Ontario Court of Appeal enforces two-year limitation for estate claims in unjust enrichment dispute

The Ontario Court of Appeal ruled that the two-year limitation period under the Trustee Act applies to an equitable trust claim based on unjust enrichment against an estate, overturning a lower court decision that applied the ten-year period under the Real Property Limitations Act (RPLA).

In Ingram v. Kulynych Estate, 2024 ONCA 678, the respondent alleged she had been in a common-law relationship with the late Henry Kulynych from 1999 until he died in 2017. She initiated a claim against his estate in 2021, more than four years after his passing. She argued that she was entitled to compensation from the estate based on constructive trust and unjust enrichment.

According to her claim, she provided significant emotional and financial support to Kulynych during their relationship, which allowed him to accumulate wealth, particularly in real estate. The estate’s primary asset was a house in Ajax, Ontario, which was sold after his death. The respondent asserted that Kulynych’s estate was unjustly enriched by her contributions, entitling her to a share of the estate.

Initially, the motion judge ruled that the respondent’s claim could proceed under the ten-year limitation period specified in s. 4 of the RPLA, which governs actions related to property claims. The motion judge rejected the appellants' argument that the two-year limitation under s. 38(3) of the Trustee Act applied, concluding that the respondent’s equitable trust claim was distinct from a tort claim and did not involve any "wrong" committed by the deceased. Consequently, the judge found the claim was a property-related issue falling under the RPLA’s longer time limit.

On appeal, however, the Ontario Court of Appeal disagreed with this reasoning, ruling that the two-year limitation period under the Trustee Act should apply. The court explained that even if framed as equitable trust claims, unjust enrichment claims constitute a “wrong” under s. 38(2) of the Trustee Act, which governs actions against estates for wrongs committed by the deceased. The court further emphasized that the two-year period reflects the legislative intent to ensure the prompt administration of estates. The court noted that allowing longer periods for claims would undermine the certainty and finality that estate trustees and beneficiaries rely on in managing and distributing estate assets.

The court also rejected the argument that the equitable trust claim was primarily a property claim under the RPLA. While the respondent sought an interest in Kulynych’s estate assets, including the Ajax house, the court found that the nature of her claim centred on the alleged unjust enrichment by the deceased during his lifetime, making it subject to the Trustee Act.

The court underscored the importance of adhering to the stricter two-year limitation period for claims involving estates. As a result, the court allowed the appeal, ruling that the respondent’s claim was statute-barred for being brought outside the two-year limitation period.