For trust claims made against estates in Ontario, the law has been murky as of late as to which limitation period applies to claims that involve real property. While trust claims against estates are typically subject to a two-year limitation period starting when the deceased passed away, as per subsection 38(3) of the Trustee Act, R.S.O. 1990, c. T.23, recent case law held that the ten-year limitation period set out in section 4 of the Real Property Limitations Act, R.S.O. 1990, c. L.15(the “RPLA”) applied instead to estate litigation involving real property: see Wilkinson v The Estate of Linda Robinson, 2020 ONSC 91. 

This issue has finally been decided by the Ontario Court of Appeal – in Ingram v. Kulynych Estate, 2024 ONCA 678, the court confirmed that trust claims against an estate ought to be subject to the Trustee Act and the two-year limitation period in section 38, unless specifically exempted.

In this case, the testator’s former common-law partner brought a claim against his estate more than four years following his death, claiming entitlement to a portion of his estate on the basis of constructive trust and unjust enrichment. Since the testator had rented his house out for years while residing with his common-law partner, she claimed that he had accumulated “significant value” at her expense and that she was entitled to share in his estate. In response, the estate sought the dismissal of the claim, as it had been commenced more than four years following the testator’s death, long after the limitation period set out in the Trustee Act had expired. 

Without considering the merits of the claim, the lower court found that the 10-year limitation period under section 4 of the RPLA applied andthat the claim could proceed. In making this determination, the court considered the “plain wording” of the statutory provisions, concluding that the equitable trust claim was not premised on “a wrong” committed by the deceased and therefore was not subject to section 38 of the Trustee Act. To learn more about this decision, which is unreported, see my previous blog post 10-Year Limitation Period Applies to Estate Litigation Involving Real Property.

On appeal, the lower court’s decision was reversed, with the Court of Appeal finding that the claim was subject to section 38 of the Trustee Act and thereby statute-barred. In reaching this decision, the court did not focus only on the plain language of the legislation. Instead, Justice Roberts explained that a different “analytical path” needed to be taken to determine which limitation period applied, in keeping with the court’s decision last year in Bank of Montreal v. Iskenderov, 2023 ONCA 528. Accordingly, the court considered the historical approach to the limitation period in issue, specifically the legislative purpose of section 38 of the Trustee Act and the judicial approach to interpreting it, and the nature of the relief sought, in addition to the actual statutory provisions.

Turning first to the legislative purpose of section 38 of the Trustee Act, Justice Roberts noted a number of appellate decisions, including Levesque v. Crampton Estate, 2017 ONCA 455 and Waschkowski v. Hopkinson Estate, 2000 CanLII 5646 (ON CA), where this provision has been described as a “legislative compromise”. But for section 38, death typically terminates a claimant’s ability to seek legal redress under the common law. The purpose of this provision, therefore, is to provide access to a remedy against an estate, but only “for a limited time without indefinite fiscal vulnerability to the estate”. Justice Roberts also noted a number of other considerations which indicate that the legislature intended a two-year limitation period to govern claims made against estates, including: 

• the fact that the discoverability principle cannot be used to extend the limitation period under section 38 of the Trustee Act;  
• the “long-established duty of estate trustees to administer estates promptly and diligently, including ascertaining the estate’s liabilities and debts as quickly as possible, as the expeditious administration of estates is in the interests of justice”; 
• the notion that “[w]ithout a time limit, an executor or an administrator would not feel free to distribute the assets of an estate until all reasonable possibilities of claim had been addressed”, as noted by the Supreme Court of Canada in Ryan v. Moore, 2005 SCC 38; and 
• how legislative intent of a shorter limitation period for estate matters permeates both estate legislation and family law legislation. Specific examples of this legislative intent include the 30-day time limit under section 44 of the Estates Act, R.S.O. 1990, c. E.21, the six-month limitation period for support claims under subsection 61(1) of the Succession Law Reform Act, R.S.O. 1990, c. S.26, and the short claim period for spousal elections under subsection 5(2) of the Family Law Act, R.S.O. 1990, c. F.3.

Justice Roberts ultimately concluded that including equitable trust claims against estates under section 4 of the RPLA would ignore “the language, legislative history, purpose, and judicial treatment of s. 38 of the Trustee Act” and would also “be inconsistent with the overarching interests of justice that estates be efficiently and quickly administered”. As an aside, the court also held that section 4 did not apply to the claim in any event, since the testator’s partner had not commenced an action to recover land – instead, her claim sought an interest in all of the assets held by the estate.

Enjoy the rest of your day!