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Deciding to Separate?  Some Noteworthy Points About the “Valuation Date” in Family Law

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Deciding to Separate?  Some Noteworthy Points About the “Valuation Date” in Family Law

A basic concept in Ontario Family Law is that, once spouses decide to separate, their respective entitlement to the matrimonial property they have brought into the relationship and accumulated during the marriage has to be assessed.  That assessment takes place on what is described in section 4(1) of the Family Law Act (FLA) as the “valuation date,” which is defined as:

The date the spouses separate and there is no reasonable prospect that they will resume cohabitation.

Often – but not always – the valuation date will be the same as the formal separation date, which is often the date one spouse moves out of the former matrimonial home. But as we all know, life is not always that simple, and relationships do not always end cleanly.

Here are some important points that the court has clarified about this “valuation date”, in a case called Strobele v. Strobele:

  • The purpose of this FLA definition is to fix the date on which the economic partnership should be fairly terminated.
  • This definition has two aspects:
    • The date on which the spouses separate; and
    • That there is no reasonable prospect that they will resume cohabitation. In other words, there concepts of separation and cohabitation are linked.
  • However, the two concepts, while related, are not interchangeable, i.e.:
    • “Separation” requires more than living under separate roofs, but rather involves a cessation of the “multi-levelled intricate relationship between couples.”
    • Likewise, “cohabitation” implies conjugality.

If a separated couple is not agreed on the exact date on which these two factors were met, a court may have to make the determination for them.  This involves an evaluation of numerous aspects of the relationship and its ending, not to mention the mindset of each spouse.  As the court points out:

Continuation of a relationship requires two people. Either can end the relationship without the consent of the other. As a matter of common sense, there will be many cases where one spouse knows that there will be no reconciliation and the other does not because the one has decided he or she does not wish to reconcile, but the other does not yet understand this. A fair determination of this issue requires that an objective eye be cast upon the unique circumstances of the couple. Thus it is that there are cases where couples are found to have met the test under section 4(1) even though they both continue to live in the matrimonial home….

The court goes on to emphasize that the test under this FLA provision has a clear purpose:

When was it that there was no reasonable prospect that they would resume cohabitation? … In considering this question, it is helpful to keep in mind the purpose for which the question is being asked. It is to set the valuation date, the date at which the parties ceased being one kind of entity for financial purposes – a couple – and became another, a separated couple. Surely it is obvious that there is no one moment in time that can be fixed as the objectively true separation date. Rather the Court should determine the date on which it is fair that the parties no longer share the financial consequences of being married.

Finally, it should be noted that the FLA also allows for the valuation date to be set earlier or later than a couple’s separation date, depending on the circumstances.  The court explains:

Where one spouse with the intention of ending the relationship transfers or dissipates assets, an early valuation date may be appropriate. Where one spouse has decided to terminate the relationship, but has not made this clear to the other spouse, then a valuation date that is later may be in order. However, the test is not purely subjective. Groundless hopes of reconciliation should not extend a valuation date where one spouse has been clear in his or her intentions to end the relationship.

For the full text of the decision, see:

Strobele v. Strobele

At Russell Alexander, Family Lawyers our focus is exclusively family law, offering pre-separation legal advice and assisting clients with family related issues including: custody and access, separation agreements, child and spousal support, division of family property, paternity disputes, and enforcement of court orders.  For more information, visit us at RussellAlexander.com