In an earlier blog, I explained how the matrimonial home is treated differently than other property. For example, Sarah owned a $300,000. house prior to the marriage which was then treated as the matrimonial home during the course of the marriage—i.e. the property was ‘ordinarily occupied’ by the parties’ and served as a family residence as of the date of separation. At the date of separation, the home was worth $350,000 (an increase in $50,000). The whole value of the home, however, would go on Sarah’s side of the ledger, not just the increase in the value of the home from the date of marriage to the date of separation. In other words, Sarah’s spouse is entitled to half the full value of the home. This doesn’t seem fair, does it?
The law recognizes that sometimes an even split of the marriage ‘spoils’ might not be fair. Section 5 (6) of the Family Law Act addresses this subject…..
Variation of share
(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 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. R.S.O. 1990, c. F.3, s. 5 (6).
So can Sarah be reassured that Section 5(6) will address the unfair result of having to share the value of her home 50-50?
Please note the word “UNCONSCIONABLE”.
Unconscionable means really, really, really UNFAIR. The Courts have equated the term with “shocking”, much more than “mere unfairness, harshness or injustice". The threshold one must cross in order to open the door to an unequal division is “exceptionally high”.
In other words, Section 5(6) will not necessarily come to the rescue of poor Sarah. Nor does it help in many cases where an equal division of net family property would appear demonstrably unfair.
Sarah should have invested in a marriage contract, one that protected her interest in the matrimonial home she brought into the marriage. I know, I know: the idea of entering into a formal contract is somewhat offensive to the sensibilities of one about to embark upon a supposedly enduring relationship, one based on true love, one of non-ending connubial bliss, lasting until death to we part yada yada yada…. Regrettably, many relationships (over 50%) do not end up that way.
Life is about change. People often change overtime. But people do not necessarily change in the same direction; they grow and change in divergent ways. Often, with the passage of time, these lovebirds, who once pledged eternal love, one day look across at each other over breakfast and wonder who that stranger is at the other end of the table. Sadly, it happens all the time. That’s why there are so many of those gosh-darned family lawyers—those custodians and overseers of broken hearts and shattered dreams—floating around.