Tag: limitation period
My colleague, Sydney Osmar, blogged in June on a summary of actions taken by the Ontario Legislature to issue, and later extend, the terms of certain orders issued in the days following the provincial state of emergency declared on March 17, 2020. These orders were intended to provide direction in light of the procedural and administrative concerns arising as a result of the immediate suspension of courthouse operations that followed the declaration of the state of emergency and, in particular, the effect of the declaration on litigation time periods provided under the Rules of Civil Procedure.
The Legislature introduced two key regulations in an effort to provide guidance to the litigation bar. O.Reg 73/20, made on March 20, 2020, provided for an indefinite suspension of any limitation periods or period of time within which litigation steps were to be taken, as established by statute, by-law, or order of the Ontario government, for the duration of the state of emergency.
O.Reg 259/20, made on June 5, 2020, amended O.Reg 73/20 primarily in decoupling the suspension from the “duration of the emergency” to a fixed date of September 11, 2020, in order to provide certainty and predictability to members of the litigation bar. The Emergency Management and Civil Protection Act provides that temporary suspensions by emergency order shall not exceed 90 days, hence the choice of a fixed date of September 11. However, the Legislature remains empowered to issue further orders extending the suspension beyond the chosen date should such deferrals be required in light of the pandemic.
As of the posting date of this blog, no further guidance or direction has been delivered by the Legislature with respect to a suggested extension of the suspension period. Although the circumstances are such that direction in that respect may be received on minimal notice, this blog is intended to serve as a mere reminder of the upcoming expiration of the suspension period or, in other words, the resumption of applicable litigation timings.
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Few would have the audacity (or the poor judgment) to perform surgery or fly an airplane without requisite training. The hero of The Simpsons, Homer, (a sad example of his namesake), can often be seen, rather comically, making errors on the job at the Springfield nuclear power plant – and yet there is nothing funny, in real life, about an untrained nuclear technician staring down a crisis. Our world is no longer one in which most people provide all their wants for themselves; instead, trades are highly specialized. Lawyers, for instance, will not typically build their own houses – most, indeed, would not know how to build their own tables. There is temptation, however, in self-sufficiency: one may save money in cutting one’s own hair and gain pride in cooking one’s own meals; and in case of failure, one may always pay one’s expert barber to salvage one’s botched haircut and scramble to one’s favourite restaurant to relieve one’s palate.
Whereas the consequences of conducting surgery or flying an airplane without training are readily apparent to the imagination, the risks associated with self-representation in court can be deceiving. Some think they are – or truly are – qualified to argue their own cases if they do some private research, study the procedures and access free legal resources at their disposal. They may find the endeavour exciting, a personal rite of passage or a challenge from which they may grow. It is a sad truth, as well, that many self-represented litigants simply do not have the financial means to afford legal counsel. Options available to litigants of more modest means – such as legal aid, pro bono and hiring a lawyer on contingency – are often imperfect (and, alas, sometimes unattainable), but they may be preferable to going into the legal fray alone. In any case, Bristol v. Bristol,  O.N.S.C. 1684 (“Bristol”), is a stirring instance of what may go wrong with respect to legal self-representation.
The facts in Bristol are as follows: the matriarch of the Bristol family, Elizabeth, passed away on December 6, 2016, survived by ten children; in 2002, she executed a will in which she distributed her estate equally amongst the ten children; in 2004, she left another will by which she disinherited nine of the children and left her entire estate to Berry, the tenth child. Her stated purpose for disinheriting the nine others was that she had assisted them sufficiently throughout their lives.
On December 30, 2016, one of the disinherited children, Stephanie, filed a Notice of Objection, on behalf of herself and four of her siblings, alleging incapacity and undue influence with respect to the latter will. Berry filed his Notice to Objector on July 18, 2017, and then Stephanie filed a Notice of Appearance on July 25, 2017. After almost two years, during which time Stephanie was allegedly waiting for Berry to “take a step in the probate proceeding”, Stephanie brought a Motion for Directions. This was on April 23, 2019. The Court indicated that she should issue an Application within 45 days but without prejudice to Berry bringing a motion to dismiss on the grounds that the Application was statute-barred, for sections 4 and 5 of the Limitations Act prohibit a proceeding from commencing more than two years after the day on which the claim was discovered.
In its decision, the Court found that the steps Stephanie had taken, namely filing the Notice of Objection and Notice of Appearance, did not commence a proceeding; the former is merely a “caveat” or “caution”, not a proceeding, and the latter does not institute proceedings. She needed to issue an Application. It was next determined that the date of discoverability was either December 6, 2016 (the date of death) or at the latest December 30, 2016 (the date of the Notice of Objection), and that, therefore, the two-year limitation period had expired. As a last resort, Stephanie argued that she was seeking declaratory relief and that no limitation period thus barred her. The Court decreed that “will challenges cannot be framed as declaratory relief”.
There was sympathy for Stephanie’s position, but the Court declined to make an exception for her merely because she was self-represented:
“The Applicant insisted that because she was self-represented and because the Respondent had taken no steps, she was forced to bring a Motion for Directions in April 2019. It was only on the motion date that she learned that she was required to actually issue an Application. While all of this is unfortunate, it does not permit the Applicant to escape the presumption in ss. 4 and 5 of the Act.”
In consideration of Stephanie’s position, however, the Court opted not to order costs for Berry, to which he would have been entitled “in normal circumstances”.
In conclusion, we may finish with three observations. Firstly, as Berry won the case, the Court may have awarded costs against Stephanie. As was mentioned in the decision, estates litigants may have costs awarded against themselves personally – the estate no longer by necessity absorbs the legal costs for all parties. Secondly, had Stephanie hired counsel, it is likely that this procedural error would have been avoided and the will challenge determined on its merits. Engaging counsel would have perhaps carried greater financial risks, but the chance of gain (winning the case, settling) would have also sweetened the prospect. Lastly, Bristol is another lesson that litigants, both trained and untrained, must beware of time, and the limitations it summons, for it can be a stern and unconquerable foe.
Ian Hull & Devin McMurtry
The main issue on appeal was whether Justice Dietrich was right in finding that the applicant could still ask the court to determine whether certain codicils were valid (or invalid) seven years after death. Justice Dietrich based her limitations analysis on whether this proceeding would fall under section 16(1)(a) of the Limitations Act, 2002 where there is no limitation period in respect of “a proceeding for a declaration if no consequential relief is sought”.
In her reasons, Justice Dietrich distinguished the case before her from the other limitations cases that have applied the two-year, basic limitation period to will challenges: Leibel v. Leibel, 2014 ONSC 4516, Birtzu v. McCron, 2017 ONSC 1420, and Shannon v. Hrabovsky, 2018 ONSC 6593. The case before her was different from Liebel, Birtzu, and Shannon because nothing had been done by the respondent beneficiary to propound the codicils that she had an interest in. If the proceeding was started differently in 2015, by the very beneficiary who has an interest in the codicils, then the estate trustee would have a limitations defence against the beneficiary. Since the beneficiary had done nothing, it remained opened to the estate trustee to commence an application for declaratory relief. Such declaratory relief is “a formal statement by a court pronouncing upon the existence or non-existence of a legal state of affairs.’ It is restricted to a pronunciation on the parties’ rights” (see para. 46, 2019 ONSC 1190).
The Court of Appeal agreed that there was no limitation period in this case because the applicant did not seek consequential relief in addition to a determination of the validity or invalidity of the codicils. The Will had not been probated and nothing had been done for seven years to resolve the issue.
“In these circumstances, Helen was entitled to seek declaratory relief, simply to establish the validity, or lack of validity, of the codicils – to define the rights of the parties in order to avoid future disputes.”, Strathy C.J.O., MacPherson J.A., and Jamal J.A.
Thanks for reading and more on these limitation cases to follow later this week!
We often encounter situations where the administration of an estate is complicated by the fact that the deceased was married multiple times, and there is a clash between children from a prior relationship and a subsequent spouse (and/or his or her children). Sometimes, a couple will be closer with one set of children, which may lead to disputes following both of their deaths. Estate of Ronald Alfred Craymer v Hayward et al, 2019 ONSC 4600, was one such case, in which Joan and Ronald had been closer for much of their 32-year marriage with Joan’s children from a prior marriage. After Joan and Ronald died in 2016 and 2017, respectively, a dispute arose between their adult children.
While Ronald’s will named his own children as beneficiaries of his estate, his Continuing Power of Attorney or Property (like Joan’s), named Joan’s daughter as alternate attorney for property, should his spouse be unable to act. Joan had acted as Ronald’s attorney for property from 2006, during which he had suffered a stroke, until her death. In 2011, Joan had transferred the couple’s matrimonial home, previously held jointly, to herself alone. During this period, however, there had been no request by Ronald’s children for an accounting. Joan’s daughter had subsequently acted as Ronald’s attorney for property and as estate trustee for Joan’s estate over the period of approximately eight months between the deaths of Joan and Ronald.
Ronald’s children sought a passing of accounts with respect to the management of their father’s property by Jane and her daughter and, specifically, challenged the change in title to the matrimonial home. The Court referred to Wall v Shaw, 2018 ONCA 929, in stating that there is no limitation period to compel an accounting. Accordingly, it considered the only bar to this relief to be laches and acquiescence. Justice C.F. de Sa commented that the there was nothing improper in the manner in which the plaintiff had sought the accounting and, furthermore, that the delay was not unreasonable in the circumstances. The Court permitted the claim regarding the matrimonial home to continue, but nevertheless declined to order a passing of accounts:
…[O]rdering the passing of accounts is discretionary. And in my view, to require an accounting at this point would result in a clear injustice as between the parties.
[Joan’s daughter,] Linda, as Estate Trustee, is hardly in a position to account for Joan’s spending while she was alive. Yet, to require a passing of accounts at this point would subject every line of Joan’s spending (as Attorney for Property) to the court’s scrutiny. Moreover, as the Estate Trustee, the Defendant would be liable to account for any unexplained expenditures.
Indeed, it is unclear that the spending was spurious given the nature of the relationship between Joan and Ronald. Joan would have been spending the money as his wife as much as his Attorney for Property. The failure to keep detailed accounts is hardly suspicious given the circumstances here.
…In the circumstances, I will not order a passing of accounts.
This decision is interesting in that it clearly considers the practicality of a passing of accounts and the inability of the deceased attorney’s estate trustee to properly account in the absence of relevant records in determining that it would be unjust to order a passing of accounts, despite there being no other apparent legal reason not to do so.
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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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A recent decision of the Ontario Court of Appeal considered whether s. 7 of the Limitations Act, 2002 applies to extend the time within which an estate trustee can bring a claim that arose prior to a deceased person’s death.
Section 7 of the Limitations Act, 2002 provides as follows:
7 (1) The limitation period established by section 4 does not run during any time in which the person with the claim,
(a) is incapable of commencing a proceeding in respect of the claim because of his or her physical, mental or psychological condition; and
(b) is not represented by a litigation guardian in relation to the claim.
(2) A person shall be presumed to have been capable of commencing a proceeding in respect of a claim at all times unless the contrary is proved. 2002, c. 24, Sched. B, s. 7 (2).
(3) If the running of a limitation period is postponed or suspended under this section and the period has less than six months to run when the postponement or suspension ends, the period is extended to include the day that is six months after the day on which the postponement or suspension ends.
In Lee v Ponte, 2018 ONCA 1021, the estate trustee of the deceased person commenced a claim more than 2 years after the date on which the limitation period began to run, as determined by the trial judge. As a result, the action was statute barred.
The estate trustee appealed, taking the position that section 7 of the Limitations Act, 2002 should be “liberally construed”. The estate trustee argued that a deceased person is incapable of commencing a proceeding because of “his or her physical, mental or psychological condition”. He also argued that policy reasons support allowing additional time for an estate trustee or litigation guardian to be appointed and take over the management of the affairs of the incapable/deceased person.
The Court of Appeal disagreed and did not allow the appeal. In its view, the “grammatical and ordinary sense of the words of s. 7 are simply not elastic enough to apply to a deceased person and to construe an estate trustee to be a litigation guardian.”
Although the outcome is not surprising, it does serve as a reminder that limitation periods can be unforgiving. Estate trustees would be well-advised to act swiftly in reviewing the affairs of a deceased person in order to determine whether any claims may have arisen prior to death, and whether the expiry of any limitation periods are looming.
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This week on Hull on Estates, Natalia Angelini and Kira Domratchev discuss the decision in Shannon v Hrabovsky, 2018 ONSC 6593, and the question of a limitation period in a Will challenge.
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Applications to pass accounts are unique as civil proceedings go. The nature of the inquiries being made by the Court, the relief that a judge is empowered to grant, and the procedural considerations that apply are all features that distinguish applications to pass accounts from other civil applications. Procedural considerations in particular have garnered some notoriety recently as a result of several notable decisions released in the past few years. The recent decision of the Court of Appeal for Ontario (then sitting as the Divisional Court) in Wall v Shaw, 2018 ONCA 929, provides some clarity to a few of the loose ends.
In Wall, the Deceased died leaving a Will naming the appellant as estate trustee and which created two testamentary trusts for the benefit of her two children. The Deceased’s nieces and nephews were also named as contingent beneficiaries in the event that both children died before vesting in the trust property.
The estate trustee acted for more than 10 years, but never formally passed his accounts. Instead, the estate trustee held frequent informal meetings with the Deceased’s children to review the administration of the estate and to discuss the estate trustee’s compensation.
A dispute between the Deceased’s daughter and the estate trustee relating to the latter’s compensation eventually led the daughter to bring an application seeking an order compelling the estate trustee to pass his accounts.
The estate trustee subsequently commenced an application to pass accounts in March 2015. In June 2015, the Deceased’s daughter filed a notice of objection to the accounts, followed in January 2016 by a notice of objection delivered by two of the Deceased’s nieces.
In response, the estate trustee brought a motion seeking to strike out the objections of the daughter on several grounds. Notably, the estate trustee took the position that the daughter’s approval of the accounts at the informal meetings constituted acquiescence of the estate trustee’s conduct. In the alternative, the estate trustee argued that the daughter’s objections were now statute-barred pursuant to sections 4 and 5 of Ontario’s Limitations Act or barred by the doctrine of laches.
The estate trustee was unsuccessful at first instance on all three grounds, but only chose to appeal the first ground. Specifically, the estate trustee argued on appeal that the judge at first instance had erred in refusing to apply the two-year limitation period under section 4 of the Limitations Act. The appeal was dismissed, and the reasons on appeal provide some procedural clarity in respect of the interplay between limitation periods and passings of accounts.
Section 4 of the Limitations Act generally provides that a “proceeding” cannot be commenced in respect of a “claim” if more than two years have elapsed since the date the claim was discovered. The Court of Appeal took issue with each of the quoted terms.
Notably, the held that a notice of objection does not commence a “proceeding” for the purposes of section 4 of the Limitations Act. Rather, a notice of objection ought to be viewed as a response to a proceeding that has already been commenced, being the application to pass accounts. The Court also pointed to its prior ruling in Armitage v The Salvation Army, in which it was held that an application to pass accounts was not a “claim” pursuant to section 4 of the Limitations Act. Accordingly, it followed that a responding objection raised in that application could also not constitute a claim.
Finally, the Court highlighted an important distinction between applications to pass accounts and other civil applications. Unlike a traditional civil claim, the Court in an application to pass accounts is not tasked with awarding judgment in favour of one party or the other. The purpose of an application to pass accounts to is initiate a “judicial inquiry” into the management of an estate and, if appropriate, provide redress to the estate, rather than to the beneficiaries personally.
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