All About Estates

Death Starts the Clock Ticking on the Limitation Period for Contribution and Indemnity Claims

Conflicting Limitation Periods

In Ontario, as in other Canadian jurisdictions, various statutes establish limitation periods within which an injured party can commence a claim against a wrongdoer, including against the estate of a deceased wrongdoer. Under sections 4 and 5 of the Limitations Act, 2002, S.O. 2002, c. 24 , Sched B, a claim must be commenced within two years from the date the plaintiff could reasonably have discovered that he or she has suffered injury, loss or damage. Where a defendant believes that another wrongdoer is responsible or partly responsible for the plaintiff’s injury, loss or damage, s.18 of the Limitations Act, 2002 provides that a claim for contribution and indemnity against that wrongdoer is “discovered”, and therefore, the two year limitation period begins to run, on the day on which the defendant is served with the plaintiff’s claim.

To complicate matters, s.19(4) of the Limitations Act, 2002 provides that any limitation periods contained in the statutes listed in the Act’s Schedule trump those contained in the Act itself. One such statute is the Trustee Act, R.S.O. 1990, c. T.23. Under s.38(3) of the Trustee Act, an action against an executor or administrator of an estate for a wrong committed by a deceased person must be brought within two years of the date of death.

Conflicting Limitation Periods in Levesque v. Crampton Estate

What happens when a defendant has a claim for contribution against the estate of a deceased wrongdoer, and such a claim arises more than two years after the wrongdoer’s death, but within the two year limitation period to bring a contribution and indemnity claim under s.18 of the Limitations Act, 2002? Can a defendant’s claim for indemnity against the estate of a deceased wrongdoer be time-barred even before the plaintiff has sued the defendant?

These questions came to a head in the recent Ontario Court of Appeal decision of Levesque v. Crampton Estate, 2017 ONCA 455. In that case, the plaintiff alleged that he was sexually assaulted by a priest in 1976, when the plaintiff was 12 years old. The priest died in 2010. In 2013, the plaintiff and his family brought an action against the priest’s estate and the Roman Catholic Episcopal Corporation of Ottawa (“RCECO”), claiming that the RCECO was vicariously liable for the priest’s conduct and breached duties owed to the plaintiff. In 2014, the RCECO defended the plaintiff’s claim, and brought a crossclaim for contribution and indemnity against the priest’s estate. In 2015, the plaintiffs consented to an order dismissing their claim against the estate because it was barred by the two-year limitation period under s.38(3) of the Trustee Act. The estate brought a motion to dismiss the RCECO’s crossclaim, relying on the same limitation period. The motion judge dismissed the motion, finding that the RCECO’s crossclaim could proceed under s.18 of the Limitations Act, 2002. This decision was overturned by the Ontario Court of Appeal, which considered the interplay between the conflicting limitation periods under s.38(3) of the Trustee Act and s.18 of the Limitations Act, 2002, and resolved the conflict in favour of the hard and fast two-year limitation period under the Trustee Act.

The Court of Appeal noted that the Limitations Act, 2002 is based on discoverability. Section 18(1) deems a claim to be “discovered” on the date the claim is served on the person who seeks contribution and indemnity. In contrast, the limitation periods under s.38(3) is fixed and absolute, and is triggered by the death of the party against whom a claim is made. The policy rationale behind this limitation period is to provide a limited-time remedy to claimants, without exposing the deceased’s estate to indefinite fiscal vulnerability.

The Court of Appeal acknowledged that the application of the limitation period under the Trustee Act can sometimes result in harsh consequences. Here, the contribution claim of the RCECO was time-barred before the RCECO had even been sued by the plaintiffs.

Commentary and Practice Points

Ironically, had the priest lived, both the plaintiffs’ claim and the RCECO’s crossclaim could have proceeded, since there is no limitation period in respect of proceedings based on sexual assault (see s.16(1)(h) of the Limitations Act, 2002). Therefore, the priest’s death shielded him (or rather, his estate) from civil liability in this matter.

In order to preserve their rights, a plaintiff who learns about a potential defendant’s death should note the hard and fast limitation period under s.38(3) of the Trustee Act and consider commencing their claim well in advance of the expiry of that limitation period. This will permit defendants to assert contribution and indemnity claims against a deceased wrongdoer within two years of the date of death, and perhaps increase the funds available to satisfy an eventual judgment or fund a settlement with the plaintiff.   

About Rebecca Studin
Rebecca Studin was called to the Bar in 2009. Before joining de VRIES LITIGATION LLP, Rebecca practised estates and commercial litigation at a full-service international law firm in Toronto. Rebecca’s estates experience includes will interpretation applications, will rectification applications, solicitor’s negligence actions, and other estates and trusts matters. Rebecca obtained her law degree from Osgoode Hall Law School after earning her honours bachelor of arts degree from Glendon College, York University. Following her call to the Bar, Rebecca was selected as a Fox Scholar and spent a year training as a barrister at the Middle Temple, Inns of Court, in London, UK.

0 Comments

Leave a Reply

Your email address will not be published. Required fields are marked *