The recent Ontario Court of Appeal decision in Ingram v. Kulynych Estate https://canlii.ca/t/k6rj7 (“Kulynych Estate”)”,[1] provides clarity on the limitation period applicable to equitable claims against an estate. Roberts J.A. speaking for the Court, confirmed that the two-year limitation period under section 38 of the Trustee Act,[2] applies to equitable claims, not the ten-year limitation period under section 4 of the Real Property Limitations Act (“RPLA”).[3]
Background
Mr. Kulynych died in February 2017 (the “Deceased”), leaving a Last Will and Testament from 1989 (the “Will”). The dispositive provisions of the Will were such that his estate was left to his first wife, but in the event, she predeceased him it flowed to his three children. The applicant at first instance was Ms. Ingram, who alleged that she was the Deceased’s common law spouse from 1999 until the time of his passing. The Will left nothing to Ms. Ingram.[4]
By March 2020, the estate trustee had distributed most of the assets of the estate. Two years prior, in March 2018, Ms. Ingram sent a letter through her counsel asserting that she was entitled to receive one-third of the total value of the estate, given she had supported the Deceased emotionally and financially for many years.[5] It was not until March 2021, over four years since the Deceased’s passing, that Ms. Ingram commenced an application against the Deceased’s estate for dependant’s support. Ms. Ingram also made an equitable claim, by way of constructive or resulting trust, for a share of the estate.[6] The estate trustee argued that Ms. Ingram was statute-barred from bringing her application, given two-years had passed since the Deceased death. The motion judge rejected this argument and ruled that the ten-year limitation period under the RPLA applied. The decision appealed.
Issues for Court of Appeal
The chief issue for the Court of Appeal was not the quality of Ms. Ingram’s equitable trust claim, but rather whether she was statute-barred from bringing it. Two applicable limitation periods with recognized:
- The two-year limitation period against an estate under section 38(3) of the Trustee Act; and
- The ten-year limitation period in relation to interest in property under section 4 of the RPLA.
The relevant provisions of the Trustee Act are:
Actions against executors and administrators for torts
38(2) Except in cases of libel and slander, if a deceased person committed or is by law liable for a wrong to another in respect of his or her person or to another person’s property, the person wronged may maintain an action against the executor or administrator of the person who committed or is by law liable for the wrong.
Limitation of actions
38(3) An action under this section shall not be brought after the expiration of two years from the death of the deceased.[7]
And the RPLA:
Limitation where the subject interested
-
- No person shall make an entry or distress, or bring an action to recover any land or rent, but within ten years next after the time at which the right to make such entry or distress, or to bring such action, first accrued to some person through whom the person making or bringing it claims, or if the right did not accrue to any person through whom that person claims, then within ten years next after the time at which the right to make such entry or distress, or to bring such action, first accrued to the person making or bringing it.[8]
Analysis
Iskenderov factors
The Court of Appeal relied on a previous appellate decision in Bank of Montreal v. Iskenderov (“Iskenderov”).[9] In Iskenderov, the Court of Appeal grappled with the issue of two potentially applicable limitation periods in the context of fraudulent conveyance. Feldman J.A. established the correct analytical path to follow when considering which should apply, which includes consideration of the following factors:
- The historical approach to the limitation periods in issue – including the legislative purpose of the relevant statutory limitation periods;
- The judicial approach to interpreting limitation periods in issue;
- The nature of the relief sought in the action; and
- The language of the statutory limitation provisions.[10]
Importantly, the motion judge in Kulynych Estate did not have the benefit of the Iskenderov analysis. The Court of Appeal proceeded to consider each of the Iskenderov factors in turn.
Historical purpose of two-year limitation period against estates
As to the historical approach and the legislative purpose, the Court of Appeal noted that:
The shorter, two-year limitation period for estate matters reflects the long-established duty of estate trustees to administer estates promptly and diligently, including ascertaining the estate’s liabilities and debts as quickly as possible, as the expeditious administration of estates is in the interests of justice.[11]
The Court of Appeal further discussed how the discoverability principle does not apply to actions under section 38 of the Trustee Act. It cited the decision in Ryan v. Moore,[12] where the Supreme Court of Canada stated:
A further reason for the non-application of the discoverability rule is the evident impact such a rule would have on the distribution of assets to the beneficiaries. Without a time limit, an executor or an administrator would not feel free to distribute the assets of an estate until all reasonable possibilities of claim had been addressed. This would be cumbersome and unrealistic. ‘An estate should not be held to ransom interminably by the advancement of claims which are not proceeded with in a timely manner’.[13]
Accordingly, the legislature had underlying policy reasons for applying a strict, two-year limitation period to claims against an estate.
As further evidence of the legislative intent for the shorter limitation period for estate claims, the Court of Appeal noted the requirement for the timely administration of estate assets under the Estates Administration Act (“ECA”).[14] Section 9 of the ECA concerns vesting of estate property and establishes that in the absence of a registered caution, all real property not disposed of within three years of the deceased’s death automatically vests, without conveyance by a deceased’s personal representative, in the persons beneficially entitled to it.[15]
Which limitation period applies?
The Court of Appeal found that Ms. Ingram’s equitable trust claim fell neatly within section 38(2) of the Trustee Act. This was a reversal of the decision by the motion judge, who ruled that this provision did not encompass unjust enrichment claims, given no ‘wrongs’ were committed by the Deceased. To the contrary, Ms. Ingram’s claim was predicated on the fact that the Deceased financially benefited from her, living rent-free in her apartment for years while renting out his own property. In other words, Ms. Ingram was wronged by the Deceased’s unjust enrichment.[16]
Examining the issue more generally, the Court of Appeal noted the potential conflict between limitation periods, which could both arguably apply to an equitable trust claim against an estate. However, it cited the well-recognized principle of statutory interpretation, generalia specialibus non derogant, which provides that special or more specific legislation overrides general legislation in the case of conflict so that the two statutes are brought into harmony.[17]
The Court of Appeal found that sections 38(2) and 38(3) of the Trustee Act are more specific than section 4 of the RPLA. Section 4 of the RPLA is general in nature and does not refer to estate proceedings. To include estate proceedings under this provision of the RPLA “ignores the language, legislative history, purpose, and judicial treatment of s.38 of the Trustee Act”.[18] It would require the inclusion of language that the legislature did not intend and would be inconsistent with the overarching interests of justice that estates be efficiently and quickly administered.[19]
Further still, was Ms. Ingram’s equitable trust claim “an action to recover any land” for the purposes of the RPLA? The Court of Appeal did not agree, given the nature of her equitable claim was in relation to estate assets and not the Deceased’s real property. Ms. Ingram’s claim for relief was specifically for an order, by way of constructive or resulting trust, for one-third interest in all estate assets or their money’s worth. The fact that Ms. Ingram claimed an interest in all estate assets, based on unjust enrichment, indicates that her claim was an estate claim that falls within the Trustee Act, not the RPLA.[20]
Accordingly, Ms. Ingram’s equitable trust claim crystallized on the passing of the Deceased, at which point his assets vested in his estate trustee. Her claim was in the ownership of these assets, not the Deceased’s property, and the two-year limitation period in the Trustee Act applied. Because Ms. Ingram brought her action more than two years after the Deceased’s passing, the Court of Appeal ordered that she was statute-barred.[21]
Concluding Comments
The decision in Kulynych Estate brings even more clarity to the applicable limitation periods for equitable claims against an estate. Prior to this decision, estate litigators could rely upon the decision in Wilkinson v. The Estate of Linda Robinson,[22] for the principle that the ten-year limitation period under the RPLA could apply to constructive trust claims against estate property. The Court of Appeal found that Wilkinson was wrongly decided.[23]
—
[1] Ingram v. Kulynych Estate, 2024 ONCA 678 (“Kulynych Estate”).
[2] Trustee Act, RSO 1990, c T.23 (“Trustee Act”).
[3] Real Property Limitations Act, RSO 1990, c L.15 (“RPLA”).
[4] Kulynych Estate at para 4.
[5] Kulynych Estate at paras 5 and 6.
[6] Kulynych Estate at para 7.
[7] Trustee Act, sections 38(2) and 38(3) [emphasis added].
[8] RPLA, section 4 [emphasis added].
[9] Bank of Montreal v. Iskenderov, 2023 ONCA 528 (CanLII).
[10] Kulynych Estate at para 21.
[11] Kulynych Estate at para 29 [emphasis added].
[12] Ryan v. Moore, 2005 SCC 38 (CanLII), [2005] 2 SCR 53.
[13] Ibid. para 33 [emphasis added].
[14] Estates Administration Act, RSO 1990, c E.22.
[15] ECA, section 9(1).
[16] Kulynych Estate at para 52.
[17] Kulynych Estate at para 55.
[18] Kulynych Estate at para 58.
[19] Ibid.
[20] Kulynych Estate at para 60.
[21] Kulynych Estate at para 61.
[22] Wilkinson v. The Estate of Linda Robinson, 2020 ONSC 91 (CanLII).
[23] Kulynych Estate at para 65.
Written by: Oliver O'Brien
Posted on: September 30, 2024
Categories: Commentary, Limitation Periods, WEL Newsletter, Wills
The recent Ontario Court of Appeal decision in Ingram v. Kulynych Estate https://canlii.ca/t/k6rj7 (“Kulynych Estate”)”,[1] provides clarity on the limitation period applicable to equitable claims against an estate. Roberts J.A. speaking for the Court, confirmed that the two-year limitation period under section 38 of the Trustee Act,[2] applies to equitable claims, not the ten-year limitation period under section 4 of the Real Property Limitations Act (“RPLA”).[3]
Background
Mr. Kulynych died in February 2017 (the “Deceased”), leaving a Last Will and Testament from 1989 (the “Will”). The dispositive provisions of the Will were such that his estate was left to his first wife, but in the event, she predeceased him it flowed to his three children. The applicant at first instance was Ms. Ingram, who alleged that she was the Deceased’s common law spouse from 1999 until the time of his passing. The Will left nothing to Ms. Ingram.[4]
By March 2020, the estate trustee had distributed most of the assets of the estate. Two years prior, in March 2018, Ms. Ingram sent a letter through her counsel asserting that she was entitled to receive one-third of the total value of the estate, given she had supported the Deceased emotionally and financially for many years.[5] It was not until March 2021, over four years since the Deceased’s passing, that Ms. Ingram commenced an application against the Deceased’s estate for dependant’s support. Ms. Ingram also made an equitable claim, by way of constructive or resulting trust, for a share of the estate.[6] The estate trustee argued that Ms. Ingram was statute-barred from bringing her application, given two-years had passed since the Deceased death. The motion judge rejected this argument and ruled that the ten-year limitation period under the RPLA applied. The decision appealed.
Issues for Court of Appeal
The chief issue for the Court of Appeal was not the quality of Ms. Ingram’s equitable trust claim, but rather whether she was statute-barred from bringing it. Two applicable limitation periods with recognized:
The relevant provisions of the Trustee Act are:
Actions against executors and administrators for torts
38(2) Except in cases of libel and slander, if a deceased person committed or is by law liable for a wrong to another in respect of his or her person or to another person’s property, the person wronged may maintain an action against the executor or administrator of the person who committed or is by law liable for the wrong.
Limitation of actions
38(3) An action under this section shall not be brought after the expiration of two years from the death of the deceased.[7]
And the RPLA:
Limitation where the subject interested
Analysis
Iskenderov factors
The Court of Appeal relied on a previous appellate decision in Bank of Montreal v. Iskenderov (“Iskenderov”).[9] In Iskenderov, the Court of Appeal grappled with the issue of two potentially applicable limitation periods in the context of fraudulent conveyance. Feldman J.A. established the correct analytical path to follow when considering which should apply, which includes consideration of the following factors:
Importantly, the motion judge in Kulynych Estate did not have the benefit of the Iskenderov analysis. The Court of Appeal proceeded to consider each of the Iskenderov factors in turn.
Historical purpose of two-year limitation period against estates
As to the historical approach and the legislative purpose, the Court of Appeal noted that:
The shorter, two-year limitation period for estate matters reflects the long-established duty of estate trustees to administer estates promptly and diligently, including ascertaining the estate’s liabilities and debts as quickly as possible, as the expeditious administration of estates is in the interests of justice.[11]
The Court of Appeal further discussed how the discoverability principle does not apply to actions under section 38 of the Trustee Act. It cited the decision in Ryan v. Moore,[12] where the Supreme Court of Canada stated:
A further reason for the non-application of the discoverability rule is the evident impact such a rule would have on the distribution of assets to the beneficiaries. Without a time limit, an executor or an administrator would not feel free to distribute the assets of an estate until all reasonable possibilities of claim had been addressed. This would be cumbersome and unrealistic. ‘An estate should not be held to ransom interminably by the advancement of claims which are not proceeded with in a timely manner’.[13]
Accordingly, the legislature had underlying policy reasons for applying a strict, two-year limitation period to claims against an estate.
As further evidence of the legislative intent for the shorter limitation period for estate claims, the Court of Appeal noted the requirement for the timely administration of estate assets under the Estates Administration Act (“ECA”).[14] Section 9 of the ECA concerns vesting of estate property and establishes that in the absence of a registered caution, all real property not disposed of within three years of the deceased’s death automatically vests, without conveyance by a deceased’s personal representative, in the persons beneficially entitled to it.[15]
Which limitation period applies?
The Court of Appeal found that Ms. Ingram’s equitable trust claim fell neatly within section 38(2) of the Trustee Act. This was a reversal of the decision by the motion judge, who ruled that this provision did not encompass unjust enrichment claims, given no ‘wrongs’ were committed by the Deceased. To the contrary, Ms. Ingram’s claim was predicated on the fact that the Deceased financially benefited from her, living rent-free in her apartment for years while renting out his own property. In other words, Ms. Ingram was wronged by the Deceased’s unjust enrichment.[16]
Examining the issue more generally, the Court of Appeal noted the potential conflict between limitation periods, which could both arguably apply to an equitable trust claim against an estate. However, it cited the well-recognized principle of statutory interpretation, generalia specialibus non derogant, which provides that special or more specific legislation overrides general legislation in the case of conflict so that the two statutes are brought into harmony.[17]
The Court of Appeal found that sections 38(2) and 38(3) of the Trustee Act are more specific than section 4 of the RPLA. Section 4 of the RPLA is general in nature and does not refer to estate proceedings. To include estate proceedings under this provision of the RPLA “ignores the language, legislative history, purpose, and judicial treatment of s.38 of the Trustee Act”.[18] It would require the inclusion of language that the legislature did not intend and would be inconsistent with the overarching interests of justice that estates be efficiently and quickly administered.[19]
Further still, was Ms. Ingram’s equitable trust claim “an action to recover any land” for the purposes of the RPLA? The Court of Appeal did not agree, given the nature of her equitable claim was in relation to estate assets and not the Deceased’s real property. Ms. Ingram’s claim for relief was specifically for an order, by way of constructive or resulting trust, for one-third interest in all estate assets or their money’s worth. The fact that Ms. Ingram claimed an interest in all estate assets, based on unjust enrichment, indicates that her claim was an estate claim that falls within the Trustee Act, not the RPLA.[20]
Accordingly, Ms. Ingram’s equitable trust claim crystallized on the passing of the Deceased, at which point his assets vested in his estate trustee. Her claim was in the ownership of these assets, not the Deceased’s property, and the two-year limitation period in the Trustee Act applied. Because Ms. Ingram brought her action more than two years after the Deceased’s passing, the Court of Appeal ordered that she was statute-barred.[21]
Concluding Comments
The decision in Kulynych Estate brings even more clarity to the applicable limitation periods for equitable claims against an estate. Prior to this decision, estate litigators could rely upon the decision in Wilkinson v. The Estate of Linda Robinson,[22] for the principle that the ten-year limitation period under the RPLA could apply to constructive trust claims against estate property. The Court of Appeal found that Wilkinson was wrongly decided.[23]
—
[1] Ingram v. Kulynych Estate, 2024 ONCA 678 (“Kulynych Estate”).
[2] Trustee Act, RSO 1990, c T.23 (“Trustee Act”).
[3] Real Property Limitations Act, RSO 1990, c L.15 (“RPLA”).
[4] Kulynych Estate at para 4.
[5] Kulynych Estate at paras 5 and 6.
[6] Kulynych Estate at para 7.
[7] Trustee Act, sections 38(2) and 38(3) [emphasis added].
[8] RPLA, section 4 [emphasis added].
[9] Bank of Montreal v. Iskenderov, 2023 ONCA 528 (CanLII).
[10] Kulynych Estate at para 21.
[11] Kulynych Estate at para 29 [emphasis added].
[12] Ryan v. Moore, 2005 SCC 38 (CanLII), [2005] 2 SCR 53.
[13] Ibid. para 33 [emphasis added].
[14] Estates Administration Act, RSO 1990, c E.22.
[15] ECA, section 9(1).
[16] Kulynych Estate at para 52.
[17] Kulynych Estate at para 55.
[18] Kulynych Estate at para 58.
[19] Ibid.
[20] Kulynych Estate at para 60.
[21] Kulynych Estate at para 61.
[22] Wilkinson v. The Estate of Linda Robinson, 2020 ONSC 91 (CanLII).
[23] Kulynych Estate at para 65.
Author
View all posts