{"id":549,"date":"2017-01-20T13:28:46","date_gmt":"2017-01-20T17:28:46","guid":{"rendered":"http:\/\/limitations.ca\/?p=549"},"modified":"2017-01-20T13:28:46","modified_gmt":"2017-01-20T17:28:46","slug":"ontario-limitations-act-doesnt-apply-to-applications-for-attorney-compensation","status":"publish","type":"post","link":"http:\/\/limitations.ca\/?p=549","title":{"rendered":"Ontario: Limitations Act doesn’t apply to applications for attorney compensation"},"content":{"rendered":"

In April, I reported<\/a> that in Armitage v. The Salvation Army<\/em><\/a>, Justice Ray held wrongly that the limitation period for claiming compensation as a property attorney commences on the death of the person who granted the power of attorney.\u00a0 I wrote that the Limitations Act<\/a> doesn’t apply to such an application.\u00a0 In December, the Court of Appeal agreed<\/a>.<\/p>\n

Armitage brought applications to pass her accounts as attorney for property and as estate trustee.\u00a0 The Salvation Army filed notices of objection in both proceeding raising a limitations defence.\u00a0 Justice Ray held that the death of the person who granted the power of attorney terminated the continuing power of attorney and was the commencement of the applicable limitation period.\u00a0 The applications were accordingly timely.<\/p>\n

Not so, I wrote.\u00a0 While there may be sound policy reasons for\u00a0limiting a claim for attorney\u2019s compensation after the death of the grantor, no\u00a0limitation period applies to such an\u00a0application. \u00a0The application is\u00a0not a \u201cclaim\u201d within the meaning of the Limitations Act because it doesn\u2019t seek to remedy loss resulting from an act\u00a0or omission. \u00a0If it\u2019s not a \u201cclaim\u201d, the basic and ultimate limitation periods can\u2019t\u00a0apply. \u00a0In fairness to Justice Ray, we noted that neither party raised this point.<\/p>\n

Armitage raised the point on appeal, and Justice Hourigan accepted it:<\/p>\n

[19]\u00a0\u00a0 \u00a0\u00a0 While I agree with the result reached by the application judge, I disagree with his conclusion that the Limitations Act, 2002<\/a><\/em>had any application in the circumstances of this case.<\/em> As I will discuss below, in my view, the Limitations Act, 2002<\/a><\/em> does not apply because compensation for an attorney for property through the passing of accounts process does not constitute a \u201cclaim\u201d within the meaning of the Limitations Act, 2002<\/a>.<\/em><\/p>\n

[20]\u00a0\u00a0 \u00a0\u00a0 It is useful to briefly consider the nature of compensation for attorneys for property and how the passing of accounts process works. An attorney for property is a fiduciary and has an obligation under s. 32(6) and 38(1) of the SDA<\/em><\/a> to, among other things, keep accounts of all transactions involving the property.<\/p>\n

[21]\u00a0\u00a0 \u00a0\u00a0 The attorney for property may bring an application to the Superior Court to have his or her accounts approved. Through that process, the attorney for property may also seek court approval of compensation for his or her services. The responding parties to the application have an opportunity to file a notice of objection to the accounts, and to object to the compensation that the attorney for property proposes to take or has taken.<\/p>\n

[22]\u00a0\u00a0 \u00a0\u00a0 Where the attorney for property has not commenced an application for the passing of accounts, an interested party may bring an application under s. 42(1) of the SDA<\/em> to compel the passing of accounts.<\/p>\n

[23]\u00a0\u00a0 \u00a0\u00a0 As noted by Matthew Furrow and Daniel Zacks in their very recent article \u201cThe Limitation of Applications to Pass Accounts\u201d (2016) 46 Adv. Q. 2,<\/em> historically in Ontario there was no statutory limitation period for the passing of accounts. The only bars were the equitable defences of laches and acquiescence. The question becomes whether the enactment of the Limitations Act, 2002<\/a><\/em>changed the law and imposed the general two-year limitation period on claims for compensation for attorney for property.<\/p>\n

[24]\u00a0\u00a0 \u00a0\u00a0 At first blush it would appear that such claims might be captured by the general limitation period. The Limitations Act, 2002<\/a>\u00a0<\/em>was designed to comprehensively deal with all manner of civil claims, whether grounded in equity, law, or statute. There are specific carve outs in the legislation for claims that are not subject to the Act. It is arguable, therefore, that if compensation for attorneys for property was intended to be exempted from the general limitation period it would have been specifically exempted under the Limitations Act, 2002<\/a>.<\/em><\/p>\n

[25]\u00a0\u00a0 \u00a0\u00a0 The difficulty with that argument is that the Limitations Act, 2002<\/a> <\/em>applies only to the assertion of a \u201cclaim\u201d, and a claim is defined in the Act as follows: \u201ca claim to remedy an injury, loss or damage that occurred as a result of an act or omission.\u201d<\/p>\n

[26]\u00a0\u00a0 \u00a0\u00a0 The appellant submits that the right under the SDA<\/em> to seek compensation is a new statutory right and, as with all rights, where there is a right there must be a remedy. Further, the appellant argues that the respondent\u2019s claim for compensation fits within the statutory definition of a claim. Counsel for the appellant submits that in seeking compensation at this time the respondent has suffered a loss because she chose not to seek self-help and take her compensation earlier. He goes on to argue that this loss is the result of the respondent\u2019s omission in failing to claim compensation earlier.<\/p>\n

[27]\u00a0\u00a0 \u00a0\u00a0 I am unable to accede to this rather circular argument. The fact is that in seeking court approval of the passing of accounts, an attorney for property is not seeking redress for any loss, injury, or damage. Rather, he or she is seeking approval from the court of his or her actions in managing the property, including approval for compensation previously taken or now sought. A passing of accounts application is the opposite of remedial; it is a process that seeks a court order that no remedy is necessary with respect to the accounts: see Furrow and Zacks, at pp. 9-10. Thus, the passing of accounts does not fit within the first part of theLimitations Act, 2002<\/a> <\/em>definition of claim.<\/p>\n

[28]\u00a0\u00a0 \u00a0\u00a0 An application for the passing of accounts also does not fit within the second part of the statutory definition of claim. Where the definition speaks of an act or omission, it must surely refer to an action taken or not taken by a third party that has the effect of causing loss, injury, or damage. It would be a strange result if a limitation period could not be triggered until the party asserting the claim took an action or omitted to do something.<\/p>\n

[29]\u00a0\u00a0 \u00a0\u00a0 The result, in my view, is that a passing of accounts under the SDA<\/em> is not subject to the two-year general limitation period found in the Limitations Act,<\/em> 2002<\/em><\/a>.[1]<\/a> The common law in that regard was not changed with the enactment of that legislation. Consequently, the only defences available are the equitable defences of laches and acquiescence, neither of which were asserted in the present case.<\/p><\/blockquote>\n

Obviously, I think this is sound reasoning (based as it is on a paper I wrote with my colleague Matthew Furrow).<\/p>\n

Importantly, Justice Hourigan explicitly not does hold that the Limitations Act has no applicability to the passing of accounts process under the SDA:<\/p>\n

[1]<\/a> I do not mean to categorically provide that the Limitations Act, 2002<\/a> <\/em>has no applicability to the passing of accounts process under the SDA<\/em>. In particular, it may be that the filing by a beneficiary of a notice of objection after an attorney has sought a passing of accounts is a claim within the meaning of the Limitations Act, 2002<\/a><\/em>. However, I leave this determination to another case where it arises directly on the facts.<\/p><\/blockquote>\n

In our paper, Matthew and I argue a notice of objection that asserts a claim within the meaning of the Limitations Act is subject to its limitation periods.\u00a0 Send me a note if you’d like a copy.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

In April, I reported that in Armitage v. The Salvation Army, Justice Ray held wrongly that the limitation period for claiming compensation as a property attorney commences on the death of the person who granted the power of attorney.\u00a0 I wrote that the Limitations Act doesn’t apply to such an application.\u00a0 In December, the Court … Continue reading Ontario: Limitations Act doesn’t apply to applications for attorney compensation<\/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":[299,311,312,6,310,43,309],"class_list":["post-549","post","type-post","status-publish","format-standard","hentry","category-ontario","tag-applications","tag-applications-to-pass-acounts","tag-court-of-appeal-citing-learned-authorities","tag-estates","tag-ontario-act-s-1","tag-ontario-court-of-appeal","tag-ontario-substitute-decisions-act"],"_links":{"self":[{"href":"http:\/\/limitations.ca\/index.php?rest_route=\/wp\/v2\/posts\/549","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=549"}],"version-history":[{"count":1,"href":"http:\/\/limitations.ca\/index.php?rest_route=\/wp\/v2\/posts\/549\/revisions"}],"predecessor-version":[{"id":550,"href":"http:\/\/limitations.ca\/index.php?rest_route=\/wp\/v2\/posts\/549\/revisions\/550"}],"wp:attachment":[{"href":"http:\/\/limitations.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=549"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/limitations.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=549"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/limitations.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=549"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}