There has quite rightly been a lot of discussion recently about the Court of Appeal’s decision in Ingram v. Kulynych Estate, 2024 ONCA 678. The apparent confirmation by the Court of Appeal the strict two-year limitation period from death under section 38 of the Trustee Act applies to equitable claims against a deceased individual even when the claim includes claims against real property, and the longer 10 year limitation period under section 4 of the Real Property Limitations Act does not apply, gave extra clarity when advising Estate Trustees about the risks associated with making distributions in the face of potential claims against an estate.
Great news if you are an Estate Trustee right? As section 38 of the Trustee Act is not subject to the “discoverability” principle, an Estate Trustee must now surely only need to wait two years from death to see if any claims materialize, after which they can see to distributing the estate safe in the knowledge section 38 of the Trustee Act would stop any future claims which could materialize. Like most things in life the answer is unfortunately not quite so straightforward, as the classic lawyer answer of “it depends” can also apply to the situation.
Take for example the question of whether the strict application of section 38 of the Trustee Act would apply to all potential equitable claims no matter who may bring them, including even claims which may be brought by parties who are under a legal disability whether on account of being a minor or otherwise.
Sections 6 and 7 of the Limitations Act, 2002 make it clear the standard limitation period under the Limitations Act does not run against an individual who is either a minor or incapable while the individual is not represented by a litigation guardian. Although the Trustee Act itself does not contain similar language potentially tolling section 38 as it relates to incapable individuals, section 38 of the Trustee Act is one of the sections included in the schedule to section 19 of the Limitations Act, with section 19(5) of the Limitations Act noting that any limitation periods mentioned in the schedule are still subject to sections 6 and 7 of the Limitations Act (i.e. the provisions tolling the limitation period against minor and incapable beneficiaries).
As a result of section 19(5) of the Limitations Act, the strict application of the two-year limitation period from death regardless of discoverability under section 38 of the Trustee Act does not apply against individuals who are under a legal disability while they are not represented by a litigation guardian. As a result, although the Court of Appeal’s analysis in Ingram v. Kulynych Estate can provide some comfort to an Estate Trustee wanting to make a distribution after two years from death, if it is a circumstance in which one of the claimants could be under a legal disability the Estate Trustee may still need to exercise caution.
Thank you for reading.