In Aquilina v Aquilina (2018 ONSC 3607), S.F. Dunphy J. explains when it is appropriate to extend the statutory deadline by which a surviving spouse must elect between equalization under the Family Law Act vs the Succession Law Reform Act.
George and Maria Aquilina moved to Canada from Malta and built up a sizable family fortune. George died in December 2017, leaving behind Maria, their three adult children, and a complex estate with business interests in Malta. No will could be found.
The FLA and SLRA have very different property regimes for surviving spouses.
- Under the SLRA, if there is no will and more than one child, the spouse receives a third of the estate plus a preferential share (ss. 45, 45(2))
- Under the FLA, the surviving spouse receives one half of the difference in net family property
A spouse has six months to elect between the FLA and SLRA. If no election is made, then the SLRA prevails (see FLA ss. 6(10), 6(11)). No distributions can be made from the estate during this period.
The court may apply to extend this six month deadline where there are apparent grounds for relief, delays have been incurred in good faith, and no person will "suffer substantial prejudice" because of the delay (FLA s. 2(8)).
It's not immediatley clear whether Maria is better off electing for the FLA or SLRA regime. She applied to the court to have the statutory deadline increased to two years. Her three children do not oppose the application.
When is it appropriate to extend the time by statute for surviving spouse to elect for equalization under FLA vs. the SLRA?
The issue in this case is often addressed in courts via short, handwritten endorsements. S.F. Dunphy J. took this case as an opportunity to add to the published jurisprudence on this subject, noting that:
- The FLA and SLRA should be read together as one scheme
- Spouses should have time to grieve, as well as gather the information necessary to make an informed decision.
- The spouse does not need every last detail about the estate to make an informed decision. "Sufficient" information will do.
- Courts must balance the needs of the surviving spouse vs the other stakeholders of the estate
- Extensions should be rare
... there are grounds for relief when the electing spouse has not been able to assemble a reasonable knowledge base from which an informed choice might fairly be expected to be made ... reasonable is measured having regard to the nature of the information needed, its materiality to the choice to be made and the interests of other stakeholders in the process [para 26].
Application to the Case at Hand
S.F. Dunphy J. granted a one-year extension rather than the two years requested.
There were grounds for relief because George's death was sudden and a shock to the family. Time was spent looking for a will. The complexity of the estate meant that it took time to appraise assets and identify foreign holdings. The delays in this case were understandable and in good faith. Maria's three adult children are prejudiced by the delay, but the fact that they do not oppose the application mitigates this somewhat.