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Courts may depart from an equal division of property upon separation for short marriages when spouses have been married for less than five years. However, this factor alone will not necessarily be enough to reduce the entitlement to equalization. In one Ontario case, the judge looked at the equalization provision within the context of family law reforms, which remedied the historical exclusion of women from property rights and undervalued their role within traditional marriages. An unequal division of family property requires a high threshold to deprive recipients of the right to equalization.
Father Argues an Equal Division of Property Would be Unconscionable
In McNally v. Modarres, the applicant father was 69 years old, suffered from Parkinson’s disease, but continued to work as a family physician. He endured financial and physical abuse from his 46-year-old wife, the respondent mother. They had been married less than four years but had a child who had been diagnosed with autism and had significant needs. Nevertheless, the mother refused to consent to apply for government funding that would help with the son’s care. This required the father to spend additional money that the father could not afford on the son’s needs.
The two main issues were the equalization of net family property and spousal support. In Greenglass v. Greenglass, the Ontario Court of Appeal recognized that when both issues are considered, the amount of an equalization payment and the treatment of income-generating assets can impact the spousal support analysis. The court directed that calculating the equalization payment and deciding the division of assets needed to precede any support analysis. Here, the judge followed Greenglass and dealt with the couple’s property first since it would impact the mother’s future self-sufficiency.
The father’s counsel argued that an equalization payment should not be owed to the mother because it would be unconscionable under section 5(6) of the Family Law Act (FLA). That section enables a court to vary the share of the equalization payment and award 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”. The father pointed to several considerations under the Act, including:
(e) the fact that the amount a spouse would otherwise receive 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.
(h) any other circumstance relating to property acquisition, disposition, preservation, maintenance or improvement.
The basis for this argument was that it would be unconscionable for the mother to obtain an equalization payment given that the difference between the two net family properties was due to the value of the matrimonial home.
A Short Marriage Doesn’t Always Justify Reducing Equalization Payment
Justice Akazaki looked at the policy roots behind the equalization provision in the legislation and explained that it evolved out of family law reform, which was intended to resolve the “historical exclusion of women from property rights and the undervaluing of their contribution to the household economy in “traditional marriages”. Consequently, “unconscionability” requires a high threshold beyond mere unfairness. In Serra v. Serra, the court stated that “to cross the threshold, an equal division of net family properties in the circumstances must ‘shock the conscience of the court’”. The judge acknowledged that there have been numerous cases where one party has brought funds into the marriage that were used to purchase the matrimonial home. The unfairness in an equal property division did not meet the threshold of being unconscionable. In Serra, the court explained that the focus needs to be on an unconscionable result instead of the behaviour of the parties. Yet, courts have concluded that even if the result of an equal division of net family property is not shocking, other circumstances may combine with the result to make the equalization unconscionable.
Here, Justice Akazaki looked at the economics of the parties’ relationship, in which the mother’s role was in a “quasi-traditional marriage”. She looked after the son, which enabled the father to earn an income as a doctor. The judge could not rely on the mother’s behaviour, including instigating family conflict, since the conduct was not related to the acquisition or upkeep of property. Overall, the fact that this involved a short marriage of less than five years was insufficient to justify reducing the equalization payment. The judge also looked at the fact that the mother’s refusal to apply for government support caused the family’s property to be reduced. However, it was unclear what amount of government assistance may have been available, and it was difficult to apply it as a counterweight to the equalization entitlement. In the end, her actions only deprived her and her son. Ultimately, the judge could not conclude that the mother’s entitlement to an equalization amount could be reduced or eliminated by section 5(6) of the FLA, since “to do so would deprive her of the benefit of hard-won family law reform championed by the women’s movement in the 20th century”.
Remedy Aims to Shield Child From Financial Hardship
The father’s alternative argument was that if an equalization payment was ordered, the amount should be offset by the overpayment of spousal support. He pointed to the decision in M.B. v. S.B.B., which recognized that some overpayments could be set off against ongoing obligations. Justice Akazaki agreed that the authority to set off competing obligations can be used to ensure fairness between the parties. This alternate argument did not have a legal threshold that was as high as that. The father had overpaid spousal support, and it could be used to offset equalization. The result was that the equalization payment would be reduced, with the mother still obtaining the full value of the equalization. The judge explained that “the fact that she must use it to discharge her costs liability to the father does not negate the fact that she obtains a benefit”.
The mother had a presumptive entitlement to spousal support. However, the child’s needs required significant expense, and the judge needed to ensure the parties had the financial resources to pay the costs. Additionally, under section 15.3 of the Divorce Act, the court must prioritize child support over spousal support orders. Yet, the judge was reluctant to deny spousal support payments to the mother because of the income tax consequences to the father, so the father was ordered to pay the monthly support obligation by reducing the mother’s costs obligation owed to the father by the same amount. Likewise, the costs awarded in this case also set off the mother’s property equalization. As Justice Akazaki explained, these steps were required to avoid the hardship the father experienced trying to fund the expenses his child needed. The remedy was intended to prioritize child support. While the mother would receive payments of the same amount as her spousal support entitlement, she would ultimately receive instalments of her equalization payment.
Court Makes Orders to Prioritize Child Support
The case clarifies that “unconscionability” requires a high threshold to deprive a spouse of the presumed equal division of family property, resulting from modern family law reform. However, judges must prioritize child support over spousal support, and courts can craft remedies so funds will be available to meet a child’s needs.
Windsor Family Lawyers Providing Strategic Legal Guidance on Equalization and Child Support Disputes
Disputes involving property division and child support require a nuanced understanding of Ontario’s family law framework, especially when complex issues such as unequal equalization, short marriages, and financial hardship are involved. At Johnson Miller Family Lawyers, we are committed to helping clients understand their rights under modern family law reform and advocating for fair, strategic outcomes in parenting and financial matters.
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