Delay in family law cases can have significant repercussions (e.g. it may result in the creation of an unfavorable status quo for the parenting arrangements, lead a judge to conclude that one of the parties is not acting reasonably, etc.). Fortunately, in most cases delay will not result in the complete loss of a person's ability to at least try to pursue his or her rights in court. But that is not always the case. There are a number of situations that can arise in family law cases where delay will result in the complete loss of a person's ability to seek substantive relief that he or she would have otherwise been entitled to pursue. This brief paper provides an overview of some of the most significant limitation periods and substantive time limits that can arise in family law cases.
Equalization Claims
The Limitation Period For An Equalization Claim
Pursuant to s. 7(3) of the Family Law Act,[1] a claim for an Equalization Payment must be commenced before the earliest of the following dates:
(a) Two years after the date a divorce is granted;
(b) Six years after the date of separation; or
(c) Six months after the first spouse's death.
Subsection 2(8) of the Family Law Act, however, gives the court discretion to extend the limitation period for an Equalization Payment if the claimant can establish that:
There are apparent grounds for relief;
(b) The delay has been incurred in good faith; and
(c) No person will suffer substantial prejudice as a result of the delay.[2]
Despite this discretionary provision, however, do not allow the limitation period for your client to claim an Equalization Payment to expire in the hopes that you will subsequently be able to convince a court to extend it. Such requests are frequently refused.[3]
An Estate Cannot Commence A Claim For An Equalization Payment
Subsections 5(2) and 7(2)(b) of the Family Law Act allow a surviving spouse to claim an Equalization Payment from his or her spouse's estate, and ss. 5(1) and 7(2)(a) permit an estate or a surviving spouse to continue a claim for an Equalization Payment that was commenced before the death occurred. However, the Family Law Act does not appear to allow the estate of a deceased spouse to commence a claim for an Equalization Payment against the surviving spouse.[4] It is important for you to consider this issue if you are acting for a spouse who may be entitled to an Equalization Payment and wants to ensure that money will be available for his or her heirs (e.g. in a second marriage where a party has a child from a prior relationship who the new spouse may not be willing to support, where one of the children is not on good terms with the other parent, etc.). And, it is absolutely critical that you do so if you have reason to believe that your client already has health problems.
Trust Claims, Unjust Enrichment Claims, Joint Family Venture Claims, And Claims To Set Aside Domestic Contracts
The General Two Year Limitation Period
Section 4 of the Limitations Act, 2002[5] states that unless a statute provides otherwise, a claim must be brought within 2 years of the date that the claimant discovers his or her claim.[6]
Section 5 of the Limitations Act provides that a claim is discovered when the claimant knew, or a reasonable person with the abilities and in the circumstances of the claimant ought to have known, that:
The injury, loss, or damage had occurred;
(b) The injury, loss, or damage was caused by or contributed to by an act or omission;
(c) The act or omission was that of the person against whom the claim is made; and
(d) Having regard to the nature of the injury, loss, or damage, a proceeding would be an appropriate means to seek to remedy it.[7]
Unlike the Equalization provisions of the Family Law Act, the Limitations Act does not give a court jurisdiction to extend a limitation period after it has already expired.[8]
Trust Claims, Unjust Enrichment Claims, And Joint Family Venture Claims Are Governed By The Limitations Act
The general two year limitation period established by the Limitations Act applies to all claims that are not specifically exempted by the statute, including equitable claims (e.g. resulting trust, unjust enrichment, joint family venture, etc.).[9] However, if a claim relates to real property (e.g. a claim for a beneficial interest in a matrimonial home by way of constructive or resulting trust), s. 2(a) of the Limitations Act provides that the Real Property Limitations Act[10] applies, and s. 4 of that statute establishes a ten year limitation period for commencing a claim to an interest in real property.[11]
With respect to when the limitation period for an equitable claim starts to run in a family law case, Justice Rosenberg noted in McConnell v. Huxtable that "I would think that ordinarily the claim should be taken not to have been discovered until the parties have separated and there is no prospect of resumption of cohabitation."[12] As this statement was made in obiter, however, you should always at least consider whether you may be dealing with a situation where the limitation period may have actually started to run before the parties separated.
Claims to Set Aside Domestic Contracts are (Likely) Governed by the Limitations Act
Although there is not yet any caselaw directly on point, given the broad definition of a "claim" under s. 1(1) of the Limitations Act, it is likely that a request to set aside a domestic contract under s. 56(4) of the Family Law Act is governed by the Limitations Act and must be commenced within two years of the date the claim is discovered. Given Justice Rosenberg's comment in McConnell v. Huxtable that is set out above, it is unlikely that the limitation period for commencing a claim to set aside a Cohabitation Agreement or a Marriage Contract will start to run until the parties have separated. However, as Justice Rosenberg made this comment in obiter, this is an issue that you should at least give some thought to when you are dealing with a potential claim to set aside a Cohabitation Agreement or a Marriage Contract.
Support Claims
Spousal Support Cannot Be Claimed By A Party Who Was Divorced Outside Of Canada
A court in Ontario does not have jurisdiction to make an Order for spousal support under either the Divorce Act[13] or the Family Law Act if the parties have been divorced outside of Canada.[14] This is so even if the claim for support in Ontario was commenced before the foreign divorce was granted.[15] In other words, a foreign divorce will permanently extinguish your client's ability to obtain spousal support in Ontario. Accordingly, if your client is claiming spousal support and is served with an application for a divorce from a foreign jurisdiction, it is critical that you take immediate steps to deal with the matter.
Retroactive Child Support (Likely) Cannot Be Claimed For Someone Who Is No Longer A Child
Based on the Supreme Court of Canada's decision in S.(D.B.) v. G.(S.R.), a court in Ontario likely does not have jurisdiction to Order retroactive child support for a person who does not qualify as a child under s. 2(1) of the Divorce Act or pursuant to ss. 1(1) and 31(1) of the Family Law Act at the time the claim is made.[16] While the courts have carved out a number of exceptions to this general rule,[17] your client can and should avoid this potential jurisdictional pitfall by commencing his or her claim for retroactive child support while the person in question still meets the definition of a child under the applicable statute.
Bankruptcy
Pursuant to s. 178 of the Bankruptcy and Insolvency Act,[18] a spouse cannot pursue an Equalization Payment or a trust claim against a spouse who made an assignment in bankruptcy after separation after the spouse has received a discharge.[19] Accordingly, if such a spouse owns an asset that is exempt from bankruptcy (e.g. an RRSP, an interest in a registered pension plan, etc.[20]), it is critical that you take immediate steps to apply to lift the automatic stay provided for by s. 69.3 of the BIA, and obtain leave to pursue a remedy against the exempt assets pursuant to s. 69.4. And, if your client wants to claim that property legally owned by the bankrupt spouse should not vest in his or her trustee because your client is the beneficial owner or has a beneficial interest, you need to apply to lift the automatic stay before you can proceed with the claim.
By taking these steps before a discharge is granted, you may be able to recover all or part of the money that your client would have been entitled to had the other spouse not gone bankrupt.[21]
Conclusion
While delay in family law cases is sometimes unavoidable, it is essential to be able to differentiate between claims that can still be pursued and dealt with at a later date, and ones that will be lost completely if they are not dealt with in a timely manner. This brief paper, while not exhaustive, should help you to ensure that your client's rights are not extinguished by the passage of time.
About the author
Michael Zalev, Epstein Cole
[1] Family Law Act, R.S.O. 1990, c. F.3 [Family Law Act].
[2] For a comprehensive discussion of how the courts have applied the provisions of s. 2(8) of the Family Law Act, see Scherer v. Scherer (2002), 59 O.R. (3d) 393 (C.A.) at paras. 15-28 and El Feky v. Tohamy (2010), 90 R.F.L. (6th) 302 (C.A.) at paras. 26-39.
[3] In B. Hovius, "Limitation Periods for Property Claims by Common-Law Partners and Spouses" (2015) 34 CFLQ 281, Professor Hovius summarized 41 cases that have dealt with s. 2(8) of the Family Law Act, and noted that while "[a]s a general rule, courts allow bona fide claims to proceed where the delay can be explained and no one involved will be substantially prejudiced by the delay", the "courts have refused to grant extensions in a significant proportion of the cases — 17 out of the 41 included in the Appendix."
[4] For a more detailed discussion about whether the Family Law Act allows an estate to commence a claim for an Equalization Payment against a surviving spouse, see J. Atin, "Application for Equalization: Death of Separated Spouses" (2003) 21 CFLQ 235.
[5] Limitations Act, 2002, S.O. 2002, c. 24, Sch. B [Limitations Act].
[6] Subsection 1(1) of the Limitations Act broadly defines a "claim" as "a claim to remedy an injury, loss or damage that occurred as a result of an act or omission[.]"
[7] A discussion of the caselaw that has interpreted s. 5 of the Limitations Act is beyond the scope of this paper. However, it is important to understand that when considering when a claim is discovered for the purposes of s. 5, as the Ontario Court of Appeal recently reiterated in Lausen v. Silverman (2016), 130 O.R. (3d) 665 (C.A.) "[t]he circumstance that a potential claimant may not appreciate the legal significance of the facts does not postpone the commencement of the limitation period if he or she knows or ought to know the existence of the material facts, which is to say the [constituent] elements of his or her cause of action. Error or ignorance of the law or legal consequences of the facts does not postpone the running of the limitation period."
[8] Section 22 of the Limitations Act does, however, allow parties to agree to suspend or extend a limitation period.
[9] McConnell v. Huxtable (2014), 118 O.R. (3d) 561 (C.A.) at para. 50.
[10] Real Property Limitations Act, R.S.O. 1990, c. L.15.
[11] McConnell v. Huxtable (2014), 118 O.R. (3d) 561 (C.A.) at paras. 38-42.
[12] McConnell v. Huxtable (2014), 118 O.R. (3d) 561 (C.A.) at para. 54.
[13] Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.) [Divorce Act].
[14] Rothgiesser v. Rothgiesser (2000), 46 O.R. (3d) 577 (C.A.) at paras. 50-51 and 59, and Okmyansky v. Okmyansky (2007), 86 O.R. (3d) 587 (C.A.) at paras. 31-41.
[15] Stefanou v. Stefanou (2012), 47 R.F.L. (7th) 385 (S.C.J.) at paras. 162-170, and Cheng v. Liu, 2017 ONCA 104 (C.A.) at paras. 28-34.
[16] S.(D.B.) v. G.(S.R.), [2006] 2 S.C.R. 231 (S.C.C.) at paras. 86-90.
[17] See e.g. George v. Gayed, 2014 ONSC 5360 (S.C.J.) at paras. 65-70, and Lalande v. Pitre, 2017 ONSC 208 (S.C.J.) at paras. 65-70.
[18] Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3 [BIA].
[19] Schreyer v. Schreyer, [2011] 2 S.C.R. 605 (S.C.C.) at paras. 19-25, and Thibodeau v. Thibodeau (2011), 104 O.R. (3d) 161 (C.A.) at paras. 35-43.
[20] Section 67 of the Bankruptcy and Insolvency Act lists the types of assets that are exempt from bankruptcy.
[21] In Schreyer v. Schreyer, [2011] 2 S.C.R. 605 (S.C.C.) at paras. 32-36, the Supreme Court of Canada noted that it depending on the facts of the case, it may still be possible for a former spouse to pursue relief against an exempt asset even after discharge by bringing a motion to suspend the discharge under s. 187(5) of the BIA. And, in Re Shreyer (2013), 295 Man. R. (2nd) 127 (Reg.), aff'd (2014), 302 Man. R. (2d) 205 (Q.B.), Registrar Lee rescinded Mr. Schreyer's discharge and allowed Ms. Schreyer to pursue her claims against his exempt assets. That being said, the circumstances aunder which a discharge can be varied are very fact specific, and it is advisable to avoid the need to apply for relief under s. 187(5) of the BIA entirely by dealing with the matter before a discharge has been granted.