Court File and Parties
Court File No.: CV-23-00000032-0000 Date: 2026-03-20 Superior Court of Justice - Ontario
Re: Elizabeth Ann Phillips, in her capacity as the Estate Trustee Without a Will for The Estate of Reinhold "Roy" Tocholke, deceased, Plaintiff
And: Rick MacDonald, ProAlliance Realty Corporation o/a Royal Lepage ProAlliance Realty, Kenneth Gregory Menlove, Menlove Law Professional Corporation, Charles Douglas Mason, Wendy Jane Mason, and Carolyn Emily Mason, Defendants
Before: The Honourable Mr. Justice Marc Smith
Counsel: James J. Dunphy and Jake Palace, Counsel for the Plaintiff Michael D. Swindley and Nick Zapotochny, Counsel for the Defendants Rick MacDonald and ProAlliance Realty Corporation o/a Royal Lepage ProAlliance Realty Matthew Rendely, Counsel for the Defendants Charles Douglas Mason, Wendy Jane Mason, and Carolyn Emily Mason Krystyne Rusek, Counsel for the Defendants Kenneth Gregory Menlove and Menlove Law Professional Corporation
Heard: February 9, 2026
Reasons for Decision
M. SMITH J
Overview
1The Defendants Rick MacDonald and ProAlliance Realty Corporation o/a Royal Lepage ProAlliance Realty (collectively the "Defendants") bring a motion pursuant to r. 21.01(1)(a) of the Rules of Civil Procedure, R.R.O. 1990, Regulation 194 (the "Rules") to dismiss the Plaintiff's action on the basis that it is statute barred by operation of s. 38 of the Trustee Act, R.S.O. 1990, c. T.23, or alternatively, s. 4 of the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B.
2The other Defendants did not file any motion materials but were present at the motion and participated only very minimally.
3The Plaintiff opposes the motion based on the notion that the Defendants cannot avail themselves of r. 21.01(1)(a) of the Rules to obtain a dismissal of her action.
4For reasons that follow, the Defendants' motion is dismissed.
Facts as Pleaded
5The factual background comes from the Amended Statement of Claim dated November 12, 2024, and the Plaintiff's Reply dated January 22, 2025:
i. The Plaintiff is the successor to Reinhold "Roy" Tocholke (the "Deceased") who suffered from mental illness and dementia and lacked the capacity to manage his affairs. He was not represented by a litigation guardian.
ii. The Deceased was the owner of two properties, a house and a lot (collectively the "Lands").
iii. Rick MacDonald is a licensed real estate agent who represented the Deceased with respect to the sale of the Lands.
iv. Kenneth Gregory Menlove is a licensed lawyer that represented the Deceased in relation to the sale of the Lands.
v. Charles Douglas Mason, Wendy Jane Mason ("Mrs. Mason") and Carolyn Emily Mason were the purchasers of the Lands (collectively the "Masons").
vi. Mr. MacDonald had a prior business relationship with one or more of the Masons.
vii. In or around August 2016, the Deceased entered into a listing agreement for the Lands with Mr. MacDonald and his brokerage firm.
viii. In or around August 2016, Mr. MacDonald was advised by a social worker that the Deceased was cognitively impaired and lacked the capacity to manage his financial affairs.
ix. In or around August 16, 2016, Mr. MacDonald and one or more of the Masons agreed to convince the Deceased to sell the Lands to Mr. Mason substantially below fair market value. The Masons, Mr. MacDonald, and the brokerage entered into a conspiracy where they would split the profits received from Mr. Mason's subsequent sale of the Lands at fair market value.
x. In or around March 2017, upon referral from Mr. MacDonald, the Deceased retained Mr. Menlove to advise and represent him in connection with the sale of the Lands.
xi. In or around the end of March 2017, the Deceased sold the house to the Masons for $100,000 and the land for $60,000. On March 31, 2017, Mr. Mason assigned his interest in the house to Mrs. Mason, and the lot was transferred to Mr. Mason.
xii. In or around October 2017, the house was sold for $285,000 (profit of 185% approximately one year after the making of the agreement with the Deceased) and in or around September 2019, the lot was sold for $135,000 (a profit of 125% approximately two years after the making of the agreement with the Deceased).
xiii. The Deceased passed away on January 4, 2019.
xiv. The Plaintiff learned of the Deceased's death on January 6, 2019.
xv. The Plaintiff learned that the Deceased was involved with the Public Guardian and Trustee ("PGT"). She provided her contact information to the PGT on January 14, 2019.
xvi. In February 2019, the PGT advised the Plaintiff that they require a Certificate of Appointment of Estate Trustee before information can be released to her.
xvii. The Plaintiff obtained a Certificate of Appointment of Estate Trustee on March 24, 2020, which is subsequently provided to the PGT on April 14, 2020.
xviii. In May 2020, the PGT released the Deceased's funds and accounting to the Plaintiff.
xix. In July 2020, the PGT denied the Plaintiff access to the Deceased's medical files.
xx. In August 2020, the Plaintiff appealed the PGT's decision to the Information and Privacy Commissioner of Ontario ("IPC"), which appeal is acknowledged by the IPC on October 29, 2020.
xxi. On October 21, 2021, the PGT advised the Plaintiff to contact the Local Health Integration Network ("LHIN") to request a copy of the Deceased's file.
xxii. On December 8, 2021, the Plaintiff requested a copy of the Deceased's LHIN file, which is received by email on December 22, 2021.
xxiii. The Plaintiff reviewed the LHIN file between February and March 2023, at which point she discovered that the Deceased may not have had the requisite capacity to effect the transactions at issue in the litigation.
Legal Principles
6Rule 21.01(1)(a) of the Rules provides that a party may move before a judge for the determination, before trial, of a question of law raised by a pleading in an action where the determination of the question may dispose of all or part of the action, substantially shorten the trial, or result in a substantial saving of costs.
7Rule 21.01(2)(a) of the Rules states that no evidence is admissible on a motion of this kind.
8Section 38(1) of the Trustee Act states that an executor or administrator of any deceased person may maintain an action for all torts or injuries to the person or to the property in the same manner and with the same rights and remedies as the deceased would, if living, have been entitled to do.
9Section 38(3) of the Trustee Act says that an action under s. 38 of the Trustee Act shall not be brought after the expiration of two years from the death of the deceased.
10Section 4 of the Limitations Act, 2002 provides that 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 sets out the discoverability test and section 7 deals with incapacity and the suspension of the limitation period.
11The test under r. 21.01(1)(a) of the Rules was articulated by the Court of Appeal in Beaudoin Estate v. Campbellford Memorial Hospital, 2021 ONCA 57, 154 O.R. (3d) 587, at para. 14:
The test under r. 21.01(1)(a) is whether the determination of the issue of law is "plain and obvious", which is the same test that applies under r. 21.01(1)(b) for whether the pleading should be struck because it discloses no reasonable cause of action or defence: Transamerica Life Canada Inc. v. ING Canada Inc. (2003), 2003 CanLII 9923 (ON CA), 68 O.R. (3d) 457 (C.A.), at para. 37; Paul M. Perell & John W. Morden, The Law of Civil Procedure in Ontario, 4th ed. (Toronto: LexisNexis Canada, 2020), at para. 6.
The facts pleaded in the statement of claim are assumed to be true, unless they are patently ridiculous or manifestly incapable of proof: Paton Estate v. Ontario Lottery and Gaming Corporation (Fallsview Casino Resort and OLG Casino Brantford), 2016 ONCA 458, 131 O.R. (3d) 273, at para. 12.
The statement of claim should be read as generously as possible to accommodate any drafting inadequacies in the pleading. If the claim has some chance of success, it should be permitted to proceed: R. v. Imperial Tobacco Canada Ltd., 2011 SCC 42, [2011] 3 S.C.R. 45, at paras. 17-22.
12The jurisprudence establishes a clear principle that parties should refrain using r. 21.01(1)(a) of the Rules to determine limitation period issues save in very narrow circumstances where pleadings are closed and the facts relevant to the limitation period are undisputed: Beaudoin Estate: at para. 30.
13The applicable legal principles regarding s. 38(3) of the Trustee Act were also articulated by the Court of Appeal in Beaudoin Estate, at para. 17:
Claims brought by the deceased's dependents under s. 61 of the Family Law Act are governed by the same limitation period in s. 38(3) of the Trustee Act: Camarata v. Morgan, 2009 ONCA 38, 94 O.R. (3d) 496, at para. 9; Smith Estate v. College of Physicians and Surgeons of Ontario (1998), 1998 CanLII 1523 (ON CA), 41 O.R. (3d) 481 (C.A.), at p. 488, leave to appeal refused, [1998] S.C.C.A. No. 635.
Section 38(3) of the Trustee Act prescribes a "hard" or absolute limitation period triggered by a fixed and known event -- when the deceased dies -- and expires two years later: Levesque v. Crampton Estate, 2017 ONCA 455, 136 O.R. (3d) 161, at para. 51; Bikur Cholim Jewish Volunteer Services v. Penna Estate, 2009 ONCA 196, 94 O.R. (3d) 401, at para. 25.
The discoverability principles under the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B do not apply to toll the limitation period under s. 38(3) of the Trustee Act: Giroux Estate v. Trillium Health Centre (2005), 2005 CanLII 1488 (ON CA), 74 O.R. (3d) 341 (C.A.), at para. 33; Bikur Cholim, at para. 26; and Levesque, at para. 47. Although this can sometimes be harsh, since a claim under the Trustee Act can be time-barred even before it is discovered, this can be mitigated by common law rules, such as the doctrine of fraudulent concealment: Levesque, at para. 56; Bikur Cholim, at para. 25.
14The shorter two-year limitation period for estate matters reflects the long-established duty of estate trustees to administer estates promptly and diligently. The legislative rationale for doing so is that it allows access to a remedy available for a limited time without creating indefinite fiscal vulnerability for an estate: Ingram v. Kulynych Estate, 2024 ONCA 678, 501 D.L.R. (4th) 491, at paras. 27 and 29.
15The doctrine of fraudulent concealment is an "equitable doctrine that prevents limitation periods from being used 'as an instrument of injustice'…[w]here the defendant fraudulently conceals the existence of a cause of action, the limitation period is suspended until the plaintiff discovers the fraud or ought reasonably to have discovered the fraud". Although fraudulent concealment can apply when there is a special relationship between the parties, it is not required. It can apply whenever "it would be, for any reason unconscionable for the defendant to rely on the advantage gained by having concealed the existence of a cause of action": Pioneer Corp. v. Godfrey, 2019 SCC 42, [2019] 3 S.C.R. 295, at paras. 52 and 54.
16A fraudulent concealment claim should not be decided by way of a motion pursuant to r. 21.01(1)(a) of the Rules because to do so would be unfair to a plaintiff when no evidence is admissible on such a motion except with leave of the court or on consent: Beaudoin Estate, at para. 34.
Analysis
Position of the Defendants
17The Defendants take the position that the facts relevant to the limitation period are undisputed and because they are undisputed, it is appropriate for the court to determine the limitation issue on a motion pursuant to r. 21.01(1)(a) of the Rules.
18The Defendants say that under the strict limitation period set out by s. 38(3) of the Trustee Act, the Plaintiff's action needed to be commenced within two years of the Plaintiff's death, being January 4, 2019. The Plaintiff's claim was not issued until December 22, 2023, and therefore it is statute-barred.
19The Defendants submit that the next issue is to determine whether the action can be saved by operation of the doctrine of fraudulent concealment. They argue that it cannot, as the Plaintiff has not established that any alleged fraudulent concealment of material facts prevented the Plaintiff from discovering the cause of action and thereby caused the limitation period to expire. The Defendants note that no requests were made by the Plaintiff to the Defendants for any disclosure or information at anytime prior to the expiry of the limitation period.
20The Defendants argue that the basis for any finding of equitable fraud is entirely absent in this case. Fraudulent concealment cannot toll a limitation period that has not yet commenced. Under the Trustee Act, the limitation period is triggered only upon the Deceased's death. Any alleged fraudulent concealment directed at the Deceased during his lifetime predates the running of the limitation period and is therefore irrelevant. Even if the Deceased lacked capacity and failed to appreciate the sale transactions because of fraudulent concealment, the doctrine is not engaged and cannot save the action because it would have occurred before the limitation period.
21Alternatively, if the Trustee Act does not apply, the Defendants say that the two-year limitation period under the Limitations Act, 2002 applies. The facts relevant to the discovery of the Plaintiff's cause of action are not in dispute. The Masons' resale of the last property in September 2019 was a matter of public record, and the Plaintiff knew or ought to have known that it was sold. Moreover, the Plaintiff failed to exercise reasonable diligence in requesting the Deceased's medical files, which were not obtained until November 2021. The action was not commenced until December 2023. Even if the latest possible discovery date is taken to be November 2021, the claim is still statute-barred.
Position of the Plaintiff
22The Plaintiff submits that the Defendants' motion under r. 21.01(1)(a) of the Rules is unsuitable for two reasons: (i) there are numerous contested facts that are directly material to whether a dismissal can be properly granted under the Trustee Act or the Limitations Act, 2002; (ii) the Defendants do not meet the plain and obvious standard, namely that upon a review of the Amended Statement of Claim, a dismissal is appropriate under either statute.
23First, the Plaintiff argues that r. 21.01(1)(a) of the Rules cannot be used to determine a question of law where material facts are disputed, that is where there is no agreement on the factual foundation underpinning the legal issue. A proper and uncontested factual record is a prerequisite to bring a motion under this rule.
24The disputed facts include the following: the Plaintiff asserts, and the Defendants deny, that the Deceased lacked the capacity to enter into a solicitor-client relationship or a principal-agent relationship; that he lacked the capacity to enter into the agreement of purchase and sale for his property; that the Defendants knew the Deceased was incapable at all material times; that the Defendants participated in a conspiracy and shared in its profits; that the Defendants concealed the information necessary to discover their alleged unconscionable conduct; and that Mr. MacDonald did not have the Deceased's full, free, and informed consent to act jointly for both the Deceased and the Masons.
25The Plaintiff says that the doctrine of fraudulent concealment can be used to toll the two-year limitation period prescribed by the Trustee Act. This doctrine could apply if it would be, for any reason, unconscionable for the Defendants to rely on the advantage gained by having concealed the existence of a cause of action. It is further submitted that the courts have explicitly denounced using r. 21.01(1)(a) of the Rules to determine if the doctrine of fraudulent concealment has been properly laid out.
26Second, the Plaintiff says that it is not plain and obvious that the Defendants did not engage in unconscionable conduct so as to toll the limitation period. The plain and obvious test proceeds on the assumption that the facts stated in the Amended Statement of Claim can be proved and the facts are to be taken at their highest. The Plaintiff says that it was not plain and obvious that the Deceased was capable nor that the Defendants did not engage in conduct that was unconscionable.
Discussion
27While the jurisprudence makes it clear that r. 21.01(1)(a) of the Rules should generally not be used to adjudicate limitation period issues, I find that, in this case, the determination of the limitation issue is plain and obvious.
28Two limitation periods are potentially applicable in relation to the Plaintiff's claim: (a) the strict two‑year limitation period under s. 38(3) of the Trustee Act; and (b) the basic two‑year limitation period under s. 4 of the Limitations Act, 2002.
29However, as set out below, the central issue on this motion is whether the limitation period can be suspended, either through fraudulent concealment or incapacity. I find that the limitation period cannot be suspended based on fraudulent concealment, but it can be tolled due to incapacity, pursuant to s. 7 of the Limitations Act, 2002.
Trustee Act
30Section 38(3) of the Trustee Act imposes a strict two-year limitation period from the date of death of the Deceased, irrespective of the discoverability principle. The Deceased died on January 4, 2019. The Statement of Claim was issued on December 22, 2023. It is undisputed that the Plaintiff failed to commence her claim against the Defendants within two years of the Deceased's death. It is therefore statute-barred.
31The issue is whether the action can be saved by the operation of the doctrine of fraudulent concealment.
32The parties disagree as to when the doctrine of fraudulent concealment should be assessed. The Defendants argue that it must occur after the Deceased's death, while the Plaintiff says that it is before the Deceased's death. I agree with the Defendants' position that the proper temporal focus is after the death because death is the event that triggers the limitation period under s. 38(3) of the Trustee Act. The limitation period does not exist prior to the death of the Deceased, and therefore, fraudulent concealment occurring during the Deceased's lifetime cannot suspend or toll a limitation period that has not yet commenced. The Plaintiff has identified instances of fraudulent concealment during the Deceased's lifetime, some of which may even be unconscionable, but such conduct is irrelevant to the analysis under s. 38(3) because it only begins to run from the moment of death. The correct inquiry is therefore whether it is plain and obvious that any fraudulent concealment occurred after the Deceased's death, during the running of the statutory limitation period.
33The facts are not disputed as to what occurred after the Deceased's death.
34The Plaintiff learned of the Deceased's death on January 6, 2019, and, shortly thereafter, discovered that the Deceased had been involved with the PGT. In February 2019, the PGT advised that no information could be released without a Certificate of Appointment of Estate Trustee. The Plaintiff obtained the Certificate on March 24, 2020 and provided it to the PGT on April 14, 2020. In May 2020, the PGT released the Deceased's funds and accounting, but in July 2020 denied the Plaintiff access to the Deceased's medical records. The Plaintiff appealed this refusal to the IPC in August 2020, and the IPC acknowledged the appeal on October 29, 2020. On October 21, 2021, the PGT directed the Plaintiff to request the Deceased's file from the LHIN, which she did on December 8, 2021, receiving the LHIN records by email on December 22, 2021. The Plaintiff reviewed the records 14 to 15 months later and discovered information suggesting that the Deceased may not have had the requisite capacity to engage in the transactions underlying this litigation.
35On the facts pleaded, the Plaintiff had no communication with any of the Defendants during the two‑year limitation period following the Deceased's death. Nor did the Defendants receive any request from the Plaintiff for medical records or any other information in their possession relating to the Deceased.
36The Plaintiff has not pleaded any facts capable of supporting a finding of fraudulent concealment after the Deceased's death, which is the only period relevant to the operation of the limitation period in s. 38(3) of the Trustee Act. Accordingly, it is plain and obvious that there is no causal connection between the alleged fraudulent concealment and the Plaintiff's inability to commence her action within the applicable two‑year limitation period.
37Therefore, the Plaintiff cannot rely on fraudulent concealment to toll the limitation period.
Limitations Act, 2002
38Section 7(1)(a) of the Limitations Act, 2002, suspends the running of the limitation period established by s. 4, when a person is incapable of commencing a proceeding because of a physical, mental, or psychological condition.
39Section 19 provides that a limitation period set out in another statute has no effect unless it is listed in the Schedule of the Limitations Act, 2002. Subsection 38(3) of the Trustee Act is listed in the Schedule.
40Section 19(5) of the Limitations Act, 2002, stipulates that limitation periods listed in the Schedule are subject to s. 7, which governs persons under disability. As a result, even if s. 38(3) of the Trustee Act imposes a strict two-year period from the date of death, section 19(5) prevents the strict two-year period from running against incapable individuals.
41In relation to the Deceased's incapacity, the Amended Statement of Claim pleads, in part, as follows:
The plaintiff is the successor of Reinhold "Roy" Tocholke. At all material times, Tocholke suffered from mental illness and dementia, and lacked the capacity to manage his financial affairs.
Also in or around August 2016, MacDonald was advised by a social worker, Sue Briggs, that the Deceased was cognitively impaired and lacked the capacity to manage his financial affairs. Notwithstanding MacDonald being advised by Ms. Briggs that the Deceased lacked the capacity to manage his financial affairs, MacDonald and the Brokerage continued to purport to advise and represent the Deceased with respect to the sale of the Lands.
Menlove and the Menlove Firm breached their agreement with the Deceased because they:
(c) knowingly assisted in dishonesty when they took steps so that the purchase and sale of the Lands pursuant to the House APS and the Lot APS could close notwithstanding the Deceased lacking the capacity to manage his financial affairs.
(e) failed to take steps to have a lawfully authorized representative appointed, for example, a substitute decision maker appointed under the Substitute Decisions Act, 1992, S.O. 1992, c. 30, as amended, or to obtain the assistance of the Office of the Public Guardian and Trustee to protect the interests of the Deceased.
Further, or in the alternative, the Estate claims that Menlove and the Menlove Firm owed their client, the Deceased, a duty of care to act as a reasonably competent real estate transaction lawyer and that they breached that duty of care when they continued to act for the Deceased in relation to the Transaction when they knew or ought to have known that the Deceased lacked the capacity to manage his financial affairs.
The Estate claims that the defendants' conduct was high handed, malicious and is deserving of this Honourable Court's reproach by way of an award of punitive damages because the defendants, motivated by greed, took advantage of a vulnerable person who lacked capacity to manage his financial affairs when they obtained the Lands at a price well below fair market value.
42The foregoing pleaded facts are assumed to be true, and I do not find them to be patently ridiculous or manifestly incapable of proof. It is therefore not plain and obvious that the Deceased had capacity to manage his financial affairs, including entering into financial transactions.
43The Defendants argue that the allegations concerning the Deceased's capacity should not be determinative to the issues before the court because the Plaintiff is not seeking a declaration that the agreements of purchase and sale of the Lands are void. The Plaintiff is only seeking damages and as such, should not be able to rely on the Deceased's alleged incapacity.
44I am not persuaded by the Defendants' argument. In any event, the Plaintiff has relied on s. 7 of the Limitations Act, 2002 in her pleading and the issue of incapacity may be directly related to the Plaintiff's claim for punitive damages.
45Taking the facts as pleaded at their highest, I believe that it would be open for a trier of fact to conclude that the Deceased did not have the capacity to enter into an agreement to sell the Lands, which would suspend the running of the limitation period under s. 38(3) of the Trustee Act and s. 4 of the Limitations Act, 2002.
Disposition
46For the foregoing reasons, the Defendants' motion is dismissed.
47In terms of costs for this motion, if the parties are unable to agree, the Plaintiff shall serve and file her costs submissions, within 15 days of these Reasons for Decision, limited to three pages, excluding the Bill of Costs and Offers to Settle. The Defendants shall then serve and file their responding costs submissions, with the same page restrictions, within 15 days thereafter.
M. Smith J
Released: March 20, 2026