Court File and Parties

COURT FILE NO.: FC-22-00000419-0000 DATE: 2024-05-28

ONTARIO SUPERIOR COURT OF JUSTICE FAMILY COURT

B E T W E E N:

Peggy Gale Denee Applicant

• and -

Mark Peter Denee Respondent

Counsel: K. Newell, for the Applicant D. Moldenhauer, for the Respondent

HEARD: May 23, 2024

The Honourable Justice J. R. Henderson

ENDORSEMENT ON MOTION

[1] This is a motion brought by the respondent, Mark Peter Denee, to extend the limitation period set out in s.7(3) of the Family Law Act, R.S.O. 1990, c. F.3 (the "Act"), to permit the respondent to bring a claim under s.5 of the Act for an equalization payment.

[2] Section 7(3) provides that an application based on s.5 shall not be brought after the earliest of … "(b) six years after the day the spouses separate and there is no reasonable prospect that they will resume cohabitation."

[3] The parties agree that they separated, without any prospect of reconciliation, in 2014, although they disagree on the precise date of the separation. At the latest, the limitation period would have started to run as of November 2014. Therefore, the limitation period as set out in the Act expired by November 2020. However, because all limitation periods were briefly suspended because of the COVID-19 pandemic, I accept that the limitation period for the respondent's s.5 claim in this case would have expired, at the latest, in May 2021.

[4] There were no court proceedings between these parties until the applicant, Peggy Gale Denee, issued an application in September 2022 in which the applicant only claimed a divorce.

[5] The respondent delivered an answer that included his s.5 claim for an equalization payment in January 2023. Accordingly, I find that the respondent's s.5 claim was brought after the expiry of the limitation period.

FACTUAL BACKGROUND

[6] By way of background, I accept that the parties purchased a matrimonial home known as 1872 Four Mile Creek Road, in Niagara-on-the-lake, Ontario, in 2007. Title was taken in the applicant's name alone. The respondent signed as a guarantor of the mortgage.

[7] The parties have three children, now aged 19, 22, and 26 years old. After the parties separated, the applicant and the three children remained in the matrimonial home.

[8] The respondent provided the applicant with regular monetary payments after they separated. The respondent claims that those payments included money for child support and for the carrying costs of the matrimonial home. The applicant submits that the money provided by the respondent was only for child support. Between the date of separation and November 2021, the respondent made payments to the applicant that totalled more than $144,000.

[9] I accept that the parties had some discussions after the separation about the possibility of the applicant purchasing the respondent's interest in the matrimonial home. It is clear that the applicant wished to remain in the matrimonial home, and that she wished to purchase the respondent's interest; the respondent was agreeable to proceeding in this way. However, the applicant did not have the funds to purchase the respondent's interest, and therefore both parties agreed to defer a resolution of this issue to a later date.

[10] In December 2018, I find that the applicant obtained an opinion of value with respect to the matrimonial home. I find that she did so because of her desire to purchase the respondent's interest in the home, and that she provided a copy of the opinion of value to the respondent. The parties did not reach an agreement about the home at that time, and again the issue was deferred.

[11] The parties at no time entered into a separation agreement regarding any of the matrimonial issues. The parties did not commence any court action until the applicant's application in September 2022.

[12] The applicant has remained in the matrimonial home since the separation. The applicant continues to be the sole registered owner of the matrimonial home. The respondent continues to be a guarantor on the mortgage.

ANALYSIS

[13] Section 2(8) of the Act states that the court may, on motion, extend a time prescribed by the 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."

[14] I find that the onus is on the respondent in this case to show, on a balance of probabilities, that all three elements of s.2(8) apply, and if so, that the court should exercise its discretion to extend the limitation period.

[15] Counsel for the applicant concedes that the respondent can show that subsections (a) and (c) apply as there are apparent grounds for the s.5 claim, and there is no substantial prejudice to the applicant caused by the delay. The issue is whether subsection (b) applies.

[16] Regarding subsection (b), counsel for the applicant submits that the respondent is unable to show that the relief is unavailable because of delay. The applicant submits that the only relevant marital asset is the matrimonial home. Therefore, if the respondent was entitled to pursue a claim under s.5, the respondent in effect would only be claiming compensation for his interest in the matrimonial home.

[17] Counsel for the applicant submits that the respondent can claim compensation for his interest in the matrimonial home by way of a claim for unjust enrichment. The claim for unjust enrichment is not yet statute barred, and it has already been claimed in the respondent's answer in addition to his s.5 claim. Therefore, the applicant submits that the relief requested by the respondent remains available to him by way of his unjust enrichment claim.

[18] On this point, I disagree with the submissions made by counsel for the applicant. Although s.5 claims and unjust enrichment claims are closely related, they are two different claims with different tests. Further, I find that s.5 claims in most cases would include other assets in addition to a matrimonial home, whereas unjust enrichment claims are limited to specific properties, in this case the matrimonial home.

[19] Therefore, the true issue under subsection (b) is whether the respondent has acted in good faith. In my view, there are several factors that support the respondent's position.

[20] I find that the fact that the respondent made regular payments to the applicant constitutes evidence of his good faith. I accept that the payments made by the respondent included child support, but I find that the payments also included payments toward the carrying costs of the matrimonial home. The respondent made these payments from 2014 until 2021. I accept that these payments assisted the applicant with the costs of the matrimonial home and thereby allowed the applicant and the children to continue to reside in the home.

[21] Further, I find that the respondent's payments toward the carrying costs of the matrimonial home also indicate that the respondent had an honest belief that he was entitled to an interest in the matrimonial home. That is, he was making payments to preserve an asset in which he believed that he had an interest.

[22] Still further, I find that there were at least some discussions between the parties about the applicant buying out the respondent's interest in the home. I find that the applicant at all times wanted to buy out the respondent's interest, and that the respondent was at all times content to sell his interest. However, because the applicant had difficulty affording the buyout, I find that both parties agreed or acquiesced to deferring the potential purchase by the applicant of the respondent's interest. That is, they both agreed to deal with that issue at a later date.

[23] For all these reasons, I find that the respondent has proved all of the three elements of s.2(8) of the Act. In exercising my discretion, I have considered that the respondent has made significant payments toward the carrying costs of the matrimonial home since the separation and thus he has invested money, after the separation, into the home. Further, I have taken into consideration the fact that the respondent continues to have liability as a guarantor of the mortgage on the matrimonial home. For these reasons, I find that the limitation period should be extended as requested.

[24] In conclusion, I hereby extend the limitation period for the respondent to bring a claim under s.5 of the Act to February 28, 2023.

J. R. Henderson, J.

Date Released: May 28, 2024