How Long Do You Have to Sue a Trustee in Ontario?

If you are a beneficiary and think a trustee has mishandled trust property, one of your first questions is likely how long you have to act. Waiting too long can end a claim, even a strong one.

This article explains the main time limits that apply in Ontario, when the clock generally starts, and the exceptions that can change the timing. Your own deadline depends on your facts, so confirm it with a lawyer as early as you can.

The basic two-year rule

The general limitation period in Ontario is two years from the day the claim was discovered. This comes from the Limitations Act, 2002.

After the limitation period ends, a court can generally refuse to hear the claim, no matter how serious the complaint was. That is why it matters to know when the clock started.

When does the clock start?

A claim is discovered when you knew, or reasonably ought to have known, of it. So the clock does not necessarily start on the day the trustee did something. It can depend on what you knew and what you could reasonably have found out.

This is often the hardest part of a trust dispute. Reviewing trust statements, accounts and correspondence can help you work out when you first knew, or should have known, about a problem.

The 15-year outer limit and its exceptions

No proceeding may be started more than 15 years after the act or omission. This is a separate, outer limit.

There is an exception for wilful concealment. The 15-year period does not run while the defendant wilfully conceals the loss, and the claimant must prove the concealment.

Minors, incapable persons and deceased persons

• The two-year period does not run while the claimant is a minor, or is incapable of starting a proceeding, and is not represented by a litigation guardian.
• Trustee Act s. 38(3) keeps a separate deadline: tort actions by or against a deceased person's executor or administrator must be brought within two years of the death.

In Ontario, a person stops being a minor at 18. Where a minor or unborn person has an interest, the Office of the Children's Lawyer must be served with an application to vary a trust or to pass estate accounts.

If either situation may apply to you, do not assume the usual rule fits. Get advice on which deadline applies.

Protections for trustees and other options

A time limit is only one issue in a claim against a trustee. A trustee has defences that go to the merits, and there are options other than a lawsuit. Knowing about them can help you decide how to approach a dispute.

When investing trust property, a trustee must use the care, skill, diligence and judgment of a prudent investor. A trustee is not liable for an investment loss if the conduct that led to the loss followed an investment plan or strategy that a prudent investor could adopt.

For a breach of trust, a court may relieve a trustee wholly or partly from personal liability if the trustee acted honestly and reasonably and ought fairly to be excused. That relief does not apply to losses from investing trust property.

• A person who appears to have a financial interest in an estate may bring a motion for an order requiring the estate trustee to pass accounts.
• The Superior Court of Justice may appoint a new trustee, either replacing or adding to the existing trustees.
• For executors and other personal representatives, the Superior Court of Justice may remove them on any ground on which it could remove any other trustee, and appoint someone else in their place.

Whether any of these options affects your deadline depends on your situation, so it is worth confirming with a lawyer.

What to do next

• Write down when you first learned of the problem and how you learned it.
• Collect trust documents, account statements and emails with the trustee.
• Note the dates of the acts you are concerned about.
• Speak with a lawyer early so the deadline can be confirmed against your facts.

Frequently asked questions