Limitation Period for an Equalization Claim: Campbell v. Nicol, 2016 ONSC 4879
In this case, the Applicant Husband brought a motion for an order pursuant to section 2(8) of the Family Law Act (FLA), extending time to bring an application for an equalization payment pursuant to section 7(3) of the FLA.
The Respondent Wife opposed the motion on the basis that the Husband was not able to satisfy the grounds in section 2(8) and that he failed to file a claim for equitable relief within two years as required under the Limitations Act.
The parties were married on October 29, 1988 and separated on November 1, 2005. In 2008, the parties attended mediation with an experienced mediator in Ottawa but mediation failed. Following same, the Husband retained counsel and prepared the documentation for the commencement of his application. When the Husband’s lawyer attended the Family Court counter, the staff would not issue the application as the Husband had failed to provide his 2010 notice of assessment which must be filed with his financial statement in accordance with the Family Law Rules. The Husband tried to obtain the Wife’s consent to obtain an order dispensing with the requirement to file with the notice of assessment, but she did not respond.
When the Husband received his 2010 notice of assessment from the Canada Revenue Agency, his lawyer attempted to issue the application. The application was issued on December 12, 2011 which was 42 days past the six year limitation period set out in s.7(3)(b) of the Family Law Act.
The husband submitted that he had met the conditions set out in section 2(8) of the Family Law Act for an extension of time to bring his application for an equalization of net family properties. Specifically, the Husband argued the following:
- He had grounds for relief because he would be entitled to approximately $245,000 as an equalization payment which is half of the value of the matrimonial home at the date of separation;
- The delay was incurred in good faith as he was only 42 days late for filing his claim. As well, the parties agreed that the matrimonial home would not be sold until their children were older; and
- The Wife would not suffer substantial prejudice as a result of the delay.
The Wife argued that the Husband had not satisfied the conditions in section 2(8) of the FLA and he had done nothing to move the matter forward before or after the expiration of the limitation period.
The Court began with an overview of the legal principles. Section 2(8) of the FLA states:
The Court may, on motion, extend a time prescribed by this Act if it is satisfied that,
- There are apparent grounds for relief;
- Relief is unavailable because of delay that has been incurred in good faith; and
- No person will suffer substantial prejudice by reason of the delay.
Are there apparent grounds for relief?
The Court found that the husband had apparent grounds for relief. The husband had a right to an equalization payment as he was entitled to half of the value of the difference of the net family properties, which includes the matrimonial home.
Is relief unavailable because of delay that has been incurred in good faith?
The Court found that the delay was incurred in good faith. The Husband was aware of his rights and took steps to assert same. The Husband took steps to commence his claim before the limitation period expired and was unable to issue his application due to procedural requirements related to his notice of assessment.
The Court also found that in the six year period leading up to the issuance of the application, the Husband prioritized his family’s needs over his own as he was the main provider. The Husband paid for many of the home expenses; the parties agreed not to sell the home until the children were older; and after separation, he helped at the home by gardening, installing interlocking and winter protection on the car port. Ultimately, the husband felt trapped as he was the sole provider for the family.
The Husband had also been paying voluntary support of $2500 per month and contributed to the purchase and maintenance of the matrimonial home before and after separation. Therefore, there is a good faith explanation for the delay in the issuance of the application.
No person will suffer substantial prejudice by reason of delay.
The Court held that the matrimonial home had already been valued as of the date of separation and as such there is no prejudice to the Wife with respect to that issue. With respect to the Wife’s other assets and debts as of the date of separation and marriage, the Husband agreed to gather all documentation at his cost so that the Wife could complete the calculation of her net family property.
Given the above, the Court held that the Husband had met the conditions set out in section 2(8) of the FLA and his application could proceed pursuant to section 7(3) of the FLA.