août 31. 2020

Appeal Court Rules: No Time-Limit for Simple Court Declaration Voiding Marriage Contract

Kyle v. Atwill, 2020 ONCA 476 (CanLII)

In a very recent and significant Ontario Court of Appeal decision in a case called Kyle v. Atwill, the legal issue was simple: Whether a former spouse could have a marriage contract set aside, even though the standard two-year deadline under provincial limitation period legislation had already expired.

The former couple, who had been living together for a year, had entered into a pre-nup (which is one form of marriage contract) one week before their marriage ceremony. It was drafted based on a template for pre-nups that the wife had found on the internet. Neither of them obtained legal advice before signing it.

Under the pre-nup’s wording, neither of them could claim spousal support from the other if they separated, and they would continue to treat their property separately (meaning there would be no equalization process).

The spouses did separate, after seven years. More than two years later, and despite the pre-nup, the husband nonetheless brought Family Law proceedings claiming for spousal support and equalization of net family property. This prompted a volley of legal arguments and counter-arguments between them:

  1. The wife pointed to the pre-nup as completely blocking all of the husband’s asserted claims against her.
  2. The husband responded by asking the court to set the pre-nup aside, because he had ostensibly signed it without legal advice, under duress, and with inadequate financial disclosure.
  3. In turn, the wife claimed that the husband’s bid to rescind the pre-nup was out of time, because there was a two-year limitation period on bringing such requests, and it had already expired.

A lower court judge accepted the wife’s last argument as to the lapsed limitation period, and concluded that the husband’s claim was time-barred.

The husband appealed – successfully – to the Ontario Court of Appeal.

The Appeal Court noted that the two-year limitation period in question, under the Ontario Limitations Act, 2002, was simply inapplicable to the type of proceedings and outcomes pursued by the husband.

First of all, his attempt to have the pre-nup set aside was governed by s. 56(4) of the Family Law Act, which allows a court to declare all or part of a marriage contract null and void in certain circumstances. His was a request for a straightforward court declaration to that effect, and did not include any application for what is known as “consequential relief” (such as damages or other remedies needed to achieve justice). Such requests for court declarations, where no consequential relief sought, are simply not subject to any time limits at all under the Limitations Act, 2002, the Court said.

Likewise, the husband’s claim for spousal support fell under the Family Law Act, and was not subject to any deadline at all; his claim for equalization was governed by the six-year period stipulated in the Family Law Act, which had not yet lapsed here. A careful reading of the Limitations Act, 2002 yielded no authority or reason to trump those outcomes. As the Court observed:

These special limitation periods account for the need to allow spouses more time to try to resolve their property issues without having to go to court, and the fact that a spouse or former spouse’s support needs can change over time and may be addressed whenever they do.

The Appeal Court also noted that the combined operation of Family Law Act deadlines together with the Limitations Act, 2002 (which expressly recognizes the time limits in other legislation) usually results in Family-related proceedings having a more generous limitation period than the standard two years. This, the Court said, is “in recognition of the unique situation of spouses and families on the breakup of a marriage”.

In the end, the Appeal Court held that none of the husband’s asserted claims were statute-barred, and that the lower court ruling was to be overruled. He could proceed to ask the court to have the pre-nup set aside on the merits, and for other requested remedies.

For the full text of the decision, see:

Kyle v. Atwill, 2020 ONCA 476

[This post by Russell Alexander first appeared on FamilyLLB.com on August 25, 2020]