Extending the Limitation Period for Claiming Equalization
The case of Poirier v. Alie, 2007 CarswellOnt 3612 (Ont. S.C.J.) deals with a husband asking the court to extend the period for claiming an equalization payment beyond the six year limitation period. Having an extension in time is not an altogether uncommon occurrence, but in order to grant such an extension the claimant must pass the test set out in s. 2(8) of the Family Law Act, R.S.O. 1990, c. F.3. Namely, the test states that:
2(8) The court may, on motion, extend a time prescribed by this Act if it is satisfied that:
(a) there are apparent grounds for relief;
(b) relief is unavailable because of delay that has been incurred in good faith; and
(c) no person will suffer substantial prejudice by reason of the delay.
In order to appreciate the court’s decision each of the steps of the test will be evaluated in turn. However, first the facts of case will be stated.
The couple separated in 1995. They made various failed attempts at a mediated resolution. The matrimonial home was solely in the wife’s name, although the husband had exclusive possession of the home. The Matrimonial Home was sold in 2001 and on the advice of the real estate lawyer the husband signed a direction permitting all disbursements go to the wife. The money was to be put into a joint bank account. The wife never did so and promised the husband the money was safe. Finally in 2006 she informed her husband that he was not entitled to any of the money.
(a) Grounds for Relief
The grounds for relief were clearly made out. The husband requires relief of the court in order to be able to claim that which he is entitled to.
(b) Good Faith Delay
Good faith has been interpreted to mean that the applicant has acted honestly and with no ulterior motives (see Scherer v. Scherer, 26 R.F.L.(5th) 183 (Ont. C.A.) and Hart v. Hart, 27 R.F.L.(3d) 419 (Ont. U.F.C.)). Interestingly, the court determined that the wife’s repeated assurances that the money was safe did in fact make the money safe for the husband. The husband believed that no court action was required because the money was safe, thereby making the delay based on honest faith. He had no ulterior motives in delaying the application and thus acted in good faith.
(c) No Substantial Prejudice
The wife was fully aware that this debt was owed to the husband. She had acknowledged it on various occasions, including a 2005 mediation session. She acknowledged the debt of at least half the proceeds of the sale of the home well past the expiration of the limitation period. Her awareness and acknowledgment of the husband’s interest in equalization does not allow her to now turn around and say that she is prejudiced by the delay.
This case is interesting in that it demonstrates that courts are willing to extend limitation periods where the late filing party has been given assurances from the other party. This seems fair. If such an extension were not granted then it would deter people from trying to settle their issues through mediation. Such parties would fear missing deadlines and thus being disentitled from their equalization rights. This cae suggests that acknowledging equalization rights keep those rights alive past their limitation period. It is however still important to make claim within the limitation period in order to avoid this argument. It is also important to note that a person that tries to delay the matter by negotiation may not be successful in claiming that the other party missed the limitation date.