Court File and Parties
Court File No.: FC-19-1168-01 Date: 2020-03-05 Superior Court of Justice - Ontario
Re: Henriette Stepanian, Applicant And: Steve Stepanian, Respondent
Before: The Honourable Justice R.S. Jain
Counsel: James Bennett, Counsel for the Applicant John Craig, Counsel, for the Respondent
Heard: March 5, 2020
Endorsement
[1] The applicant and respondent were married August 31, 1991 and separated June 13, 2013. They were divorced on November 18, 2019. On February 12, 2020 the applicant issued an application making claims relating to property and equalization, costs and requesting an order extending the limitation period for the commencement of her claim for an equalization of net family property under s. 2(8) of the Family Law Act, R.S.O. 1990, c. F3 (FLA). This is my ruling on the applicant’s motion to extend the limitation period.
[2] Prior to the commencement of the motion, the court pointed out to the parties and counsel that they may benefit from attending a case conference prior to the motion. Both counsel agreed that they wished to proceed without having a case conference. The court also pointed out that credibility issues may be raised during this motion, however, both counsel advised they were not concerned about this and they wished to proceed with the motion today.
[3] Section 2(8) of the FLA provides as follows:
The Court may, on motion, extend a time prescribed by this Act if it is satisfied that,
(a) There are prima facie grounds for relief;
(b) Relief is unavailable because of the delay that has been incurred in good faith; and
(c) No person will suffer substantial prejudice by reason of the delay.
[4] Both counsel agreed that the test set out in s. 2(8) is a threefold test and that each of the requirements set out therein must be met. Further, Mr. Craig argued that even if the criteria in s. 2(8) are met, the application for extension may be denied for other reasons. Mr. Bennett argued that there may be equity reasons that the court may grant or deny the extension.
[5] There is no disagreement between the parties regarding the first part of the test. Both parties agree the applicant has a prima facie claim for equalization. At the time of separation there existed a matrimonial home and a business. The respondent still resides in the matrimonial home and the business is still ongoing. None of this property has been equalized.
[6] The question for the court to determine is whether the applicant’s delay was “incurred in good faith;” and whether either party will “suffer substantial prejudice by reason of the delay.” I am satisfied with the evidence presented to find that the applicant incurred the delay in good faith and that the respondent will not suffer substantial prejudice by reason of the delay.
[7] The applicant has resided in New Brunswick since separation. She admits that she received legal advice regarding spousal support and equalization from two lawyers in New Brunswick: once in 2015 and once again in 2018. She says that she knew she had a claim for equalization, however, she could not pursue the property claim in New Brunswick. Also, she says that because the lawyers she consulted were in New Brunswick, she did not know about and was not advised of the limitation date to bring her claim in Ontario. In her affidavit, the applicant says that neither of the two lawyers in New Brunswick advised her of the limitation date in Ontario. She decided to pursue her spousal support claim in New Brunswick and this issue was settled on a final basis in September 2019.
[8] In the applicant’s affidavit, she stated that it was not until October 2019 that she received legal advice from an Ontario lawyer regarding the limitation date. She then actively began her search for a lawyer to commence her Application and to seek the extension to the limitation period. I find that the applicant was not “willfully blind” or indifferent to her claims. I find that she intended to pursue the claim, however, she was hindered by her modest means and her honest confusion regarding the limitation date due to lack of advice on the issue. I found her explanation for the delay was reasonable and honest, and thus the delay was incurred in good faith.
[9] Mr. Craig correctly argues that the limitation periods have been created to promote finality and that with all the time that has passed, the equalization calculation will be difficult. However, I agree with Mr. Bennett that although the equalization calculation will be complex and difficult, this does not make it impossible. As Hebner J. said in Taylor v. Taylor, 2019 ONSC 2968, the complexity of the equalization calculation “does not necessarily qualify as ‘substantial prejudice.” Further, as McDermot J. said in Paulsen v. Paulsen, 2017 ONSC 2937, there “must be some specific evidence of prejudice to the respondent for the subsection to be applicable.” The respondent provided no such evidence of substantial prejudice by reason of the 10 month delay or the extension of the limitation period as requested by the applicant. Therefore, I find that there is no substantial prejudice by reason of the delay.
[10] Both parties will need to be prepared to incur costs for valuations. This could be minimized and shared by the joint retainer of the experts. Both parties will also need to gather their evidence to calculate any post-separation adjustments and credits for maintenance and improvement to the property since separation. If they cannot agree on the valuations and disclosure, they will need to conference those issues. For all the reasons set out above, I am making the following order:
i. The limitation period under s. 7(3)(b) of the Family Law Act shall be extended to February 12, 2020, being the date that the application was issued in this matter.
[11] Each party shall bear their own costs of this motion.