In Kyle v. Atwill, 2020 CarswellOnt 10337 the Court of Appeal was tasked with determining what, if any, limitation period applied to a request to set aside a marriage contract (or to claim relief contrary to a marriage contract)?
The Limitations Act sets out a 2-year Limitation period from the date the claim is discoverable? Was it the two- or six-year limitation period in the Family Law Act that applied? Was there no limitation period that applied? It was a novel issue and primarily one of first instance.
In this case, the husband and wife signed a "kitchen table" marriage contract one week before their wedding, in July 2005. the wife found a template on the Internet for a "prenuptial agreement", better known in Canada as a “Marriage Contract” and presented it to the husband for signing.
The agreement that they signed appeared to waive any and all property and support obligations upon the breakdown of their marriage. There was no financial disclosure between the parties at the time of the signing, and neither sought Independent Legal Advice (“ILA”). However, the agreement plainly stated that both parties did exchange financial disclosure and had ILA. The inclusion of same on the contract should have alerted the parties to its significance in enforcing the contract, however both clearly chose to ignore the warning.
The parties separated in August 2012 and began negotiations for their separation. The husband struggled with mental health and a result did not bring his Application until August 25, 2017. Once the matter was eventually brought before the court, the Motion judge determined that the husband was bound by the 2-year limitation period as he commenced his Application over 2 years after their separation.
The husband sought to set aside the Motion judge’s decision that he claim should not be barred by the limitation period.
The Court of Appeal unanimously agreed with the husband that the limitation period should not prevent him from bringing his claim to set aside the marriage contract and subsequently overturned the Motion judges’ decisions. Interestingly, the Court of Appeal judges although unanimous in their decision, were divided in their reasonings.
Two of the judges concluded that the husband's "plea" to set aside the marriage contract should have been considered a request for a "declaration where no consequential relief is sought" and therefore, pursuant to section 16(1)(a) of the Limitations Act, no limitation period applied.
The court found that “when isolated from the husband's claims for equalization and spousal support, his "plea" to set aside the marriage contract was a "significant obstacle" to claiming this relief, and not a claim for the relief in itself”. Therefore, it amounted to a proceeding for only declaratory relief, with no consequential relief, and subject to no limitation period.
According to Justice Brown, since the husband was claiming equalization and spousal support - consequential relief - s. 16(1)(a) of the Limitations Act, 2002 could not apply.
Instead, Justice Brown took a different approach. He concluded that setting aside a marriage contract was just a "gateway" to claiming (in this case) equalization of net family properties and spousal support, and not a stand-alone "claim" to which a separate limitation period applied.
Therefore, the limitation periods that applied to the husband's claims were:
a. the Family Law Act's six-year limitation period, in the case of the husband's claim for equalization of net family properties; and
b. no limitation period, in the case of the husband's claim for spousal support.
Justice Brown further noted that “there is no limitation period in respect of . . . a proceeding to obtain support under the Family law Act or to enforce a provision for support or maintenance contained in a contract or agreement that could be filed under section 35 of the Act”
The Court did however acknowledge that Family Law brings about unique circumstances, and the court is aware of the impractical consequences that may arise as a result of a 2 year limitation period. The court further commented that “the special and often more generous limitation periods in family law, "account for the need to allow spouses more time to try to resolve their property issues without having to go to court, and the fact that a spouse or former spouse's support needs can change over time and may be addressed whenever they do."
Do not forget however, that the 6 year limitation period for equalization under the Family Law Act still exists and people should be weary and aware of any limitation period that may apply to them, in order to ensure that they do not lose out on any claim they are entitled to make.
For more information, please call us at Feldstein Family Law Group P.C. or contact our firm online.