In today’s podcast, Natalia Angelini and Garrett Horrocks discuss the court’s reasons for declining to order a formal passing of accounts in the McLoughlin Estate decision.
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The applicability of limitation periods to estates, trusts, and capacity matters is crucial for litigators to consider. In a recent decision of the Superior Court of Justice, the Court was asked to consider the application of the limitation period in Part V of the Succession Law Reform Act (“SLRA”) to a claim that was advanced by the Public Guardian and Trustee (the “PGT”) as the litigation guardian of an incapable support claimant.
Shaw v. Barber, 2017 ONSC 2155, is an important precedent for the proposition that limitation periods do not run against the incapable person from the day that the PGT becomes his/her statutory guardian of property. By operation of section 16(5) of the Substitute Decisions Act, 1992, the PGT automatically becomes an incapable person’s statutory guardian of property the moment they receive a certificate of incapacity from the assessor. In Shaw v. Barber, the dependant support claimant, Lois Shaw, was assessed and found to be incapable of managing property on February 16, 2015 and a copy of the certificate was sent to the PGT on or about February 25, 2015.
Prior to the assessment, Ms. Shaw lived with Frank Cyril Barber on the date of his death, although they were not married. Mr. Barber died in August, 2014, leaving a Will which named his son as the sole Estate Trustee and beneficiary of his Estate. A Certificate of Appointment of Estate Trustee with a Will was issued to Mr. Barber’s son on February 5, 2015. Pursuant to section 61(1) of the SLRA, an application for dependant support may not be made six months after the grant of probate, subject to the Court’s discretion in section 61(2) to allow claims against the undistributed portion of an estate. Without considering the Court’s discretion in section 61(2) of the Act, Justice McNamara found that Ms. Shaw’s claim for dependant support was not statute barred despite the fact that it was issued, one year after six months from probate, on August 5, 2016.
In his reasoning, Justice McNamara considered the tolling provision applicable to incapable persons while he/she is not represented by a litigation guardian in section 7 of the Limitations Act, 2002 (which applies to the section 61 of the SLRA). The turning point then becomes whether a guardian of property is automatically a litigation guardian in relation to the claim at issue since a guardian has the power to do anything the incapable person may do except make a will. In this case, there was an affidavit from PGT counsel which explained the time consuming investigations involved when the PGT becomes a statutory guardian of property because of the lack of first-hand information from the incapable individual. Justice McNamara determined that a guardian of property shall act as litigation guardian when he/she has determined that there is a basis for exercising their authority in that role, and that imposing a limitation period from the date in which the PGT becomes statutory guardian is contrary to the Limitations Act and it would create impossible timelines and potential injustice for this vulnerable group. Furthermore, Justice McNamara was also persuaded by the fact that the Estate Trustee in this case will not be prejudiced by the delay, given that he is also the sole beneficiary, and that he was aware all along that the PGT was considering a claim against the Estate.
This case is also an example of the latitude that Courts may accord to large-scale claimants as seen in 407 ETR Concession Company Limited v. Day, 2016 ONCA 709.
Please do not hesitate to contact our firm for a copy of Justice McNamara’s reasons in Shaw v. Barber and click here for comments from Russel Molot, counsel for the PGT in this matter, as reported in the Law Times.
The Limitations Act, R.S.O. 2002 has now been in force for a number of years. It has been commented that the changes to the limitations laws were designed to "rationalize and modernize a complex area of law" (J. Lee, “An Overview of the Ontario Limitations Act, 2002” (2004) 28 Advocates’ Q. 29 at 29). Notwithstanding this intent, the changes are still causing considerable difficulty for legal practitioners, and their clients.
Yesterday, the Court of Appeal released a decision, Guillemette v. Doucett, in which the provisions of the new Limitations Act were applied in circumstances where a client sought to assess a solicitor’s account. The application was brought 33 months after the account was delivered and paid. The solicitor argued that the application for assessment was out of time.
The Court of Appeal stated that the Limitations Act "seeks to simplify and standardize the law of limitation periods in Ontario in part by fixing to general applicable limitation periods", being a basic two year limitation period, and an ultimate limitation period of 15 years.
The Court of Appeal found that the two-year limitation period applied to the assessment of a solicitor’s account.
However, the Solicitors Act allows for an extension of time in which to seek an assessment "under special circumstances". The Court of Appeal applied s. 20 of the Limitations Act, which provides that "This Act does not affect the extension, suspension or other variation of a limitation period or other time limit by or under another Act”. Thus, while the two year limitation imposed by the Limitations Act applied, the “special circumstances" exception set out in the Solicitors Act was maintained.
Limitations acts are said to be "statutes of repose". However, it is apparent from this recent Court of Appeal decision that there is not necessarily repose for solicitors.
Thank you for reading. Have a great weekend.