Order requiring wife to pay $40,000 loan to husband's estate overturned
The Court of Appeal for Ontario recently adjusted the financial obligations of ex-spouses following the breakdown of their marriage. The wife need not repay certain funds advanced to her business during the marriage, the ruling said.
In 2012, the husband advanced $40,346 – via a corporation that he owned – to assist his wife’s daycare business. In 2013, the husband advanced $341,000. The marriage then broke down. Litigation over support and financial issues ensued, with the ex-husband requesting repayment of these advances.
The trial judge held that the ex-wife was liable to repay the amount of $40,346 but not the amount of $341,000 since the two-year limitation period under Ontario’s Limitations Act, 2002 barred this claim.
After the ex-husband passed away, his estate continued the litigation. On appeal, the estate alleged that the trial judge should have granted the claim for $341,000. The estate argued that, because the advances were demand loans, the limitation period should begin running only after the demand for repayment, which occurred within two years of the amended claim.
On cross-appeal, the ex-wife challenged the trial judge’s calculation of child support and the finding that she was liable to repay $40,346 to the ex-husband’s estate.
In T.O. Estate v. D.O., 2024 ONCA 603, the Ontario Court of Appeal varied the decision of the trial judge, who failed to apply the correct provision of the Limitations Act. After the variation, the decision would require the daycare business to pay the sum of $341,000.
The claim for $341,000 was not time-barred, the appeal court ruled. The limitation period for demand loans should start only after the making of a demand for repayment, which occurred within the two-year period in this case, the appeal court explained.
The appeal court allowed the ex-wife’s cross-appeal. First, the appeal court decided that she was not liable to repay $40,346 to her ex-husband’s estate. A corporation controlled by her ex-husband, not her ex-husband himself, advanced this amount, the appeal court said.
Second, the appeal court accepted that the trial judge made an error in the child support calculation. Instead, the ex-husband’s estate should pay child support from June 1, 2018 to Oct. 1, 2022, fixed at the sum of $910 per month, the appeal court found.
