The issue of limitation periods in equitable claims in family law has been an area of confusion for quite some time, particularly on the heels of the Supreme Court’s decision in Kerr v. Baranow and Vanasse v. Seguin in 2011 and the unjust enrichment litigation that has followed as well as the additional questions sparked by the new Limitations Act in Ontario a number of years ago. Thankfully, Superior Court Justice Craig Perkins brings some clarity, at least for the time being, to the issue.
Historically, claims in equity, including those for unjust enrichment in family law, were thought to have no specific limitation period and were simply subject to the doctrine of laches or equitable estoppel. So where do we stand now? The short answer, according to Perkins, is that if a party is seeking a constructive trust remedy in respect of real property, then a 10-year limitation period under the Real Property Limitations Act applies. All other unjust enrichment claims in family law continue to have no statutory limitation period and are subject to limitation by the courts’ equitable jurisdiction.
In McConnell v. Huxtable, Judith McConnell brought an unjust enrichment claim against Brian Huxtable. She sought a constructive trust remedy for an ownership interest in a home where she alleged the parties cohabited and sought damages for unjust enrichment in the alternative. She also raised other claims, including for spousal support.
Huxtable denied that the parties had cohabited in a spousal relationship. McConnell argued the parties had been in a spousal relationship for roughly 13 years.
Huxtable brought a motion for summary judgment. He took the position that the two-year limitation period under Ontario’s Limitations Act had passed and therefore the unjust enrichment claim was statute barred. McConnell argued there was no statutory limitation period and only equitable principles applied. Alternatively, she said that if there was a statutory limitation period, it was the 10-year time frame under the Real Property Limitations Act that applied and her claim could therefore proceed.
The decision is very well reasoned and is an excellent review of limitations laws in Ontario, including the legislative history and intent when the new limitations scheme was in development. All family lawyers should read the decision, particularly in our current climate of increasing unjust enrichment litigation.
Perkins conducts a thorough analysis of the Limitations Act, specifically s. 4 that provides for the basic two-year limitation period from the date of discovering a claim and s. 5 that enumerates specific elements necessary to determine when someone discovered or should have been aware of a claim.
Ultimately, Perkins comes to the conclusion that as a result of the factors enumerated in s. 5 of the Limitations Act, the two-year limitation period can’t apply in the context of unjust enrichment claims in family law because the requirements may make it impossible for some claimants to assess discoverability given the particular nature of such allegations. When, for example, did the loss or, more appropriately, the unjust enrichment occur?
Thereafter, Perkins canvassed the Real Property Limitations Act and its applicability to constructive trust claims in matrimonial matters. Dismissing Huxtable’s argument that a constructive trust claim for property isn’t an action to recover land as stated in that act, Perkins concluded that recovery of land can include a court ordering an interest in land where technically one didn’t exist previously. Notably, the Real Property Limitations Act doesn’t have the same rigid criteria of discoverability as Ontario’s Limitations Act. However, the test still requires an assessment of when the right to bring such an action first accrued, a requirement that can ultimately leave the parties with the same difficulty as trying to assess the Limitations Act criteria.
What’s eminently clear from this case and conversations I’m sure most of us have had with other colleagues in the family law bar is that we need either some form of appellate clarity on the issue of equitable claims in family law when it comes to limitation periods or, alternatively, another crack at revisions to or clarification on the revamped scheme by the legislature given the changing landscape. In the meantime, family practitioners should confirm with the other side that they’re not going to rely on limitation periods if they’re trying to negotiate before initiating an actual court application.
Marta Siemiarczuk is a lawyer practising family law litigation and collaborative family law at Nelligan O’Brien Payne LLP in Ottawa. She can be reached at [email protected].
Historically, claims in equity, including those for unjust enrichment in family law, were thought to have no specific limitation period and were simply subject to the doctrine of laches or equitable estoppel. So where do we stand now? The short answer, according to Perkins, is that if a party is seeking a constructive trust remedy in respect of real property, then a 10-year limitation period under the Real Property Limitations Act applies. All other unjust enrichment claims in family law continue to have no statutory limitation period and are subject to limitation by the courts’ equitable jurisdiction.In McConnell v. Huxtable, Judith McConnell brought an unjust enrichment claim against Brian Huxtable. She sought a constructive trust remedy for an ownership interest in a home where she alleged the parties cohabited and sought damages for unjust enrichment in the alternative. She also raised other claims, including for spousal support.
Huxtable denied that the parties had cohabited in a spousal relationship. McConnell argued the parties had been in a spousal relationship for roughly 13 years.
Huxtable brought a motion for summary judgment. He took the position that the two-year limitation period under Ontario’s Limitations Act had passed and therefore the unjust enrichment claim was statute barred. McConnell argued there was no statutory limitation period and only equitable principles applied. Alternatively, she said that if there was a statutory limitation period, it was the 10-year time frame under the Real Property Limitations Act that applied and her claim could therefore proceed.
The decision is very well reasoned and is an excellent review of limitations laws in Ontario, including the legislative history and intent when the new limitations scheme was in development. All family lawyers should read the decision, particularly in our current climate of increasing unjust enrichment litigation.
Perkins conducts a thorough analysis of the Limitations Act, specifically s. 4 that provides for the basic two-year limitation period from the date of discovering a claim and s. 5 that enumerates specific elements necessary to determine when someone discovered or should have been aware of a claim.
Ultimately, Perkins comes to the conclusion that as a result of the factors enumerated in s. 5 of the Limitations Act, the two-year limitation period can’t apply in the context of unjust enrichment claims in family law because the requirements may make it impossible for some claimants to assess discoverability given the particular nature of such allegations. When, for example, did the loss or, more appropriately, the unjust enrichment occur?
Thereafter, Perkins canvassed the Real Property Limitations Act and its applicability to constructive trust claims in matrimonial matters. Dismissing Huxtable’s argument that a constructive trust claim for property isn’t an action to recover land as stated in that act, Perkins concluded that recovery of land can include a court ordering an interest in land where technically one didn’t exist previously. Notably, the Real Property Limitations Act doesn’t have the same rigid criteria of discoverability as Ontario’s Limitations Act. However, the test still requires an assessment of when the right to bring such an action first accrued, a requirement that can ultimately leave the parties with the same difficulty as trying to assess the Limitations Act criteria.
What’s eminently clear from this case and conversations I’m sure most of us have had with other colleagues in the family law bar is that we need either some form of appellate clarity on the issue of equitable claims in family law when it comes to limitation periods or, alternatively, another crack at revisions to or clarification on the revamped scheme by the legislature given the changing landscape. In the meantime, family practitioners should confirm with the other side that they’re not going to rely on limitation periods if they’re trying to negotiate before initiating an actual court application.
Marta Siemiarczuk is a lawyer practising family law litigation and collaborative family law at Nelligan O’Brien Payne LLP in Ottawa. She can be reached at [email protected].