F.K. v. E.A., 2019 ONSC 3707: Limitation Period for Setting Aside a Marriage Contract

In F.E. v. E.A., the court was tasked with determining the limitation period for setting aside a signed marriage contract or separation agreement due to invalidity.

Case Background

The Applicant (“husband”) and the Respondent (“wife”) got married on July 20, 2005, and later entered into a marriage contract styled as a “Prenuptial Agreement” on July 14, 2005. The agreement waived spousal support and set out a separate property regime. It was signed by both parties and witnessed. The agreement indicates that each party received independent legal advice; however, this statement is false, as neither of the parties did.

The husband said he was presented with the marriage contract six days before the wedding, and that his wife refused to marry him unless he signed the agreement. The wife denied the allegation and countered that the husband never mentioned needing more time to review the agreement. The parties disagreed as to whether the wife encouraged the husband to obtain legal advice before signing the agreement. There was no formal exchange of financial disclosure, but each party had a general understanding of the other’s respective financial affairs.

The parties separated on August 13, 2012. Shortly after separating, the husband retained a lawyer and brief negotiations between the parties followed. The husband suffered from bi-polar disorder and decided to halt negotiations in 2013 due to mental health reasons.

The parties did not dispute that the husband’s counsel wrote to the wife’s counsel in the spring of 2015, indicating that court documents were being prepared for pending litigation. The husband’s application for spousal support and equalization of property was issued on August 24, 2017. In that proceeding, the husband moved to set aside the marriage contract.

Analysis

A Prenuptial Agreement is a marriage contract, and therefore a domestic contract under Part IV of the Family Law Act. Domestic contracts are presumed to be valid and enforceable if they are in writing, signed by both parties, and witnessed – unless there is a declaration pronouncing the contract void or an order is issued to set it aside.

The husband applied to have the marriage contract set aside pursuant to section 56(4) of the Family Law Act, which provides that a “court may on application, set aside a domestic contract or a provision in it,

  1. If a party failed to disclose to the other significant assets, or significant debts or other liabilities, existing when the domestic contract was made;
  2. If a party did not understand the nature or consequences of the domestic contract; or
  3. Otherwise in accordance with the law of contract.”

It was contested whether a 2-year limitation period would also apply to the husband’s claim, as per the Limitations Act, 2002, which states, “Unless this Act provides otherwise, a proceeding shall not be commenced in respect of a claim after the second anniversary of the day on which the claim was discovered.”

(1) Is the Husband’s Request to Set Aside the Marriage Contract a “Claim?”

The husband argued that his request is not a “claim,” as it was not brought to “remedy an injury, loss or damage” as contemplated by the Limitations Act. However, the Court determined that the loss alleged by the husband is the extinguishment of his family law remedies by the purportedly inadequate marriage contract. From this, the court concluded that the husband’s claim to set aside the marriage contract is a “claim” as defined in the Limitati0ons Act, and the limitation period commences when the husband’s claim was first discovered.

(2) Did the Limitation Act “Provide Otherwise” with Respect to the Limitation Period That Applied to the Husband’s Claim?

The court held that the three exceptions to the limitation period outlined in the Limitations Act do not apply to this situation. Therefore, the 2-year limitation period applied.

(3) If Not, When Was the Claim “Discovered?”

The court held that the claim was discovered some time before October 17, 2012, when the husband first learned from his counsel that the validity of the marriage contract was an issue. As the wife maintained her position on the validity of the marriage contract despite the husband’s concerns, any reasonable person in the husband’s position ought to have known that a court proceeding as an appropriate means to challenge the marriage contract.

Therefore, the court concluded that the limitation period began to run on October 17, 2012, the date on which the husband acknowledged to his social worker that the marriage contract had issues and that the wife was nonetheless relying on it.

(4) Did the Husband Suffer from an Incapacity That Would Suspend the Running of the Limitation Period?

The husband argued that his ability to bring his claim at an earlier time was hindered by his mental health issues. However, the relevant medical notes he provided as evidence did not speak to an incapacity. As such, there was no reliable evidence to rebut the presumption of capacity in section 7(2) of the Limitations Act.

Furthermore, the court refers to Sutton v. Balinsky in stating that citizens are presumed to know the “law of the land,” which includes the applicable limitation periods. Error or ignorance as to the application of a limitation period does not postpone it or stop it from running.

Summary

Ultimately, the court held that the Limitations Act, 2002 applied to the husband’s claim to set aside the marriage contract. Since the husband failed to bring his claim within the 2-year limitation period, the court granted the wife’s motion to dismiss the husband’s claim. As such, this case evidences that it is incumbent to bring forward any claim to set aside a marriage contract or separation agreement within 2 years of the date of discovery.

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