Overview of the Case
In Simko v. Pirner, 2025 ONSC 6397, the Ontario Superior Court of Justice dismissed an estate trustee’s application to recover funds transferred by the deceased to family members, ruling that the claims were barred by the two-year limitation period under the Limitations Act, 2002. The case centered on allegations of resulting trusts over inter vivos transfers (gifts made during the deceased’s lifetime), but the court held that the Trustee Act‘s provisions did not extend the time to bring the claims after the deceased’s death. This decision highlights the tension between estate administration policies and limitation rules, emphasizing that estates cannot revive expired claims from the deceased’s lifetime.
The Facts
Anna Simko passed away on January 9, 2022, leaving behind her two adult children: Thomas Simko (Tom) and Diane Pirner (Diane). Under her 2018 will, Tom and Diane were appointed joint estate trustees and were the sole beneficiaries.
Tom initiated two applications in late 2022 and 2023 (later combined for trial):
- One against Diane, seeking her removal as estate trustee and the return of approximately $689,000 transferred by Anna to Diane between 2016 and 2019. The largest transfer was $600,000 in May 2019.
- Another against Diane’s daughter, Samantha Pirner, to recover about $2,300 in smaller transfers made by Anna between 2009 and 2016.
Tom argued these transfers were not outright gifts but were held on resulting trust for Anna’s estate, meaning the funds should be returned. Notably, Anna’s capacity to make these transfers was not challenged— she was presumed competent, and no fraudulent concealment was alleged.
The respondents (Diane and Samantha) moved to dismiss the applications as statute-barred, pointing out that even accounting for a six-month COVID-19 suspension of limitation periods (March 16 to September 14, 2020), the claims were filed more than two years after the last transfer in May 2019.
The court heard motions on June 30, 2025, with Justice Spencer Nicholson presiding. The key issue was which limitation period applied: the general two-year rule under the Limitations Act, 2002, or a two-year period from the date of death under s. 38 of the Trustee Act.
The Law
The case involved several key legal principles and statutes:
Resulting Trusts
A resulting trust arises when property is transferred gratuitously (without payment), and equity presumes the transferor did not intend a gift unless proven otherwise (Pecore v. Pecore, 2007 SCC 17). The focus is on the transferor’s intent at the time of the transfer. Here, Tom invoked resulting trusts to claim the funds belonged to the estate, shifting the burden to the respondents to show the transfers were gifts.
Resulting trusts are remedies, not standalone causes of action; they often stem from unjust enrichment, where one party retains a benefit without a valid reason, causing deprivation to another (McConnell v. Huxtable, 2014 ONCA 86).
Limitation Periods
- Limitations Act, 2002: Provides a basic two-year limitation period from when a claim is “discovered” (s. 4). Discovery occurs when the claimant knows of the loss, its cause, the responsible party, and that a proceeding is appropriate (s. 5). There’s a presumption of discovery on the date of the act/omission (s. 5(2)). Incapacity can suspend the period (s. 7), but discoverability is key.
- Trustee Act (s. 38): Allows estate trustees to pursue claims the deceased could have brought (s. 38(1)), standing in their shoes. Claims against estates for wrongs by the deceased fall under s. 38(2). All such actions must be brought within two years of death (s. 38(3)). Unlike the Limitations Act, discoverability does not apply (Waschkowski v. Hopkinson Estate, 2000 ONCA).
- Real Property Limitations Act: Imposes a 10-year period for land-related claims but was not applicable here, as the disputes involved personal property (money transfers).
The Limitations Act (s. 19) defers to other acts’ limitation periods if listed in its Schedule, including s. 38 of the Trustee Act. Public policy favors limitation periods for certainty, evidence reliability, and diligence (Levesque v. Crampton Estate, 2017 ONCA 455).
Recent case law, like Ingram v. Kulynych Estate (2024 ONCA 678), clarified that s. 38 applies to equitable claims (e.g., unjust enrichment) against estates, prioritizing expeditious estate administration over prolonged litigation.
Analysis
Justice Nicholson ruled that the Limitations Act, 2002 applied, not the Trustee Act, because Anna’s potential claims arose during her lifetime when she made the transfers. As a competent individual, she had two years from discovery (presumed at the transfer dates) to sue for unjust enrichment or resulting trusts. Those periods expired before her death in 2022, even with the COVID suspension.
The court distinguished s. 38(1) of the Trustee Act (claims by estates) from s. 38(2) (claims against estates). While Ingram applied the two-year-from-death rule to claims against estates to promote quick distribution, extending it here would delay estate administration by allowing reviews of decades-old transactions—contrary to policy goals.
Key reasoning:
- Section 38(3) caps, but does not extend, limitation periods (Swain Estate v. Lake of the Woods District Hospital, 1992 ONCA; Camarata v. Morgan, 2009 ONCA 38).
- The cause of action for unjust enrichment crystallizes at the time of the transfer (McConnell; Sinclair v. Harris, 2018 ONSC 5718).
- Cases cited by Tom (e.g., Vout v. Vout, 2024 ONSC 4484; Van De Keere Estate, 2012 MBCA 109) did not address limitations, rendering them unhelpful.
- Rolston v. Rolston (2016 ONSC 2937) was distinguished as inter vivos claims, and Ingram overruled similar precedents.
The applications were dismissed as time-barred. The disclosure motion became moot, and the prematurity argument failed due to a prior consent order.
Lessons Learned
This case offers critical insights for estate planners, trustees, and litigators:
- Act Promptly on Lifetime Transfers: If a person believes a transfer was not a gift, they must challenge it within two years under the Limitations Act. Death doesn’t reset the clock for estates.
- Capacity Matters: Where incapacity is alleged, the Limitations Act‘s suspension provisions could preserve claims. Here, unchallenged competence sealed the fate.
- Estate Administration Efficiency: Courts prioritize finality in estates. Trustees shouldn’t assume they can undo old transactions without limitation barriers—focus on survivorship assets or post-death discoveries.
- Strategic Framing of Claims: Equitable remedies like resulting trusts are powerful but subject to strict timelines. Litigants should consider discoverability evidence early.
- Policy Over Equity: The decision underscores that limitation periods, though harsh, prevent “indeterminate litigation” and ensure repose for recipients of lifetime gifts.
For families in similar disputes, consulting an estates lawyer early is essential to navigate these pitfalls.
Bobila Walker Law is a Toronto-based firm specializing in estate litigation, probate, guardianship disputes, and related areas such as family law, civil litigation, and crypto fraud recovery.
Led by Managing Partner Daniel Walker, the firm assists clients in navigating complex wills, trusts, and contentious family matters to achieve fair outcomes. To discuss your legal needs, contact us at 416-847-1859 or email at daniel@bobilawalkerlaw.com
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