Court Excuses Husband’s 10-Year Delay in Seeking Equalization
In a recent P.E.I. decision with a surprising outcome, the court exercised its authority to allow a husband to bring a claim for equalization of net family property, even though he missed the deadline for doing so by a full four years. (And in doing so, the court drew expressly from similar Ontario case law on this point).
The spouses had separated back in 2009, after being married for more than 30 years. The husband had continued to live in the matrimonial home since that time, even though title was in the wife’s name alone.
More than 10 years passed. Even though they both had separate lawyers – and despite some initial negotiations that went nowhere – the matter failed to progress at all during that decade. Periodically, the wife did raise the matter of the family home, but as the husband’s lawyer explained:
… the years have gone by and the parties simply have not brought any finality to the issues arising from their marriage and separation, notwithstanding the separation occurred over a decade ago.
From the husband’s standpoint, this now raised an important procedural roadblock: Under the P.E.I. Family legislation, the limitation period for him to bring his claim was six years from the date he and the wife separated. In this case, that limitation period expired in 2015.
The matter came to a head in March of 2020, when the wife retained a new lawyer who advised the husband that: 1) he was now out of time to claim for a division of net family property, and 2) he had 60 days to vacate the matrimonial home. The wife then listed the property for sale.
In response, the husband applied to the court to have the deadline for bringing his equalization claim extended. He explained that he was completely unaware of the six-year limitation period.
The court granted the husband’s request. But before doing so, it flatly rejected his basic argument that his ignorance of the law or facts was – in and of itself – a sufficient excuse for missing the deadline. Nor was it a sufficient reason for the court to extend the deadline, without more.
Nonetheless, the P.E.I. court noted that it possessed legislated authority to extend the governing limitation period in narrow instances. Under its Family Law Act, these include scenarios where: 1) there are “apparent grounds for relief”; 2) the husband’s delay was incurred in good faith; and 3) the delay did not cause substantial prejudice to the wife.
(And note to readers: These P.E.I. Family Law provisions are identical to those of Ontario, which are found in s. 7(3) of this province’s Family Law Act).
Since there was no local precedent, the P.E.I. court relied on a number of Ontario cases, though none had the decade-long delay featured in the case before it. In one of them, Taylor v. Taylor, the wife had neglected to commence her claim for equalization of net family property until 10 months after the limitation period expired. The court allowed the deadline to be extended based on numerous factors, including her good faith attempts to obtain legal assistance and start her claim in the years immediately after separation. Plus, on the particular facts of Taylor, the husband was found not to suffer any prejudice from the granted extension.
Similarly in this case, the P.E.I. court found the tardy husband had acted honestly – and with no ulterior motive – despite letting the deadline slip. Admittedly, he knew that the “day of reckoning was coming”, and failed to make specific inquiries about his equalization claim. But this alone did not erase his good faith, nor did it constitute wilful blindness, in the court’s view.
Both spouses knew that he had an equalization claim in the works, and – except for the limitation period issue – the wife knew she owed the husband an equalization payment. She offered no evidence that she was prejudiced by the delay. In fact, the evidence showed that the husband paid off the mortgage, and paid the operational and maintenance expenses associated with the home since separation.
In the end, the court found there were “apparent grounds for relief” in these circumstances.
Note: Readers should know that the outcome for the husband in this case was surprisingly favourable. Courts will generally uphold limitation periods strictly, so it’s always best to proceed expeditiously with any legal claims. Otherwise, there’s a real risk that the door to pursuing them will be firmly closed.
For the full text of these decisions, see:
D.L. v. B.W., 2021 PESC 20
Taylor v. Taylor, 2019 ONSC 2968
