Background

The wife appealed an Order granting summary judgement to the husband which dismissed her application for equalization and other relief.

The parties were married in 1980, separated in 2006 and divorced in 2008. Following separation, the husband swore a Financial Statement showing his Net Family Property as $0. Through negotiations with counsel, the parties resolved the financial issues but they never signed a formal agreement. Pursuant to section 55 of the Family Law Act, a domestic contract is unenforceable unless it is made in writing, signed by the parties and witnessed. Sometime in 2019, the wife was made aware that at the same time the husband swore the aforementioned Financial Statement, he was representing to his bank that he had a net worth of approximately $21 million. Upon learning this, the wife commenced an Application for an equalization payment and spousal support claiming that the husband had misrepresented material facts and failed to make significant disclosure at the time of the divorce application.

Rather than serving and filing an Answer and Financial Statement, the husband brought a motion for summary judgement under Rule 16 of the Family Law Rules on the basis that the wife’s claim for equalization was statute barred because it needed to have been brought by the earlier of two years after divorce or six years after separation. The motion judge confirmed that the husband was not required to file an Answer or Financial Statement pending the determination of this motion.

The motion judge determined that there was no genuine issue requiring a trial and dismissed the wife’s property and support claims by granting an order for summary judgement in the husband’s favour. The motion judge found that there was no evidence of an intention to mislead, no evidence of fraud and no evidence the husband had acted in bad faith. The Ontario Court of Appeal’s summary of the motion judge’s decision seemed to indicate that the motion judge was of the view that the wife understood, or ought to have understood, the husband’s finances when they separated, was represented by counsel and there was no evidence the husband intentionally misled or defrauded the wife.

Analysis

The test for a summary judgement motion comes from the 2014 Supreme Court of Canada decision in Hyrniak v. Mauldin and involves a determination of whether there is a genuine issue for trial. The issue on this Appeal were twofold: (1) did the motion judge err by allowing the husband’s motion for summary judgement when he had not served an answer and (2) did the motion judge misapply s. 2(8) of the Family Law Act regarding granting an extension of the limitation period.

The Court of Appeal determined that the motion judge had made two legal errors. The first error was that that husband was allowed to proceed with his motion for summary judgement before he had filed an Answer and sworn Financial Statement. Rule 16 of the Family Law Rules clearly states that a party may make a motion for summary judgement for a final order without a trial on all or part of any claim made, or any defense presented in the case after the Respondent has served an answer or after the time for serving an answer has expired. However, the court determined that an Answer and Financial Statement was required in this case regardless of the motion for summary judgement brought by the husband as then the wife would have been able to cross-examine him on the Financial Statement. The Court of Appeal clarified that it is the responsibility of the individual with the assets to make the disclosure and the valuation of assets. The Court of Appeal went so far as saying that the husband could not have succeeded on a summary judgement motion without putting forward detailed information about his financial circumstances.

The Court of Appeal found that the motion judge’s second error was that they misapplied the test for extending the limitation period for claiming an equalization payment. While the Court of Appeal agreed that the wife’s equalization claim was prima facie statue barred by virtue of the fact that the parties divorced in 2008, the limitation period could be extended if the moving party can establish 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.

The issue with the motion judge’s application of this was that he considered whether the wife had raised a genuine issue about whether the husband had committed fraud by swearing a Financial Statement with a net family property of $0. This, however, was not the correct test to be applied and held the wife to a higher standard than section 2(8) of the Family Law Rules. The Court of Appeal also determined that the motion judge erred by inferring that the wife knew, or ought to have known, all information about the trusts and corporations involved in this matter.

Conclusion

The Ontario Court of Appeal found that there was in fact a genuine issue requiring trial and overturned the motion judge’s decision. The Ontario Court of Appeal remitted the matter back to trial but did so without prejudice to either party’s right to bring a fresh motion for summary judgement once the husband had filed an Answer and Financial Statement. The Ontario Court of Appeal also ordered costs against the husband in the amount of $15,000.

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