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Declaration with no consequential relief not subject to limitations

A case review of Piekut v Romoli1

In Piekut, the court determined that a codicil to a will was valid notwithstanding that the application was commenced more than two years after the applicant discovered the codicil’s existence. Justice Dietrich made this determination despite case law that stands for the proposition that a party seeking to challenge a will must do so within two years from the date of the deceased’s death,2 subject to the discoverability rules in the Limitations Act (the “Act”).3 Her Honour’s analysis is very important to those who need to determine the validity of a testamentary document more than two years after its discovery.

In this case, husband and wife (the “Parents”) both executed wills in 2001. Both wills provided that the contents of their home were bequeathed to their daughter Helen; a truck was bequeathed to their son Steve; and the residue of the estate was divided equally among their three children. In 2006, the parents executed a “joint” codicil (the “Codicil”). The codicil gifted two properties, 1577 Dundas St. W. and 1579 Dundas St. W. (The “Dundas Street properties”) to their daughter Krystyna. If the codicil was declared invalid, the Dundas Street properties would fall into the residue to be shared equally between all three children.

The Parents died in 2008. Approximately three years later, Helen commenced an application to determine the validity of the codicil. Within that application, Krystyna brought a motion for summary judgment seeking the dismissal of Helen’s application on the basis that it was statute-barred pursuant to the Act.4

There were no material facts in dispute. Helen acknowledged that she did not commence her application within two years of discovering the Codicil. Nonetheless, relying on Section 16(1)(a) of the Act, Helen argued that there was no limitation period in respect of a proceeding for a declaration if no consequential relief is sought. Justice Dietrich explained Helen’s argument as follows:

Helen submits that she is seeking relief in the form of a declaratory judgment. Specifically, are the codicils valid or invalid? She submits that she remains neutral in this determination, but asserts that the declaratory judgment is essential. Without this assistance from the court, the Executors and Trustees cannot agree on the testamentary documents to be submitted to the probate process. In this regard, Helen relies on paragraph 16(1)(a) of the Limitations Act and asserts that she is seeking declaratory relief only and not seeking consequential relief, e.g., an order compelling the Executors and Trustees of her late father’s estate to deal with the Dundas St. properties in a particular way. Helen relies on Skylark Holdings Ltd. v. Minhas, 2017 ONSC 1328 (Ont. S.C.J.) and McMurtry v. McMurtry, 2016 ONSC 2853 (Ont. S.C.J.) (“McMurtry”) in support of her position.5

Justice Dietrich agreed with Helen. In paragraphs 47-52 of her reasons, Her Honour stated:

….no such step has been taken to propound the codicils in this case. It would have been in Krystyna’s interest to do so since she has a vested interest in proving them. Had she brought such an application and had Helen responded to the application with a challenge to the validity of the codicils, the two-year limitation period, subject to the discoverability rules, would have applied. However, in the absence of such an application to prove the codicils, it remains open to Helen to bring an application for declaratory relief…. I must also consider whether, in addition to the declaration, Helen is seeking consequential relief. The declaration would, naturally, result in consequences for the Executors and Trustees in the administration of their late parents’ estates as well as for them as residual beneficiaries of the estates. However, these consequences are distinct from consequential relief as illustrated in the McMurtry case,6 in which the facts are not dissimilar to the case at bar… I find that Helen’s question with respect to the validity of the codicils is restricted to declaratory relief. She is not seeking consequential relief. She is not asking the court to determine the ultimate beneficiary of Dundas St. properties or to vest the properties in any particular beneficiary or beneficiaries. Following the declaration as to whether the codicils are valid or not, the next steps would be administrative. The Executors and Trustees of the respective estates of each Mr. and Mrs. Wroblewski would apply for a Certificate of Appointment of Estate Trustee with a Will, if required, and administer the respective estates in accordance with the deceased’s last will (including any valid codicil). Any further order of the court that may be required would arise in the context of the due administration of the estate and not as a consequence of the declaratory relief sought. Because Helen is seeking a declaration with no consequential relief, I find that Helen’s application is not barred by the Limitations Act.7

The analysis was two-pronged. First, Her Honour analyzed whether Helen was seeking a formal statement by a court pronouncing upon the existence or non-existence of a legal state of affairs. Justice Dietrich concluded that answering that question was restricted to a pronunciation on the parties’ rights.8 The second prong of the question was “whether Helen was seeking consequential relief.”

In arriving at her decision, Justice Dietrich distinguished between consequences and consequential relief.

Clearly there were consequences to making such a declaration. For the executor’s administration, it was necessary to know which testamentary document governed. For the beneficiaries, if the Codicil was valid only Krystyna would get the Dundas Properties; if it was invalid the Dundas Properties would form part of the residue to be shared by Helen, Steve, and Krystyna. But, the judge concluded that these consequences were not consequential relief permitting the court to determine the validity of the codicil.9

What is Consequential relief?

Professor Waters explains:

“In Ontario, there is no limitation in respect of “a proceeding for a declaration if no consequential relief is sought. Thus, if the plaintiff seeks not only a declaration that property is held in trust for her, but an order that the property be transferred to her, she seems to step outside of this provision.”10

In his article, Limitation Periods in Estate Litigation, Archie Rabinowitz opined that applications which may involve a declaration and no consequential relief can be found under Rule 14.05(3) of the Rules of Civil Procedure. In her article, Limitation Periods in Ontario,11 Anne Werker quotes the Alberta Law Reform Institute’s definition of “declaration” in the context of our discussion:

[a] declaration of rights and duties, legal relations or personal status has no creative effect. Rather, it reflects a judicial determination of what rights and duties, legal relations or personal status existed under the law before the declaration, albeit in dispute, and declares what they were and are. Properly understood, a declaration is not a judicial remedy for it remedies nothing; it does not order anyone to do, or to refrain from doing anything- The interested parties may leave the court in peace and comply with their duties as defined in the declaration without resort to the judicial Process. Only if a claim is brought before a court alleging a breach of duty and requesting a remedial order will the court be in a position to consider granting a remedial order. At that time the issue of whether or not the defendant is entitled to immunity from liability under the claim under the [limitation] Act may arise.

In McMurtry v. McMurtry,12 the court adopted the following definition:

“In Yellowbird v. Samson Cree Nation No. 444, 2008 ABCA 270, 433 A.R. 350 (Alta. C.A.), at paras. 45 and 46 [Yellowbird], the Alberta Court of Appeal summarized the meaning of “consequential relief”: Rather, [the trial judge] held that “[t]he coercive nature of a remedial order is captured in the words, ‘requiring a defendant to comply’”, and concluded that a helpful test for determining whether a remedy was declaratory or remedial would be to ask:

If the Court granted the declaration, and the defendant resisted the implementation of the declaration, could the plaintiff “leave the court in peace” and enjoy the benefits of the declaration “without further resort to the judicial process”? (para. 35)

With this background, let’s review Justice Dietrich’s decision that Helen was not seeking consequential relief. Her Honour noted that Helen was not seeking an order compelling the Executors and Trustees to deal with the Dundas St. properties in any particular way. An order requiring the executors and trustees to fulfill their obligations would not be required as a consequence of the declaration made. Her Honour quoted paragraph 49 of the McMurtry case for the proposition that the legal consequences which naturally flow from a declaration which pronounces on a legal position do not constitute consequential relief.

Conclusion

Subsequent to the passage of the Act, there were cases that indicated that Will Challenges pursued after the limitation period expired were statute-barred unless they fell under s. 16(1)(a). That section states that there is no limitation period in respect of a proceeding for a declaration if no consequential relief is sought. Justice Dietrich’s decision in Piekut v Romoli is an important decision as it applies that provision and makes it clear how it will be analyzed and interpreted. The decision reminds the legal community that the limitation period issue surrounding determining the validity of wills is extremely nuanced. It requires a knowledge of the case law and understanding of the subtle distinction between consequences and consequential relief. It will be interesting to see what impact this decision has on future cases.

Footnotes
  1.   2019 CarswellOnt 4723, 2019 ONSC 1190, 304 A.C.W.S. (3d) 899, 47 E.T.R. (4th) 106 (Piekut)
     
  2.   We also refer you to the following cases:

    Leibel v. Leibel, 2014 ONSC 4516(Ont. S.C.J.(Estates List)) (Leibel). Greer J. stated that the two-year limitation period under section 4 of the Act runs from the date of the testator’s death because of section 5(2) of the Act and the principle that a will speaks from the date of death. She concluded that, in the context of a will challenge, section 5(2) had the result that a person challenging a will is presumed to have known the facts referred to in section 5(1)(a) of the Act on the date of death unless the contrary is proved.

    Shannon v. Hrabovsky, 2018 ONSC 6593, 2018 CarswellOnt 18448, 2018 ONSC 6593, 298 A.C.W.S. (3d) 629, 41 E.T.R. (4th) 190 (Ont. S.C.J.) (Shannon). In paragraphs 63 and 64 of that decision, Wilton- Siegal J. stated, in part, “As I understand the analysis in Leibel v. Leibel, because a will is effective as of the date of death, section 5(2) creates a presumption that an applicant has knowledge of the contents of the will on such date. Given this presumption, an applicant with knowledge at the date of death of a will, and its contents, together with all other facts upon which a claim for lack of testamentary capacity would be based would therefore be fixed with all necessary knowledge as of that date. In such circumstances, the date on which such a claim would have been discovered for the purposes of section 5(1)(a) would be the date of death. … However, the foregoing analysis does not exclude the operation of the “discoverability principle” in the circumstances where an applicant can establish that he or she did not know of the matters referred to in section 5(1)(a) on the date of death. In that case, the presumption in section 5(2) would be rebutted and the “discoverability principle” would be operative.

    Birtzu v. McCron, 2017 ONSC 1420, 24 E.T.R. (4th) 14 (Ont. S.C.J.),
     

  3.   See Limitations Act, 2002, S.O. 2002, c. 24, Sched. B (the “Act”).

    Section 4 of the Act states “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.

    Section 5(2) of the Act states “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.” In the context of a will challenge the date of death is the date on which the claim is based because up until that time the testator could make a new “valid” will.

    That is why, the best practice is for the will challenger to commence his/her claim within 2 years of the date of death. It is always open on the will challenger to rely on section 5(1) and argue that s/he did not discover the claim until later. But, we direct the reader to section 5(1)(b) for the proper test. It is not the actual day on which the claim was known. Section 5(1)(b) states that “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).”
     

  4.   The case was somewhat more complicated. The focus of the blog is just with respect to the limitation period issue. Helen brought application for determination of validity of codicil — Krystyna brought a motion for summary judgment for dismissal of Helen’s application on the basis of expiration of limitation period;
     
  5.   See paragraph 42 of Piekut.
     
  6.   In paragraph 48 of her decision Justice Dietrich quotes at length from the McMurtry case. On the distinction between administrative and consequential relief she quotes Justice Corthorn at paras. 138-140 of his decision. The distinction is key to this case,

    It would be open to the executors and trustees to take the steps necessary, in the context of the administration of the estate, to facilitate a transfer, unconditionally, of the Shares from the Estate to Mrs. McMurtry. … An order of the Court requiring the executors and trustees of the Estate to fulfill their obligations would not be required as a consequence of the declaration requested being made. Such an order, if required, would arise from and be consequential to a failure on the part of the executors and trustees of the estate to fulfill their obligations in accordance with the terms of the Will (i.e. as relates to the residue of the estate). Such an order would be based on a cause of action distinct from that upon which Mrs. McMurtry’s claim for declaratory relief is based. … The legal consequences which naturally flow from a declaration which pronounces on a legal position do not constitute “consequential relief.” (Emphasis added.)
     

  7.   This argument first came about with the introduction of the Limitations Act, 2002, See Archie Rabinowitz, “Limitation Periods in Estate Litigation”, Practice Gems: The Administration of Estates 2012; September 13, 2012
     
  8.   See paragraph 46 of Piekut where Her Honour stated,

    As noted by Justice Lang, as she then was, in Harrison v. Antonopoulos (2002), 2002 CanLII 28725 (ON SC), 62 O.R. (3d) 463 (S.C.), quoting from Zamir & Woolf: The Declaratory Judgment, 3rd ed. (London: Sweet & Maxwell, 2002), at para. 26: “a (declaratory) judgment ‘is a formal statement by a court pronouncing upon the existence or non-existence of a legal state of affairs.’ It is restricted to a pronunciation on the parties’ rights.”
     

  9.   Paragraph 46 Piekut.
     
  10.   See footnote 125 of Waters’ Law of Trusts in Canada, 4th Ed.25 — Breach of Trust: Remedy of the Beneficiary Against the Trustee Personally Editor: Donovan W.M. Waters, Contributing Editors: Mark R. Gillen and Lionel D. Smith
     
  11.   Anne Werker, “Limitation Periods in Ontario and Claims by Beneficiaries” (2008) 34:1 Advocates’ Q;
     
  12.   See 2016 CarswellOnt 7488, 2016 ONSC 2853, 17 E.T.R. (4th) 223, 266 A.C.W.S. (3d) 747 ( McMurtry)
     

Gregory Sidlofsky, David Wagner and Charles Wagner

The authors of this blog are Gregory Sidlofsky, David Wagner and Charles Wagner. Gregory is a Certified Specialist in Litigation by The Law Society of Upper Canada and partner at Wagner Sidlofsky LLP. David is a member of the firm’s Estate and Commercial Litigation Groups. Charles is a Certified Specialist in Estates and Trusts and partner at Wagner Sidlofsky LLP.

This blog is not intended to serve as a comprehensive treatment of the topic. It is not meant to be legal advice. Every case turns on its specific facts and it would be a mistake for the reader of this blog to conclude how it might impact on the reader’s case. Nothing replaces retaining a qualified, competent lawyer, well versed in this niche area of practice and getting some good legal advice.

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