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Perspectives

Exception for Incapable Persons Cannot be Used to Extend Time For Estate Trustees

The Ontario Court of Appeal confirmed inLee v. Ponte that s. 7 of the Limitations Actdoes not apply to extend the time within which an estate trustee can bring a claim that the deceased person had before death.

In 2007, Lee, the deceased, had loaned the respondent $55,000.00 secured by a promissory note payable on demand or upon the sale of a specified piece of property, whichever occurred first. The trial judge found that the property had been sold and that Lee had discovered this on June 6, 2013. The limitation period began running at this time. Lee's estate trustee made a demand in May 2015 and then commenced an action on July 17, 2015 for the loan. The motion judge found the action was statute barred.

The appellant estate trustee argued that s. 7 of the Limitations Act ought to apply to extend the limitation period by six months of the action. Section 7 states:

Incapable persons

(1) The limitation period established by section 4 does not run during any time in which the person with the claim,

(a) is incapable of commencing a proceeding in respect of the claim because of his or her physical, mental or psychological condition; and

(b) is not represented by a litigation guardian in relation to the claim.

Presumption

(2) A person shall be presumed to have been capable of commencing a proceeding in respect of a claim at all times unless the contrary is proved.

Extension

(3) If the running of a limitation period is postponed or suspended under this section and the period has less than six months to run when the postponement or suspension ends, the period is extended to include the day that is six months after the day on which the postponement or suspension ends.

The estate trustee argued that s. 7 should be interpreted to apply when the person having the claim dies before commencing proceedings, and that "it takes time for an estate trustee to review the affairs of the deceased, and to obtain probate".

The Court was unpersuaded, stating "the grammatical and ordinary sense of the words of s. 7 are simply not elastic enough to apply to a deceased person and to construe an estate trustee to be a litigation guardian." The appellant did not rely on s. 38(3) of the Trustee Act and the Court did not consider whether this may have some bearing on the issue raised in the appeal.

The decision serves as a reminder for estate trustees to act promptly in bringing claims on behalf of the estate.