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Wife Misses Deadline for Claiming Equalization

Wife Misses Deadline for Claiming Equalization

It may be a little-known fact that in Ontario, there is a deadline for spouses to claim for an equalization payment after separation. A recent case illustrates what can happen when one of the parties fails to act promptly.

The spouses in Martynko v. Martynko were married in 1997, but separated in 2002. In keeping with their separation negotiations at that time, the husband paid the wife $50,000 so that she could buy herself a house to live in, and in 2003 they both signed a handwritten confirmation of what they called an “out of court settlement.” At this time the wife also set up a separate bank account, and began sleeping in separate bedrooms until her new home was finished being built.

In 2006, the husband started divorce proceedings, which the wife did not defend despite being properly notified. The divorce was granted that same year, and the husband remarried in 2008. Shortly after, in August of that same year, the wife brought a court action under the Family Law Act for division of property and spousal support.

The husband pointed out that Ontario law provides for a statutory limitation period for applications of this nature: the wife was required to bring her claim within six years from “the day the spouses separate and there is no reasonable prospect that they will resume cohabitation”.

The court was asked to determine whether the wife was out of time. Using well-established legal tests as to when a couple is considered to be “separated” for legal purposes, it found that the marriage effectively “died” when the husband made the $50,000 payment to the wife in 2002; after this date, there was no reasonable prospect of reconciliation between the spouses. Therefore, for family law purposes, the separation date was in 2002. And since more than six years had passed at the time the wife brought her equalization application, she was too late.

The court did consider the fact that the Family Law Act allows for extension of the 6-year limitation period in some narrow circumstances; however, the wife in this case had failed to respond to the divorce application, had not brought a motion to extend the limitation period, had shown no good reason for not contacting a lawyer to determine her rights, and had shown no other good faith reason as to why an extension should be granted in her case.

Indeed, to allow the wife to proceed with the equalization application at this point would result in significant prejudice to the now-remarried husband, who had relocated to a new city and had purchased a heavily-mortgaged home with his new wife.

Additional information on family law issues can be found on our web site  www.russellalexander.com

For the full text of the decision, see: Martynko v. Martynko, 2010 ONSC 5341 (S.C.J.) http://bit.ly/gU9pHS