The test for unequal division of assets in family law in Ontario is exceptionally high. (Photo courtesy of stock.xchng. All rights reserved.)
Toronto Family Lawyer Pei-Shing B. Wang:
In Ontario, the division of property when the marriage breaks down is called equalization. Equalization is a process where each of the spouses calculates his/her net family property following a set of rules under the Family Law Act.* At the end of the process, the spouse with less net family property is entitled to receive half the difference from the other spouse.
On rare occasions, when the court is of the opinion that equalizing the family property would be unconscionable for some reason, the court may award a spouse an amount that is larger or smaller than the equalization payment. The factors that the court must take into account are these:
(a) a spouse’s failure to disclose to the other spouse debts or other liabilities existing at the date of the marriage;
(b) the fact that debts or other liabilities claimed in reduction of a spouse’s net family property were incurred recklessly or in bad faith;
(c) the fact that part of a spouse’s net family property consists of gifts made by the other spouse;
(d) a spouse’s intentional or reckless depletion of his or her net family property;
(e) the fact that the amount a spouse would otherwise receive under subsection (1), (2), or (3) is disproportionately large in relation to a period of cohabitation that is less than five years;
(f) the fact that one spouse has incurred a disproportionately larger amount of debts or other liabilities than the other spouse for the support of the family;
(g) a written agreement between the spouses that is not a domestic contract; or
(h) any other circumstance relating to the acquisition, disposition, preservation, maintenance or improvement of property
The courts have consistently held that the threshold for an unequal division of assets is exceptionally high. This is because the underlying policy of the Family Law Act encourages finality, predictability, and certainty. The exercise of judicial discretion should be minimized as much as possible. To cross the threshold, according to the Court of Appeal in Serra v. Serra, an equal division of net family properties in the circumstances must “shock the conscience of the court.”+
In the recent case of Ward v. Ward, the Ontario Court of Appeal clarified its decision in Serra, supra, holding that the exercise of discretion is not to alleviate every situation that may be viewed as in some way unfair or inequitable. To do so, the court explained, would defeat the underlying policy of discouraging litigation.
*R.S.O. 1990, c. F.3, as am. s.5
+ 2009 ONCA 105
^ 2012 ONCA 462
& see e.g. Boisvert v. Boisvert, [2007] O.J. No. 2555, 40 R.F.L. (6th) 158 (S.C.J.)
This blog is provided for educational purposes and for your reference. It is not intended as legal advice and should not be regarded as such. The law may have changed since the publication of this article.
@PSWLaw_TO
Unequal Division of Assets in Family Law in Ontario
The test for unequal division of assets in family law in Ontario is exceptionally high. (Photo courtesy of stock.xchng. All rights reserved.)
Toronto Family Lawyer Pei-Shing B. Wang:
In Ontario, the division of property when the marriage breaks down is called equalization. Equalization is a process where each of the spouses calculates his/her net family property following a set of rules under the Family Law Act.* At the end of the process, the spouse with less net family property is entitled to receive half the difference from the other spouse.
On rare occasions, when the court is of the opinion that equalizing the family property would be unconscionable for some reason, the court may award a spouse an amount that is larger or smaller than the equalization payment. The factors that the court must take into account are these:
(a) a spouse’s failure to disclose to the other spouse debts or other liabilities existing at the date of the marriage;
(b) the fact that debts or other liabilities claimed in reduction of a spouse’s net family property were incurred recklessly or in bad faith;
(c) the fact that part of a spouse’s net family property consists of gifts made by the other spouse;
(d) a spouse’s intentional or reckless depletion of his or her net family property;
(e) the fact that the amount a spouse would otherwise receive under subsection (1), (2), or (3) is disproportionately large in relation to a period of cohabitation that is less than five years;
(f) the fact that one spouse has incurred a disproportionately larger amount of debts or other liabilities than the other spouse for the support of the family;
(g) a written agreement between the spouses that is not a domestic contract; or
(h) any other circumstance relating to the acquisition, disposition, preservation, maintenance or improvement of property
The courts have consistently held that the threshold for an unequal division of assets is exceptionally high. This is because the underlying policy of the Family Law Act encourages finality, predictability, and certainty. The exercise of judicial discretion should be minimized as much as possible. To cross the threshold, according to the Court of Appeal in Serra v. Serra, an equal division of net family properties in the circumstances must “shock the conscience of the court.”+
In the recent case of Ward v. Ward, the Ontario Court of Appeal clarified its decision in Serra, supra, holding that the exercise of discretion is not to alleviate every situation that may be viewed as in some way unfair or inequitable. To do so, the court explained, would defeat the underlying policy of discouraging litigation.
*R.S.O. 1990, c. F.3, as am. s.5
+ 2009 ONCA 105
^ 2012 ONCA 462
& see e.g. Boisvert v. Boisvert, [2007] O.J. No. 2555, 40 R.F.L. (6th) 158 (S.C.J.)
This blog is provided for educational purposes and for your reference. It is not intended as legal advice and should not be regarded as such. The law may have changed since the publication of this article.