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Litigation lawyers live in fear and sober respect of the limitation period. We all know that missing a statutory limitation period can be the kiss of death. Given the right circumstances, however, there is one light in the dark that can overcome the shadow of both statutory limitations and common law laches arguments.

Fraudulent concealment is a common law doctrine that operates in equity to defeat  limitations defences where:

1)      The defendant and plaintiff are engaged in a special relationship with one another;

2)      Given the special or confidential nature of their relationship, the defendant's conduct amounts to an unconscionable thing for the one to do towards the other; and

3)      The defendant conceals the plaintiff's right of action, either actively, or as a result of the manner in which the act that gave rise to the right of action is performed.

Fraudulent concealment is not a rule of construction like the discoverability rule. It is an equitable principle that prevents a limitation period from operating “as an instrument of injustice”. It is aimed at preventing unscrupulous defendants who stand in a special relationship with the injured party from using a limitation provision as an instrument of fraud. See Giroux Estate v. Trillium Health Centre, 2005 CanLII 1488 (ON C.A.)

The fraudulent concealment necessary to postpone a limitation period need not amount to deceit or common law fraud. It is sufficient if the conduct, having regard to some special relationship between the parties, is an unconscionable thing for the one to do towards the other. See Guerin v. The Queen, [1984] 2 S.C.R. 335

For more information on limitation periods and an excellent in-depth analysis of the effect of the Limitations Act, 2002, see Anne Werker, “ Limitation Periods in Ontario and Claims by Beneficiaries” (2008) 34:1 The Advocates Quarterly, 1.

Perhaps now would be a good time to take a minute to check on a few limitation periods - just in case!

Sharon Davis

Sharon Davis - Click here for more information on Sharon Davis.

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 A recent decision from British Columbia, Desbiens v. Bernacki, 2008 BCSC 696 is a good reminder that a limitation period is a shield, not a sword. 

In Desbiens, the deceased had four children from a first marriage.  After his first wife left him, he placed three of his children in foster care; one child was adopted.  The deceased never provided financially for his children.  He eventually married his second wife.  His Will left his entire estate to his second wife.  His executrix later learned of the existence of the four children and found addresses for them among the deceased's belongings.  She mailed notices in the form prescribed by British Columbia's Estate Administration Act, along with copies of the Will.  None of the children received the notices, as the addresses were outdated.  The executrix did not apply to the court for directions and apparently took no active steps to verify the addresses or the current whereabouts of the children.  Three years after the deceased's death, three of the children commenced an pplication under British Columbia's Wills Variation Act.  The executrix and second wife sought to have their application dismissed, on the basis that the limitation period had expired.

The Court ultimately concluded that the executrix and the second wife were estopped from invoking the limitation period defence.  The Court held that the executrix did not meet the statutory degree of diligence required when giving notice and failed to "deliver" the notices as required by the Estate Administration Act.  Simply mailing the notices to unconfirmed addresses was insufficient, and the executrix should have made reasonable inquiries into the current whereabouts of the children.

Have a great day!

Bianca La Neve

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Limitation provisions generally aim to strike the appropriate balance between an aggrieved party’s right to seek redress and a potential defendant’s right not to remain under the cloud of litigation indefinitely or to answer for a wrong where it has become difficult, if not impossible, to marshal the evidence.

The case of Webster v. Webster Estate , a recent decision of the Ontario Superior Court of Justice, attracted notoriety in the media, as the Webster family is well known in Montreal and the world of philanthropy. The case is interesting to read given the amount of money at stake and the family dynamics. The case also deals with limitation periods in the estate context. Today, I will discuss the facts. Tomorrow, I will discuss the law and the court’s decision.

By way of background, Mr. & Mrs Webster were married for 29 years. It was a second marriage for both parties. Mrs. Webster was a devoted wife. Mr. & Mrs. Webster gave generously to their community. They lived happily ever after until Mr. Webster’s death on October 11, 2003. Mr. Webster was 87 years old when he died. Mrs. Webster was then 81 years old.

Mr. Webster’s estate was valued at around $24 million. Mrs. Webster was provided for under the terms of the Will, but the bulk of the Estate was left to the Eric T. Webster Foundation. Unfortunately, since the death of her husband, Mrs. Webster developed Alzheimer’s disease, which had progressed to the point where she was unable to testify as a witness in the proceeding.

The Will appointed four Estate Trustees of the Estate including Mrs. Webster and her son by her first marriage, who was also Mrs. Webster’s legal representative and the step-son of Mr. Webster.
In Ontario, when a spouse dies with a Will, the surviving spouse may elect to take the benefits bestowed under the Will, or seek the equalization of net family property from the estate as calculated under the provisions of the Family Law Act.

An application for an equalization payment must be brought within six months of the first spouse’s death, otherwise the surviving spouse is deemed to have chosen to take under the Will.

Mrs. Webster did not file an election within the prescribed six months. This meant that she could no longer elect to equalize their net family property. However, Mrs. Webster and her son both alleged that they were unaware of any right to elect to receive an equalization payment under the Family Law Act in the six months following Mr. Webster’s death. Mrs. Webster therefore sought an order extending the time within which she could file an election to make an equalization claim from the Estate of her deceased husband.

Unfortunately for Mrs. Webster, and her son who ultimately spearheaded the proceeding, they did not receive a sympathetic hearing from the court. Tomorrow I will consider the law and the court’s decision. Stay tuned.

Have a great day.

Justin de Vries