Edwards et al. v. Law Society of Upper Canada et al., (2000) 133 O.A.C. 305 (CA)

• Judge: Finlayson, Moldaver and Goudge, JJ.A.
• Court: Court of Appeal (Ontario)
• Case Date: June 07, 2000
• Jurisdiction: Ontario
• Citations: (2000), 133 O.A.C. 305 (CA)

Edwards v. LSUC (2000), 133 O.A.C. 305 (CA)

MLB headnote and full text

Temp. Cite: [2000] O.A.C. TBEd. JN.055

John Edwards and Nancy Edwards on behalf of themselves and with leave of the court on behalf of the class herein described (plaintiffs/appellants) v. The Law Society of Upper Canada, Palmer Mills, Beverly Hoover, and James Thomas Leslie Mills, executors of the Estate of John T. Murray Mills, deceased, Sisto Consultants Inc., Maurice Carr, Jasper Naude, John Davison, Marilyn Davison, Arlene Woolcox, Jasbir Gill, Sisto Finance Inc., Camm-Tex International Inc. and Sisto Finance N.V. (defendants/respondents)

(C29476; C29477)

Indexed As: Edwards et al. v. Law Society of Upper Canada et al.

Ontario Court of Appeal

Finlayson, Moldaver and Goudge, JJ.A.

June 7, 2000.

Summary:

The plaintiffs sued the defendants alleging that they were victims of fraud which in­volved the purchase of gold delivery con­tracts for which they paid substantial sums. The defendants included the executors of a deceased solicitor (Mills) with whom the plaintiffs alleged a solicitor-client relation­ship. The plaintiffs alleged that Mills was in breach of his contractual and fiduciary obli­gations with respect to these funds and claimed an accounting, tracing of the funds and damages. The executors moved for an order dismissing the action against them on the ground that the claim was statute barred. The executors argued that the claim against them was barred by the two year limitation period in s. 38(3) of the Trustee Act, while the plaintiffs contended that their claim was saved by ss. 43 and 44 of the Limitations Act. The executors argued further that the action should be dismissed on the basis of plene administravit (i.e., there were no assets in the estate). The plaintiffs argued that there were assets because of coverage under a lawyer's professional liability insurance policy.

The Ontario Court (General Division), in a decision reported (1998), 55 O.T.C. 189, granted partial summary judgment substan­tially dismissing the claim against the execu­tors. The court held that part of the claim was statute barred. To the extent the claim was not statute barred, it failed to qualify for coverage under the insurance policy and the executors were entitled to rely on the plene administravit defence, except to the extent of $7,138, the only funds in the estate. The plaintiffs appealed.

The Ontario Court of Appeal agreed that so far as the action was saved by ss. 43 and 44 of the Limitations Act, it was not statute barred, although did for somewhat different reasons. The court however, held that the doctrine of plene administravit could not be applied at this early stage of the proceedings. Therefore, the court allowed the appeal and permitted the action against the defendants to proceed.

Executors and Administrators - Topic 5246

Actions by and against representatives - Actions against executors and ad­ministrators - Defences - Plea of plene administravit - The defendants in a fraud action included the executors of a deceased solicitor - The executors sought to have the action dismissed raising the two year limi­tation period in s. 38(3) of the Trustee Act and the doctrine of plene administravit (i.e., there were no assets in the estate) - A motions judge granted partial judgment substantially dismissing the claim against the executors - To the extent the action fell within the saving provisions of ss. 43 and 44 of the Limitations Act, it was not barred by s. 38(3) of the Trustee Act; however, the doctrine of plene ad­ministravit applied - The Ontario Court of Appeal agreed that so far as the action was saved by ss. 43 and 44 of the Limitations Act, it was not statute barred - However, the doctrine of plene administravit could not be applied at this early stage of the proceedings and therefore the action against the executors could proceed.

Executors and Administrators - Topic 5401

Actions by and against representatives - Limitation of actions - General - [See Executors and Administrators - Topic 5246 ].

Limitation of Actions - Topic 6024

Trusts - Actions against trustee - Fraud (incl. equitable fraud) - [See Executors and Administrators - Topic 5246 ].

Limitation of Actions - Topic 8558

Claims by or against an estate - Applicable limitation period - [See Executors and Administrators - Topic 5246 ].

Cases Noticed:

Murphy v. Welsh, [1993] 2 S.C.R. 1069; 156 N.R. 263; 65 O.A.C. 103; 106 D.L.R.(4th) 404, addendum 157 N.R. 372; 66 O.A.C. 240, refd to. [para. 10].

Swain's Estate v. Lake of the Woods District Hospital (1992), 56 O.A.C. 327; 9 O.R.(3d) 74 (C.A.), dist. [para. 12].

Smith Estate et al. v. College of Physicians and Surgeons (Ont.) et al. (1998), 41 O.R.(3d) 481 (C.A.), dist. [para. 12].

Waschkowski v. Hopkinson Estate (2000), 129 O.A.C. 287 (C.A.), refd to. [para. 15].

Commander Leasing Corp. v. Aiyede Estate and Aiyede (1984), 1 O.A.C. 135; 44 O.R.(2d) 356 (C.A.), refd to. [para. 22].

Statutes Noticed:

Limitations Act, R.S.O. 1990, c. L-15, sect. 43(2)1, sect. 44(2) [para. 9].

Trustee Act, R.S.O. 1990, c. T-23, sect. 38(2), sect. 38(3) [para. 8].

Counsel:

David E. Wires and L. LaHorey, for John and Nancy Edwards;

L. Ricchetti, for the Law Foundation;

Michael Teitelbaum and M. Binks, for B. Hoover and J.T. Mills.

This appeal was heard on January 27 and 28, 2000, before Finlayson, Moldaver and Goudge, JJ.A., of the Ontario Court of Appeal. The following decision was deliv­ered for the court by Goudge, J.A., and released on June 7, 2000.