Wills

Ontario: Court of Appeal sort of confirms Limitations Act applies to will challenges

The Court of Appeal decision in Shannon v. Hrabovsky is an unfortunate addition to limitations jurisprudence. Arguably, it stands for the principle that the basic limitation period applies to will challenge proceedings. An appellate court has never before considered the issue, and there is much to criticize about the few lower court decisions that Shannon cites in accepting, without consideration, that will challenge are subject to statutory limitation.

The applicant in Shannon successfully challenged the validity of a will. On appeal, the respondents argued that the application judge ought to have found the application statute-barred by the Limitations Act’s basic two-year limitation period. They sought leave to adduce fresh evidence to support their limitations defence. The appeal is really about the entitlement to adduce fresh evidence, not the limitation of will challenges, and so it’s arguable that the limitations analysis is obiter.

I wrote about the application decision here. I criticised its limitations and analysis and later Matthew Furrow and I published a paper arguing that applying statutory limitation periods to will challenges is ahistorical (it was uncontroversial that statutory limitation periods didn’t apply to will challenges from the date of reception until 2004), and requires taking an indefensibly flexible approach to the application of the s. 5 discovery provisions: see Will Challenges and the Limitations Act, 2002: A Reconsideration, 40 Est. Tr. & Pensions J. 190 (2020-2021). I also made the point more succintly in the fourth edition of the Law of Limitations:

The Act applies only to causes of action. A will challenge is not a cause of action; it is a contested proceeding to prove a will in solemn form. Section 2 of the Act limits its application to “claims” pursued in court proceedings.

 

Reformed limitations statutes apply to “claims” instead of causes of action. The “claim” converts every cause of action, for limitations purposes, into a single remedial unit comprised of two elements: actionable conduct and resulting loss. In doing so, it allows for a universal basic and ultimate limitation period with one set of accrual rules. However, as the Supreme Court of Canada observed in Grant Thornton LLP v. New Brunswick, the distinction between the “claim” and the cause of action it derives from can be one without a difference. Simply, reformed limitations statutes continue to apply only to causes of action pursued in court proceedings. As a will challenge is not a cause of action, the current Act — and any other provincial act that applies to “claims” pursued in court proceedings—does not apply to it.

 

A will challenge is the square peg to the Act’s round hole. There are procedural issues. The expiry of a limitation period is an affirmative defence that a defendant/respondent must plead and prove. Yet the party challenging a will may be a plaintiff/applicant or a defendant/respondent depending on which method is used to bring the proceeding to court. There is no procedural mechanism for a plaintiff/applicant to plead a limitations defence.

 

There are discovery issues. Codified discovery is premised on a defendant committing actionable conduct — an “act or omission” — that causes damage to the plaintiff. A will challenge does not arise from actionable conduct. The absence of actionable conduct makes it impossible to identify the presumptive commencement of the basic limitation period and the ultimate limitation period because both run from the date of the actionable conduct. It also makes it impossible to obtain knowledge of three discovery matters: commission of actionable conduct by the person against whom the claim is made causing the plaintiff loss. As the Supreme Court of Canada formulated it in Grant Thornton, discovery requires knowledge of “the material facts upon which a plausible inference of liability on the defendant’s part can be drawn”. A will challenge does not result in a finding of anyone’s liability.

 

Shannon doesn’t address any of these issues. Because the parties agreed that the basic limitation period applies to will challenge (why the applicant conceded that point is mysterious), the Court of Appeal didn’t consider the correctness of this premise. Instead, its reasoning treats the application of the Limitations Act to will challenges as noncontroversial. This is disappointing. You can’t blame the court for not considering arguments the parties didn’t make, but you might hope that in engaging with the application of s. 5 to a will challenge there might have been some consideration given to whether the principles that originate in Leibel make sense, because they don’t.

Let’s take a look at the application judge’s analysis:

[20]      The application judge concluded:

In the present circumstances, Gayle had all the facts necessary to commence her application, on the grounds of both a lack of testamentary capacity and undue influence, before the Testator’s death, with the exception of knowledge of the existence and contents of the 2007 Will. While she had suspicions that a will had been executed in 2007, she was never able to confirm its existence nor was she made aware of its contents until January 2015, after the date of death. Accordingly, Gayle has established that, on the date of the Testator’s death, when the act on which the claim is based occurred, being the effectiveness of the 2007 Will, she did not have knowledge of the existence and contents of the 2007 Will which are essential elements of her application. Gayle has therefore rebutted the presumption in section 5(2) that she had knowledge of the matters referred to in section 5(1)(a) on the day on which the act or omission on which her claim is based occurred. Gayle did not discover the claim in this application until sometime in January 2015, with the result that the two-year limitation period under the Act did not begin to run until that time. [Emphasis added.]

Just like in Leibel, this reasoning only works at the most superficial level. If the testator’s death is the act on which the applicant’s claim is based, it means that to discover the claim, the applicant required knowledge “that the act or omission was that of the person against whom the claim is made”–in other words that the respondents committed the act of the testator’s death. That’s absurd. At risk of belabouring the point, this a symptom of the fundamental problem: a will challenge isn’t based on any actionable conduct and it doesn’t seek an in personem remedy against an individual. It has never been subject to statutory limitation (and, I’d argue, equitable limitation) because it is not a creature of the common law or equity, but canon law.

In sum, please hire me to argue this point.

Ontario: Court of Appeal holds no limitation period for applications for a declaration on a codicil’s validity

In Piekut v. Romoli, the Court of Appeal held that no limitation period applies to an application for a declaration on the validity of a codicil.

The motion judge held that such an application is a proceeding for a declaration without consequential relief and therefore free from limitation pursuant to s. 16(1)(a) of the Limitations Act.

The court rejected the appellant’s argument that the basic limitation period applied:

[11]      We do not accept this submission. Both Leibel and Birtzu are readily distinguishable from this appeal.

 [12]      In Leibel, Greer J. acknowledged the potential application of s. 16(1)(a) of the Limitations Act, but held that it did not apply because the applicants had clearly sought consequential relief in addition to a determination of the validity of the will. This consequential relief included: an Order revoking the grant of the Certificate of Appointment of Estate Trustees with a Will; an Order removing the Estate Trustees; an Order that the Estate Trustees pass their accounts; an Order appointing an Estate Trustee During Litigation; and an Order for damages in negligence against the drafting solicitor and her law firm. In addition, in Leibel the primary will of the deceased had been probated. Birtzu had a similar fact pattern.
 [13]      In contrast, in this case Helen sought none of this consequential relief. Nor has anyone done anything to propound the will. It sat there for seven years, presumably because the siblings were all trying to work out their disagreements. In these circumstances, Helen was entitled to seek declaratory relief, simply to establish the validity, or lack of validity, of the codicils – to define the rights of the parties in order to avoid future disputes.

As I wrote regarding the motion judge’s decision, this is the correct outcome by the wrong reasoning.

No limitation period applied to the proceeding because it didn’t pursue a “claim”.  The Limitations Act applies to “claims” pursued in court proceeding (s. 2).  If there’s no “claim”, no limitation period applies.  “Claims” derive from causes of action.  If there’s no cause of action, there’s no “claim”.

There’s no cause of action asserted in an application for a declaration regarding the validity of a codicil (or a will).  Accordingly, the applicants were not pursuing a “claim” in a court proceeding, and no limitation period applied to it.

Statutory limitation periods have always applied to causes of action, which is why there was no suggestion that they applied to will challenges under the former scheme.  The confusion arises from misapprehending the universality of the basic limitation period.  It is universal in that applies to all causes of action, not because it applies to every proceeding.

Ontario: there’s no limitation period for an application for a declaration of a codicil’s validity

 

In Piekut v. Romoli, the applicant sought a declaration as to whether codicils were valid. The respondent moved to dismiss the application as statute-barred. The court denied the motion on the basis that no limitation period applied pursuant to s. 16(1)(a), which prescribes no limitation period for a proceeding for a declaration if no consequential relief is sought.    The applicant was not seeking consequential relief:

[50]           I find that Helen’s question with respect to the validity of the codicils is restricted to declaratory relief. She is not seeking consequential relief. She is not asking the court to determine the ultimate beneficiary of Dundas St. properties or to vest the properties in any particular beneficiary or beneficiaries.

This is the correct outcome by the wrong reasoning.  No limitation period applied to the proceeding because it didn’t pursue a “claim”.  The Limitations Act applies to “claims” pursued in court proceeding (s. 2).  If there’s no “claim”, there’s no limitation period.  “Claims” derive from causes of action.  If there’s no cause of action, there’s no “claim”.

There’s no cause of action asserted in an application for a declaration regarding the validity of a codicil (or a will).  Accordingly, the applicants were not pursuing a “claim” in a court proceeding, and no limitation period applied to it.

Update! The Court of Appeal upheld this decision.

Ontario: statutory limitation periods apply to will challenges

Justice DiTomaso’s decision in Taylor-Reid v. Taylor is another that cites Leibel for the principle that will challenges are subject to the basic limitation period.  The issue is gradually becoming settled.  These are the relevant paragraphs:

[106]      Even if Andrea could demonstrate a genuine issue for trial based on evidence of actual “physical damage” and/or that services were actually performed pursuant to an actual agreement, Andrea is statute barred from commencing a claim against the Estate pursuant to s. 4 of the Limitations Act, 2002 and the case of Leibel v. Leibel.

[107]      In the case of Leibel v. Leibel, the court determined that, in a Will challenge, the limitation period commences on the date of death, being September 22, 2011.  This, however, is subject to the discoverability rule outlined in s. 5 of theLimitations Act, 2002.  In Leibel v. Leibel, the Plaintiff (Will challenger) was found to have discovered the claim within 60 days of the date of death and, since the claim was commenced outside of the two year limitation period, it was statute barred.

Ontario: Will challenges subject to the two-year limitation period

Leave a Comment

The Superior Court has ruled on the application of the Limitations Act, 2002 to will challenges. The general two-year limitation period in section 4 of the act applies, subject to the section 5 discovery provisions.

Leibel v. Leibel involved two wills. The wills left a specific asset to the testatrix’s son Blake, and divided the remaining assets equally between Blake and her other son Cody. Blake applied for a declaration that the wills were invalid, and Cody and other respondents moved for an order dismissing the application on the basis that it was statute-barred by the expiry of the limitation period.

Justice Greer held that limitation period began running in June 2011, the date of the testatrix’s death , because a will speaks from death (see paras. 36 and 50). However, Just Greer found that Blake discovered his claim within the meaning of section 5 about a month later in July 2011:

In applying the “discoverability principle,” Blake had the knowledge to commence a will challenge on or before July 31, 2011. By that date he knew the following facts:

(a)   Prior to Eleanor’s death Blake knew that Eleanor [the testatrix] had recovered from lung cancer but now had brain cancer.

(b)   He knew Eleanor had changed her previous Wills.

(c)   He knew the date of Eleanor’s death, as Lorne had called him and Cody on that date.

(d)   He received copies of the Wills prior to July 31, 2011, and he knew who the Estate Trustees were under the Wills.

(e)   He knew what Eleanor’s assets were. He had at least a sense of her income, as she had been sending him monthly cheques before the date of her death and had a sense of the value of her assets.

(f)   He signed corporate documents for a company now owned by her Estate prior to July 31, 2011.

(g)   He had communicated with Ms. Rintoul [a lawyer] about his concerns and she gave him the names of three estates counsel to consider, as independent legal advisors.

Blake, therefore, had all of the information needed to begin a will challenge. He chose, instead, to take many of his benefits under the Wills before he commenced his Application (see para. 39).

By the time Blake brought his application in September 2013, the limitation period had expired.

Justice Greer rejected Blake’s argument that no limitation period applied to his will challenge pursuant to section 16(1)(a) of the act because his challenge did not seek consequential relief. This is noteworthy. Prior to this decision, it was widely considered that this section would apply to a will challenge. Consider a passage from Anne Werker’s influential 2008 article on limitation periods in estate actions:

It has been suggested that the 15-year absolute limitation period applies to will challenges. I do not agree. Section 16(1)(a) of the new Act expressly states that there is no limitation period in respect of “a proceeding for a declaration if no consequential relief is sought”.

In particular, it was thought that where a distribution had not been undertaken before the will challenge, no consequential relief would be necessary and so no limitation period would apply. (See Anne Werker, “Limitation Periods in Ontario and Claims by Beneficiaries”, (2008) 34:1 Advocates’ Q at 24-28).

Justice Greer held that the legislature did not intend for section 16(1)(a) to exclude will challenges from the two-year limitation period:

To say that every next-of-kin has an innate right to bring on a will challenge at any time as long as there are assets still undistributed or those that can be traced, would put all Estate Trustees in peril of being sued at any time. There is a reason why the Legislature replaced the six-year limitation in favour of a two-year limitation. (See para. 52).

In any event, Justice Greer found that the order Blake sought did ask for consequential relief:

Although subsection 16 (1) (a) of the Act says there is no limitation period in respect of a proceeding for a declaration if no consequential relief is sought, Blake’s will challenge claims consequential relief in that it asks for an Order revoking the grant of the Certificate of Appointment of Estate Trustees with a Will issued to Roslyn and Lorne, asks for an Order removing them as Estate Trustees, asks for an Order that they pass their accounts as Estate Trustees, and for an Order appointing an Estate Trustee During Litigation.  In addition, Blake asks for declarations relating to the revocation of Eleanor’s December 12, 2008 Wills and for an Order in damages in negligence against Ms. Rintoul and her law firm, and for Orders disclosing Eleanor’s medical records and her legal records.  Consequential relief is clearly sought by Blake (see para. 28).

This decision should have a significant impact on how the estates bar approaches will challenges, and it will be interesting to see whether there is an appeal. Meanwhile, it’s likely that it will influence estates jurisprudence in other jurisdictions with limitations provisions equivalent to section 16(1)(a), for example section 2(1)(d) of the BC Limitation Act.