Michael Ford

When do I run out of time to sue?

By Pei-Shing Wang

Limitation period is a legal term referring to the maximum time after an event that legal proceedings must be commenced. If the matter in dispute is not brought before the courts within that time frame, it will be barred and will not be heard by the court. In Ontario, the basic limitation period is two years.

However, family law is unique because of the interdependence of the spouses before the breakdown of their relationships. Hence, depending on the circumstances and the relief sought, the Family Law Act sets out different limitation periods under different circumstances.

For married couples in Ontario, they have six years to seek property rights from the date of separation, or two years from the date that the divorce is granted, whichever occurs first. If one of the spouses dies, the time is much shorter.

Interestingly, there is no limitation period for support claims in Ontario regardless if the couple are married or merely deemed spouses of each other (i.e., “common law”).

For unmarried couples living together, it’s more difficult to ascertain what limitation periods, if any, are applicable to them because there is no legislative regime for property division at the breakdown of the relationship, especially when a claim of constructive trust is made.

The recent decision of McConnell v. Huxtable of the Ontario Superior Court may provide some guidance on this matter. The facts are as follows: After a relationship of 13 years, the applicant sought relief from the court for division of the respondent’s assets, including his home. As there is no statutory provisions for the claim, the applicant asked for compensation, among other things, constructive trust.

The respondent denied that there was cohabitation and claimed that the applicant was too late because the limitation period of two years for the applicant’s claim had already expired since its discovery in 2007. The respondent brought a summary judgment motion to have the case dismissed.

The judge, mindful that there had been no prior rulings on this issue since the Limitations Act, 2002, came into effect, undertook careful analysis to decide whether the act would apply to the applicant’s claim of constructive trust, or whether an exemption relating to the recovery of land governed by another statute (of a longer limitation period, which had not yet expired) applies. If the act applies, the applicant is out of time. If it does not, then the applicant may continue to peruse her claims in court.

The judge remarked that there are difficulties in applying the Limitations Act, 2002, in the family law setting. For one, the legal ownership of properties is often treated as an afterthought after the relationship has gone sour.

It’s not infrequent that couples only discover that the registered title of the matrimonial home belongs to only one of the spouses when both parties thought they owned half of that property in the middle of litigation. Under this scenario, it would be nearly impossible to pinpoint when the limitation period starts to run as the law mandates that the limitation period starts running when the “act or omission” is discovered or ought to be discovered by a reasonable person.  Would that be when the parties separated? When the case started? When the error was discovered?

In short, the judge found that, short of an absurd interpretation, the claim of a constructive trust cannot be applied property under the Limitations Act, 2002. The judge observed as follows:

[112] It seems to me a claimant would often be aware of making a contribution and might, but would not necessarily, know that that he or she has suffered a deprivation or enriched the other party.  While a couple live together and get along reasonably well, there would likely not be any thought of deprivation or loss.  Does that knowledge reasonably or actually arise when the couple are no longer getting along?  When one of them thinks of separating?  When one of them tries to raise the issue of the title to a particular piece of property?  Is every case dependent on what the mythical reasonable person would have known at a particular time?

Thus, the judge concluded that it’s impossible to apply the Limitations Act, 2002, to a constructive trust claim in family law. As such, the judge ruled that the limitation period for the claim of constructive trust in Ontario was covered under another statute and had not expired.

Given this case is the first one on the issue of limitation periods for constructive trust claims in family law since the Limitations Act, 2002, came into force, it may well be reviewed by the appellate courts. I am in the opinion that the judge’s reasons are comprehensive and reasonable. For the time being, the decision will stand until a higher court decides otherwise.

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