In 1997, the plaintiff purchased a condominium unit and a parking space. The lawyers for the applicant and the vendor inadvertently neglected to include a conveyance of the parking space. The applicant discovered the error in 2015, but was unable to locate the vendor. He brought an application for a declaration that he owned the parking space.
Held, the application should be allowed.
Equitable title to the parking space was transferred to the applicant with the payment of the purchase price in full under a written agreement obliging the vendor to transfer upon payment. The vendor held title to the parking space as constructive trustee in favour of the applicant. The right of a beneficiary of a constructive trust to enforce his or her title as against the trustee is governed by the Real Property Limitations Act (“RPLA”). Where the interest in land claimed is an equitable title under a constructive trust, the ten-year limitation period in the RPLA is subject to the principle of discoverability, or possibly is governed by s. 5(1) of the RPLA and only begins to run from the time of dispossession (which had not yet occurred). The application was not statute-barred.
I find based on the record before me that the applicant has purchased and paid for the parking unit associated with his unit. He was entitled to be the registered owner at closing of the transaction in 1997 and has acted ever since as if he were. The issue is what jurisdiction I have to clear his title after all of these years and in light of the fact that the unit is registered under the Land Titles Act, R.S.O. 1990, c. L.5 and s. 51(1) of that Act abolishes the right of adverse possession in respect of land where title is registered thereunder. Section 51(1) of the Land Titles Act provides:
51(1) Despite any provision of this Act, the Real Property Limitations Act or any other Act, no title to and no right or interest in land registered under this Act that is adverse to or in derogation of the title of the registered owner shall be acquired hereafter or be deemed to have been acquired heretofore by any length of possession or by prescription.
While rule 14.05(3)(e) of the Rules of Civil Procedure authorizes the court to make a declaration regarding an interest in land, it cannot authorize me to declare possessory title in contravention of s. 51(1) of the Land Titles Act. As well, I must consider the Limitations Act, 2002, S.O. 2002, c. 24, Sch. B, which applies an “ultimate limitation period” of 15 years (Limitations Act, 2002, s. 15). The applicant suggests that s. 16(1)(a) of the Limitations Act, 2002 may provide an exception to the ultimate limitation period in s. 15 since it permits the court to entertain a claim for declaratory relief “if no consequential relief is sought”. I am not sure that this provides the desired result for the applicant since a declaration of ownership simpliciter without the consequential relief sought (in particular, a direction to the land registry office to transfer title) will be of little use.
In my view, the correct analysis here is as follows.
The applicant agreed to buy the unit and the parking space with the respondent. He paid the agreed price in full. Since a legal transfer was inadvertently not provided for the parking unit, legal title did not transfer at closing in respect of the parking unit. Equitable title, however, did transfer with the payment of the purchase price in full under a written agreement obliging the vendor to transfer upon payment. From and after closing, the vendor was a constructive trustee of title to the parking unit for the benefit of the purchaser/applicant. The purchaser had paid in full and was entitled to the title which the vendor had inadvertently failed to convey. The vendor retained no beneficial title. The vendor thus has held title to the parking unit as constructive trustee in favour of the purchaser/applicant.
The right of a beneficiary of a constructive trust to enforce his or her title as against the trustee is governed by the Real Property Limitations Act, R.S.O. 1990, c. L.15 (“RPLA”): McConnell v. Huxtable (2014), 118 O.R. (3d) 561, [2014] O.J. No. 477, 2014 ONCA 86. Section 2(1)(a) of the Limitations Act, 2002 provides that it does not apply to a proceeding to which the RPLA applies. Under the RPLA, there is a ten-year limitation period (RPLA, s. 4) for an action to claim an interest in land. However, where the interest in land claimed is an equitable title under a constructive trust, the limitation period is subject to the principle of discoverability (McConnell v. Huxtable, supra, at paras. 53-54) or possibly is governed by s. 5(1) of the RPLA and only begins to run from the time of dispossession (which has not occurred). In either event, there can be no question of the limitation period having run since the applicant has not been dispossessed and only discovered the error in connection with preparing to sell his condominium over the past few months and has acted promptly.
*source: Ontario Reports
