Conflicting Limitation Periods Resolved In Favour Of Finality For Estates
Until recently, a conflict between two limitation periods created uncertainty for the administrators of estates in circumstances where the deceased was one of two or more potential wrongdoers. The Limitation Act 2002 creates a limitation period of two years that is triggered by a claim being served on one or more of the wrongdoers. That defendant can then claim contribution and indemnity against any other potential wrongdoer(s), and has two years from when served to start the claim for contribution and indemnity. This means that the action could be started more than two years from when the wrong was committed.
In contrast, the Trustee Act creates a limitation period of two years from any wrong committed by the deceased. That limitation period is triggered by the death of the deceased.
Not surprisingly, the court was asked to weigh in on which one of these two provisions applied in an action against an estate. At first instance the judge ruled that the Trustee Act applied and that the two year limitation period was triggered by the death of the deceased. The decision was appealed and upheld. The Court stated:
[51] The Limitations Act, 2002 is based on discoverability. Section 18(1) deems the claim to be discovered on the date the claim is served on the person who seeks contribution or indemnity. In contrast, s. 38(3) of the Trustee Act is a “hard” or absolute limitation period. It is triggered by a fixed and known event – the death of the party against whom a claim is made.
[52] The purpose of the Trustee Act limitation period is clear. It is to provide a remedy for a limited time, without indefinite fiscal vulnerability to the estate.
The Lesson: Actions alleging wrongdoing by a deceased should be brought in a timely manner. Failure to do so could mean that one of the potential wrongdoers is not involved in the litigation. Should this wrongdoer be found to have contributed to the loss or damage, a significant part of the award could be lost.
Levesque v Crampton Estate, 2017 ONCA 455 (ONCA) https://www.canlii.org/en/on/onca/doc/2017/2017onca455/2017onca455.pdf
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