Two-year Limitation Period Applies To Fraudulent Conveyance Actions (Bank Of Montreal v. Iskenderov)

• Published date: 11 August 2023
• Law Firm: Gardiner Roberts LLP
• Author: Isabel Yoo

An important consideration for determining whether (and when) to pursue litigation is the limitation period, which is the time limit by which a party must commence their claim against another party. If the claim is not commenced within the applicable limitation period, the claiming party loses its right to commence and pursue the claim. In Ontario, the Limitations Act, 2002 outlines a basic two-year limitation for most claims commencing on the date on which the claim was or reasonably could have been discovered. There are some limited exceptions for certain types of "claims," which engage different limitation periods and occasionally the courts are called upon to determine whether or not the claim is subject to the Limitations Act, 2002.

In Bank of Montreal v. Iskenderov, 2023 ONCA 528, a five-judge panel of the Court of Appeal for Ontario determined the correct limitation period for a claim to declare a fraudulent conveyance void as against creditors under the Fraudulent Conveyances Act.

The Bank of Montreal was a creditor of the defendant, Iskenderov. The bank sought to set aside Iskenderov's transfer of his residence to his wife as an alleged fraudulent conveyance. The action was brought more than two years after the transfer. The defendants (Iskenderov and his wife) moved for summary judgment, seeking to dismiss the action as time-barred for missing the two-year limitation period.

The motion judge disagreed with the defendants, held that the ten-year limitation period under section 4 of the...