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Family Law Property Settlement Time Limits

Family Law Property Settlement Time Limits

The lawyer-client relationship and limitation periods in family law.

In 2014, a Newfoundland woman, Cheryl Hefferman, commenced a court action against her former family lawyers in relation to a claim for the division of pensions that had never been brought between herself and her ex-husband, despite her understanding that the pension issue had been resolved. The parties divorced in 2002. 

Family Court Appeal Time Limit

Pursuant to the Family Law Act, an application for the division of a spouse’s property must be brought within two years of divorce — in Hefferman’s case, by 2004. Due to her ex-lawyers’ alleged negligence, the claim was never brought and she was unable to divide the pension, as she did not realize there was an error until 2013.

Hefferman brought an action for negligence against her ex-lawyers in 2014. The lawyers argued that the action could not proceed pursuant to s. 14(3) of the Limitations Act, which states that the maximum limitation period for a negligence claim is 10 years from the date of the alleged negligence. However, the Newfoundland Court of Appeal ruled that the negligent act, or in this case the negligent omission, did not occur until 2004 (i.e., the date when the property claim could no longer be brought) and that the lawyer-client relationship was never effectively terminated in 2002, thus affirming the responsibility her lawyers had in 2004. Hence, Hefferman’s action for negligence was brought within the 10-year limitation period and the action could proceed (see Fitzpatrick v.Hefferman 2019 NLCA 77).

This case highlights two vital points: 

1) the importance of having a thorough understanding of your lawyer-client relationship and 

2) the terminal effects of limitations periods.

The lawyer-client relationship

The ex-lawyers in Fitzpatrick believed that they had terminated their professional relationship with Hefferman once she moved out of the province. However, Hefferman was under the impression that the lawyer-client relationship was ongoing or, at minimum, was unsure as to whether the lawyer client relationship had terminated. The Court of Appeal emphasized that the ambiguity in whether or not the lawyer-client relationship had ended was sufficient evidence to conclude that the lawyer client relationship was, in fact, continuing. It is important, for both lawyers and their clients, to define the terms of their relationship and have a mutual understanding of the scope of the legal services. If the relationship is terminated, it should be

clear to both parties. Any confusion and misunderstandings can prove to be detrimental to both the lawyers’, and more importantly the client’s, interests.

Limitations periods in family law in Ontario

The decision in Fitzpatrick rested on the application of limitation periods. Although this case was one of negligence, it is a reminder that one should keep in mind the limitation period when commencing a family law application, too.

Limitation periods and the bar to claims that arise thereof are considered to be vested rights in

favour of the party against whom these claims are being brought. Unless explicitly noted, courts are reluctant to rebut the presumption of these rights. It is therefore important to keep the below-note limitations periods in mind, albeit in family law, courts do show some willingness in extending the limitations periods where they deem just.

Support claims

A claim for ongoing child support does not have a limitation period and can be brought at any time, so long as the child is a “child of the marriage.” From 2004 onwards, there is no limitation period for spousal support claims or for claims against a payor’s default under a separation agreement, whether the parties were married or common law spouses, pursuant to s. 16(1)(c) of the Limitations Act, 2002. This does not apply if a party’s spousal support claim expired prior to 2004.

However, when bringing a claim for retroactive support, the applicant should keep in mind that the court will not order retroactive support beyond three years of the effective or formal notice. In determining whether this limitation period can be adjusted, the court will consider four factors, as outlined in D.B.S. v. S.R.G [2006] 2 S.C.R. 231:

  1. The reason for delay in asking for an order in child support;
  2. Misconduct of the payor;
  3. Prejudice and hardship suffered by the children;
  4. Prejudice and hardship the payor might suffer if forced to pay retroactive support.

Property claims

In family law cases, a claim is considered to be “discovered” at the time of divorce or dissolution of the relationship and thus the limitation clock begins to tick at that point.

This idea is clearly articulated in s. 7(3) of the Family Law Act, which states that an application for a claim for the division of property or equalization must be brought within two years after the marriage is terminated by divorce or six years after the day the spouses separate and there is no reasonable prospect of reconciliation. Property claims include claims for the matrimonial home, vehicles, pension funds and retirement benefits and business assets.

If a party misses the limitation period set out in s. 7(3) of the Family Law Act, they may apply for an order extending the time to bring a claim. An extension may be granted if the court is satisfied that there are grounds for relief, the delay had been incurred in good faith and neither party would be substantially prejudiced should the claim be brought forth.

Equitable claims, such an unjust enrichment or constructive trust claims, are usually subject to the two-year limitation period set out in the Limitations Act, 2002, as confirmed in the case of Schneider v. State Farm Mutual Automobile Insurance Co. 2010 ONSC 4734. However, equitable claims for the division of real property (i.e., land or a home) fall under the limitation periods set out in the Real Property Limitations Act and must be brought within 10 years, as ruled in McConnell v. Huxtable 2013 ONSC 948.

Although a court may use its discretion in extending a limitation period, this bar exists in order to

ensure that respondents and/or defendants are not prejudiced by undue delays in commencement of a court proceeding; thus courts will not extend a limitation period without good reason. As such, it is important to keep the above noted limitation periods in mind and outline the relevant timelines in relation to notice, separation and divorce when bringing for claims related to property and financial support.

Barry Nussbaum is a senior lawyer at Nussbaum Law, a Toronto-based law firm that exclusively practises family and divorce law.