Halliday v. Halliday: Time limitations and other “traps for the unwary” when challenging separation agreements.

A pocket watch counting time limitations in separation agreements

The British Columbia Court of Appeal recently addressed the issue of time limitations for family law cases in Halliday v. Halliday, 2015 BCCA 82.

This case involved a couple that had separated and then divorced after 24 years of marriage. Following their separation in 2008, the couple entered into a settlement agreement, without legal advice, which was intended to finalize all of the issues between them, including the division of property, pension division and spousal support payments. According to their settlement agreement, the Husband was supposed to pay the Wife 12 months’ spousal support of $500 per month, for a total of $6000. However, a year later, after he had already made 12 spousal support payments (totalling $4000), the Husband was laid off from his long-term job. After the Husband was unable to find work, the Wife agreed to “call it even” and overlook the remaining $2000 of spousal support owed. The couple later divorced in 2009, and no claims were made by either the Husband or Wife concerning property division or continued spousal support.

Nearly 5 years later, in 2014, the Wife filed an application to the courts for spousal support and the division of marital assets under the Family Law Act. She did so again without any legal advice.

By 2014, the Husband had returned to work and was making over $100,000 per year. Through his lawyer, the Husband responded that the Wife’s court application was too late, and should be dismissed, as it was beyond the two-year limitation allowed under the Family Law Act. At the court of first instance, the Wife argued that she had not made an earlier claim for support or division of assets because her Husband had been out of work, and also because she had been recovering from the emotional stress of both the divorce and the loss of her mother. She had also only become aware of the grounds upon which she brought her claim – gross unfairness – in late 2012. The court accepted the Wife’s arguments, and deemed her application to be within the applicable two-year limitation period, and therefore not late as the Husband had argued. The Husband then appealed.

When this case finally got to the Court of Appeal, it was a jumbled mess due to “the series of procedural errors and missteps” made by the parties. Indeed, in the first two paragraphs of their judgement, the Court of Appeal warned of the many traps that could befall unwary litigants, especially when self-represented as had been the Wife:

[1]             Family law cases contain many traps for the unwary. The Supreme Court Family Rules (the “Family Rules”) and the different legislative regimes are complex. Litigants must select with care the appropriate procedures under Family Rules. They must be mindful in seeking relief of the distinctions within and differences between federal and provincial legislation. While the Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.), the Family Law Act, S.B.C. 2011, c. 25 (the “FLA”), and the Family Relations Act, R.S.B.C. 1996, c. 128 (the “FRA”), to the extent that it still applies, contain many similar provisions, they are not identical.

[2]             Particular care must be taken with regard to the procedures and time limits to bring proceedings to set aside provisions of a separation agreement. The fact that many family law litigants are unrepresented compounds the problem. The fine distinctions in procedure and in the legislation are often understandingly lost to the legally untrained and, I might add, to those that are legally trained. Recognizing the distinctions can be the difference between success and failure. This proceeding, to date, is a cautionary tale as to what can go wrong.

In the end, the Court of Appeal found based upon the numerous procedural errors that the Wife’s case should not have proceeded in the manner that it did, and set aside the lower court’s decision. In so doing, the Court of Appeal cautioned the Wife to make a claim for spousal support under the Divorce Act and not the Family Law Act as she had done before.
The Halliday case underlines the importance of informing oneself of the relevant law and limitation periods when challenging separation agreements or the like. As was explained in the Court of Appeal’s decision, spousal support can be claimed under either the Family Law Act or under the Divorce Act. However, under the Family Law Act a “spouse” must bring his or her claim for spousal support within two years of a divorce or declaration of nullity – in the case of married spouses, or, within two years of separation – in the case of married spouses. Under the Divorce Act, there is no express time limitation period within which “spouses” or “divorced spouses” must bring a spousal support application. Additionally, as was also noted in Halliday, the existence of an agreement between former spouses governing spousal support is not a bar to an application for further support.