Limitation Periods and Equalization – The Time-Related Expiry of Rights and Obligations

In law, a limitation period refers to the amount of time that a claimant has to start a court proceeding for a claim against another person before their rights to start that claim expire. Put another way, a limitation period is the time limit that a person has to start court for a claim.  If the person misses that limitation period, then his/her claim expires under the law.  This is also referred to as a claim being “statute-barred.”

Equalization

In Ontario equalization cases (property division for married spouses) a limitation period applies. Section 7 of the Family Law Act provides that a court application for equalization shall not be brought after the earliest of,

  1. two years after the day the marriage is terminated by divorce or judgment of nullity; and
  2. six years after the day the spouses separate and there is no reasonable prospect that they will resume cohabitation.

There is a shorter limitation period (6 months after the first spouse’s death) dealing with equalization and a deceased spouse, but for the purposes of this article we are only discussing the situation of separated and divorced spouses.

As a result of this, it is important to know what your date of separation is and to properly calculate the limitation period for equalization. If you are entitled to an equalization payment from your spouse (separated or divorced) and you have not been paid that payment, then it is extremely important that you start a court application against your spouse for equalization before the limitation period expires, otherwise you will not be entitled to that payment.

It is important to hold off on obtaining a divorce until the equalization payment has been calculated and paid. Otherwise, as you can see above, the limitation period, once you are divorced, shrinks, giving you less time to start a court application regarding equalization.

Also of note, this limitation period does not apply to claims relating to constructive trusts and unjust enrichment. Those claims have separate limitation periods.

We would be happy to help you calculate and obtain your equalization payment before the limitation period expires. Please contact us today for a one-hour no obligation consultation.

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