearly offend the 10-year limitation period in s. 4 of the RPLA. If, however, it accrued at the time the Beeton property was sold (i.e. August 5, 2003), the claim would no less still be statute barred.
Given the above, his Honour somewhat reluctantly held at paragraph 30 of his reasons that:
Thus, it is not without some regret that I find this to be the inevitable result on the facts of this case. The defendants are entitled to summary judgement on the basis that the claims advanced are statute barred.
Though Justice Nakatsuru did express regret over arriving at this inevitable conclusion, he did take the opportunity to highlight some of the reasons for having limitation periods, even if they sometimes force the courts to arrive at less than satisfactory conclusions. As his Honour put it:
The defendants have moved away to a far-away foreign jurisdiction, have lived a settled and quiet life there for years, and are themselves advancing in their years. They now find themselves litigants in Ontario. They argue that their ability to properly defend this action is impaired by the loss of corroborative evidence and fading memories. Ms. Rock, who would have been a key source of evidence as to what happened in this case, has passed away.
All told, the Harrises were granted their summary judgement and the Estate Trustees’ action was dismissed.
Keep an eye on those limitation periods – they are there for a reason and have the ability to ultimately determine the outcome of a case.