The Applicability of the Limitations Act, 2002 to Passings of Accounts
On December 22nd, 2016, the Court of Appeal released its decision in the case of Armitage v. Salvation Army[1] (“Armitage”) and overturned the lower court’s finding that claims for compensation for an attorney for property are subject to the Limitations Act, 2002[2].
In Armitage, Hourigan, J.A., speaking for the Court, makes the finding that “compensation for an attorney for property through the passing of accounts process does not constitute a ‘claim’ within the meaning of the Limitations Act, 2002.”[3]
In reaching this conclusion, His Honour reviews the nature of compensation for attorneys and how passings of accounts by attorneys work. Under the Substitute Decisions Act, 1992, attorneys may apply to the court to have accounts their approved. As part of the application, the attorney may also seek approval of compensation. Responding parties may object to the accounts, including the compensation claimed.
In his decision, Hourigan, J.A. finds that an application for approval of accounts and compensation is not an application that seeks redress for any loss, injury or damage.[4] Citing the recent article of Matthew Furrow and Daniel Zacks[5], His Honour states that an application to pass accounts is the “opposite of remedial: it is a process that seeks a court to order that no remedy is necessary with respect to the accounts” [emphasis added]. As the Limitations Act only applies to the assertion of a “claim to remedy an injury, loss or damage…”, it therefore does not apply to passings of accounts and approval of compensation.
In its analysis and in the end result, the Court of Appeal confirms that the only bars available to claims for compensation for an attorney for property are the equitable doctrines of laches and acquiescence.
In an unconventional footnote to its decision, Hourigan, J.A. leaves open the door to whether the filing of a notice of objection could be considered a claim within the meaning of the Limitations Act, 2002. The implications of this statement is that an objection could potentially be defeated on the grounds that it is statute-barred.[6] Given the significance of the Armitage decision, there is no doubt that Hourigan, J.A.’s obiter dictum will create new issues in passing of accounts applications.
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[1] 2016 ONCA 971, 2016 CarswellOnt 20023, link: http://www.ontariocourts.ca/decisions/2016/2016ONCA0971.htm.
[2] S.O. 2002, c. 30.
[3] Supra note 1 at para 19.
[4] Supra at para
[5] Furrow and Zacks “The Limitation of Applications to Pass Accounts”, (2016) 46 Adv. Q. 2.
[6] This consequence is discussed in detail in the Furrow and Zacks article referenced above.
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Written by: WEL Partners
Posted on: January 12, 2017
Categories: Commentary
On December 22nd, 2016, the Court of Appeal released its decision in the case of Armitage v. Salvation Army[1] (“Armitage”) and overturned the lower court’s finding that claims for compensation for an attorney for property are subject to the Limitations Act, 2002[2].
In Armitage, Hourigan, J.A., speaking for the Court, makes the finding that “compensation for an attorney for property through the passing of accounts process does not constitute a ‘claim’ within the meaning of the Limitations Act, 2002.”[3]
In reaching this conclusion, His Honour reviews the nature of compensation for attorneys and how passings of accounts by attorneys work. Under the Substitute Decisions Act, 1992, attorneys may apply to the court to have accounts their approved. As part of the application, the attorney may also seek approval of compensation. Responding parties may object to the accounts, including the compensation claimed.
In his decision, Hourigan, J.A. finds that an application for approval of accounts and compensation is not an application that seeks redress for any loss, injury or damage.[4] Citing the recent article of Matthew Furrow and Daniel Zacks[5], His Honour states that an application to pass accounts is the “opposite of remedial: it is a process that seeks a court to order that no remedy is necessary with respect to the accounts” [emphasis added]. As the Limitations Act only applies to the assertion of a “claim to remedy an injury, loss or damage…”, it therefore does not apply to passings of accounts and approval of compensation.
In its analysis and in the end result, the Court of Appeal confirms that the only bars available to claims for compensation for an attorney for property are the equitable doctrines of laches and acquiescence.
In an unconventional footnote to its decision, Hourigan, J.A. leaves open the door to whether the filing of a notice of objection could be considered a claim within the meaning of the Limitations Act, 2002. The implications of this statement is that an objection could potentially be defeated on the grounds that it is statute-barred.[6] Given the significance of the Armitage decision, there is no doubt that Hourigan, J.A.’s obiter dictum will create new issues in passing of accounts applications.
—-
[1] 2016 ONCA 971, 2016 CarswellOnt 20023, link: http://www.ontariocourts.ca/decisions/2016/2016ONCA0971.htm.
[2] S.O. 2002, c. 30.
[3] Supra note 1 at para 19.
[4] Supra at para
[5] Furrow and Zacks “The Limitation of Applications to Pass Accounts”, (2016) 46 Adv. Q. 2.
[6] This consequence is discussed in detail in the Furrow and Zacks article referenced above.
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