{"id":739,"date":"2018-04-06T18:44:18","date_gmt":"2018-04-06T22:44:18","guid":{"rendered":"http:\/\/limitations.ca\/?p=739"},"modified":"2018-06-22T17:20:41","modified_gmt":"2018-06-22T21:20:41","slug":"ontario-does-the-limitations-act-apply-to-notices-of-objection","status":"publish","type":"post","link":"http:\/\/limitations.ca\/?p=739","title":{"rendered":"Ontario: Does the limitations act apply to Notices of Objection?"},"content":{"rendered":"

In the Wall Estate<\/em><\/a>, the court held that the Limitations Act<\/a> does not apply to a claim asserted in a beneficiary’s Notice of Objection to Accounts:<\/p>\n

[<\/a>1]\u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0\u00a0The discreet issue for consideration at this motion is as follows:\u00a0 Can an estate trustee move to strike a beneficiary\u2019s Notice of Objection to Accounts in the face of the estate trustee\u2019s Application to Pass Accounts, based on the\u00a0Limitations Act,\u00a0<\/i>2002<\/a>, or laches or acquiescence?\u00a0 For reasons that follow, I am satisfied that the beneficiary, Elizabeth Wall, is not barred from filing an objection to the accounts for the entire period under administration.<\/p><\/blockquote>\n

Marjorie Wall died in 2005.\u00a0 The objector was Elizabeth Wall, her daughter and beneficiary of the estate.\u00a0 Marjorie left the bulk of her estate to her two children in trust until they attained the age of 60 years.\u00a0 Both children were under 60 at the time of Marjorie’s death.\u00a0 The trustee had absolute discretion to pay funds to the children during their lifetime prior to reaching 60.\u00a0 If they didn’t reach 60, the will provided that the estate’s residue was to be divided amongst nieces and nephews.\u00a0 Elizabeth was 54 at the time of the application, so she had a vested interested in the discretionary trust and a contingent interest in the residue of the estate.<\/p>\n

In response to her objection, the trustee took the position that he was not required to address it because it was time-barred, either by the Limitations Act or equity.<\/p>\n

The court disagreed.\u00a0 Relying on the decision in Armitage<\/em><\/a>, the court reasoned that if a passing of accounts doesn’t fit the definition of a “claim” in the Limitations Act, neither does a Notice of Objection:<\/p>\n

\n

[<\/a>31]\u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0Based on the facts in\u00a0Armitage,\u00a0<\/i>Hourigan J.A. found that the passing of accounts does not fit within the definition of a claim within the\u00a0Limitations Act,\u00a0<\/i>2002<\/a>.\u00a0 In my view, if the passing of accounts does not constitute a claim, I am not satisfied that a Notice of Objection is a claim.\u00a0 In filing a Notice of Objection, the beneficiary is seeking answers to questions about steps taken by the estate trustee during the currency of an administration of an estate.\u00a0 Answers to those questions may assist the beneficiary in consenting to the passing of accounts without the necessity of a formal hearing.\u00a0 An absence of consent will require a formal hearing.\u00a0 A formal hearing will assist the court in determining if the fees sought and investment steps taken are appropriate under all the circumstances.<\/p>\n

[32]\u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0The objections taken at their highest may result in a reduction or loss of compensation for the estate trustee or other remedies.\u00a0 In this case, if the objections are successful to any extent, no additional funds would be payable immediately to Elizabeth as beneficiary of the discretionary trust.\u00a0 The corpus of the estate would be enlarged, increasing the funds available for the discretionary trust, and ultimately, could increase the amount available to be paid to Elizabeth, but only if she survives to age 60.\u00a0 On the facts here, I am not satisfied that the Notice of Objection rises to the level of a \u201cclaim\u201d as contemplated by the\u00a0Limitations Act,\u00a0<\/i>2002<\/a>.<\/p>\n<\/blockquote>\n

This reasoning is problematic.\u00a0 The threshold question is whether the Notice of Objection contains a “claim”.\u00a0 If so, as the Limitations Act applies to all claims pursued in court proceedings, it would limit the claim pursued in the Notice of Objection.\u00a0 Section 1 of the Limitations Act defines “claim”: \u00a0“a claim to remedy an injury, loss or damage that occurred as a result of an act or omission”.\u00a0 Accordingly, answering the threshold question requires assessing whether the elements that comprise a claim\u2014wrongful conduct and resulting damage\u2014are present.<\/p>\n

In Armitage<\/em>, the Court of Appeal found that an attorney for property’s application to pass accounts was not a “claim”. The application did not seek a remedy for any damage, but rather court approval of the attorney’s conduct.<\/p>\n

The decision Wall <\/em>does not quote the definition of “claim” and does not explicitly consider its elements. Rather, it reasons that if the application to pass accounts in Armitage <\/em>was not a “claim”, then neither was the Notice of Objection.\u00a0 This is not a sound limitations analysis.<\/p>\n

Indeed, the decision certainly gives the impression that the Notice of Objection was “claim”.\u00a0 In it, Elizabeth alleged that the trustee had wrongfully carried out his duties resulting in a diminution of the funds available to her; in other words, she sought to remedy damage resulting from wrongful conduct.<\/p>\n

It may be that the court arrived at the correct decision, but from a limitations perspective it’s a very dubious decision.<\/p>\n

Update!<\/strong><\/p>\n

Leigh Sands<\/a>\u00a0kindly brought to my attention Iaboni Estate v. Iaboni<\/em><\/a> in which an application judge considered a limitations defence raised in response to a notice of objection without any suggestion that this is an unsettled area of the law:<\/p>\n

Did the limitation periods expire, such that the claims made in his Notice of Objection are out of time?<\/u><\/b><\/p>\n

[32]\u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0The objections of Mr. C. Iaboni that the trustee \u2018excluded\u2019 many valuable assets such as a mortgage, two businesses, a condo and life insurance policy from the estate of Lidia Iaboni and that when Lidia Iaboni became disabled, her husband\u2019s wealth evaporated and the applicant has no interest in marshalling this wealth is, in part, a complaint about the administration of Umberto Iaboni\u2019s affairs, between the onset of his disability in 2006 and his death in 2010 and latterly a complaint about the administration of his mother\u2019s affairs between the onset of her disability in 2006\/2007 and before her death in 2012. His allegations in the Notice of Objection filed in his mother\u2019s estate, as outlined above were in substance the same as those made in the litigation he initiated on December 15, 2010.\u00a0 All of the transactions about which he complains were disclosed to him no later than the accounting delivered on behalf of his siblings pursuant to the Minutes of Settlement, with the possible exception of the discharge of the mortgage on his sister\u2019s home, which was a matter of public record.\u00a0 His civil action was dismissed on May 15, 2013.<\/p>\n

[33]\u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0It appears, therefore, that Mr. C. Iaboni\u2019s Notice of Objection raises issues as particularized above that are outside of the 2-year period within which they may have been pursued.<\/p>\n<\/blockquote>\n

The Court of Appeal upheld the decision:<\/p>\n

\n

[<\/a>10]\u00a0\u00a0 \u00a0\u00a0\u00a0We are not persuaded that the motions judge made any error. The appellant consented to the passing of accounts from the time of the appointment of BNS, and has not appealed that aspect of the order. Even if the appellant were able to identify errors with respect to the abuse of process and\u00a0Limitations Act<\/em>\u00a0claims, the motions judge\u2019s findings of fact on the merits are fatal to the appeal. She made findings that the appellant had not substantiated his suspicions with respect to the discharge of mortgage, the share certificate, or general dissipation of funds. She also found the evidence of the respondent Norma to be credible and reliable. Those findings are entitled to deference and are dispositive of the appeal.<\/p>\n<\/blockquote>\n

It is certainly arguable that this decision is determinative of the issue, even if the court determined it without analysis or acknowledgement that it is the subject of debate.<\/p>\n

However, Matthew Furrow<\/a>, who is a far greater authority on these issues than me, disagrees.\u00a0\u00a0He notes that really, all the Court held was\u00a0that the facts were dispositive of the appeal, and not the limitations analysis.\u00a0 I think he’s right, which means uncertainty remains.<\/p>\n

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

In the Wall Estate, the court held that the Limitations Act does not apply to a claim asserted in a beneficiary’s Notice of Objection to Accounts: [1]\u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0\u00a0The discreet issue for consideration at this motion is as follows:\u00a0 Can an estate trustee move to strike a beneficiary\u2019s Notice of Objection to Accounts … Continue reading Ontario: Does the limitations act apply to Notices of Objection?<\/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":[202,376,449,6,357,310,356],"class_list":["post-739","post","type-post","status-publish","format-standard","hentry","category-ontario","tag-claim","tag-accrual-of-a-claim","tag-appeals-id-like-to-argue","tag-estates","tag-notice-of-objection","tag-ontario-act-s-1","tag-passing-accounts"],"_links":{"self":[{"href":"http:\/\/limitations.ca\/index.php?rest_route=\/wp\/v2\/posts\/739","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=739"}],"version-history":[{"count":5,"href":"http:\/\/limitations.ca\/index.php?rest_route=\/wp\/v2\/posts\/739\/revisions"}],"predecessor-version":[{"id":794,"href":"http:\/\/limitations.ca\/index.php?rest_route=\/wp\/v2\/posts\/739\/revisions\/794"}],"wp:attachment":[{"href":"http:\/\/limitations.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=739"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/limitations.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=739"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/limitations.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=739"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}