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Equalisation


In Martynko v Martynko, 2010 ONSC 5341, Justice Hambly laid out some very useful principles related to how the limitation period applies to a claim for equalisation under the family law act.

In practical terms let us analyse what this means. If a couple separates in 2010 can one of the parties move the court in 2016 that is after a six-year period of separation has passed? According to this case it will be difficult to make such an exception and it may not be possible to claim equalisation after a period of six years of separation.

WHAT THE LAW STATES:

Application to court

7.--(1) The court may, on the application of a spouse… determine any matter in practical terms let us analyse what this means. Respecting the spouses' entitlement under section 5.

Personal action;

Limitation

(3) An application based on subsection 5 (1) … shall not be brought …

(b) six years after the day the spouses separate and there is no reasonable prospect that they will resume cohabitation;


Should the Limitation Date Be Extended


[26] Since it is more than six years from what I have found to be valuation date until the wife commenced her application, it will be necessary to extend the limitation date if the wife is to obtain an order for division of net family property. The following sections of the Family Law Act have application:


Extension of times

2 (8) The court may, on motion, extend a time prescribed by this Act if it is satisfied 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.

In Busch v. Amos 1994 CanLII 7454 (ON SC), [1994] O.J. No. 2975 Justice Salhany stated the following:

I agree that the term "good faith" means acting honestly and with no ulterior motive. I also agree that failure to act in ignorance of one's rights may, in some circumstances, amount to "good faith". However, in my view, it is not enough for a party who must establish good faith to say that he or she was ignorant of their rights. They must also establish that they had no reason to make enquiries about those rights.

In this case, the applicant in her evidence says that she did not make enquiries about her rights at the time of the divorce because she did not have the money to pay a lawyer. Although she knew that she could obtain a lawyer through the Legal Aid Plan, she decided not to do so because she did not want the Legal Aid Plan to put a lien on her property to secure repayment of part, or all of the fees that her lawyer would bill to the Legal Aid Plan. In other words, she had the opportunity to consult with a lawyer but deliberately chose not do so. Had she consulted with a lawyer, she would have probably learned about her right to equalization. I am of the view that she was ignorant of her rights because she chose to be ignorant or wilfully blind. I find it difficult to conclude that this amounted to "good faith" on her part.

The principles set out in the above cases apply to this case. The wife has testified that the husband did nothing to discourage her from consulting a lawyer, either at the time of their separation in 2002 or later. The parties were not in communication when Deanna gave her mother the handwritten separation agreement in August 2003, for her signature. She did nothing to respond to the divorce application, which must have been served upon her in the fall of 2006 or at the latest in early 2007. There is no evidence as to why she did not contact a lawyer to determine her rights prior to her retaining Mr. Verbanac. I find that the wife has failed to satisfy the requirement of good faith for the purpose of extending the limitation date.

Prejudice:

The husband commenced a relationship with his present wife in 2005. They were married on March 24, 2008. He has moved to Penetanguishene. He has purchased a house which is heavily mortgaged. He lives there with his wife.

In Busch v. Amos 1994 CanLII 7454 (ON SC), [1994] O.J. No. 2975 Justice Salhany stated the following:

11 … In my view, a spouse who arranges his financial affairs following separation or divorce upon the assumption that matters between him (and) a former spouse is resolved, is entitled to rely on the limitation period in the Family Law Act. It would seem to me that the purpose of the limitation period is to encourage finality so that the parties can get on with their lives. …

As Justice Salhany was in Busch, I am satisfied that there would be substantial prejudice to the husband to permit the wife to proceed with her application for equalization of net family property.


Implications at a practical level:

It would be wise to claim equalisation before the six year separation mark arises. But sale of a matrimonial house to satisfy the proceedings of an equalisation, if done after the six-year period, may well negate the exception provided in the limitation period.


In addition, the case gives us some practical definitions of terms such as prejudice and good faith - we use these terms, but legally, what do they mean? Well, now we know and importantly, we need to adapt these terms to our lives and cases.

How Shankar law can help you:

Family law is complex; especially matrimonial issues relating to equalisation and divorce.

At #ShankarLaw, we are happy to assist and guide you through whatever challenges you have in your #spousallife. We work in three counties: #Huron, #Bruce, and #Grey and span several cities (#Southampton, #Kincardine, #Goderich, #Wiarton, #Hanover, #Dundalk, #Walkerton, #Meaford, #Markdale, #Chatsworth), through our two office locations in #PortElgin and in #OwenSound.


#Familylaw #equalization #divorce #equalisation #separation #matrimony

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