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Unequal Division of Net Family Property: A High Bar to Achieve



Sometimes, clients ask me if, based on poor spending habits by the other party, they can have their net family property unequally divided as opposed to being split equally.


The bar for an unequal division is unusually high. You're highly unlikely to succeed, at least going by a recent case.


In Osborne v. Shevalier, 2022 ONSC 73 (CanLII), Justice Sproat recently ruled that a case had not been made for unequal division of the net family property.


The Court relied on Fielding v. Fielding, 2015 ONCA 901 where the court identified the stringent test that must be met to justify unequal division, as follows:


[37] The wife also claims she is entitled to an unequal division of NFP. Section 5(6) of the Family Law Act sets out the circumstances under which a variation in the presumptive equal sharing of NFP can occur:


5(6) The court may award a spouse an amount that is more or less than half the difference between the net family properties if the court is of the [page72 ]opinion that equalizing the net family properties would be unconscionable, having regard to,


(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 part of a spouse's net family property that 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.


[38] 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 NFP must "shock the conscience of the court".


Analysis:


So, the test is for an equal division to shock the conscience of the Court. The circumstances of the party's action must be so egregious to shock the court's conscience.


Applying the legal principles to the facts at hand, Justice Sproat noted that the parties were always living beyond their means. Though the wife had alleged wild spending by the husband, the court found that the finances were largely an open book if Ms. Shevalier had wanted to look. The tax returns were in a cabinet at home. Ms. Shevalier at least partially contributed to them living beyond their means by purchasing a new vehicle in priority to paying down debts.


There was no evidence to suggest that Mr. Osborne had a covert lavish lifestyle. That being the case, the RRSP withdrawals benefitted Ms. Shevalier by funding living expenses, reducing family debts or enhancing the value of family assets.


As such, there are no grounds for ordering an unequal division of net family property.


What are lessons from this case?:


A client's desire for unequal division must be supported by facts that show behaviour that would shock the courts conscience - not just any misbehaviour or negative actions. This is very difficult to achieve.


At Shankar Law, you can be assured of a careful analysis of your options and advice in a blunt yet polite manner. Though you may feel it best to litigate to want unequal division, we will guide and advise you if that's the best option available or not. Losing on a major point like this at a trial can result in debilitating cost awards against the losing side - hence a careful analysis is needed.


We operate throughout Ontario from our three physical offices in Owen Sound, Port Elgin and Wiarton, while serving the communities of Kincardine, Goderich, Meaford, Walkerton, Hanover and other areas.

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