Does the limitation period apply to a beneficiary of a constructive trust?

British Columbia, Canada


The following excerpt is from Kreeft v. Kreeft, 2001 BCSC 893 (CanLII):

This distinction was noted by Bouck J. in Rankin v. Irving (1983), 47 B.C.L.R. 243 at 247 where he stated: The running of time with respect to a limitation period is postponed and does not run against the beneficiary where the action is based on fraud or fraudulent breach of trust to which the trustee is a party. But the postponement provision set out in s. 6 only applies until the beneficiary becomes fully aware of the fraud. After that, time begins to run against the beneficiary and in favour of the trustee. Moreover, in actions involving an honest trustee, Bouck J. stated: There is a good argument to be made that the plaintiff’s delay in bringing these proceedings after more than 11 years amounts to laches. That submission acquires added weight when the defendant is a constructive trustee as compared to an express trustee. At least, an express trustee knows who is or is not a beneficiary by the terms of the trust itself, while a constructive trustee may only become aware of his obligations when a claim is made against him by an alleged beneficiary. Until then, the constructive trustee may not realize he is in a position of trust and if he is, who are the beneficiaries of the trust. Thus, when a beneficiary of a constructive trust takes over 11 years to bring an action, a defence of acquiescence has a good chance of succeeding.

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