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RPLA - "Limitation where the subject interested" [s.4]. Bank of Montreal v. Iskenderov
In Bank of Montreal v. Iskenderov (Ont CA, 2023) the Court of Appeal considered (and allowed) an appeal where the trial judge held that a ten-year s.4 ["Limitation where the subject interested"] RPLA limitation applied, rather than the general two-year limitations period:[1] The respondent bank, a creditor of Roufat Iskenderov, the appellant, sought to set aside as a fraudulent conveyance, Mr. Iskenderov’s transfer of his residence to his wife, the appellant, Elena Lazareva. The action was commenced more than two years but less than ten years after the transfer. The appellants’ position was that the claim was statute barred under the Limitations Act, 2002, S.O. 2002, c. 24, Sch. B, but the motion judge found that the ten-year limitation period under s. 4 of the Real Property Limitations Act, R.S.O. 1990, c. L.15 (“RPLA”), applied, and that the claim was brought in time and could proceed.
[2] That finding followed this court’s decision in Anisman v. Drabinsky, 2021 ONCA 120 (“Anisman (ONCA)”). On appeal, the appellants sought to argue that Anisman (ONCA) was not a binding authority of this court because full reasons were not given and it was wrong in law, and that this court should find that the two-year limitation period under the Limitations Act, 2002 applied to the subject action. The court heard the appeal with a five-judge panel in order to be able to fully address the legal issue of which limitation statute and which limitation period applies to an action to set aside a fraudulent conveyance of real property (a “fraudulent conveyance action”).
[3] For the reasons that follow, I would allow the appeal. Anisman (ONCA) was decided without the benefit of the relevant historical authority. The ten-year limitation period in s. 4 of the RPLA does not apply to an action to declare a fraudulent conveyance of real property void as against creditors under s. 2 of the Fraudulent Conveyances Act, R.S.O. 1990, c. F.29. Instead, the two-year limitation period from the date the claim was discovered under s. 4 of the Limitations Act, 2002 applies.
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[8] On issue one, the motion judge reviewed the conflicting case law in the Ontario Superior Court of Justice on the issue of which limitation period applies to a claim to set aside a transfer of real property as a fraudulent conveyance, but rejected the submission that he was not bound by this court’s decision in Anisman (ONCA) that the RPLA and not the Limitations Act, 2002 applies. He therefore found that the ten-year limitation period in the RPLA applies and the action was commenced well within that time.
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[12] The appellants raise three issues on the appeal: 1) Did the motion judge err in law by following Anisman (ONCA) for the principle that the RPLA ten-year limitation period rather than the Limitations Act, 2002 two-year limitation period applies to an action to declare a fraudulent conveyance of real property void as against creditors? .... The court extensively considers [at paras 13-56] the RPLA-Limitations Act competing issue, deciding that RPLA s.4 does not apply to fraudulent conveyances.
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