{"id":899,"date":"2019-04-12T18:08:46","date_gmt":"2019-04-12T22:08:46","guid":{"rendered":"http:\/\/limitations.ca\/?p=899"},"modified":"2019-04-12T20:05:28","modified_gmt":"2019-04-13T00:05:28","slug":"ontario-the-limitation-of-breach-of-resulting-trust-claims","status":"publish","type":"post","link":"http:\/\/limitations.ca\/?p=899","title":{"rendered":"Ontario: the limitation of breach of resulting trust claims"},"content":{"rendered":"

In Sinclair v. Harris<\/a><\/em>, the plaintiff argued that no limitation period applies to claims for breach of a resulting trust relating to real property.\u00a0 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<\/em>, in which some unlikely facts allowed me to make a successful s. 24 argument:<\/p>\n

[<\/a>18]\u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0The first issue that needs to be resolved is what limitation period, if any, is applicable in this case.\u00a0 There is a stark difference in the position of the parties.\u00a0 The plaintiffs submit that no limitation is applicable to a resulting trust in equity.\u00a0 The defendants submit that a 10-year limitation period applies to this trust.<\/p>\n

[<\/a>19]\u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0The definition of a resulting trust is succinctly stated in\u00a0Waters\u2019 Law of Trusts in Canada 4th<\/sup>\u00a0Ed.<\/i>:<\/p>\n

Broadly speaking, a resulting trust arises whenever legal or equitable title to property is in one party\u2019s 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.<\/p>\n

See\u00a0Pecore v. Pecore,\u00a0<\/i>2007 SCC 17<\/span>\u00a0(CanLII)<\/a>\u00a0at para. 20<\/span>.<\/p>\n

[<\/a>20]\u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0The responding parties argue that the plaintiffs\u2019 action should be dismissed because any resulting trust established on the evidence is statute barred.\u00a0 They rely upon the 10-year limitation period found in\u00a0s. 4<\/a>\u00a0of the\u00a0Real Property Limitations Act,\u00a0<\/i>R.S.O. 1990, c. L.15<\/a>\u00a0(\u201cRPLA<\/a>\u201d)<\/i>:<\/p>\n

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.<\/p>\n

[<\/a>21]\u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0In\u00a0McConnell v. Huxtable,\u00a0<\/i>2014 ONCA 86 (CanLII)<\/span><\/a><\/span>, Rosenberg J.A. traced the history of the law of limitations in this province. With respect to\u00a0s. 4<\/a>, 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.\u00a0 In other words, it applied to an equitable interest in land through the imposition of a constructive trust.<\/p>\n

[<\/a>22]\u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0In\u00a0Waterstone Properties Corp. v. Caledon (Town),\u00a0<\/i>2017 ONCA 623 (CanLII)<\/span><\/a><\/span>, the court made it clear that the 10-year limitation period in\u00a0s. 4<\/a>\u00a0did 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):<\/p>\n

The words \u201caction to recover any land\u201d in\u00a0s. 4<\/a>\u00a0of the\u00a0RPLA<\/a><\/i><\/span>\u00a0are not limited to claims for possession of land or to regain something a plaintiff has lost. Rather, \u201cto recover any land\u201d means simply \u201cto obtain any land by judgment of the Court\u201d 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:\u00a0Hartman Estate v.\u00a0Hartfam Holdings Ltd.<\/i><\/span>,\u00a02006 CanLII 266 (ON CA)<\/a>,\u00a0[2006] O.J. No. 69<\/span>, at para. 56<\/span>;\u00a0McConnell v.\u00a0Huxtable<\/i><\/span>,\u00a02014 ONCA 86<\/span>\u00a0(CanLII)<\/a>,\u00a0118 O.R. (3d) 561<\/span>, at paras. 38 – 39<\/span>.<\/p>\n

[<\/a>23]\u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0The plaintiffs rely on the case of\u00a0Drakoulakos v. Stirpe<\/i>,\u00a02017 ONCA 957 (CanLII)<\/span><\/a><\/span>.\u00a0 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\u00a0Limitations Act 2002<\/a>.\u00a0<\/i>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.\u00a0 The Court of Appeal overturned the decision because there was no limitation period for a claim based upon the transitional provisions of the\u00a0Limitations Act 2002<\/a>,\u00a0<\/i>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.<\/p>\n

[<\/a>24]\u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0These 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.\u00a0 They were not making broad statements that are applicable to the facts before me. I further see\u00a0Drakoulakos\u00a0<\/i>as distinguishable.\u00a0 In that case, the court was dealing with taxi licenses and shares in a company.\u00a0 It was unconnected to any real property. Thus, the\u00a0Real Property Limitations Act<\/a><\/i>\u00a0would have no application to it. Similarly, in\u00a0McConnell v. Huxtable<\/i>, (at para. 41) Rosenberg J.A. held that\u00a0s. 4<\/a>\u00a0did not apply where the claimant was seeking an interest in a pension or a business. See also\u00a0The Equitable Trust Co. v. Marsig<\/i>,\u00a02012 ONCA 235<\/span>\u00a0(CanLII)<\/a>\u00a0at para. 19<\/span>.\u00a0 I see no conflict in these authorities.<\/p>\n

[<\/a>25]\u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0Likewise, comments made in\u00a0McCracken v. Kossar<\/i>,\u00a02007 CanLII 4875 (ON SC)<\/a>,\u00a0[2007] O.J. No. 664 (S.C.J.)<\/span>\u00a0at para. 36<\/span>, relied upon by the plaintiff, that queries whether equitable trusts are subject to the\u00a0RPLA<\/a>\u00a0<\/i>have now been overtaken by the appellate authorities noted above, and must be viewed in that light.<\/p>\n

[<\/a>26]\u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0The 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.\u00a0 I cannot agree.\u00a0 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.\u00a0 The monies were expressly given to the defendants so that they could purchase the home and land.\u00a0 This is not a case where Ms. Rock gave a sum of money which was unrelated to any real property to the defendants.\u00a0 Here the connection is clear and direct.\u00a0 Further, to try and distinguish the defendants\u2019 authorities on this basis is futile.\u00a0 In most real property transactions, money is involved.\u00a0 The\u00a0RPLA\u00a0<\/i>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\u00a0s. 4<\/a>\u00a0given what they are seeking is \u201cmoney to be laid out in the purchase of land\u201d which fits within the definition of \u201cland\u201d under the\u00a0RPLA<\/a><\/i>:\u00a0Harvey v. Talon International Inc.,\u00a0<\/i>2017 ONCA 267<\/span>\u00a0(CanLII)<\/a>\u00a0at paras. 50<\/span>\u00a0to 54 (dealing with a return of a deposit on the purchase of land);\u00a0Scicluna v. Solstice Two Ltd.,\u00a0<\/i>2018 ONCA 176<\/span>\u00a0(CanLII)<\/a>\u00a0at para. 25<\/span>\u00a0(dealing with relief from forfeiture of a deposit for the purchase of land);\u00a0Goldhar Estate v. Mann,\u00a0<\/i>[2016] O.J. No. 6872 (S.C.J.)<\/span><\/span>\u00a0(holding that the Act applied to equitable mortgage).<\/p>\n

[<\/a>27]\u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0 \u00a0\u00a0In short, the plaintiffs\u2019 claim is an action to recover land and as such falls within\u00a0s. 4<\/a>\u00a0of the\u00a0RPLA<\/a>.<\/i><\/p>\n<\/blockquote>\n","protected":false},"excerpt":{"rendered":"

In Sinclair v. Harris, the plaintiff argued that no limitation period applies to claims for breach of a resulting trust relating to real property.\u00a0 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 … Continue reading Ontario: the limitation of breach of resulting trust claims<\/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":[345,53,267,532,533],"class_list":["post-899","post","type-post","status-publish","format-standard","hentry","category-ontario","tag-ontario-real-property-limitations-act-s-4","tag-real-property","tag-real-property-limitations-act-s-4","tag-resulting-trusts","tag-trusts"],"_links":{"self":[{"href":"http:\/\/limitations.ca\/index.php?rest_route=\/wp\/v2\/posts\/899","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=899"}],"version-history":[{"count":1,"href":"http:\/\/limitations.ca\/index.php?rest_route=\/wp\/v2\/posts\/899\/revisions"}],"predecessor-version":[{"id":900,"href":"http:\/\/limitations.ca\/index.php?rest_route=\/wp\/v2\/posts\/899\/revisions\/900"}],"wp:attachment":[{"href":"http:\/\/limitations.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=899"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/limitations.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=899"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/limitations.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=899"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}