Domestic Contracts (Limitations)

Kyle v. Atwill, 2020 ONCA 476 (CanLII)

[57] I conclude that a proceeding under s. 56(4) of the Family Law Act comes within s. 16(1)(a) of the Limitations Act. There is no limitation period for bringing the proceeding for a declaration setting aside a marriage contract, whether as a stand-alone matter or if the proceeding also claims other family law relief. The other relief remains subject to the applicable limitation periods, including the residual discretion of a family court to grant extensions of time under s. 2(8) of the Family Law Act. In this case, those limitation periods are six years for the husband’s equalization claim, and there is no limitation period for his spousal support claim.

[58] This result also works seamlessly within the limitation structure of the Family Law Act, because it does not add a new, shorter limitation period of two years, which would disrupt the longer time spouses have been given to resolve their affairs. It does not interfere with the philosophy of the Act, which is to give more generous time periods for separating spouses to resolve their claims for equalization and spousal support.

[59] Moreover, while spouses may seek to set aside a marriage contract in the circumstances set out in s. 56(4) at any time, a spouse is unlikely to bring such an application during the marriage, even if the spouse learns that the other spouse failed to disclose some material assets when they were negotiating their agreement. If they remain happily married, there will be no need.

[60] An application to set aside a marriage contract would likely be brought in the context of marriage break-up and its financial consequences for the parties. Those financial consequences are governed by the limitation periods specified in the Act and in the Limitations Act. An application to set aside a marriage contract will not extend or reduce those periods.

[62] Accordingly, I conclude that the motion judge erred in law in failing to find that s. 16(1)(a) of the Limitations Act applies to a proceeding under s. 56(4) of the Family Law Act for a declaration setting aside the marriage contract, and in finding that the two-year limitation period under s. 4 applies.