When most people reference a “limitation period” in Ontario, chances are that they are referencing the limitation period imposed by the Limitations Act, 2002, which generally provides an individual with two years from the date on which a claim is “discovered” to commence a claim before it is statute barred. Although an individual is presumed under the Limitations Act to have “discovered” the claim on the date that the loss or injury occurred, if it can be shown that the individual did not “discover” the claim until some later date the limitation period will not begin to run until that later date, potentially extending the limitation period for the claim to be brought for many years beyond the second anniversary of the actual loss or damage.
Although the limitation period imposed by the Limitations Act must be considered for situations in which an individual intends to commence a claim against someone who has died, individuals in such situations must also consider the much stricter limitation period imposed by section 38 of the Trustee Act.
Section 38 of the Trustee Act imposes a hard two year limitation period from the date of death for any individual to commence a claim against a deceased individual in tort. Unlike the limitation period imposed by the Limitations Act, the limitation period imposed by section 38 of the Trustee Act is not subject to the “discoverability” principle, but is rather a hard limitation period that expires two years from death regardless of whether the individual has actually yet to “discover” the claim. If an individual starts a claim against a deceased individual in tort more than two years after the deceased’s individual’s death it is statute barred by section 38 of the Trustee Act regardless of when the claim was “discovered”.
The non-applicability of the “discoverability” principle to the two year limitation period imposed by section 38 of the Trustee Act is confirmed by the Ontario Court of Appeal in Waschkowski v. Hopkinson Estate, (2000) 47 O.R. (3d) 370, wherein the court states:
“As indicated earlier in these reasons, based on the language of the limitation provision, the discoverability principle does not apply to s. 38(3) of the Trustee Act. The effect of s. 38(3) is, in my view, that the state of actual or attributed knowledge of an injured person in a tort claim is not germane when a death has occurred. The only applicable limitation period is the two-year period found in s. 38(3) of the Trustee Act.” [emphasis added]
Although the Court of Appeal in Waschkowski v. Hopkinson Estate appears firm in their position that the court should not take when the claim was “discovered” into consideration when applying the limitation period from section 38 of the Trustee Act, it should be noted that in the recent decision of Estate of John Edward Graham v. Southlake Regional Health Centre, 2019 ONSC 392 (“Graham Estate“), the court allowed a claim to brought after the second anniversary of the deceased’s death citing “special circumstances”. Although the Graham Estate decision is from the lower court while the Waschkowski v. Hopkinson Estate decision is from the Court of Appeal, such that it is at least questionable whether it has established a new line of thinking or was correctly decided, the Graham Estate decision may suggest that the application of the limitation period from section 38 of the Trustee Act is not as harsh as it was once considered. More can be read about the Graham Estate decision in Garrett Horrocks’ previous blog found here.
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The recent Ontario Superior Court of Justice decision in F.K. v. E.A. addresses limitation periods and discoverability in the context of setting aside a marriage contract.
By way of background, husband and wife began their relationship in 2000, cohabitating in June of 2004, and marrying on July 20, 2005. Shortly before marriage, on July 14, 2005, the (soon to be) husband and wife entered into a marriage contract. The marriage contract was prepared by the wife who obtained a template off the internet. The husband and wife eventually separated on August 13, 2012. A dispute arose over certain terms of the marriage contract. The husband thereafter brought a claim on August 24, 2017 for spousal support, equalization, as well as setting aside the marriage contract. Two of the issues that the Court addressed included whether (i) the relief sought to set aside the marriage contract is subject to the two year limitation period and, if so, (2) whether the husband brought his claim in time.
Regarding the first issue, the Court found that the husband’s claim to set aside the marriage contract is a claim as defined in section 1 of the Limitations Act and therefore subject to the two year limitation period.
As it relates to the second issue of discoverability, evidence was adduced that the husband met with a lawyer in October 2012 to discuss the dispute with his wife and certain legal issues arising with respect to the marriage contract. Based on this evidence, the Court established that by that date at the latest, he first knew: that the injury, loss or damage had occurred; that the injury, loss or damage was caused by or contributed to by an act or omission; and, that the act or omission was that of the person against whom the claim is made. The Court dismissed the husband’s claim finding that the two years began running the date he met with his lawyer.
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Section 38 of Ontario’s Trustee Act provides that an estate trustee may commence or maintain, on behalf of a Deceased individual, an action in tort that could otherwise have been commenced by that individual. As discussed in related blogs on this section, such actions are ordinarily subject to a stricter limitation period than that of other civil claims.
In typical civil claims, Ontario’s Limitations Act imports a two-year limitation period which begins to run as of the date the cause of action was discovered. The limitation period under the Trustee Act, however, begins to run as of the Deceased’s date of death and is not subject to this principle of discoverability, unless the Plaintiff can satisfy the Doctrine of Special Circumstances. The decision in Graham Estate v Southlake Regional Health Centre recently contextualized this Doctrine and, in so doing, suggests that the principle of discoverability will not always be dispensed with.
In May 2008, the Deceased in Graham Estate underwent a botched surgical procedure that ultimately gave rise to a claim in medical negligence. The Deceased subsequently died in February 2009, and a claim was commenced by the Deceased’s Estate in May 2010, well within the two-year limitation period under section 38(3).
As part of this initial claim, the Estate obtained disclosure of relevant medical records relating to the operation. In or about 2015, more than four years after the limitation period had expired, counsel for the Estate subsequently received an additional unprompted cache of records that had not been previously disclosed. This new set of records gave rise to a claim against a party who was not a party to the existing litigation.
In February 2017, the Estate subsequently brought a motion seeking to add the Proposed Defendant as a party to the litigation. At issue in this decision was whether the Estate was out of time as a result of the strict operation of section 38(3) of the Trustee Act. The Court ultimately held that the Estate ought to succeed on the basis of the Doctrine of Special Circumstances.
As the claim against the Proposed Defendant was, on its face, out of time, the Estate argued that the Doctrine of Special Circumstances ought to apply. This Doctrine is comprised of a two-step test to be satisfied by the Plaintiff:
- The Plaintiff must rebut the presumption of prejudice that would result to the party to be added; and
- The Plaintiff must satisfy the Court that special circumstances justify the addition of that party.
At the outset, the Court held that the loss of a limitation defence immediately gave rise to a presumption of prejudice in favour of the Proposed Defendant. However, the Estate identified a number of factors that operated to rebut the presumption of prejudice, notably:
- The claims to be made against the Proposed Defendant were identical to those already commenced against the existing Defendants;
- The action against the Proposed Defendant was tenable in law; and
- There would be no procedural unfairness to the Proposed Defendant if he were added as a party, as no trial date had been set and he would have sufficient time to prepare a defence.
The Court then considered whether there were any equitable special circumstances that merited the addition of the Proposed Defendant as a party. As above, the Court held that there were, but in so doing, in effect considered factors not unlike the discoverability principle.
Chiefly, the Court noted that the Proposed Defendant’s role in the circumstances giving rise to the initial negligence claim had not become apparent until the limitation period had already expired. The Court found that the Estate had made efforts to obtained the relevant records well within the limitation period, and that the records implicating the Proposed Defendant had erroneously been omitted. The Court held that this was not a case in which the Estate was “handicapped by its own inaction.”
While section 38(3) of the Trustee Act on its face imports a strict limitation period, the Graham Estate decision nonetheless suggests that the courts will consider discoverability, among other factors. That said, this analysis is only engaged if the presumption of prejudice is rebutted.
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When does the limitation period start running for a challenge to the validity of a Will? A recent decision at the Superior Court of Justice dealt with this very question and found that the limitation period may continue to run even after two years from the date of death of the testator.
In the decision of Shannon v Hrabovsky, 2018 ONSC 6593, the testator prepared a will in 2006 which he provided to his daughter following its execution. However, the testator subsequently executed a will in 2007 (the “2007 Will”) which essentially disinherited his daughter to the benefit of his son. The daughter was not provided with a copy of this will, but the daughter was aware that the testator attended a lawyer’s office in 2007 and signed something. The testator died on November 15, 2014 and the daughter was provided a copy of the 2007 Will in January 2015 when her brother and uncle applied for a Certificate of Appointment of Estate Trustee under the 2007 Will.
The daughter commenced a challenge to the validity of the Will on December 23, 2016. This claim was commenced more than two years after the testator’s date of death, but less than two years from when the daughter received a copy of the 2007 Will in January 2015. As a preliminary issue, Justice Wilton-Siegel determined the issue of whether the limitation period for bringing a challenge to the validity of the 2007 Will had expired.
In particular, Justice Wilton-Siegal examined the issue of whether the discoverability principle applies in the case of will challenges. Under the Limitations Act, 2002, SO 2002, c 24, sched B, a claim generally may not be commenced after the second anniversary of the day on which the claim is discovered. Section 5(1) of that act sets out that:
5 (1) A claim is discovered on the earlier of,
(a) the day on which the person with the claim first knew,
(i) that the injury, loss or damage had occurred,
(ii) that the injury, loss or damage was caused by or contributed to by an act or omission,
(iii) that the act or omission was that of the person against whom the claim is made, and
(iv) that, having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it; and
(b) the day on which a reasonable person with the abilities and in the circumstances of the person with the claim first ought to have known of the matters referred to in clause (a).
(2) A person with a claim shall be presumed to have known of the matters referred to in clause (1) (a) on the day the act or omission on which the claim is based took place, unless the contrary is proved.
Justice Wilton-Siegel referred to the decision in Leibel v Leibel, 2014 ONSC 4516 where the Court found that as a will speaks from the date of death, the limitation period begins running from the date of death. In Shannon v Hrabovsky, it appears that the respondents attempted to argue that the discoverability principle did not apply and that a will challenge can only be brought within two years of the date of death. Justice Wilton-Siegel found, however, that the discoverability principle continues to apply to will challenges and that Leibel v Leibel was not to be taken as meaning that such a principle did not apply.
In the circumstances of the case, Justice Wilton-Siegel found that the will challenge was not statute-barred as the daughter had not discovered the existence of the 2007 Will until she was provided with a copy in January 2015.
The circumstances of each case are unique and while some might be concerned that this case opens up potential claims against the validity of a Will long after a testator has passed away, it is important to remember that the Court will examine the discoverability principle with respect to whether a reasonable person ought to have discovered the claim.
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The doctrine of constructive trust was recently applied earlier this year to register a transfer of a parking space to an applicant who entered into an agreement of purchase and sale of a condominium in 1997.
In Chopra v. Vincent, 2015 ONSC 3203, the Applicant Chopra agreed to purchase a condo from the Respondent Vincent on June 30, 1997. The Agreement of Purchase and Sale between the parties expressly provided for the purchase of a condominium unit and a related parking space. Since 1997, the Applicant Chopra lived in the condo unit, parked in the parking space, and paid related expenses such as common area charges and property tax.
18 years later, the Applicant discovered that the lawyers for the vendor and purchaser neglected to include a transfer of the parking space which has a separate PIN from the condominium unit. Once discovered, the Applicant Chopra sought a declaration of his ownership of the parking space in order to sell the parking space along with the condominium unit while the Respondent Vincent could not be located.
The Court found that equitable title to the parking space was transferred to the Applicant, notwithstanding the inadvertence of the legal transfer of title, on the basis that the Applicant had paid the agreed purchase price in full consideration for a transfer of the condominium unit and the parking space.
According to Justice Dunphy,
“The right of a beneficiary of a constructive trust to enforce his or her title as against the trustee is governed by the Real Property Limitations Act, R.S.O. 1990, c. L-15 (the “RPLA”): McConnell v Huxtable, 2014 ONCA 86 (CanLII). Section 2(1)(a) of the Limitations Act, 2002 provides that it does not apply to a proceeding to which the RPLA applies. Under the RPLA, there is a ten year limitation period (RPLA, s. 4) for an action to claim an interest in land. However, where the interest in land claimed is an equitable title under a constructive trust, the limitation period is subject to the principle of discoverability (McConnell v. Huxtable, supra, at para. 53-54) or possibly is governed by s. 5(1) of the RPLA and only begins to run from the time of dispossession (which has not occurred). In either event, there can be no question of the limitation period having run since the applicant has not been dispossessed and only discovered the error in connection with preparing to sell his condominium over the past few months and has acted promptly.”
Thanks for parking your attention here as always!
As lawyers well know, all lawsuits must be instituted within the applicable limitation period as a first hurdle to successful litigation. While the time periods within which one must start a claim are clear in the Limitations Act and in other legislation, the time from which those periods start to run is not always so clear and may be a matter for a judge to decide.
In Zurba v. Lakeridge Health Corp. (2010), 99 O.R. (3d) 596 (ON SCJ), the plaintiff fractured his ankle in a way that exposed his bone and internal tissues to grass and dirt in August of 2003. The doctor who initially treated the plaintiff cleaned and dressed the wound with a cast instead of proceeding with the necessary surgery. Significant ongoing infection at the fracture site later caused another doctor to suggest amputation. The plaintiff refused and after lengthy course of surgeries and therapy with no improvement, the plaintiff retained counsel and initiated the law suit. The plaintiff subsequently received an expert medical opinion from an orthopaedic expert that the treating doctor’s care was negligent.
The Ontario Superior Court considered the Limitations Act, 2002 and its applicability with respect to the discoverability of the cause of action. Lauwers, J. found that a plaintiff must not only know of the injury but must also know that someone erred before the cause of action crystallizes and the limitation period commences running.
The Court went on to establish two categories of cases: 1) Where an expert opinion is not necessary to know whether to institute an action because all the material facts are known; and 2) where an expert opinion is required to trigger the limitation period because all material facts cannot be known without one. In Zurba, notwithstanding that the statement of claim was issued before the expert medical report was obtained, the Court found that it could consider the report with respect to discoverability in order to determine when the limitation period began to run.
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