The concept of constructive trust has long been used, in family law, to support the awarding of an interest in property to a common-law spouse who is not on title.

While the concept of the matrimonial home exists to ensure that married spouses share in the family home on marriage breakdown, the matrimonial home rules do not apply to common-law spouses. However, many common-law spouses contribute to the family economy in such a way, during a period of cohabitation, that fairness dictates that they receive a share in property to which the other ex-spouse is on title. To support this kind of transfer, courts often impose, at a party’s request, a constructive trust on certain property.

The Limitations Act, 2002 would seem to impose a limitation period of two years for claims based on constructive trusts. On February 13, 2013, the Ontario Superior Court of Justice rendered judgment in McConnell v. Huxtable (2013 ONSC 948 (CanLII)), a case testing that limitation period. In this case, the applicant ex-common-law spouse Judith McConnell made a constructive trust-based claim against her ex-spouse’s property in February 2012. Her evidence was that the parties had separated in 2007 after a 13-year cohabitation. The respondent Brian Huxtable, relying on the Limitations Act, 2002, argued that her claim was statute-barred.

In refusing to issue summary judgment in favour of Huxtable, the court held that the limitation period applicable to family law-based constructive trust claims is 10 years, as prescribed in the Real Property Limitations Act, not two years.

The court explained that the nature of family breakdown makes it difficult to identify with any degree of accuracy the timing of the breakdown, and hence the moment when the claim for a constructive interest in the other spouse’s property arises. Instead, the claim should be characterized as an “action to recover land’ governed by section 4 of the Real Property Limitations Act, and subject to a 10-year limitation period.

In light of the frequency of claims against lawyers that are based on missed limitation periods, this decision deserves to be welcomed by the Ontario family bar; however, an appeal has been filed. Until a final decision is rendered by the Court of Appeal, we strongly recommend that lawyers file constructive trust claims within two years from the time they are discovered.

Categories: Real Estate, Family Law