When two people are registered as equal tenants in common of an investment property, does the one who provided the down payment and collected the rents lose a resulting-trust claim after ten years? In Harris v. Melo, 2026 ONCA 798, released November 9, 2026, the Court of Appeal held that s. 5(1) of the Real Property Limitations Act postponed the start of the ten-year period in s. 4, because the claimant was never dispossessed and his possession was never discontinued (paras. 10–14). The Court declared Joseph Melo the beneficial owner of Karen Harris's interest (para. 17).
The decision at a glance
Citation: Harris v. Melo, 2026 ONCA 798 (Huscroft, Dawe and Brownstone JJ.A.; heard October 13, 2026; released November 9, 2026).
Official text: Court of Appeal for Ontario decision
Result: appeal allowed; judgment below set aside; Mr. Melo declared the beneficial owner of Ms. Harris's interest, which governs distribution of the sale proceeds (paras. 17–18).
What happened
Joseph Melo and Karen Harris are registered as 50 percent tenants in common of an investment property purchased in 1989 (paras. 1, 4). Mr. Melo had intended to buy with a third party. When that party could not participate, he asked Ms. Harris to take that place. She agreed to go on title and to co-sign the mortgage (para. 4). He provided all of the funds for the down payment. There was no evidence that she contributed financially to the purchase, mortgage payments, or upkeep (para. 5). For the entire time they remained on title, he alone managed the property and received the tenants' rents (para. 5).
He applied for a declaration that Ms. Harris held her interest in trust for him and that he was the 100 percent beneficial owner (para. 1). The application judge found that, but for a limitations bar, Mr. Melo would have been entitled to that declaration, and that in 1995, if not earlier, Ms. Harris had put him on notice that she claimed both legal and beneficial title to her 50 percent (paras. 1, 6). On that s. 4 analysis, the judge dismissed the claim as more than ten years late and granted partition and sale (paras. 1, 8).
RPLA s. 4 versus s. 5(1)
Limitations were argued below solely under s. 4, the general ten-year period for recovering land or rent, which the Court recorded also captures resulting- and constructive-trust ownership claims, with discoverability applying (paras. 7–8, citing Browne v. Meunier, 2023 ONCA 223 and Waterstone Properties Corporation v. Caledon (Town), 2017 ONCA 623). On appeal, Mr. Melo argued that s. 5(1) postponed the start of the s. 4 clock. The argument was new on appeal. Ms. Harris did not object and acknowledged that the necessary facts were before the Court, but argued that s. 5(1) did not apply (para. 2).
As the Court framed it, s. 5(1) postpones the start of the s. 4 period. The right is deemed to have first accrued at the time of dispossession or discontinuance of possession, or at the last time profits or rent were received (para. 9).
Ms. Harris acknowledged that Mr. Melo had been in continuous receipt of the rents since the purchase and had never been dispossessed of those receipts (para. 10). The Court held that s. 5(1) applied and that the limitation period did not start running, because he was never dispossessed and his possession was not discontinued, following Waterstone (paras. 11, 14). She submitted that s. 5(1) does not apply because he was never dispossessed. The Court rejected that reading: that was exactly the situation in Waterstone, and "it is the very fact that the appellant was never dispossessed that renders s. 5(1) applicable, resulting in a finding that the limitation period never started to run" (para. 12). She also submitted that s. 5(1) applies only when the claimant has no legal title and obtains the entire interest by adverse possession. The Court held that neither the text of s. 5(1) nor Waterstone supports that distinction (para. 13).
The purchase-money resulting trust
Ms. Harris did not appeal the finding that she had failed to rebut the presumption of a purchase-money resulting trust in Mr. Melo's favour. The Court agreed with that finding (para. 15). Her only route to success was the limitation issue; once that was resolved in his favour, the resulting-trust finding took effect (para. 15).
What changed, and what didn't
The Court allowed the appeal, set aside the decision below, which had granted partition and sale, and declared Mr. Melo the beneficial owner of Ms. Harris's interest (paras. 1, 17). He had also sought vesting and rectification of title. Because the property had been sold, the effect of the order will be to govern how the proceeds are disbursed, and the Court held the declaration sufficient to dispose of the appeal (para. 18). The Court did not rule on the 1995 notice finding. It held that s. 5(1) postponed the start of the period because of continued possession and receipt of the rents (paras. 6, 8, 11–14).
Who this affects
This decision matters for people who provided the down payment, went on title with someone else, and stayed in possession or in receipt of the rents (paras. 4–5, 11–14); for title holders who rely on a stale s. 4 "notice" date alone (paras. 6, 8, 12); and for parties facing partition and sale while beneficial ownership is still in issue (paras. 1, 17–18).
Practical takeaways
Section 4 is not the end of the analysis. Section 5(1) can postpone the start of the ten-year period (paras. 9, 14).
Staying in receipt of the rents can keep the clock from starting. On these facts, the limitation period never started to run (paras. 11–12, 14).
Section 5(1) is not confined to adverse possession. The Court rejected the argument that it applies only where the claimant has no legal title (para. 13).
Frequently asked questions
If someone is on title as a 50 percent tenant in common, do they beneficially own half?
Not necessarily. A purchase-money resulting trust was found in Mr. Melo's favour, was not appealed, and took effect once the limitations defence failed (para. 15).
Can a resulting-trust claim still proceed more than ten years after notice of an adverse position?
On these facts, yes. The application judge applied s. 4 from the 1995 notice (paras. 6, 8). The Court of Appeal held that s. 5(1) postponed the start of that period (paras. 11–14).
How did the Court treat RPLA s. 4 versus s. 5(1)?
Section 4 is the general ten-year period. Section 5(1) postpones when it starts, to the time of dispossession or discontinuance, or the last receipt of profits or rent (paras. 7–9). Here, the period never started to run (paras. 11–12, 14).
Does s. 5(1) apply only to adverse-possession claims, or only when the claimant has no legal title?
No. The Court held that neither the text of s. 5(1) nor Waterstone supports that distinction (para. 13).
What happened to the partition and sale order?
The Court set aside the decision below, which had granted partition and sale (paras. 1, 17). Because the property had already been sold, the effect of the Court's declaration is to govern how the proceeds are disbursed (para. 18).
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Written by the lawyers of Francis Mehr LLP. Published November 10, 2026; reflects the decision released November 9, 2026. This post is general information, not legal advice.
