Are marriage contracts subject to a limitation period? In a recent case, the Ontario Court of Appeal (OCA) grappled with this very question. In the end, the father’s request to set aside the marriage contract was allowed, but the OCA was divided on whether all proceedings under the Family Law Act (FLA) that seek to set aside a domestic contract fall within s. 16(1)(a) of the Limitations Act, 2002 (LA) and therefore have no limitation period at all.
The Parties’ Marriage Contract
The parties married in July 2005 and separated in August 2012.
The parties had entered into a marriage contract immediately before they got married. The contract indicated that neither party would receive spousal support in the event of a breakdown of their relationship. It also provided that the parties would be separate as to property.
In August 2017, the husband sought an equalization of net family property and spousal support, asking the court to set aside the marriage contract.
The motion judge dismissed the father’s claim. He found that the rescission of a marriage contract constituted a “claim” under the LA, that the claim was subject to the two-year limitation period in s. 4 of the LA, and that the husband had discovered his claim approximately two months after separation (and was therefore brought outside the two-year limitation period).
The husband appealed the motion judge’s decision.
Limitation Periods in Family Law Matters
In Ontario, two statutes govern limitations issues in family law proceedings: the LA and the FLA. The LA provides a general two-year limitation period for claims in Ontario (s. 4) and also outlines a list of proceedings for which there is no limitation period (s. 16(1)). In particular, and in relation to this case, s. 16(1)(a) indicates that there is no limitation period for “a proceeding for a declaration if no consequential relief is sought.”
In terms of applications for equalization of net family property, the FLA sets out three limitation periods. Specifically, s. 7(3) states that an application should not be brought after the earliest of:
- two years after the day the marriage is terminated by divorce or judgment of nullity;
- six years after the day the spouses separate and there is no reasonable prospect that they will resume cohabitation; or
- six months after the first spouse’s death.
With respect to spousal support, the FLA does not provide a limitation period for seeking an order for support. Indeed, s. 16(1)(c) of the LA provides that there is no limitation period for bringing a proceeding to obtain support or to enforce a contract providing for support under the FLA.
When it comes to setting aside a domestic contract, s. 33(4) of the FLA gives the court the power to set aside a provision that waives or reduces the right to support in three situations. Furthermore, s. 56(4) of the FLA allows a court to set aside an entire marriage contract in any of the following cases:
- if a party failed to disclose to the other significant assets, or significant debts or other liabilities, existing when the domestic contract was made;
- if a party did not understand the nature or consequences of the domestic contract; or
- otherwise in accordance with the law of contract.
There is no limitation period provided in the FLA for setting aside a domestic contract under s. 56(4).
Setting Aside the Marriage Contract
In allowing the appeal, the majority of the OCA began by outlining that the fact that the FLA does not provide a limitation period for an application to set aside a marriage contract under s. 56(4) is a clear legislative signal that the LA is to apply.
The majority of the OCA found that the husband’s plea to rescind the marriage contract was a proceeding for a declaration where no consequential relief was sought, and so, under s.16(1)(a) of the LA, no limitation period applied to that pleading. Furthermore, the majority of the OCA concluded that the husband’s claim for equalization was subject to the six-year period set out in the FLA, and his claim for spousal support was not subject to any limitation period. As a result, neither of the husband’s claims were statute-barred.
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