Estate Planning

Limitation Periods and the Power of Fraudulent Concealment

By Hull & Hull LLP

Litigation lawyers live in fear and sober respect of the limitation period. We all know that missing a statutory limitation period can be the kiss of death. Given the right circumstances, however, there is one light in the dark that can overcome the shadow of both statutory limitations and common law laches arguments.

Fraudulent concealment is a common law doctrine that operates in equity to defeat  limitations defences where:

1)      The defendant and plaintiff are engaged in a special relationship with one another;

2)      Given the special or confidential nature of their relationship, the defendant's conduct amounts to an unconscionable thing for the one to do towards the other; and

3)      The defendant conceals the plaintiff's right of action, either actively, or as a result of the manner in which the act that gave rise to the right of action is performed.

Fraudulent concealment is not a rule of construction like the discoverability rule. It is an equitable principle that prevents a limitation period from operating 'as an instrument of injustice'. It is aimed at preventing unscrupulous defendants who stand in a special relationship with the injured party from using a limitation provision as an instrument of fraud. See Giroux Estate v. Trillium Health Centre, 2005 CanLII 1488 (ON C.A.)

The fraudulent concealment necessary to postpone a limitation period need not amount to deceit or common law fraud. It is sufficient if the conduct, having regard to some special relationship between the parties, is an unconscionable thing for the one to do towards the other. See Guerin v. The Queen, [1984] 2 S.C.R. 335

For more information on limitation periods and an excellent in-depth analysis of the effect of the Limitations Act, 2002, see Anne Werker, ' Limitation Periods in Ontario and Claims by Beneficiaries' (2008) 34:1 The Advocates Quarterly, 1.

Perhaps now would be a good time to take a minute to check on a few limitation periods - just in case!

Sharon Davis

Sharon Davis - Click here for more information on Sharon Davis.

Full post as published by Toronto Estate Law Blog on October 20, 2009 (boomark / email).