In Sinclair v. Harris, the plaintiff argued that no limitation period applies to claims for breach of a resulting trust relating to real property. The court rejected this argument and found that the ten-year limitation period in s. 4 the RPLA applies. The defendant relied on a dubious interpretation of the Court of Appeal decision in Drakoulakos, in which some unlikely facts allowed me to make a successful s. 24 argument:
[18] The first issue that needs to be resolved is what limitation period, if any, is applicable in this case. There is a stark difference in the position of the parties. The plaintiffs submit that no limitation is applicable to a resulting trust in equity. The defendants submit that a 10-year limitation period applies to this trust.
[19] The definition of a resulting trust is succinctly stated in Waters’ Law of Trusts in Canada 4th Ed.:
Broadly speaking, a resulting trust arises whenever legal or equitable title to property is in one party’s name, but that party is under an obligation to return it to the original title owner, or to the person who paid the purchase money for it.
See Pecore v. Pecore, 2007 SCC 17 (CanLII) at para. 20.
[20] The responding parties argue that the plaintiffs’ action should be dismissed because any resulting trust established on the evidence is statute barred. They rely upon the 10-year limitation period found in s. 4 of the Real Property Limitations Act, R.S.O. 1990, c. L.15 (“RPLA”):
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.
[21] In McConnell v. Huxtable, 2014 ONCA 86 (CanLII), Rosenberg J.A. traced the history of the law of limitations in this province. With respect to s. 4, he held that it applied to constructive trusts where the claimant did not have any interest in the property until so declared by the court. In other words, it applied to an equitable interest in land through the imposition of a constructive trust.
[22] In Waterstone Properties Corp. v. Caledon (Town), 2017 ONCA 623 (CanLII), the court made it clear that the 10-year limitation period in s. 4 did not just apply to claims for the possession of land but would encompass claims of ownership of land advanced by way of a resulting trust (at para. 32):
The words “action to recover any land” in s. 4 of the RPLA are not limited to claims for possession of land or to regain something a plaintiff has lost. Rather, “to recover any land” means simply “to obtain any land by judgment of the Court” and thus these words also encompass claims for a declaration in respect of land and claims to the ownership of land advanced by way of resulting or constructive trust: Hartman Estate v. Hartfam Holdings Ltd., 2006 CanLII 266 (ON CA), [2006] O.J. No. 69, at para. 56; McConnell v. Huxtable, 2014 ONCA 86 (CanLII), 118 O.R. (3d) 561, at paras. 38 – 39.
[23] The plaintiffs rely on the case of Drakoulakos v. Stirpe, 2017 ONCA 957 (CanLII). This was an appeal of a summary judgment motion whereby the motions judge granted summary judgment on the basis that the claim was statute barred based on the basic limitation period of the Limitations Act 2002. In that case, more than 15 years had passed since the plaintiff had known or ought to have known he had an action arising from a resulting trust. The Court of Appeal overturned the decision because there was no limitation period for a claim based upon the transitional provisions of the Limitations Act 2002, where there was no limitation period for the claim against the trustee of a resulting trust or property still in the possession of the trustee under the former Act and the claim was discovered before January 1, 2004.
[24] These comments, which are relied upon by the plaintiffs to support their position that there are no limitations for any resulting trust, must be read with care. The Ontario Court of Appeal was dealing with the application of the transitional provisions when it came to a resulting trust. They were not making broad statements that are applicable to the facts before me. I further see Drakoulakos as distinguishable. In that case, the court was dealing with taxi licenses and shares in a company. It was unconnected to any real property. Thus, the Real Property Limitations Act would have no application to it. Similarly, in McConnell v. Huxtable, (at para. 41) Rosenberg J.A. held that s. 4 did not apply where the claimant was seeking an interest in a pension or a business. See also The Equitable Trust Co. v. Marsig, 2012 ONCA 235 (CanLII) at para. 19. I see no conflict in these authorities.
[25] Likewise, comments made in McCracken v. Kossar, 2007 CanLII 4875 (ON SC), [2007] O.J. No. 664 (S.C.J.) at para. 36, relied upon by the plaintiff, that queries whether equitable trusts are subject to the RPLA have now been overtaken by the appellate authorities noted above, and must be viewed in that light.
[26] The plaintiffs submit that the limitation period does not apply since the claim is not about land but it is about the monies that Ms. Rock gave the defendants. I cannot agree. First of all, it is clear from the statement of claim and the evidence that this claim is about a resulting trust in a piece of real property. The monies were expressly given to the defendants so that they could purchase the home and land. This is not a case where Ms. Rock gave a sum of money which was unrelated to any real property to the defendants. Here the connection is clear and direct. Further, to try and distinguish the defendants’ authorities on this basis is futile. In most real property transactions, money is involved. The RPLA cannot simply be avoided by an attempt to characterize the transaction as being about money and not land. The fact that the plaintiffs are not actually seeking the return of the Beeton property or any other piece of real property, does not avoid the application of s. 4 given what they are seeking is “money to be laid out in the purchase of land” which fits within the definition of “land” under the RPLA: Harvey v. Talon International Inc., 2017 ONCA 267 (CanLII) at paras. 50 to 54 (dealing with a return of a deposit on the purchase of land); Scicluna v. Solstice Two Ltd., 2018 ONCA 176 (CanLII) at para. 25 (dealing with relief from forfeiture of a deposit for the purchase of land); Goldhar Estate v. Mann, [2016] O.J. No. 6872 (S.C.J.) (holding that the Act applied to equitable mortgage).
[27] In short, the plaintiffs’ claim is an action to recover land and as such falls within s. 4 of the RPLA.
