The decision in Lundy v. Lundy surrounds a delay in seeking an extension to make and election under the Family Law Act (“FLA”).
This motion was brought by Carol, the surviving spouse of the Deceased, mainly for an extension of the time for her to file an election and equalization application under the FLA. The Respondent was Sean, the son of the deceased and a residuary beneficiary of the Deceased’s estate. The Deceased left a primary Will and a secondary Will naming Sean and Carol as co-Estate Trustees.
The Wills provided that Carol would receive the following:
- The Deceased’s RRSPs and RRIFs ($248,000);
- All money in his bank account/joint account with Carol ($100,00));
- The furniture and household effects in the Home, and the right to remain in the Home for as long as she wishes, though she had to pay the costs of living there;
- All amounts derived from the redemption of the Deceased’s Class A and B preferred shares of his company
Among other gifts, Sean was to receive the residue of the estate subject to the gifts to Carol, and subject to the spousal trust regarding the redemption proceeds of the Class A/B shares, Sean would inherit the shares in the Deceased’s company.
The Deceased died on June 29, 2015. Pursuant to the FLA, Carol, therefore, was required to make her election by December 29, 2015. Instead, Carol brought the motion in January of 2017, seeking:
- Leave to extend the limitation period under the FLA in order for he to file an election and equalization application by 6 months after date of return of motion;
- An order suspending distribution until the expiry of the extended limitation periods; and
- An order that the estate pay the costs of Carol retaining an expert to value the company and other real property as at date of marriage and date of death.
Section 5(2) of the FLA provides for the equalization of net family property (“NFP”) upon the death of a spouse:
When a spouse dies, if the net family property of the deceased spouse exceed the net family property of the surviving spouse, the surviving spouse is entitled to one-half the difference between them. – R.S.O. 1990, c F.3, s. 5(2)
The spouse must make an election within six months of the death of the other spouse or she will be “deemed” to have chosen to take under the Wills.
The Court went over the section 2(8) of the FLA, which permits the Court, on motion, to extend a time prescribed by the FLA if it is satisfied that:
- There are apparent grounds for relief
- Relief is unavailable because of delay that has been incurred in good faith; and
- No person will suffer substantial prejudice by reason of the delay.
Carol submitted that she had not been provided with timely or complete information regarding the value of the Estate as at the dates of marriage and death, which is required in order to calculate a possible equalization payment. She claimed that she did not have a complete picture of the assets of the Estate until July 2016, and that she still needed valuation information regarding the Deceased’s company.
Sean claimed that Carol’s delay in coming to the court has not been incurred in good faith and that he will suffer substantial prejudice by reason of the delay. Specifically, he claimed that Carol was aware of the Estate assets, as she knew the Deceased’s estate plan before he died, was a co-Estate Trustee, and was also in possession of the Deceased’s financial records. There was also evidence that she had accepted bequests made to her under the Wills and had not expressed any intention to make an equalization claim or seeks an extension to do so.
The Court found that Carol’s evidence lacked documents and details that might support her vague explanation for the delay and found that while she may not have known the exact value of her equalization claim, she knew about her FLA rights and could have brought the motion to extend time sooner.
The Court found that Carol was not ignorant about her rights as she was represented by counsel since December 2015. Specifically, the Court found that:
- Carol did not show that her delay in bringing the motion was incurred in good faith;
- She did not provide evidence to explain why she failed to assert a claim or failed to seek an extension of the FLA limitation periods if she believed she needed further time and information in order to investigate and evaluate her FLA In fact, she never gave any indication that she was pursuing a claim;
- The evidence led to a conclusion that Carol was deliberate in her actions to act as co-estate trustee even when asked to resign; she accepted her gifts under the Wills’ and may have participated, or at least tacitly acquiesced, in the distribution of the Company shares.
The Court did note that in exercising its discretion not to grant the extension, Carol was not left without any remedy, as she may still be able to pursue a claim for dependants’ support under the Succession Law Reform Act.
The case shows how important it is for surviving spouses to act quickly and diligently with respect to their entitlement to their deceased spouse’s estate and any claims that arise with it. Had Carol made it known that she was pursuing a claim or moved for the extension of time much sooner, the outcome of her FLA claim may have been different.
 Lundy v. Lundy, 2017 ONSC 2101
 Lundy, para. 61.