Hello, my name is Shilpa Mehta and I am a lawyer with the Feldstein family Law Group.
One thing that people seldom think about when they meet with family law lawyers is limitation periods or how long they have until their ability to pursue a claim under the family law runs up. This is especially the case regarding property and equalization claims. And, different rules apply to married couples and common law couples. Separating parties often do not appreciate that property and equalization claims have to be dealt with within a certain period of time to ensure that neither party’s rights or entitlements are not significantly prejudiced or lost altogether.
For married couples, the law with respect to limitation periods is very clear:
A legal claim or defence may be prejudiced or lost entirely if either or both parties do not retain legal counsel and take appropriate steps within certain time periods prescribed by law.
In particular, s.7 (3) of the Family Law Act sets out limitation periods that apply to equalization claims. Any claim to an equalization of net family property under the Family Law Act will be barred by the passage of time if court proceedings are not commenced within six (6) years of the separation, or within two (2) years after a divorce has been ordered, or within six (6) months after the first spouse’s death, whichever of these timeframes comes sooner.
First off, as detailed in our previous blogs, common law partnerships do not give rise to the same property rights and entitlements as a marriage. In a common law relationship, if just one partner owns an asset, that partner is recognized to have entitlement to that asset. However, if the other partner contributed to the asset which is solely owned by his or her partner, the non-title holding spouse may be entitled to a share of that property based on a “constructive trust” claim.
In light of this distinction between married and common law partners, the limitation periods detailed in s. 7 of the Family Law Act provide no guidance as to when a trust claim must be sought before this claim is lost altogether. While the law with respect to equalization of net family property for married couples is absolute, until recently the limitation period with respect to the property claims available to unmarried couples was unclear. In a recent court case, however, a judge in the Superior Court decided the expiry date for claiming a constructive trust claim regarding real property in family law is 10 years after finding out about the claim and no limitation period for any other sort of trust claim.
The above noted case law is revolutionary, as until this ruling, the assumption was that where a statute does not define a limitation period, the Limitation Act applies which would mean that common law couples have two years from the date of learning of their trust claim to pursue it. As identified by the superior court judge, this short limitation period would likely cause hardship as for many parties the limitation period would lapse before an action could be taken to pursue a legitimate claim. As such, the judge ruled that in a family law matter it is more practical to apply the Real Property Limitations Act that provides a 10-year limitation period for claims to recover land as opposed to the two years suggested by the Limitation Act.
We advise our clients, whether married or common law spouses, that if they have a claim for property or equalization payments, it is a good idea to act on that claim sooner rather than later.
If you would like to learn more about this or any other family law topics, visit our website. If you need legal advice about your own situation, please call us at (905) 581-7222 to schedule an initial consultation. Thanks for watching.