Real Property Limitations Act applies to a claim for monies held in a resulting trust, where monies were used to purchase land

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In Sinclair v. Harris2018 ONSC 5718, the Court considered whether a claim to recover monies that were loaned for the purpose of purchasing of land, and subsequently held in a resulting trust, is governed by the Real Property Limitations Act or whether no limitation period applies because it is governed by equity.

The plaintiffs brought a claim in favour of the Estate of Ms. Rock, the deceased, alleging that a resulting trust was established when the deceased loaned money to the defendants to purchase a property in Beeton, Ontario (the “Beeton Property”). The property was sold on August 5, 2003 by the defendants. The Estate Trustees sought re-payment of Ms. Rock’s equitable interest in the Beeton Property claiming that such funds were held by the defendants on a resulting trust in favour of Ms. Rock’s estate. The defendants argued that no such trust was formed; rather, that a contractual relationship was formed in which the money was given as consideration for shares in the defendants’ company. The defendants sought summary judgment on the basis that the plaintiffs’ claims were statute barred because they were brought outside the limitation period.

The court considered the applicable limitation period that applied to theresulting trust, which required a determination of the nature of the transaction. The plaintiffs argued that no limitation period applied to a resulting trust in equity; in particular, the claim was not about land but it was about the monies that Ms. Rock gave the defendants. However, the defendants submitted that the 10-year limitation period applied pursuant to s. 4 of theReal Property Limitations Act (which had since expired). 

The motions judge held that the RPLA cannot simply be avoided by an attempt to characterize the transaction as being about money and not land. The fact that the plaintiffs are not actually seeking the return of the Beeton Property does not avoid the application of s. 4 given what they are seeking is “money to be laid out in the purchase of land” which fits within the definition of “land” under the RPLA. Accordingly, the plaintiff’s claim was an action to recover land under s. 4 of the RPLA and the 10 year limitation period applied.

The motions judge found that at the latest, the right to recover the land accrued at the time that the Beeton Property was sold (in 2003) and Ms. Rock’s interest was not paid back to her. Since the claim was commenced in 2017 it was outside of the 10-year period. Thus, summary judgment was granted in the defendant’s favour on the basis that the plaintiffs action was statute barred.