Governing Jurisdiction for Equalization Claims
The recent decision of Burkhardt v. Burkhardt Estate deals with property rights of spouses and the question of governing jurisdiction. In this case, the parties were married in Germany, where they lived together until 2003. The testator then moved permanently to Ontario. His wife did not join him.
The testator died in Ontario in 2013. He made a will disposing of his property in Germany and another will disposing of his property in Ontario. There is no dispute that both wills are valid. The widow moves for an extension of time within which to file her election under section 6 of the Family Law Act to elect to receive the entitlement to equalization of net family property under subsection 5 (2) of the Act. The trustee of the Ontario estate moves for directions and opinion as to how to administer the estate in view of the potential claim for equalization.
The trustee was aware of the potential equalization claim within six months of the testator’s death (the day for the six months expired), but the application for equalization was not brought within that same time frame.
Subsection 7(3) of the Family Law Act provides that an application for equalization shall not be brought after the earliest of six months after the first spouse’s death. The time can be extended by a judge under subsection 2 (8) of the Act, if he/she 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.
The Judge did not find that the brief delay gave rise to any concern about bad faith or prejudice. There was a question, however, as to whether there were apparent grounds of relief – not for the extension of time, but for the application for equalization. The Judge found that the matter was decided by section 15 of the Act, which provides:
- The property rights of spouses arising out of the marital relationship are governed by the internal law of the place where both spouses had their last common habitual residence or, if there is no place where the spouses had a common habitual residence, by the law of Ontario.
On the uncontested evidence, the last common habitual residence was Germany. Accordingly, the widow’s rights had to be decided under German law. Her motion was therefore dismissed.
Jurisdictional issues can be a tricky and complicated area of the law. With more and more couples having domestic and foreign assets, this legislation is helpful to ensure clarity in the family law context.
Thanks for reading and have a good day,