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Appeal Court Settles Issue of Time Limits for Constructive Trust Claims Against Land

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Appeal Court Settles Issue of Time Limits for Constructive Trust Claims Against Land

The legal concepts of “constructive trust” and “unjust enrichment” are usually engaged by family courts in order to do justice between separating couples, most often when the separating partners are common-law spouses. In particular – and since there was no traditional marriage to trigger the application of the matrimonial home provisions in the Family Law Act – the constructive trust / unjust enrichment concepts are often applied to determine the rights relating to the home that the separating couple shared. In the typical scenario, legal title to the home is in the name of one of the spouses, but the other one has contributed toward the mortgage payments, or has provided household expenses and child care during the relationship. In the right circumstances, courts will apply the constructive trust / unjust enrichment concept to remedy the injustice of failing to acknowledge and account for the non-titled spouse’s contribution upon separation.

However, in Ontario one of the related and lingering legal questions has been whether there are any time-limits for a non-titled spouse to bring such a constructive trust claim in connection with land. Recently, the question was answered definitively by the Ontario Court of Appeal, in its follow-up to an earlier trial decision in a case called McConnell v. Huxtable, 2014 ONCA 86 (CanLII).

Prior to this decision, there had been two feasible options as to the proper deadline for bringing a constructive trust claim; either it was: 1) a 10-year deadline under the Real Property Limitations Act, or else 2) no deadline at all, because (as the trial court had found) there was a “gap” in the legislation that covered these kinds of constructive trust claims.

In its legally-complex reasons, the Court of Appeal agreed with the trial decision in finding that, for unjust enrichment or constructive claims relating to property (which is the typical scenario involving separating common-law spouses), the deadline (or “limitation period”) for the non-titled spouse to bring his or her claim is 10 years. This covers not only claims where the non-titled person is asking for the court to declare that a remedial trust exists over the land, but also situations where he or she is claiming money. (It does not, however, apply to equitable claims against something other than land, e.g. an RRSP or a pension – in those kinds of situations, the limitation period is two years, not 10).

While perhaps esoteric, the Court of Appeal’s decision clears up a good deal of confusion amongst family lawyers (and by extension, their clients) as to the deadline for bringing their claims – but still underlines the point that delay in doing so should be avoided.

For the full text of the decision, see:

McConnell v. Huxtable, 2014 ONCA 86 (CanLII)  http://canlii.ca/t/g2wrf

At Russell Alexander, Family Lawyers our focus is exclusively family law, offering pre-separation legal advice and assisting clients with family related issues including: custody and access, separation agreements, child and spousal support, division of family property, paternity disputes, and enforcement of court orders. For more information, visit us at www.RussellAlexander.com.