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Trusts - Limitations. Harris v. Melo
In Harris v. Melo (Ont CA, 2026) the Ontario Court of Appeal allowed an appeal, here brought against a decision dismissing an application for "a declaration that the respondent was holding her [SS: 50%] interest in trust for him, and that he was the 100 percent beneficial owner of the property", this as the proceeding was "barred by the ten-year limitation period established in s. 4 of the Real Property Limitations Act".
Here the court considers whether the matter is governed by RPLA s.4 ['Limitation where the subject interested'] or by s.5(1) ['When right accrues on dispossession'], and the application of the common law of discovery to trust claims:[3] .... For the following reasons, we find that s. 5(1) of the RPLA applies to the appellant’s request for relief, and as such, the limitation period did not start to run while the appellant remained in possession of the property. Therefore, his application was not statute-barred, and the application judge’s finding that the appellant is the property’s sole beneficial owner must be implemented. The appeal is therefore allowed.
Section 5 of the RPLA governs
[7] The parties argued the limitations issue before the application judge on the basis of s. 4 of the RPLA, the general limitation period in respect of real property. That section provides:No person shall make an entry or distress, or bring an action to recover any land or rent, but within ten years next after the time at which the right to make such entry or distress, or to bring such action, first accrued to some person through whom the person making or bringing it claims, or if the right did not accrue to any person through whom that person claims, then within ten years next after the time at which the right to make such entry or distress, or to bring such action, first accrued to the person making or bringing it. [8] The common law of discoverability applies to the application of s. 4: Browne v. Meunier, 2023 ONCA 223, 167 O.R. (3d) 349, at para. 14. The section captures claims to the ownership of land advanced by way of resulting and constructive trusts: Waterstone Properties Corporation v. Caledon (Town), 2017 ONCA 623, 80 R.P.R. (5th) 173, at para. 32. The application judge held that s. 4 of the RPLA barred the application, because the appellant commenced his application more than ten years after 1995, the latest date on which he was on notice of the respondent’s position regarding the nature of her ownership interest.
[9] On appeal, the appellant claims that it is s. 5(1) of the RPLA that governs the start of the limitation clock under s. 4. Section 5(1) operates to postpone the commencement of the limitation period in s. 4. It provides:Where the person claiming such land or rent, or some person through whom that person claims, has, in respect of the estate or interest claimed, been in possession or in receipt of the profits of the land, or in receipt of the rent, and has, while entitled thereto, been dispossessed, or has discontinued such possession or receipt, the right to make an entry or distress or bring an action to recover the land or rent shall be deemed to have first accrued at the time of the dispossession or discontinuance of possession, or at the last time at which any such profits or rent were so received. [10] As noted, the respondent acknowledges that the appellant has been in continuous receipt of the rents since the property was purchased. The appellant has never been dispossessed of these receipts. The facts relevant to determining this question of law are therefore not in dispute. The court has before it the facts necessary to address this point as fully as if it had been raised at the application: Kaiman v. Graham, 2009 ONCA 77, 245 O.A.C. 130, at para. 18.
[11] On those facts, the jurisprudence of this court makes it clear that s. 5(1) applies. The limitation period on the appellant’s application did not start running because the appellant was never dispossessed, nor was his possession discontinued: Waterstone, at paras. 33-36.
[12] The respondent submits that s. 5(1) does not apply because the appellant has never been dispossessed. However, this was exactly the situation in Waterstone. Indeed, it is the very fact that the appellant was never dispossessed that renders s. 5(1) applicable, resulting in a finding that the limitation period never started to run.
[13] The respondent further submits that s. 5(1) only applies when the claimant has no legal title to the property but obtains his entire interest by adverse possession. Neither the text of s. 5(1) nor this court’s decision in Waterstone supports this distinction.
[14] We therefore conclude that, by operation of s. 5(1) of the RPLA, the appellant’s application was not statute-barred.
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