



COURT OF APPEAL FOR ONTARIO

CITATION: McConnell v. Huxtable, 2014 ONCA
    86

DATE: 20140131

DOCKET: C56761

Laskin, Rosenberg and Goudge JJ.A.

BETWEEN

Judith June Barry McConnell

Applicant (Respondent)

and

Brian Wesley Scott Huxtable

Respondent (Appellant)

Bryan R.G. Smith and Lindsey Love-Forester, for the
    appellant

Bill Rogers, for the respondent

Heard: September 16, 2013

On appeal from the order of Justice Craig Perkins of the Superior
    Court of Justice, dated February 11, 2013, with reasons reported at 2013 ONSC
    948, 113 O.R. (3d) 727.

Rosenberg J.A.:

[1]

This
    appeal concerns the relationship between the
Limitations Act, 2002
and
    the
Real Property Limitations Act
in the context of a family law
    dispute. It is a matter of first impression in this court. The respondent
    Judith McConnell brings an action for unjust enrichment seeking a remedial
    constructive trust in a property owned by the appellant Brian Huxtable. In the
    alternative, she seeks a monetary award. By June 2007, the respondent was aware
    that she had claims or potential claims against the appellant including a claim
    for unjust enrichment and a remedy of constructive trust. Since she did not
    start this action until February 2012, her action may be out of time if the
    general two-year limitation period in the
Limitations Act, 2002
applies,
    but not if the ten-year limitation period in s. 4 of the
Real Property
    Limitations Act
applies. Thus, the issues in this appeal are: (1) which,
    if either, of these two limitation periods applies, or (2) whether neither Act
    applies, leaving a legislative gap such that there is no statutory limitation
    period.

[2]

The
    appellant brought a motion for summary judgment under s. 16 of the
Family
    Law Rules.
The motion judge, Perkins J., found that the
Real Property
    Limitations Act
applied. Alternatively, he found that there was a
    legislative gap and there was no limitation period for this action. I agree
    with the motion judge that the
Real Property Limitations Act
applies.
    I do not agree with the motion judges alternative conclusion that there is a
    legislative gap. Accordingly, I would dismiss the appeal.

THE FACTS

[3]

As
    indicated, this appeal arises out of a motion for summary judgment brought by
    the appellant. There are significant factual disputes between the parties as to
    the nature of their relationship and what if any contribution the respondent
    made to the properties owned by the appellant. The respondent claims that she
    made significant contributions to improving the properties, particularly the
    most recent property on Royal York Road. The appellant alleges that she made
    minimal contributions, perhaps as little as 20 hours of work, and that her
    contributions were of little value. The factual dispute is not germane to this
    motion. The facts relating to the limitation period issue are not disputed.

[4]

The parties had a relationship from 1993 or 1994 to 2007. They did
    not marry and they did not have children. During their relationship, the appellant
    bought and sold two houses and
owned
a third at the time the parties relationship ended. All properties
    were in the appellants name.
All funds to acquire the properties were
    provided by the appellant. The parties relationship ended in June 2007 when
    the police removed the respondent from the home and charged her with attempting
    to extort the appellant. She did not live at the property after that time.  The
    respondent does not admit the attempted extortion. She does admit that the
    parties relationship ended in June 2007. The parties have not shared a
    residence, had any relationship, shared any financial responsibilities or had
    any financial obligations to one another since June 2007.

[5]

Following
    the end of the parties relationship in June 2007, the respondent retained a
    lawyer who wrote to the appellant seeking an amicable settlement of issues
    arising from your joint ownership of property, cohabitation and separation.
    There was an exchange of correspondence but no settlement was reached. Nothing
    else occurred until February 2012, when the respondent learned that the
    appellant was selling his home. On February 28, 2012, the appellant was served
    with the material in this proceeding including an
ex parte
order that
    granted the respondent a Certificate of Pending Litigation (CPL) on the
    appellants home. The relevant parts of the respondents claim for the purposes
    of the appeal are the following:

(a)     A declaration that pursuant to
    the doctrines of resulting trust, constructive trust, or as a proprietary award
    for unjust enrichment, the Applicant has a 50% interest (traceable to any
    proceeds) in the house at [Royal York Road property], which is registered
    solely in the name of the Respondent;

(b)     A Certificate of Pending
    Litigation with respect to the abovementioned house, and an Order that it
    cannot be sold without the written consent of the Applicant;

(c)     In the alternative, an award to
    the Applicant of monetary damages for unjust enrichment in an amount to be
    determined;

[6]

The
    appellant brought the motion for summary judgment to have the action dismissed
    because it was out of time and to have the CPL removed. Correspondence between
    counsel on the motion for summary judgment confirmed discovery was not an
    issue. The parties included the following in an Agreed Statement of Facts:

On June 27, 2007, the Applicant Judith June Barry McConnell was
    aware that she had claims, or potential claims, against the Respondent Brian
    Wesley Scott Huxtable, in the nature of relief as against Mr. Huxtable's
    property, including but not limited to claims for unjust enrichment, and the
    remedies of constructive trust and/or damages flowing therefrom.

THE REASONS OF THE MOTION JUDGE

[7]

In
    lengthy and compelling reasons, the motion judge found that the
Real
    Property Limitations Act
governed the respondents claim. While the
Limitations
    Act, 2002
seeks to enact a comprehensive scheme for limitation periods, s.
    2(1)(a) expressly exempts

proceedings
    to which the
Real Property Limitations Act
applies. The motion judge found that the respondents claim came within s. 4
    of the
Real Property Limitations Act
, which provides as
    follows:

4.  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
    motion judge held that a claim for unjust enrichment in which the claimant seeks
    a remedial constructive trust in another partys property is an action to
    recover any land within the meaning of s. 4. In reaching this conclusion the
    motion judge conducted a thorough review of the authorities and engaged in the
    statutory interpretation exercise mandated by the Supreme Court of Canada in
    decisions such as
Rizzo & Rizzo Shoes Ltd. (Re),
[1998] 1 S.C.R.
    27. He considered the statutory history and the scheme and object of the
Real
    Property Limitations Act
and the
Limitations Act, 2002
.

[9]

The
    motion judge also noted an apparent anomaly that would occur if the two-year
    limitation period under the
Limitations Act, 2002
applied. In family
    law cases involving a married couple, an unjust enrichment claim seeking a
    remedial constructive trust is often paired with a claim for equalization under
    the
Family Law Act
. The two claims typically cover, in part, the same
    property and subject matter, and the equalization claim ordinarily has a
    six-year limitation period by virtue of s. 7(3) of the
Family Law Act
.
    Section 19 of the
Limitations Act, 2002
preserves those limitation
    periods set out in the Schedule to that Act, including s. 7(3) of the
Family
    Law Act
.

[10]

The motion judge also
    concluded that the respondents alternative claim for monetary compensation
    sheltered under her claim for recovery of land. Since the ten-year limitation
    period in s. 4 of the
Real Property Limitations Act
applied to the
    claim, the motion for summary judgment was dismissed.

[11]

Supposing in the
    alternative that the
Real Property Limitations Act
did not apply by
    virtue of the exemption in s. 2(1)(a) of the
Limitations Act, 2002
, the
    motion judge went on to consider whether the
Limitations Act, 2002
applied
    at all or whether there was instead a legislative gap. Again in comprehensive
    reasons in which he drew on his long experience conducting family law cases,
    the motion judge found that the
Limitations Act, 2002
could not apply
    to the respondents claim and thus there was a legislative gap. In the result,
    there was no statutory limitation period. The motion judge left open the
    question of whether the equitable doctrine of
laches
could apply. That
    issue could only be determined on a full record and would not be suitable for
    resolution on the motion for summary judgment in the form it was brought in
    this case.

THE ISSUES

[12]

The motion judge
    articulated the issues with clarity as follows:

1.       Is a claim in a family law
    case in which the claimant pleads facts to establish a constructive trust and
    asks the court to award an ownership interest in land, with an alternative
    claim for monetary compensation, governed by the ten year limitation period set
    out in section 4 of the
Real Property Limitations Act
or by the two
    year limitation period set out in section 4 of the
Limitations Act, 2002
?

2.       Is there a gap in the
    limitations legislation such that there is no applicable statutory limitation
    period for a constructive trust claim in a family law case, leaving scope for
    the court to devise a time limit using its equitable jurisdiction?

I will deal with the issues in the same order. As I
    agree with the motion judges resolution of the first issue, in these reasons I
    will rely extensively upon his reasons.

ANALYSIS

Application of the
Real
    Property Limitations Act

[13]

The most relevant
    parts of the
Real Property Limitations Act
are the following:

1.
In this Act,

action includes an information on behalf of the Crown and any
    civil proceeding;



land includes messuages and all other hereditaments, whether
    corporeal or incorporeal, chattels and other personal property transmissible to
    heirs, money to be laid out in the purchase of land, and any share of the same
    hereditaments and properties or any of them, any estate of inheritance, or
    estate for any life or lives, or other estate transmissible to heirs, any
    possibility, right or title of entry or action, and any other interest capable
    of being inherited, whether the same estates, possibilities, rights, titles and
    interest or any of them, are in possession, reversion, remainder or
    contingency;



4.

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.

[14]

Other parts of the Act
    are also of some assistance in interpreting the legislation and I will refer to
    those provisions later in these reasons. The
Real Property Limitations Act
is, with some modifications, what used to be Part I of the
Limitations Act,
R.S.O.1990, c. L-15. I will usually refer to this latter legislation as
    the
Old Limitations Act.
When the Legislature decided to overhaul the
    law of limitations in this province, it decided to leave the law as applied to
    real property largely untouched; hence the archaic and difficult language in
    the
Real Property Limitations Act.
For example the key definition in
    s. 1 of land uses the archaic term messuages, which, as I understand it,
    means a dwelling house, its outbuildings, the area immediately surrounding the
    dwelling, and the adjacent land appropriate to its use.

[15]

To understand the
    application of s. 4, it will be helpful to remove those parts that do not directly
    apply to this case:

No person shall bring an action to recover any land, but within
    ten years next after the time at which the right to bring such action first
    accrued to the person bringing it.

Thus, s. 4 creates a ten-year limitation period for an
    action to recover land. The central question raised by this appeal is whether a
    claim for unjust enrichment in which the claimant asks the court to impose a
    constructive trust upon the respondents real property is an action to recover
    any land. The motion judge broke the issue down into three parts: (1) is the
    respondents claim an action, (2) is the action to recover, and (3) is the
    action to recover land? There is no dispute that the respondents claim is an
    action within the meaning of s. 4. I therefore turn to the other questions.

Meaning of recover

[16]

The appellant
    challenges the motion judges approach to defining recover and, of course,
    his decision. The motion judge considered both the ordinary meaning of the term
    as well as its meaning as used in legal contexts and this courts decision in
Hartman
    Estate v. Hartfam Holdings Ltd.
(2006), 263 D.L.R. (4th) 640. The
    appellant submits that the motion judge did not go far enough and subject the
    term to the full
Rizzo & Rizzo
interpretive analysis. I do not
    accept the appellants submissions on this issue, for the following reasons.

[17]

As the motion judge
    noted, the term recover in ordinary language implies the return of something
    that the person previously held. A claim for a constructive trust does not fit
    comfortably within that definition since the applicant does not have any interest
    in the property until the court makes a declaration to that effect. However,
    legal dictionaries refer to a different usage of the term as that of gaining
    through a judgment or order. This was the definition adopted by this court in
Hartman
    Estate
at para. 57:

On a plain reading of s. 43(2), the word "recover"
    appears to mean "to obtain" the trust property. Such an
    interpretation accords with the meaning given to "recover" in s. 4 of
    the Act. In
Williams v. Thomas
, [1909] 1 Ch. 713 (C.A.) at p. 730, the
    English Court of Appeal held that the expression "to recover any
    land" in comparable legislation is not limited to obtaining possession of
    the land nor does it mean to regain something that the plaintiff had and lost.
    Rather, "recover" means to "obtain any land by judgment of the
    Court". See also
OAS Management Group Inc. v. Chirico
(1990), 9
    O.R. (3d) 171 (Dist. Ct.) at 175 to the same effect.

[18]

The court in
Hartman
    Estate
was concerned with s. 43(2) of the
Old Limitations Act
,
    which has no exact equivalent in the
Real Property Limitations Act
,
    although there is some vestige of the provision in s. 42 of the
Real
    Property Limitations Act,
which I will discuss later. Section 43 was found
    in Part II of the
Old Limitations Act
, which was repealed when the
Limitations
    Act, 2002
came into force. Part II dealt with limitations in cases
    involving trusts and trustees where the trust was created by an instrument or
    an Act of the Legislature (s. 42). Section 43 allowed a trustee the benefit of
    any statutory limitation period, with some exceptions. One of those exceptions
    was to recover trust property still retained by the trustee. Having found
    that the exception applied, this court did not have to decide whether the
    limitation period in s. 4 (identical under the
Real Property Limitations
    Act
and the
Old Limitations Act
) applied.

[19]

It is therefore true,
    strictly speaking, that the
Hartman Estate
courts discussion of the
    meaning of recover in s. 4 was
obiter
, since the court was concerned
    with the exception in s. 43. However, while the

courts consideration
    of s. 4 was
obiter
, its holding on the meaning of the term recover
    in s. 43 was not. That determination was a step towards finding that the
    trustees in that case could not rely upon a statutory limitation period, such
    as the limitation period in s. 4. It would be an odd result if recover had
    one meaning in s. 43 of the Act and a different meaning in s. 4, particularly
    given that s. 43 references s. 4, albeit in general terms (any statute of
    limitations).
Hartman Estate
was a considered decision of this court
    and I see no reason to depart from the determination of the term recover in
    that case.

[20]

The appellant places
    considerable emphasis on other parts of the
Real Property Limitations Act
that he says provide context for interpreting s. 4 and which should lead to a
    different result. In particular, he relies upon s. 15, which provides as
    follows:

At the determination of the period limited by this Act to any
    person for making an entry or distress or bringing any action, the
right
    and title of such person to the land or rent
, for the recovery whereof
    such entry, distress or action, respectively, might have been made or brought
    within such period, is extinguished. [Emphasis added.]

The appellant submits that s. 15 presumes that the
    claimant had right and title that were extinguished once the limitation period
    expired. He submits that a person with nothing more than a claim for a
    constructive trust had no right or title to be extinguished. The difficulty
    with this submission is that it gives a very narrow reading to s. 15. Once the
    limitation period expires, the applicants right to recover the land through an
    action is extinguished. Section 15 does not depend upon the claimant being the
    former legal owner of the land. While it is true that the claimants title
    cannot be extinguished since the claimant never had title, the effect of s. 15
    is also to extinguish the right to the land. A claim for a constructive trust
    as a remedy for unjust enrichment is a claim for a right to the land. I see no
    inconsistency between s. 15 and the
Hartman Estate
definition of
    recover. I agree with the motion judges resolution of this issue.

Recovery of land

[21]

This brings us to the
    central question at issue in this appeal: whether the respondents claim for a
    constructive trust based on unjust enrichment is an action for recovery of
    land. The appellants broad submission is that, as developed in Canada, a
    constructive trust is merely a remedy, not an independent claim. Therefore,
    the claim in this case is for unjust enrichment and not an action for recovery
    of land.

[22]

Hartman Estate
provides some guidance on this issue but there are material differences between
    s. 43 of the
Old Limitations Act
and s. 4 of the
Real Property
    Limitations Act
. Section 43 speaks of recovery of trust property.
    Section 4 refers to recovery of any land. It is therefore necessary, as did
    the motion judge, to delve more deeply into the interpretation exercise in
    accordance with the
Rizzo & Rizzo
principles. Fortunately, I have
    the advantage of the motion judges reasons on this matter, with which I agree.

[23]

The motion judge held
    that the plain meaning of recover any land includes seeking an equitable
    interest in land through imposition of a constructive trust. As he said at
    para. 59, a case in which someone asks the court to award them ownership of
    part or all of a piece of land held by somebody else is an action to recover
    land. The motion judge then considered the entire context of s. 4 of the
Real
    Property Limitations Act
, the scheme and object of the Act and the
    intention of the Legislature. This context included the
Limitations Act,
    2002
, and the historical context of limitations law in the province. The
    motion judge reviewed at some length the historical context beginning with a
    1969
Report on Limitation of Actions
by the Ontario Law Reform
    Commission through various reports and iterations of proposed Bills that
    resulted in the 2002 legislation that came into force in 2004. The conclusion
    of his analysis is found in paras. 74-80. For present purposes it is sufficient
    to set out para. 77:

A party seeking an ownership interest by way of constructive
    trust must plead and then prove facts establishing entitlement to it. The fact
    that a claimant must prove enrichment of the other party and a corresponding
    deprivation of the claimant, with no juristic reason for the enrichment in
    order to establish a constructive trust, and must also show that damages alone
    are insufficient and only a proprietary remedy is adequate, does not alter the
    fact that the claimant has asked the court from the beginning to award an
    interest in land. To me, all this means is that the claimant has to plead and
    prove those key elements, usually called "material facts" in
    litigation, to justify the order sought. It should not matter how many material
    facts there are or whether the entitlement to land requires a two step
    analysis, so long as the application makes a claim of entitlement to ownership
    of land.

[24]

The appellant argues
    that the motion judge erred in his treatment of the context in which s. 4 is
    found and the history of the
Real Property Limitations Act
. He makes
    two important points. First, s. 4, when it was found in Part I of the
Old
    Limitations Act,
tended to be used for adverse possession cases. Second,
    other parts of the
Real Property Limitations Act
suggest that Act was
    not intended to apply to constructive trusts.

[25]

I begin with the
    adverse possession point. Resolution of that issue requires a discussion of the
    Legislatures intent when it revised the limitation period scheme in this
    province. As the motion judge noted, originally the intent was to deal with
    limitation periods for all claims. However, this approach was abandoned
    apparently as a result of consultations that resulted in the March, 1991,
Recommendations
    for a New Limitations Act - Report of the Limitations Act Consultation Group
, published by the Ontario Ministry of the Attorney
    General
. The Group reported that it did not have the necessary
    expertise to deal with actions to recover land. Thus, language in earlier
    drafts of the new limitation legislation dealing with limitations of actions to
    recover real property was stripped out of what eventually became the
Limitations
    Act, 2002.
This history strongly suggests that actions to recover land are
    outside the
Limitations Act, 2002
.

[26]

The Legislatures
    inability to deal with real property claims unfortunately detracts from the
    clarity that was a paramount objective of the new approach to limitation
    periods as represented by the
Limitations Act, 2002
.  However, the
    fact that the Legislature did retain Part I of the
Old Limitations Act
demonstrates that the Legislature has not wholly abandoned the field of claims
    for recovery of real property. And, in my view, the objective of clarity should
    not be abandoned by a narrow reading of s. 4 to place artificial limits on its
    scope when the plain words of the section cannot fairly bear that
    interpretation. There is nothing in s. 4 to suggest it is limited to claims for
    adverse possession. The fact that the section itself refers to recovery of
    rent, not just land, tells against a narrow interpretation of the provision to
    adverse possession claims.

[27]

The appellant also
    relies upon other parts of the
Real Property Limitations Act
,
    particularly s. 42, which is as follows:

42.

Where land or rent is vested in a trustee upon an express trust, the
    right of the beneficiary of the trust or a person claiming through the
    beneficiary to bring an action against the trustee or a person claiming through
    the trustee to recover the land or rent, shall be deemed to have first accrued,
    according to the meaning of this Act, at and not before the time at which the
    land or rent has been conveyed to a purchaser for a valuable consideration, and
    shall then be deemed to have accrued only as against such purchaser and any
    person claiming through the purchaser.

[28]

The appellant argues
    that since the legislation only refers to express trusts, the Legislature could
    not have intended the Act to apply to other types of trusts, particularly
    constructive trusts. I do not accept this submission, primarily because of the
    legislative history. The
Old Limitations Act
dealt in Part II with trusts
    created by instrument and by legislation. When the new legislation repealed
    Part II (and Part III) of the
Old Limitations Act,
it left no express
    provision for real property held by trustees. The Legislature apparently
    believed that in the case of express trusts there was the need for some
    clarification. At this point it is impossible to know why the Legislature did
    not deal more broadly with all kinds of trust. One can only guess that given
    the consultation groups lack of expertise and the constant, indeed, rapid
    evolution of equitable trusts, the Legislature was of the view that the area
    was not ripe for codification. I see nothing in the
Real Property
    Limitations Act
that suggests that the Legislature intended to
    exhaustively deal with trust cases involving land. To the contrary, the
    legislative history suggests that the Legislature intended to leave the area
    largely as it was. Thus, if s. 4 can fairly bear the interpretation of applying
    to recovery of real property through a constructive trust then I see no reason
    to impose an artificial and narrow interpretation on the sections very broad
    language.

[29]

In
Hartman Estate
,
in dealing with s. 43 of the
Old
    Limitations Act
, Gillese J.A. speaking for the court did hold that the
    term trust property not only applies to express trusts but includes
    constructive trusts granted as a remedy for unjust enrichment as discussed in
    cases such as
Pettkus v. Becker
, [1980] 2 S.C.R. 834, which was the
    genesis of the modern principle of unjust enrichment discussed in
Kerr v.
    Baranow
, 2011 SCC 10, [2011] 1 S.C.R. 269, which I will discuss more fully
    below
.
In doing so, she adopted a plain reading of the section. She
    left open the broader question of application of statutory limitation periods
    for claims to land based on resulting or constructive trusts, at para. 85:

It is apparent that there is no clear, general answer to the
    question of whether claims to land based on resulting or constructive trust are
    subject to a statutory limitation period and, if so, whether the exceptions in
    s. 43(2) apply to all trustees who hold property by way of resulting or
    constructive trust. In the case at bar, however, if the statutory limitation
    period does apply to such claims, for the reasons already given, I am not bound
    to apply
Taylor v. Davies
. I would give a plain reading to s. 43(2)
    with the result that the proposed trust claims fall within the second
    exception.

[30]

I adopt a similar
    approach to the interpretation of s. 4. Its plain language is broad enough to
    encompass an equitable claim for property based on the remedy of constructive
    trust. Thus I agree with the motion judges conclusion on this point, at para. 79:

It seems odd, more than a century after the abolition of the
    common law forms of action and the merger of common law and equitable
    jurisdiction, more than 40 years after the debate on limitations reform began
    in Ontario and more than a decade since the enactment of a new limitations
    scheme, that we would be constrained to adopt the "traditional"
    approach of limiting section 4 of the
Real Property Limitations Act
to
    adverse possession claims. The plain words of the section, "action to
    recover any land", seem to apply comfortably to the applicant's claim in
    this case. The rest of the
Real Property Limitations Act
talks about
    various kinds of claims other than trust claims but does not indicate any
    intention that constructive trust claims are not properly within the meaning of
    section 4. The repeal of the former Parts II and III of the old
Limitations
    Act
, RSO 1990, c L.15, does not shed light on the meaning of section 4. A
    ten year period for constructive trust claims seeking ownership of land is not
    inconsistent with the rest of the
Real Property Limitations Act
or
    with the general scheme of the
Limitations Act, 2002
, which expressly
    defers to the
Real Property Limitations Act.

[31]

The appellant also relies heavily on the judicial history of the
    treatment of constructive trust in Canadian courts and particularly on the most
    recent Supreme Court decision on the issue,
Kerr
, which
    emphasizes the nature of the constructive trust as a remedy and the preference
    for a monetary award for all unjust enrichment claims, even those where the
    claimant is seeking a constructive trust in identified property.

[32]

Kerr
was
    decided after this courts decision in
Hartman Estate
.  It deals with some
    issues that are not germane to this appeal, such as the common intention
    resulting trust. The court held at para. 24 that the common intention resulting
    trust no longer has a role in resolving domestic cases. The respondent
    originally brought a claim based on resulting trust. The parties agreed that
    the respondent did not have the evidence to support a claim for resulting trust
    and that claim was dismissed.

[33]

In
Kerr
, the
    court dealt at length with unjust enrichment. At para. 33, Cromwell J. held
    that there is no separate line of authority for family cases developed within
    the law of unjust enrichment and reaffirmed the statement in
Peter v.
    Beblow
, [1993] 1 S.C.R. 980, at p. 997, that the basic principles
    governing the rights and remedies for unjust enrichment remain the same for all
    cases. I refer to this point because, although this is a family law case, the
    determination of the limitation period issue will have ramifications beyond
    family law. The resolution of the limitation period issue cannot turn on the
    fact that this is a family law case. Thus, in my view, the fact that the
Family
    Law Act
prescribes a limitation period for claims under that Act cannot be
    determinative of the limitation period issue.

[34]

I recognize that
    Cromwell J. went on to hold at para. 34, again referring to
Peter
, at p.997,

that the courts must
    exercise flexibility and common sense applying equitable principles to family
    law issues with due sensitivity to the special circumstances that can arise in
    such cases.  Indeed, the family law context was front and centre when
    considering the remedy for unjust enrichment in such cases. But, in my view, the
    resolution of the strictly legal question as to the application of the
Limitations
    Act, 2002
and the
Real Property Limitations Act
turns on the
    interpretation of the relevant provisions of those Acts. The issue of whether
    the
Real Property Limitations Act
applies to a claim for a
    constructive trust will be the same whether the equitable claim for an interest
    in land arises out of a domestic relationship or a purely business transaction.

[35]

In
Kerr
,
at para. 32, the court reiterated the
    by now well-known elements of a claim for unjust enrichment as developed in
    Canadian law: an enrichment of or benefit to the defendant, a corresponding
    deprivation of the plaintiff and the absence of a juristic reason for the
    enrichment. At this stage of the proceeding, those elements are not in issue.
    The motion judge was asked to deal with the legal issue on the assumption that
    the respondent could make out those elements: see para. 13 of the motion
    judges reasons. This case turns rather on the remedy for the unjust enrichment
    and how the remedies should be characterized.

[36]

Remedies for unjust
    enrichment are restitutionary and the court in
Kerr
affirmed that
    proprietary and monetary remedies are available for unjust enrichment. At para.
    46, Cromwell J. described the two available remedies in these terms:

A successful claim for unjust enrichment may attract either a
    "personal restitutionary award" or a "restitutionary proprietary
    award". In other words, the plaintiff may be entitled to a monetary or a
    proprietary remedy (
Lac Minerals Ltd. v. International Corona Resources
    Ltd.
, [1989] 2 S.C.R. 574, at p. 669,
per
La Forest J.).

Further, Cromwell J. also noted that the court should
    first consider whether a monetary award is sufficient; in most cases it is:
    para. 47. Most of
Kerr
is concerned with calculating the monetary
    award. The case does, however, refer to the proprietary award in several
    contexts. The first context is where the plaintiff, like this respondent, seeks
    a constructive trust. Justice Cromwell explains as follows at para. 50:

The Court has recognized that, in some cases, when a monetary
    award is inappropriate or insufficient, a proprietary remedy may be required.
Pettkus
is responsible for an important remedial feature of the Canadian law of unjust
    enrichment: the development of the remedial constructive trust. Imposed without
    reference to intention to create a trust, the constructive trust is a broad and
    flexible equitable tool used to determine beneficial entitlement to property (
Pettkus
,
    at pp. 843-44 and 847-48).
Where the plaintiff can demonstrate a link or
    causal connection between his or her contributions and the acquisition,
    preservation, maintenance or improvement of the disputed property, a share of
    the property proportionate to the unjust enrichment can be impressed with a
    constructive trust in his or her favour
(
Pettkus
, at pp. 852-53;
Sorochan
,
    at p. 50).
Pettkus
made clear that these principles apply equally to
    unmarried cohabitants, since "[t]he equitable principle on which the
    remedy of constructive trusts rests is broad and general; its purpose is to
    prevent unjust enrichment in whatever circumstances it occurs" (pp.
    850-51). [Emphasis added.]

[37]

Kerr
also
    makes the point that there must be a significant link between the plaintiffs
    contribution and the property that she seeks to have impressed with the trust.
    As Cromwell J. said at para. 51:

As to the nature of the link required between the contribution
    and the property, the Court has consistently held that the plaintiff must
    demonstrate a "sufficiently substantial and direct" link, a
    "causal connection" or a "nexus" between the plaintiff's
    contributions and the property which is the subject matter of the trust (
Peter
,
    at pp. 988, 997 and 999;
Pettkus
at p. 852;
Sorochan
, at pp.
    47-50;
Rathwell
, at p. 454). A minor or indirect contribution will not
    suffice (
Peter
, at p. 997). As Dickson C.J. put it in
Sorochan
,
    the primary focus is on whether the contributions have a "clear
    proprietary relationship" (p. 50, citing Professor McLeod's annotation of
Herman
    v. Smith
(1984), 42 R.F.L. (2d) 154, at p. 156). Indirect contributions of
    money and direct contributions of labour may suffice, provided that a
    connection is established between the plaintiff's deprivation and the
    acquisition, preservation, maintenance, or improvement of the property (
Sorochan
,
    at p. 50;
Pettkus
, at p. 852).

[38]

With that background I
    return to the interpretive issue and specifically to the question of whether an
    application for the equitable remedy of a constructive trust in real property
    is an application for recovery of any land.
In my view, the respondent
    is making a claim for recovery of land in the sense that she seeks to obtain
land
    by judgment of the Court. That the court might provide her with the alternative
    remedy of a monetary award does not take away from the fact that her claim is
    for a share of the property. The repeated references to constructive trust as a
    remedy for unjust enrichment in
Kerr
demonstrate that a proprietary
    remedy is a viable remedy for unjust enrichment where there is a link or causal
    connection between her contributions and the acquisition, preservation,
    maintenance or improvement of the property.

[39]

In sum, I agree with
    the motion judges conclusion at para. 80 of his reasons:

From the plain meaning of the words "action to recover any
    land" in section 4 of the
Real Property Limitations Act
, in their
    "entire context" as described above, I find that the applicant's
    claim in this case for an ownership interest in the house in question is an
    "action to recover any land" within the meaning of section 4 of the
Real
    Property Limitations Act.
It is subject to a ten year limitation period.
    Based on the record before me, it is not possible for me to conclude that the
    applicant's claim in this case is barred by the ten year limitation.
    Accordingly, this part of her claim is entitled to proceed.

[40]

I also agree with the
    motion judge that her alternative claim for a monetary award can shelter under
    s. 4 for the reasons he gave at para. 88:

My analysis of the question begins with the words of the
    section: "... bring an action to recover any land ...". In contrast
    to the
Limitations Act, 2002
, which deals with individual
    "claims", this provision deals with an "action" (extended
    by section 1 of the
Real Property Limitations Act
to include "any
    civil proceeding"). An action or application can and frequently does
    include a principal claim with an alternative claim, as in this case. Here the
    damages claim is an alternative or fallback position to the first claim
    advanced by the applicant, which is for an ownership interest. The statute does
    not say "action to recover
only
land". Further, it would not make sense to interpret section 4 of the
Real
    Property Limitations Act
as a sort of all or nothing proposition, forcing
    the court either to award a proprietary interest on what it finds to be a
    meritorious claim, when a monetary award would otherwise be an adequate and
    appropriate remedy, or to award nothing at all, because a shorter limitation
    period for a damage award bars that kind of remedy. To interpret the section as
    not protecting an alternative damage award would mean that a claimant would
    never be able to rely on the section in determining when to launch a court case
    involving land and would always have to meet the limitation period for a
    damages claim, for fear of being locked out at the end of the case.

[41]

The appellant also
    submits that the motion judges interpretation of s. 4 will result in absurdity
    because there will be a different limitation period for unjust enrichment
    claims depending on the remedy sought. For example, the claimant may be seeking
    an interest in a pension or a business to which s. 4 does not apply. The
    decision of this court in
Equitable Trust Co. v. Marsig
, 2012 ONCA 235,
    109 O.R. (3d) 561, is instructive in resolving that issue. In that case, the
    plaintiff brought an action against the guarantors of a mortgage loan. The loan
    was given in respect of real property and the guarantee was included in the
    mortgage document. One of the defendants sought summary judgment on the basis
    that the limitation period under the
Limitations Act, 2002
had expired
    because of s. 2(5) of the Act, which provides that the day on which the loss
    occurs in relation to a demand obligation is the first day on which there is a
    failure to perform the obligation. The defendant argued that the demand
    obligation was made when the plaintiff issued a notice of sale under the
    mortgage in December 2007. The action to recover the deficiency from the
    guarantors was not commenced until September 2010, more than two years after
    demand. This court agreed with the motion judge that, despite the broad
    language in the
Limitations Act, 2002
, the limitation period under s.
    43 of the
Real Property Limitations Act
applied. That section provides
    for a 10-year limitation period for actions on a covenant contained in a
    mortgage. Speaking for the court, Perell J. (
ad hoc
) dismissed the
    argument that all guarantees should be treated the same. As he said at para.
    30:

It is true that it may not always be easy to determine whether
    a particular guarantee, like the guarantee in
Bank of Nova Scotia v.
    Williamson
, is subject to the
Limitations Act, 2002
or, like the
    guarantee in the case at bar, is subject to the
Real Property Limitations
    Act
. However, it does not follow that all guarantees should be treated the
    same way.
It has been the case historically that guarantees associated with
    land transactions have different limitation periods from guarantees associated
    with contract claims.
Moreover, as already noted, it is my view that the
    Legislature intended that all limitation periods affecting land be governed by
    the
Real Property Limitations Act
. [Emphasis added.]

[42]

Despite the advances
    in the application of constructive trust claims and unjust enrichment
    generally, it is open to the Legislature to prescribe different limitation
    periods for unjust enrichment actions where the claim is for a proprietary
    remedy. I would not give effect to the appellants arguments. Accordingly, I
    would dismiss the appeal.

Is there a legislative gap?

The motion judges reasons

[43]

Given my conclusion on
    the application of s. 4 of the
Real Property Limitations Act
, it is
    not strictly necessary to deal with the legislative gap argument. However, the
    matter was dealt with fully by the motion judge and his decision has potential
    application to other claims that may not be covered by the
Real Property
    Limitations Act
. In my view, it would be helpful to deal with that issue.

[44]

In short, the motion
    judge held that if s. 4 of the
Real Property Limitations Act
did not
    apply to the respondents claim, there was no statutory limitation period
    because the
Limitations Act, 2002
could not apply to an unjust
    enrichment case in the family law context. The motion judge reached this
    conclusion because of the difficulty of applying ss. 4 and 5 of the
Limitations
    Act, 2002
to an unjust enrichment claim in the family law context. The motion
    judge dealt with this issue at length but I have reluctantly concluded that I
    cannot agree with his decision.

[45]

To appreciate the
    issue, it is necessary to consider the wording of ss. 4 and 5, especially the
    latter:

4.  Unless this Act provides
    otherwise, a proceeding shall not be commenced in respect of a claim after the
    second anniversary of the day on which the claim was discovered.

5.  (1)  A claim is
    discovered on the earlier of,

(a)  the day on
    which the person with the claim first knew,

(i)         that
    the injury, loss or damage had occurred,

(ii)        that
    the injury, loss or damage was caused by or contributed to by an act or
    omission,

(iii)       that
    the act or omission was that of the person against whom the claim is made, and

(iv)       that,
    having regard to the nature of the injury, loss or damage, a proceeding would
    be an appropriate means to seek to remedy it; and

(b)  the day on
    which a reasonable person with the abilities and in the circumstances of the
    person with the claim first ought to have known of the matters referred to in
    clause (a).

(2)  A person with a claim
    shall be presumed to have known of the matters referred to in clause (1) (a) on
    the day the act or omission on which the claim is based took place, unless the
    contrary is proved.

(3)  For the purposes of
    subclause (1) (a) (i), the day on which injury, loss or damage occurs in
    relation to a demand obligation is the first day on which there is a failure to
    perform the obligation, once a demand for the performance is made.

[46]

The
    motion judges concern was with the exhaustive statutory definition of
    discoverability in s. 5(1)(a). He found that it was problematic as to when the
    injury, loss or damage occurred within the meaning of para. (i). He appears to
    have rejected the suggestion that in a family law case, ordinarily the separation
    date would be the date when the loss occurred. He was also concerned that the
    plaintiff would not know that
the act or omission was that of
    the person against whom the claim was made. In his view, in many family law
    cases the defendant has done nothing more than be passively enriched by the
    plaintiffs actions.  As he said at paras. 122-23:

On the third element, as set out in section 5(1)(a)(iii), I
    find that there will often, in fact usually, be constructive trust claims in
    family law where there is no act or omission of the respondent that caused or
    contributed to the claimant's loss. This could be true even where the claimant
    has made a request (direct or indirect) for a change in title or for
    compensation, which the respondent has neither accepted nor rejected. There is
    no duty to say yes.

With no act or omission of the respondent, the claimant could
    not reasonably have knowledge of suffering a loss caused or contributed to by
    an "act or omission" of the respondent. Without that knowledge, the
    third element is not satisfied, the claim has not been "discovered"
    and the limitation period never starts to run. I conclude that section
    5(1)(a)(iii) simply does not work for family law constructive trust claims.

[47]

Finally,
    the motion judge considered the fourth element, 
that, having
    regard to the nature of the injury, loss or damage, a proceeding would be an
    appropriate means to seek to remedy. As I read his reasons, although he had
    some concerns, the motion judge found that, even in a family law case, a claimant
    would know whether the nature of an injury, loss or damage was such that a
    proceeding would be appropriate.

Analysis

[48]

I
    take a different approach to the application and interpretation of the
Limitations
    Act, 2002.
In my view, the starting point must be whether the Act was
    intended to apply to equitable claims. To resolve this issue it is necessary to
    consider the various sections of the legislation and in my view they point
    unequivocally to the Legislatures intent to apply the Act to such claims, unless
    the claim falls within one of the exceptions. For example, s. 2(1) not only
    excludes proceedings to which the
Real Property Limitations Act
applies (para. (a)), but proceedings based on
equitable
claims by
    aboriginal peoples against the Crown (para. (f)) [emphasis added]. Section 13
    of the Act, which deals with acknowledgments states in para. (7):

An acknowledgment of liability in respect of a claim to recover
    or enforce
an equitable interest
in personal property by a person in
    possession of it is an acknowledgment by any other person who later comes into
    possession of it. [Emphasis added.]

[49]

These references to equitable claims show that the Act was intended
    to be comprehensive and to apply to equitable claims, at least to claims other
    than for land that may be covered by the
Real Property Limitations
    Act
or other claims expressly exempted from application
    by the Act. The few cases that have considered the issue have held that
    equitable claims were intended to be covered by the
Limitations Act,
    2002
. See for example:
Bouchan v. Slipacoff
, 2010 ONSC 2693 and
Schneider v. State Farm Mutual
    Automobile Insurance Co.
, 2010 ONSC 4734. This courts
    decision in
Placzek v. Green,
2009 ONCA 83, 307
    D.L.R. (4th) 441, would also seem to support the view that the Act was intended
    to cover equitable claims.

[50]

A
    claim for equitable relief, including a claim based on unjust enrichment, fits
    within the broad definition of claim in s. 1 of the
Limitations
    Act, 2002
as a claim to remedy an injury, loss or damage that occurred as
    a result of an act or omission.
Since equitable claims are
    covered by the Act, there is no statutory gap. Thus, s. 4 of the Act applies
    and a proceeding shall not be commenced in respect of a claim after the second
    anniversary of the day on which the claim was discovered.

[51]

The motion judge did
    find, at para. 109 of his reasons, that the definition of claim in s. 1 of
    the
Limitations Act, 2002
fits comfortably enough in a family law
    constructive trust case. However, he also found, in the same paragraph (and
    again in para. 122), that ordinarily the only act or omission giving rise to a
    family law constructive trust claim is an act by the claimant, namely, the
    claimants contributions directly or indirectly to the property of another
    person. As the motion judge spelled out in his analysis, this latter finding
    raises a problem for the application of the s. 1 definition of claim to
    family law constructive trust claims, because the act or omission referred to
    in that definition must be that of the person against whom the claim is
    brought. This is made clear, for instance, in s. 5(1)(a)(iii), quoted above,
    which states that a claim is not discovered until, among other things, the
    claimant knows that the act or omission giving rise to injury, loss or damage
    is the act or omission  of the person against whom the claim is made.

[52]

I do not agree with
    the motion judge that a remedial constructive trust claim does not require any
    act or omission by the person against whom the claim is brought. Generally speaking,
    a claim of unjust enrichment requires that the defendant retain a benefit
    without juristic reason in circumstances where the claimant suffers a
    corresponding deprivation. In other words, the relevant act of the defendant is
    simply the act of keeping the enrichment (or the omission to pay it back) once
    the elements of the unjust enrichment claim have crystallized. In the family
    law context, this may typically occur on the date of separation, when shared
    assets, including real property, are divided and the possibility therefore
    arises of one party holding onto more than a fair share.

[53]

I agree with the motion judge that in some cases it may be difficult
    to apply the s. 5 definition of discoverability to equitable claims, including
    claims for unjust enrichment. But, that does not mean that the Act does not
    apply. It may well mean that the claim has not been discovered within the
    meaning of s. 5 and so the two-year limitation period does not run. This does
    not mean there is a gap in the legislation and there is no limitation period.
    Rather, the plaintiff will be able to pursue his or her claim until the
    ultimate limitation period in s. 15 applies, in most cases the period
    established by subsection (2):

No proceeding shall be commenced in respect of
    any claim after the 15th anniversary of the day on which the act or omission on
    which the claim is based took place.

[54]

That said, I would think that ordinarily the claim should be taken
    not to have been discovered until the parties have separated and there is no
    prospect of resumption of cohabitation, see: Maddaugh and McCamus,
The
    Law of Restitution
, loose-leaf,
    release no. 11 (Toronto: Canada Law Book, 2013),

at 3:500.30, and
Wilson v. Fotsch,
2010 BCCA 226, at para. 10.

DISPOSITION

[55]

Accordingly, I would dismiss the appeal. The respondent is entitled
    to her costs, which I would fix at $15,000 inclusive of taxes and
    disbursements.

Released:

JAN 31 2014                                    M.
    Rosenberg J.A.

JL                                                    I
    agree John Laskin J.A.

I
    agree S.T. Goudge J.A.


