Feb 15, 2017

Pleading Unequal Division of Net Family Property

Frick v. Frick, 2016 ONCA 799 (CanLII)

The Ontario Court of Appeal provided some clarity on this matter in the case of Frick v. Frick, 2016 ONCA 799 (CanLII).

When parties are formally married, they are both entitled to an equal share of the net wealth accumulated by both of them during the course of the marriage. This is called the Equalization of Net Family Property.

The judge, however, can give one party a larger share of the Net Family Property if the judge is satisfied that an equal division of Net Family Property would be “unconscionable” due to the following:

  1. a spouse’s failure to disclose to the other spouse debts or other liabilities existing at the date of the marriage;
  2. the fact that debts or other liabilities claimed in reduction of a spouse’s net family property were incurred recklessly or in bad faith;
  3. the part of a spouse’s net family property that consists of gifts made by the other spouse;
  4. a spouse’s intentional or reckless depletion of his or her net family property;
  5. 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;
  6. 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;
  7. a written agreement between the spouses that is not a domestic contract; or
  8. any other circumstance relating to the acquisition, disposition, preservation, maintenance or improvement of property.

This is pursuant to the Family Law Act section 5. You can read the provisions here.

The Honourable Madame Justice Benotto examined this provision. She pointed out that the key aspect of this provision is a spouse’s financial malfeasance. The other spouse, however, may not become aware of this malfeasance until after there is full financial disclosure and, in section 5 (6)(d), after there has been a calculation of the net family property. These steps do not take place until well after a party makes an Application. Madame Justice Benotto held that a judge has the option of ordering an unequal division of net family property if a party requests an equalization of net family property. A party does not have to specifically request an unequal division of net family property in the initial Application.