Bacic v. Bacic Estate

Limitation periods in British Columbia are tricky. If you have a legal claim, but do not sue before the limitation period, you are out-of-luck. But there are different limitation periods for different types of claims, meaning that whether you can sue after a certain time may depend on what category of claim you might have. The complexity is compounded by the fact that it is not always clear when the limitation clock begins to tick.

In 1986, Marko Bacic bought a new home. His father, Miljenko Bacic, lent him the money to do so. Marko Bacic agreed to repay his father when Marko sold his own home. As security for the loan, Marko’s parents took the title in their names as joint tenants.

Marko Bacic and his parents all moved into the new home, but his parents spent extended periods in Croatia. Marko Bacic paid all of the expenses such as property taxes for the home.

Marko Bacic sold his old home in 1989. The buyers paid some cash and a mortgage for the balance. Marko Bacic arranged for the mortgage to be put in his parent’s names. The buyers paid out the mortgage in 1991. In this way, Marko repaid the loan from his father.

But Marko Bacic didn’t seek to have the titled transferred to him when he repaid the loan. The title to the new house remained in Marko’s parents names, until his mother died when his father became entitled to the title by right-of-survivorship, and then in his father’s name.

Marko Bacic’s father married Nevenca Tomas in 1995, and died on February 1, 1996, without a will. Because Marko Bacic’s father didn’t have a will, his estate would be distributed in accordance with the Estate Administration Act, under which Ms. Tomas receives over half of the estate in these circumstances.

Sometime in 1997, Ms. Tomas indicated that she might claim an interest in the new home. But nothing was done, and Marko Bacic continued to live in the home, and pay the expenses.

On August 23, 2006, Marko Bacic, filed a lawsuit seeking to have the title of the home transferred to him.

Ms. Tomas’s son, Branco Tomas, was appointed administrator of the Miljenko Bacic’s estate, and took the position that the house is an estate asset.

In Bacic v. Bacic Estate, 2010 BCSC 728, Mr. Justice Butler found Marko Bacic’s parents had taken title to the property as security for the loan, which was repaid. He held that they, and then Marko Bacic’s father, held title as trustees for Marko Bacic.

But Branco Tomas as administrator of the estate argued that Marko Bacic waited to long to sue. He argued that the claim was barred by the Limitation Act, and specifically section 3(3)(d) which says:

(3) After the expiration of 10 years after the date on which the right to do so arose a person may not bring any of the following actions:
…

(d) to recover trust property or property into which trust property can be traced against a trustee or any other person….”

Mr. Tomas argued that the limitation clock began to run either from the date the home was purchased in Marko Bacic’s parent’s name, when the loan was repaid, or at the latest the date Marko Bacic’s father died. In any of those cases, more than ten years passed before Marko Bacic filed his lawsuit on August 23, 2006.

Marko Bacic argued, first, that a different section of the Limitation Period, section 3(4)(j) applies. It says:

(4) The following actions are not governed by a limitation period and may be brought at any time:
…
(j) for the title to property or for a declaration about the title to property by any person in possession of that property.

Second, he argued that if section 3(3)(d) applies, the time didn’t start to run until the existence of the trust was denied.

Mr. Justice Butler held that the limitation period was ten years in accordance with section 3(3)(d). Although section 3(4)(j) appears to apply as well, the claim is in substance a trust claim, and section 3(3)(d) to recover trust property is more specifically related to Marko Bacic’s claim.

But although the limitation period is ten years, Mr. Justice Butler held that it did not begin to run until Ms. Tomas or her son denied the existence of the trust. He applied section 6(1) which postpones the time at which the limitation period begins to run, as follows:

6(1) The running of time with respect to the limitation period set by this Act for an action
(a) based on fraud or fraudulent breach of trust to which a trustee was a party or privy, or
(b) to recover from a trustee trust property, or the proceeds from it, in the possession of the trustee or previously received by the trustee and converted to the trustee's own use,
is postponed and does not begin to run against a beneficiary until that beneficiary becomes fully aware of the fraud, fraudulent breach of trust, conversion or other act of the trustee on which the action is based.

Mr. Justice Butler ordered that the title to the home be transferred to Marko Bacic.