Court File and Parties

COURT FILE NO.: FS-17-17258 DATE: 20190515 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

Vicky Lyn Taylor Applicant – and – James Eric Taylor Respondent

Counsel: Mary Anne Ducharme, for the Applicant Janette Long, for the Respondent

HEARD: January 28, 2019

Ruling on Motion

HEBNER J.:

1The applicant wife and the respondent husband began to reside in a relationship resembling marriage in 1995. They were married on September 30, 2000. They have two daughters, Madison born August 27, 1999, and Miya born June 27, 2001. They separated in June 2010. On April 26, 2017, the applicant issued an application claiming, among other things, relief respecting the respondent’s pension. This motion was brought, originally returnable June 1, 2018, requesting an order extending the limitation period for the commencement of a claim for an equalization of net family property under s. 2(8) of the Family Law Act, R.S.O. 1990, c. F.3. This is my ruling on the motion.

Background Facts

2The respondent became employed at Ford Motor Company (“Ford”) in Windsor in May 1999. He was laid off in October 2006. The parties both made assignments in bankruptcy in July 2008 and lost their home. The respondent was given the option to transfer to Ford in Oakville and the family relocated there. Shortly after arriving in Oakville, the respondent was laid off again. In September 2009, the family returned to Windsor. In September 2010, the respondent was recalled to work at Ford in Oakville. It seems that the prospect of another move to Oakville may have been the impetus for the separation. In any event, the separation occurred and the applicant and children remained in the Windsor area.

3It is common ground that, given the parties’ financial struggles and the bankruptcy, when they separated they had few assets. The major asset at the date of separation was the respondent’s pension at Ford. The applicant seeks an equalization of net family property, which would effectively be an equalization of that pension based on its value as at the date of separation.

4At the time the applicant issued her application in April 2017, she did not have a lawyer. Ms. Ducharme came on board for the applicant in October 2017. According to the applicant’s affidavit, she previously tried on two separate occasions to issue an application for “property division, custody and support”. On both occasions she was unable to do so as “the courthouse rejected her documents”. She could not afford a lawyer.

5In 2014, the applicant completed a legal aid application. Her evidence is that she was turned down. The applicant attached, to her affidavit, a form dated March 14, 2014, entitled “legal information provided to Legal Aid Ontario”.

6The applicant claims to have mental health problems and says she is under the care of a psychiatrist. Medical records filed indicate that she was diagnosed with depression in 2014 requiring medication. She attended at the hospital emergency room in January 2017, where the records indicate she was under the care of a psychiatrist with a diagnosis of “bipolar disorder”. She was discharged the same day. The applicant also deposes that one of her daughters has had some mental health challenges.

The Issue

7The issue for the court to decide is whether an order ought to be made extending the limitation period for an equalization claim. The Family Law Act, s. 7(3) requires that such a claim must be brought within the earliest of:

a) two years after the date of marriage is terminated by divorce or judgment of nullity;

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

c) six months after the first spouse’s death.

8As both of the spouses are alive, and they are not yet divorced, the applicable limitation period is six years after the date of separation. The parties separated in June 2010. Accordingly, the limitation period expired on June 30, 2016. The application was not issued until after that date and, absent relief, is statute barred.

9The Family Law Act, s. 2(8) provides that:

The court may, on motion, extend the 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.

Analysis

10The court may only extend the limitation period if it is satisfied that the three conditions set out in s. 2(8) are met. If not, the limitation period cannot be extended. If those three conditions are met, then the court “may” extend the limitation period. The relief is discretionary.

11The first step, then, is to address the three conditions.

Are there apparent grounds for relief?

12The first condition is met. There are apparent grounds for relief. The applicant has filed a form 13.1 financial statement in which she claims minimal assets on the date of separation. The respondent has not filed a form 13.1 financial statement and so there is no evidence of his net equity position as of the date of separation. We do know, however, that the respondent had a pension with Ford on the date of separation and an equalization claim would require that the pension be valued and included in the respondent’s net family property.

Was the delay incurred in good faith?

13The Court of Appeal, in El Feky v. Tohamy, 2010 ONCA 647, addressed the question of what is meant by “good faith” in this context. The Court of Appeal, at para. 34, adopted the explanation of Mendes da Costa U.F.C.J. in Hart v. Hart (1990), 27 R.F.L. (3d) 419 at p. 432:

Section 2(8)(b) enshrines in legislative form the concept of “good faith”. As is not infrequently the case, these words are not defined in the Act, and I do not believe that it would be either possible or useful to attempt to catalogue the possibilities that they embrace. However, I must attribute to these words their “plain meaning according to the understanding and practices of the times.” Cash v. George Dundas Realty Ltd. (1973), 1 O.R. (2d) 241, 248 (C.A.). I believe, to establish “good faith”, it must be shown that the moving party acted honestly and with no ulterior motive. It does not seem to me that the Legislature, anticipating the general newsworthy nature of the family property provisions of the Act, intended that a mere failure to make enquiries should necessarily negate “good faith”, provided that the absence of enquiry does not constitute wilful blindness or does not otherwise, in all the circumstances, fall below community expectations. As I have stated, my assessment of the evidence is that the wife was ignorant of her rights under the Act, and I believe that her state of mind was one of blameless ignorance. I am satisfied that the delay in issue was delay incurred in good faith within the meaning of section 2(8) (b).

14Turning then to the case at hand, in March 2014 the applicant applied for a legal aid certificate. According to her evidence, her application was declined. The certificate was not granted. The applicant’s application for a legal aid certificate was included in the materials. It discloses the following:

• The applicant applied for a certificate “for representation regarding Family Law issues. Tariff maximum of 12 hours for all services prior to the first pretrial.”
• The applicant claimed the date of separation was October 2013.
• The disputed issues are identified to be “property”.
• The recommendation on the case was “mediation and ILA recommended”.
• In the “Notes Summary” section it reads:
  • “see DC (duty counsel) for divorce application and she can apply for custody, access and child and spousal there as well”
  • “matter has never been in court”
  • “client wants custody of 2 children, children have always been with Clt”
  • “Parties had a bankruptcy in 2008 when Ford plant shut down. Clt says there are no assets.”
  • “Issues Discussed and Advice Given”
  • “Pension – advised that OP (other party) has to provide full disclosure on his pension with Ford”
  • “There is no matrimonial home and clt said they went bankrupt and have no property issues”

15I take from the application that the applicant spoke with someone at the legal aid office who provided summary advice; that the applicant’s primary concern at the time was to obtain custody of the two children, then aged 12 and 14, and child support; that she was told the respondent would have to provide disclosure on his pension with Ford; that she was not told of a limitation period in order to make a claim for property relief.

16According to the applicant, she tried, on two separate occasions, to issue an application. In her affidavit she says, “I had to do it myself as I applied to legal aid… They turned me down.” She says, “I did try myself but the courthouse rejected my documents several times”. There is no indication as to when she tried to issue an application, but I take from her evidence that it must have been after she applied for legal aid in 2014.

17The respondent asks me to conclude that the applicant must have been advised of her need to bring an application within six years of the separation. He asks me to conclude that, because the applicant had been married and divorced previously, she was aware of her right to claim an equalization and chose to do nothing.

18The respondent relies on Busch v. Amos, [1994] O.J. No. 2975, a decision of Salhany J. dated November 7, 1994. In that decision, the applicant said that she was aware of the respondent’s entitlement to a pension from his employer before the parties separated. The applicant also said that, at the time of the divorce judgment, “she was unaware of any entitlement under s. 5(1) of the Family Law Act to an equalization of net family properties and that the value of the respondent’s pension would be included in the process of equalization.” The applicant did not seek legal advice due to lack of sufficient financial resources. Salhany J. in the circumstances of that case found out that the applicant was “ignorant of her rights because she chose to be ignorant or wilfully blind.” He said “I have difficulty in concluding that this amounted to “good faith” on her part.” (Para. 8.)

19In my view, in the case at hand, the applicant’s delay was occurred in good faith.

20I accept her evidence that she attempted, on at least two occasions, to issue her application but was turned away by court staff for reasons undisclosed. She made good faith attempts to commence her action. In addition, she made good faith attempts to obtain legal assistance to proceed with her claim by making an application for a legal aid certificate. The applicant states in her affidavit “I was not aware that there was a deadline by which I had to claim this and I did not intentionally wait to ask the court for this relief”. I accept that the applicant was not aware of the limitation period. There is no evidence to the contrary – just the respondent’s submission that I ought to reject this evidence given that the applicant had previously been married and divorced and had applied for legal aid.

21As for the applicant’s failure to more vigorously pursue her property claim, it is clear from Rosenberg J.’s decision in El Feky v. Tohamy that a mere failure to make inquiries does not necessarily negate “good faith”. Here, the applicant did make inquiries. She did try to obtain a legal aid certificate and issue a claim within the limitation period. In Paulsen v. Paulsen, 2017 ONSC 2937, McDermot J., in allowing an application for extension of time, pointed out that “unlike the situation when Busch was decided in 1994, legal aid is no longer easily obtained, especially for property issues.” That fact was certainly borne out for the applicant in this case.

22I also take into account the applicant’s personal circumstances. She suffered from mental illness; she was caring for the parties’ two children; she had to contend with her daughter’s mental health issues. This woman had, to use a colloquialism, a lot on her plate.

23Given the foregoing, I find that the second condition has been satisfied.

Did the respondent suffer substantial prejudice?

24What type of prejudice qualifies as “substantial prejudice” within the context of this question? In Paulsen v. Paulsen, it was noted that the type of prejudice that does not qualify as substantial prejudice is the prejudice the respondent will suffer from having to make an equalization payment. At para. 35, McDermot J. said:

Certainly, any extension of a limitation period will result in some prejudice to the responding party as it would result in the respondent having to make an equalization payment at this late date; this certainly cannot have been the type of prejudice referred to by the section as it begs the question as to why a limitation period might be extended.

25At para. 37, McDermot J. said:

[T]here must be some specific evidence of prejudice to the respondent for this subsection to be applicable: for example, as stated by Tillich J. in Ferguson [at para. 19], there must be evidence of “irreversible financial decisions that may have been made by the respondent based on any assumptions he may have had with regard to the pension.

26Turning, then, to the evidence of the respondent in this case. The respondent claims not to have received notice of the applicant’s interest in his pension until he was served with the application. He claims prejudice arises because, due to the passage of time, it will be more difficult to obtain precise values of assets and debts as at the date of separation. Moreover, it will no longer be possible to obtain an accurate estimate of the value of the parties’ household contents.

27The respondent points out that the applicant claimed $2,183 as RSP income on her 2010 income tax return. The respondent submits that the applicant must have had RRSPs on the date of separation that have not been disclosed. Under cross-examination, the applicant said “I had cashed all of my RRSPs and everything in prior to going bankrupt, trying to save the house”. When asked about the RSP income, she said “I don’t really know what that is, to tell you the truth. All I know is, before we went bankrupt we were trying to save the house, so the only thing that I could do was to cash in my pension from the raceway, my pension from the casino, and my RRSPs. Even though they were locked in, they let me do it because of financial hardship, and then we went bankrupt anyway. We lost the house anyhow. So I didn’t have anything.” The respondent points to that evidence and says it will be extremely difficult to determine the applicant’s accurate pension and RSP picture as at the date of separation.

28I agree with Ms. Ducharme in that the complexity of an equalization payment does not necessarily qualify as “substantial prejudice”. It may be more difficult for the parties to obtain the necessary information required to calculate the equalization of net family property, however there was no evidence filed to indicate that the information could not be obtained from third parties, particularly the RSP or pension administrator and/or financial institutions. The substantial prejudice test will not be met for this reason unless the documents are not available: see Freire v. Freire, 2017 ONSC 1188.

29Given the absence of evidence of substantial prejudice, the third condition for relief is satisfied.

Exercise of Discretion

30The use of the word “may” in s. 2(8), means that once the three conditions have been satisfied, I have a discretion to grant relief, or not. Each case will be decided on its own set of facts. It may be appropriate not to grant relief if, based on the material filed, one is satisfied that the net family property is minimal: see Rae v. Rae (1987), 59 O.R. (2d) 225. It may be appropriate not to grant relief if the respondent, following the expiry of the limitation period, made decisions altering his financial affairs in reliance on the absence of a claim: see McDonald v. McDonald, [2006] O.J. No. 7 - although if that were the case, I would think the third condition would not be satisfied.

31Here, I take into account the family constellation. The parties have two daughters. The applicant mother was the parent responsible for caring for the children over the years since the parties’ separation and, as outlined above, she had significant challenges in doing so. In the face of those challenges she made real efforts to try to pursue her claim. It seems to me that the equities favour the applicant.

32For these reasons, I exercise my discretion in favour of the applicant.

Disposition

33I order as follows:

1. The limitation period under s. 7(3)(b) of the Family Law Act shall be extended to April 26, 2017, being the date that the application was issued in this matter.
2. If the parties cannot agree on costs, they may make written submissions, to include a costs outline and any relevant offers to settle, according to the following timeline: a. The applicant may make submissions within 20 days; b. The respondent may make submissions within 20 days thereafter; c. The applicant may make any reply submissions within 10 days thereafter.