If the discovery of the cause of action occurred prior to Jan. 1, 2004, the act does not apply.
Ontario lawyers need to ensure they are aware of the restrictions of bringing specific applications in an estate litigation matter in order to properly advise their clients.
In particular, I will focus on will challenges and causes of action that are not subject to time restrictions specifically provided for by any other statute.
Lawyers practising estate litigation need to be aware of the two-year period running from the date of death (subject to discoverability) because a failure to properly advise your client may result in the commencement of a costly, lengthy and ultimately useless application that is doomed to fail.
Section 4 of the act establishes a two-year basic limitation period from the discovery of the cause of action and an ultimate limitation period from the date the cause of action arose even if the cause of action was not discovered.
To put it very simply, s. 5 of the act establishes that a person is presumed to discover a claim on the day the act or omission took place and operates to potentially extend the two-year limitation period subject to when the act or omission was discovered.
One of — if not the most — cited decisions with respect to the applicability of the act in will challenges is Leibel v. Leibel 2014.
On Sept. 5, 2013, more than two years after Eleanor Leibel’s death and after her primary will had been probated, Blake Leibel, Eleanor’s son, commenced an application seeking a declaration that her two wills dated April 9, 2011 were invalid on the basis of incapacity and undue influence in addition, and ancillary, to other consequential relief.
In finding that the will challenge brought by Leibel was statute barred, the Ontario Superior Court judge referred to the wording and purpose of the act,which sets restrictions on when parties can commence proceedings. The judge found, in part, in response to Leibel’s argument (that there is no limitation period in will challenges) that to permit a will to be challenged at any time, if there are assets still undistributed or those that can be traced, it would put all estate trustees in peril of being sued at any time.
As a result, the will challenge was found to be statute barred. In the course of rendering her decision, the judge stated that the two-year limitation period under s. 4 of the act runs from the date of the testator’s death. The judge based this conclusion on the provisions of s. 5(2) of the act and the principle that a will speaks from the date of death.
The two-year limitation period starting after the date of death was affirmed in Birtzu v. McCron by a judge of the Ontario Superior Court. In the decision, the judge considered the applicability of s. 5 of the act — the discoverability principle.
In Leibel, the judge’s decision was based on the reasoning that because a will is effective as of the date of death, there is a presumption that an applicant has knowledge of the contents of the will on that date. Therefore, this would crystalize the discoverability of the cause of action that would form the basis of a will challenge and/or claim of undue influence. However, what if this presumption is rebutted by the applicant? What if the applicant can prove that they were unaware of the contents of the will on the date of death of the testator? In that case, would the two-year limitation period still run from the date of death?
These questions were considered in the recent decision of Shannon v. Hrabovsky, 2018. In Hrabovsky, the respondent, Glenn Hrabovsky, asserted that applicant Gayle Shannon’s claim was barred by the act on the basis that her claim was discovered on the date of the testator’s death, regardless of when it was actually discovered. Shannon argued that the limitation period under s. 4 of the act was extended after the commencement of her application, being more than two years after the testator’s death, based on the fact that she did not discover the existence of the 2007 will and its contents until some time in January 2015. The judge found that in the case where an individual can establish that they did not know of the matters referred to in s. 5(1)(a) of the act on the date of death, the presumption in s. 5(2) of the act would be rebutted and the “discoverability principle” would be operative. He ultimately affirmed that the discoverability principle applied to will challenges, that the limitation period was extended in Shannon’s circumstance and that the will being challenged by Shannon was invalid.
In Leibel, the judge also considered the applicability of s. 16(1)(a) of the act, which establishes that there is no limitation period for applications seeking only declaratory relief and where no consequential relief is sought. However, the analysis of s. 16(1)(a) will have to be part of a separate, much larger, article.
The act and its applicability to will challenges is strict and unforgiving. In Leibel and McCron, the will challenge proceedings were commenced approximately three months after the two-year anniversary of the testator’s death. Counsel must always consider the applicability of the Limitations Act when consulting with prospective clients and advise accordingly.
Jonathan M. Friedman is an estate litigation lawyer practising with Heft Law PC in the Greater Toronto Area.