• by Christina Hinds
Originally published in the OFLM 2024-10 edition
Overview
In Castiglione v. Akram, 2024 CanLII 85293 (ON SC), Justice McGee considered a surviving spouse’s motion to extend the limitation period for a spousal election under section 6(1) of the Family Law Act.
A surviving spouse can elect between taking under their deceased’s spouse’s will or receiving an equalization of their net family properties (calculated as of the date of the spouse’s death). The time period to make an election is within six months after the spouse’s death. However, this period may be extended on motion if the test at section 2(8) of the Family Law Act is met.
In Castiglione, the wife died leaving behind her husband of 15 years. The husband was entitled to an equalization payment as the wife’s net family property was higher than his. The wife died with a purported Will which left nothing to the husband. The husband disputed the validity of the Will. If the Will was found not valid, the wife would have died intestate, and the husband could seek a preferential share of $200,000 from the wife’s estate under Part II of the Succession Law Reform Act.
Justice McGee found that the husband met the test and granted the extension.
Spousal Election Under the Family Law Act
Under section 5(2) of the Family Law Act, when a spouse dies, if the net family property of the deceased spouse exceeds the net family property of the surviving spouse, the surviving spouse is entitled to one-half the difference between the respective net family properties – an equalization payment.
Under section 6(1) of the Family Law Act, when a spouse dies leaving a will, the surviving spouse shall elect to take under the will or to receive the entitlement under section 5 of the Family Law Act.
Under section 6(2), when a spouse dies intestate, the surviving spouse shall elect to receive the entitlement under Part II of the Succession Law Reform Act or to receive the entitlement under section 5 of the Family Law Act.
Under section 6(3), when a spouse dies testate as to some property and intestate as to other property, the surviving spouse shall elect to take under the will and to receive the entitlement under Part II of the Succession Law Reform Act, or to receive the entitlement under section 5 of the Family Law Act.
Limitation Period
The surviving spouse must make an election within six months of their spouse’s death (section 6(10) of the FLA). In addition to filing an election, the surviving spouse must also bring an application for an equalization of net family properties within six months (section 7(3)(c) of the FLA).
Facts
In Castiglione v. Akram, at the time of the wife’s death, she lived with her husband of 15 years. There was a purported one-page Will stating “[m]y souse is financially self sufficient; I am not leaving anything further to my husband.” (at para. 3). The purported Will left everything to the wife’s brother who was named the executor of the Estate, to split between himself and his two children.
Both the husband and the wife’s brother retained lawyers. The wife’s brother filed an Application for a Certificate of Estate Trustee with a Will and the husband filed a Notice of Objection.
As the six-month limitation period approached, the husband requested an extension so that the parties could continue settlement discussions. The wife’s brother provided consent for an extension of 60 days after the granting of a Certificate of Appointment of Estate Trustee.
At the time of hearing the motion, a Certificate had not been granted, and the matter had been converted to an Action.
Limitation Period and Extension of Time under section 2(8)
The six-month time period for a spouse’s election can be extended under section 2(8) of the Family Law Act, which provides:
The court may, on motion, extend a time prescribed by this Act if it is satisfied that,
(a) there are apparent grounds for relief;
(b) relief is unavailable because of delay that has been incurred in good faith; and
(c) no person will suffer substantial prejudice by reason of the delay.
- There are apparent grounds for relief
While Justice McGee noted that the husband had “clear grounds” for relief, “a surviving spouse does not need to provide a right to an equalization payment in order to obtain an extension because disclosure may not yet be complete.” (at para. 19).
In Trezzi v. Trezzi (2019 ONCA 978), at paragraph 50 the Court of Appeal stated that the “relief” in issue is not the right to an equalization payment, but rather the right to elect for an equalization of net family property:
[…] The "relief" in issue for purposes of s. 2(8) of the FLA is not the right to the equalization payment itself, but rather the right to elect for an equalization of net family property […] To require a surviving spouse to prove a right to an equalization payment in order to obtain an extension under s. 2(8) to make an election would defeat the remedial purpose of the FLA: it would deprive a surviving spouse of the right to choose the more favourable financial outcome as between a will and under the FLA simply because they lack information necessary to make an informed choice between the two.
- Relief is unavailable because of delay that has been incurred in good faith
The Court of Appeal in Trezzi stated that the “good faith” requirement merely requires that the spouse acted with “honestly and with no ulterior motive.” (at para. 55).
Justice McGee found that the husband had in good faith relied on the consent to defer his decision (at paras. 23 and 24).
- No person will suffer substantial prejudice by reason of the delay
Justice McGee found that neither the brother (as the estate trustee) or the estate itself would suffer prejudice as the brother was still awaiting appointment of Estate Trustee and there had been no partial distribution of the Estate (at para. 30).
Conclusion
For a number of reasons, a surviving spouse may not be able to make an election or initiate an application for equalization of net family properties within six months after their spouse’s death. Fortunately, this limitation period can be extended under section 2(8) of the Family Law Act. For instance, a surviving spouse may require additional time to make an informed decision and determine which option is most beneficial.