Gambling, Drinking and Affairs – Should Spouses Have to Account for their Misdeeds?
In a recent blog , I discussed a case called Malandra v. Malandra, where the court found that – for the purposes of deciding whether their Net Family Property (NFP) should be unequally divided – the husband should not be held solely accountable for certain bad business investments.
This question of whether the NFP should be divided unequally comes up often: among other things courts must consider whether one of the spouses behaved in a manner that makes an even split unfair. Here are some of the categories of spousal misdeed that can come under the court’s scrutiny:
1) Reckless Investing
In a case called Lamantia v. Solarino, 2010 ONSC 2927, the question was whether the husband should be held accountable for deceit and various financial misconduct designed to hide his reckless investments in the stock market. He had forged the wife’s signature, and had borrowed from credit cards for which she became liable without her knowledge. He also took active steps to keep the wife from learning the true state of their financial affairs; for example, he made sure their bank statements were sent to another address. Furthermore, he continued to play the stock market even though the wife had asked him to stop. Those bad investments led to significant capital losses for the couple.
In finding that the NPF should not be equally divided, the court found that the husband had engaged in a pattern of deceit and engaged in conduct that made it unconscionable for the NFP to be divided equally.
2) Spending to Feed an Addiction
In a second case, Dillon v. Dillon, 2010 ONSC 5858, the husband was a severe alcoholic, who incurred debts to feed his alcohol addictions. He lost many jobs over the years, and took pains to hide the dire family financial circumstances from the wife, who was completely unaware.
Given that their financial circumstances were spurred by the husband’s need to incur debt to feed his addiction, the court found this was a situation completely out of the wife’s control. Because of his reckless behaviour, she had effectively contributed significantly more than the husband toward amassing their family assets which formed the NFP – for example a cottage worth $260,000, and RRSPs funds amounting to $150,000. She had also paid over $50,000 towards the husband’s debts in order to keep things afloat for the benefit of their children.
By concealing the extent and timing of his “financial perdition” (as the court called it), the husband deprived the wife of an opportunity to prevent his destructive behaviour, or to prepare herself for retirement. The court found that the husband had “taken advantage of the [wife’s] selfless act of placing herself in a position of vulnerability in the best interests of her children.” An unequal division of NFP was ordered.
3) Spending Money on an Affair Partner
Finally, in a case called Hutchings v. Hutchings (2001), 2001 CanLII 28130 (ON SC), 20 R.F.L. (5th) 83 (Ont. S.C.J.), the husband was engaged in an extra-marital affair, and used family money in to order to travel with his mistress to Europe and Quebec. The wife was suspicious, and accused the husband of spending money on not just this but other affairs as well; however she was never able to prove the allegations. In this case, the court also ordered that the husband had engaged in reckless and intentional depletion of the NFP and that there should be an unequal division.
For the full text of the decisions, see:
Hutchings v. Hutchings (2001), 2001 CanLII 28130 (ON SC), 20 R.F.L. (5th) 83 (Ont. S.C.J.)
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