Unequal Division of Net Family Property in Divorce
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Unequal division of net family property in divorce is important to understand during a divorce.
Reach out to a family lawyer in Toronto for guidance if needed.
While generally the division of the difference between the net family properties is distributed equally between the spouses, there are very limited circumstances when the division of net family property is unequal. Section 5(6) of the Family Law Act (the “Act”) delineates when a court might order an unequal division of net family property, altering the amount a spouse would otherwise receive under subsection 5(1), especially if an equal division would be unconscionable. The court uses its discretion if it believes that equalizing the net family property equally would be unconscionable.
Justice Robert A. Blair stated clearly in Serra v Serra (click here) “…The threshold of unconscionability under s. 5(6) is exceptionally high. The jurisprudence is clear that circumstances which are “unfair”, “harsh” or “unjust” alone do not meet the test. To cross the threshold, an equal division of net family properties in the circumstances must “shock the conscience of the court.”
This indicates that the spouse would otherwise receive an equalization payment reflecting half the difference, unless it meets the high bar of unconscionability.
If the court issues a finding of unconscionability, this results in an amount that is more or less than what the spouse would otherwise receive under subsection 5(1). The following eight circumstances play a role in determining unconscionability:
- A spouse fails to disclose debts at the time of the marriage.
- In 2016, the court heard the case of Rinaldi v Branch (click here), where one party was seeking the unequal division of net family property. In this case, the wife argued that the husband did not disclose his child support responsibilities at the time of marriage, along with other circumstances, such as the facts that the marriage lasted less than five years and she contributed more to the property than he did. The court found that although the three factors were taken into consideration, the court could not establish unconscionability, as she had failed to meet the high threshold.2. A spouse incurs debts recklessly or in bad faith and that reduces his or her net family property.
3. A significant part of a spouse’s net family property consists of gifts made by the other spouse.
4. There is a reckless depletion of net family property.
- In Coombs v Coombs in 2016 (click here), Mrs. Coombs had little net family property. The major asset in question was the matrimonial home, which Mrs. Coombs had very little interest in. Justice Wilcox granted Mrs. Coombs an unequal share of the net family property and transferred the title of the matrimonial home to her. Justice Wilcox ruled in Mrs. Coombs favour because she was able to prove that Mr. Coombs ran up debt on their joint line of credit without any benefit to her and that Mr. Coombs had depleted the parties’ joint bank accounts, putting the burden of providing for the family largely on Mrs. Coombs.
5. An equal division would be disproportionately large in relation to a period of cohabitation that is less than five years.
6. One spouse incurred significantly more debt throughout the marriage in order to support the family.
7. A written agreement between the spouses that is not a domestic contract.
8. There are other circumstances relating to the acquisition, disposition, preservation, maintenance or improvement of property.
- For example, in the 2011 case of Ward v Ward (click here), the wife gave up her career to stay at home and raise the children while the husband earned an executive’s salary, ranging between $263,000 and $331,000 per year from 2006-2009. Shortly before the parties separated, the wife received a gift of $200,000 from her father. The parties disagreed about what to do with the money. The wife wanted to save the money for retirement, while the husband wanted to pay down the line of credit on the matrimonial home. Ultimately, Mrs. Ward agreed to give Mr. Ward $180,000 of the gift to pay down the line of credit but the expectation was that the husband would pay her back. The judge in his reasoning considered the timing of events. Since Mr. Ward used the gift to pay down the line of credit, Mr. Ward’s interest in the matrimonial home, at the time of separation, had increased by $90,000 because of the gift. The court found it unconscionable to order equal division of net family properties because the husband benefited from the wife’s inheritance.
The finding of unconscionability by the Court, resulting in an unequal division of the parties’ net family property is rare but must be dealt with on a case-by-case basis. The onus is on the spouse who asks the court for a variation in the division of the net family property to demonstrate unconscionability.
In order to ensure you receive fair compensation, you are best off contacting an experienced family lawyer or divorce lawyer in Toronto.
This article is for information purposes only and is not legal advice. Please contact José Bento Rodrigues for more information about unequal division or if you require assistance with a separation or divorce. Get in touch for a divorce lawyer Toronto free consultation. Or learn more about family law and property with our article on excluded property.
