{"id":452,"date":"2016-07-27T19:35:09","date_gmt":"2016-07-27T23:35:09","guid":{"rendered":"http:\/\/limitations.ca\/?p=452"},"modified":"2016-07-27T19:35:09","modified_gmt":"2016-07-27T23:35:09","slug":"ontario-a-trustee-act-refresher","status":"publish","type":"post","link":"http:\/\/limitations.ca\/?p=452","title":{"rendered":"Ontario: A Trustee Act Refresher"},"content":{"rendered":"

Justice Newbould’s decision in John C. Chapling v. First Associates Investments Inc. et al.<\/em><\/a> provides a useful summary of the limitation of actions under the section 38 of the Trustee Act<\/em><\/a>:<\/p>\n

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[<\/a>10]\u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0 \u00a0 First Associates relies on the two year limitation period contained in the Trustee Act,<\/i> RSO 1990, c T.23<\/a>:<\/p>\n

38. (1) Except in cases of libel and slander, the executor or administrator of any deceased person may maintain an action for all torts or injuries to the person or to the property of the deceased in the same manner and with the same rights and remedies as the deceased would, if living, have been entitled to do, and the damages when recovered shall form part of the personal estate of the deceased; but, if death results from such injuries, no damages shall be allowed for the death or for the loss of the expectation of life, but this proviso is not in derogation of any rights conferred by Part V of the Family Law Act<\/a><\/i>.<\/p>\n

\u00a0(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\u2019s 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.<\/p>\n

\u00a0(3) An action under this section shall not be brought after the expiration of two years from the death of the deceased.<\/p>\n

[<\/a>11]\u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0 \u00a0 This limitation period is a strict one and the discoverability rule has no application. See Ryan v. Moore<\/i> 2005 SCC 38 (CanLII)<\/a>, [2005] 2 S.C.R. 53<\/span><\/span> at para. 31:<\/p>\n

31\u00a0\u00a0 \u00a0 In my view, the case that best assists this Court in the present matter is the one giving rise to the Ontario Court of Appeal’s decision in Waschkowski v. Hopkinson Estate<\/i> (2000), 2000 CanLII 5646 (ON CA)<\/a>, 47 O.R. (3d) 370<\/span><\/span>. The court had to determine the possible application of the discoverability rule to s. 38(3)<\/a> of theTrustee Act<\/i>, R.S.O. 1990, c. T.23<\/a>, the statutory provision in Ontario permitting an action in tort by or against the estate of a deceased person and limiting the period during which such actions may be commenced. Abella J.A., as she then was, concluded, at para. 16, that the discoverability rule did not apply to the section since the state of actual or attributed knowledge of an injured person in a tort claim is not germane when a death has occurred. She explained at paras. 8-9:<\/p>\n

\u00a0In s. 38(3) of the Trustee Act<\/a>, the limitation period runs from a death. Unlike cases where the wording of the limitation period permits the time to run, for example, from “when the damage was sustained” (Peixeiro<\/i>) or when the cause of action arose (Kamloops), there is no temporal elasticity possible when the pivotal event is the date of a death<\/u>. Regardless of when the injuries occurred or matured into an actionable wrong, s. 38(3)<\/a> of the Trustee Act<\/a> prevents their transformation into a legal claim unless that claim is brought within two years of the death of the wrongdoer or the person wronged.<\/p>\n

The underlying policy considerations of this clear time limit are not difficult to understand. The draconian legal impact of the common law was that death terminated any possible redress for negligent conduct. On the other hand, there was a benefit to disposing of estate matters with finality. The legislative compromise in s. 38<\/a> of the Trustee Act<\/a> was to open a two-year window, making access to a remedy available for a limited time without creating indefinite fiscal vulnerability for an estate.<\/u> [Emphasis in original.]<\/p>\n

[<\/a>12]\u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0 \u00a0 Section 38(1) refers to \u201can action for all torts or injuries to the person or to the property of the deceased\u201d. It has been held that this language covers claims in tort, contract and breach of fiduciary duty. See Lafrance Estate v Canada (Attorney General)<\/i> (2003), 2003 CanLII 40016 (ON CA)<\/a>, 64 OR (3d) 1 (C.A.)<\/span><\/span> in which claims were made by native persons who when children were sent to residential schools in Northern Ontario. Some of the persons had died and claims were made by their estates. Some of the claims made were for unpaid wages caused by forced labour. It was argued on behalf of the estates that these claims were contractual in nature and that as a claim for breach of contract could be sustained at common law, such claims did not depend upon the existence of the Trustee Act<\/a><\/i> and, therefore, were not statute-barred. That argument did not succeed. The Court stated:<\/p>\n

[54]\u00a0\u00a0 In determining whether the estate claims fall within the scope of s. 38(1)<\/a> of the Trustee Act<\/a><\/i>, the focus is not upon the form of the action but, rather, the nature of the injury. The question to be asked in determining its applicability is whether the alleged wrong constituted an injury to the deceased person. See Smallman v. Moore,<\/i> 1948 CanLII 4 (SCC)<\/a>, [1948] S.C.R. 295<\/span>, [1948] 3 D.L.R. 657<\/span><\/span>, and Roth v. Weston Estate<\/i> (1997),1997 CanLII 1125 (ON CA)<\/a>, 36 O.R. (3d) 513<\/span>, 20 E.T.R. (2d) 69 (C.A.)<\/span><\/span>.<\/p>\n

[55]\u00a0\u00a0 Whether the claim for forced labour is framed in tort, contract, quasi-contract or breach of fiduciary duty, the claim is for injury of a personal nature. The core of the alleged wrongdoing is the failure of those running the residential schools to compensate the deceased persons for the work they were forced to perform. In other words, the claims arise out of the treatment that the deceased plaintiffs endured at the residential schools. As such, the claims for forced labour are within the meaning of “injuries to the person”. Accordingly, they fall squarely within the provisions of s. 38(1)<\/a> of the Trustee Act<\/a><\/i> and are subject to the applicable two-year limitation period in s. 38(3)<\/a>.<\/p>\n

[56]\u00a0\u00a0 The same analytical approach applies to the estate claims for breach of fiduciary duty. Again, the focus is not upon the form of the action but whether the alleged wrong constitutes an injury to the person. It is apparent that the alleged breaches of fiduciary duty are said to have inflicted injury upon the deceased persons and therefore the claims for breach of fiduciary duty are within the ambit of s. 38(1)<\/a>.<\/p>\n<\/blockquote>\n

Justice Newbould also rejected the argument that the word “injury” in section 38(1) does not apply to claims for pure economic loss.<\/p>\n

\u00a0[<\/a>14]\u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0 \u00a0 The plaintiff relies on the case of English Estate v. Tregal Holdings Ltd<\/i>. [2004] OJ No 2853<\/span><\/span> in which a deceased had transferred shares in one company to another and a claim had been made by her estate against the two companies and several officers for oppression and fraud. Pepall J. (as she then was), held that the word \u201cinjury\u201d in section 38(1)<\/a> of theTrustee Act<\/a><\/i> did not apply to claims for pure economic loss. She stated:<\/p>\n

[23]\u00a0\u00a0 Counsel were unable to locate any Ontario cases that were precisely on point. Adopting the British Columbia Court of Appeal decision in Alberni District Credit Union v. Cambridge Properties Ltd<\/i>., 1985 CanLII 567 (BC CA)<\/a>, [1985] B.C.J. No. 1829<\/span><\/span>, the Alberta Court of Appeal in Guest v. Bonderove & Co<\/i>.[1988] A.J. No. 323<\/span><\/span> held that the word “injury” imported something in the nature of physical injury or damage and pure economic loss was not included.<\/p>\n

[24]\u00a0\u00a0 In examining the nature of the injury, I am unable to conclude that the wrongs alleged constitute an injury to Ms. English or her property of the type contemplated by section 38(1) of the Act<\/i>. In my view the claims in this action are not for injury of a personal nature. They therefore are not captured by section 38(1) of the Act<\/i> and hence are not barred by section 38(3)<\/a>.<\/p>\n

[<\/a>15]\u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0 \u00a0 I have difficulty with this decision and would not follow it. The Guest<\/i> case referred to in English Estate<\/i> dealt with the limitations legislation in Alberta that provided a two year limitation period for an action \u201cfor trespass or injury to real property or chattels\u201d. It was held that these words did not encompass an action alleging pure economic loss without injury to the real property in question. That language is not the language of section 38(1) of our Trustee Act<\/a><\/i>. The Alberni<\/i> case referred to involved British Columbia legislation providing for a two year limitation period \u201cfor damages in respect of injury to person or property, including economic loss arising from the injury\u201d and a claim relating to damaged property. It was held that \u201cinjury\u201d imported something in the nature of physical injury or damage and as the building had not been injured, the limitation period did not apply. There was no discussion of whether pure economic loss would constitute an injury to the person. The case did to raise the issue raised in this case.<\/p>\n

[<\/a>16]\u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0 \u00a0 Section 38(1)<\/a> of the Trustee Act<\/a><\/i> does not contain any language that suggests that the claims made in this case are not actions \u201cfor all torts or injuries to the person or to the property of the deceased\u201d. The property of the deceased, being her money, was allegedly destroyed in value due to the wrongful acts of Mr. Monaghan. Black\u2019s Law Dictionary includes in the definition of \u201cinjury\u201d the \u201cviolation of another’s legal right, for which the law provides a remedy; a wrong or injustice\u201d and \u201cany harm or damage\u201d. That is broad enough to include the claims here for damages arising from the actions of Mr. Monaghan who was a registered investment advisor with First Associates.<\/p>\n

[<\/a>17]\u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0 \u00a0 In Lafrance Estate <\/i>it was held that the claim for unpaid wages fell within section 38(1)<\/a> of the Trustee Act<\/a><\/i>. I recognize the claim as pleaded arose from being required to perform forced labour, but it was a claim for economic damages.<\/p>\n

[<\/a>18]\u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0 \u00a0 Section 38(2)<\/a> of the Trustee Act<\/a><\/i> applies to claims against the estate of a deceased who committed \u201ca wrong to another in respect of his or her person or to another person\u2019s property\u201d. Bikur Cholim Jewish Volunteer Services v. Penna Estate<\/i> 2009 ONCA 196 (CanLII)<\/span><\/a><\/span> involved a claim against a deceased\u2019s estate arising out of economic loss allegedly caused to the plaintiff. It was held that section 38(3)<\/a> applied to bar the claim. The point as to whether the claim involved a \u201cwrong to another in respect of his person or another person\u2019s property\u201d was not an issue directly raised, but the premise of the decision was that causing an economic loss was a \u201cwrong\u201d. While section 38(2) of the Trustee Act<\/a><\/i> does not include the word \u201cinjury\u201d and section 38(1)<\/a> does not include the word \u201cwrong\u201d, in principle there is no reason why the two should be treated differently. As stated in Black\u2019s Law Dictionary, injury includes a wrong.<\/p>\n

[<\/a>19]\u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0 \u00a0 \u00a0I conclude that the claims asserted in this case fall within the language of section 38(1)<\/a> of the Trustee Act<\/a><\/i>, and are statute barred under section 38(3)<\/a> unless there is reason otherwise as claimed by the plaintiff.<\/p>\n<\/blockquote>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

Justice Newbould’s decision in John C. Chapling v. First Associates Investments Inc. et al. provides a useful summary of the limitation of actions under the section 38 of the Trustee Act: [10]\u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0 \u00a0 First Associates relies on the two year limitation period contained in the Trustee Act, RSO 1990, c T.23: 38. (1) … Continue reading Ontario: A Trustee Act Refresher<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[250,206,141,248,249,142],"class_list":["post-452","post","type-post","status-publish","format-standard","hentry","category-ontario","tag-economic-loss","tag-naughty-trustees","tag-ontario-trustee-act-s-38","tag-ontario-trustee-act-s-381","tag-ontario-trustee-act-s-382","tag-ontario-trustee-act-s-383"],"_links":{"self":[{"href":"http:\/\/limitations.ca\/index.php?rest_route=\/wp\/v2\/posts\/452","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/limitations.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/limitations.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/limitations.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/limitations.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=452"}],"version-history":[{"count":1,"href":"http:\/\/limitations.ca\/index.php?rest_route=\/wp\/v2\/posts\/452\/revisions"}],"predecessor-version":[{"id":453,"href":"http:\/\/limitations.ca\/index.php?rest_route=\/wp\/v2\/posts\/452\/revisions\/453"}],"wp:attachment":[{"href":"http:\/\/limitations.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=452"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/limitations.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=452"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/limitations.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=452"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}