Limitation of Actions Consultation - Law Commission

the plaintiff, and to a long-stop limitation period of ten years from the date of the
breach of trust.
13.100 The major difficulty in applying the core regime relates to actions for breach of
trust involving fraud on the part of the trustee, or the recovery of trust property
from the trustee, where no statutory limitation period currently applies (though
the trustee may in some circumstances be able to rely on the equitable doctrines of
laches and acquiescence). This reflects the policy that trustees who have breached
their trust or have been fraudulent should remain indefinitely exposed to actions
by the beneficiaries seeking to remedy this. 121
But are (fraudulent) breaches of trust
so grave that they deserve exceptional treatment, given the merits, in terms of
certainty and simplicity, of having a universal statutory limitation regime, which is
subject to as few exceptions as possible?
13.101 Different positions have been taken on this question in other common law
jurisdictions. The Newfoundland Law Reform Commission proposed in 1986 that
breaches of trust involving fraud, conversion and retention claims should be
brought within the legislation proposed for limitations and subjected to a
limitation period of 10 years (as opposed to the shorter limitation periods of 6 and
2 years proposed for other actions). 122
This was subsequently enacted in the
Newfoundland Limitation Act 1995, section 7(c). Similarly, in British Columbia
an action against a trustee in respect of fraud or to recover trust property or its
proceeds is subject to a ten year limitation period, rather than the shorter two year
period. 123
The Alberta Law Reform Institute and the Law Reform Commission of
Western Australia treat breaches of trust (whether or not fraud is involved) on the
same basis as other causes of action. 124
In contrast, the New Zealand Law
Commission has proposed that actions for fraudulent breach of trust or for the
conversion of trust property should not be subject to the long-stop limitation
period. 125
13.102 As the above demonstrates, no one solution has been adopted by all common law
reform bodies. Our provisional view is that all breaches of trust should be subject
to our core proposals, and that the initial limitation period, running from the date
121 In 1977, the Law Reform Committee noted that all who submitted evidence on limitation
periods for trusts were opposed to the introduction of any statutory limitation period for
claims based on the trustee’s fraud. (Law Reform Committee, Twenty-First Report (Final
Report on Limitation of Actions) (1977) Cmnd 6923, para 3.82).
122 Newfoundland Law Reform Commission, Report on Limitation of Actions, NLRC-R1
(1986), p 5
123 Limitation Act RSBC 1979, s 3(2).
124 Alberta Law Reform Institute, Limitations, Report No 55 (1989), pp 36 - 37. (The Alberta
Limitations Act 1996 c L-15.1 accordingly does not treat claims for breach of trust
separately). The Western Australian Law Reform Commission notes that, in cases where
the initial and the ultimate, or long-stop, limitation periods have expired, and there has
been a fraudulent breach of trust by the trustee, the court can take that fact into account in
the exercise of its discretion. (See Report on Limitation and Notice of Actions, Project No 36 -
Part II (1997), paras 13.74 - 13.75).
125 New Zealand Law Commission, Report No 6, Limitation Defences in Civil Proceedings, NZLC
R6 (1988), para 306.
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