Was Trial Judge Right in “Ballparking” to Reduce Wife’s Equalization Payment by 90 Percent?
The Ontario Court of Appeal recently considered whether a trial judge was required to use a “mathematical formula” when arriving at a proper figure for an unequal division of a former couple’s Net Family Property.
In Booth v. Bilek, the separated spouses had lived together for four months prior to their four-year marriage. They had no children. The wife was currently 46 years old and self-sufficient, while the husband was now 69 and retired, and in receipt of CPP and OAS payments.
They went to court to resolve the sole remaining issue between them, which was how to equalize their Net Family Property (NFP).
Under the Family Law Act (FLA), a court was allowed to vary what would otherwise be a spouse’s NFP if it was of the opinion that equalizing the NFPs would be “unconscionable”. The FLA also specifies that one of the factors to be considered in this assessment, is whether the period of the spouses’ cohabitation is less than 5 years.
At the previous hearing, the trial judge declined to order a strict equalization, because:
- The wife’s NFP was largely derived from gifts given to her by the husband;
- In light of the relatively short period of cohabitation, a full equalization payment would be disproportionate; and
- The spouses’ respective financial contributions to the property they owned during their marriage was skewed – for example, the wife made no monetary contribution at all, to purchase of their matrimonial home.
As a result – and instead of giving the wife a full equalization amounting to $106,000 – she ordered that the wife was to receive only 10 percent of that, or $10,600. (This however was in addition to about $200,000 that the wife received from the sale of the matrimonial home).
The wife appealed, arguing that the trial judge had erred in finding:
- That a full equalization would be “unconscionable”; and
- That 10 percent of what would otherwise be the full equalization payment would be just and equitable.
The wife also complained that the trial judge’s reasons lacked sufficient detail on how she had arrived at the 10 percent figure.
With all this in mind, the wife asked instead for an unequal division of 87 percent, which aligned more closely with the 5-year marriage factor specifically adverted to in the FLA ( i.e. their cohabitation period was 52 months, out of a possible 60 months).
The Court of Appeal rejected the wife’s appeal. First, it confirmed that the trial judge had correctly identified the governing law, including considering the appropriate factors and the case precedent that allowed for varying the equalization share in the right circumstances.
Secondly, the trial judge found the wife had benefitted financially from the comparative short marriage. She received about $200,000 from the sale of the matrimonial home, despite not having contributed financially to its purchase. She did contribute $16,000 to the cost of renovating, but this money had come from the sale of her condo – which had been entirely financed by the husband before they married. She used the remaining $33,000 of those condo sale proceeds to pay off her own personal debts. The wife had also benefited from the engagement rings she got from the husband, and the wedding gifts, which totaled $87,000.
The threshold for unconscionability under the Family Law Act is high; it is more than mere “unfairness” – Russell Alexander, Founder & Senior Partner
Finally, the trial judge had noted that the difference between the spouses’ respective NFPs at separation was due almost entirely to the growth in the husband’s investments over the course of the 4-year marriage – which was another thing the wife had not contributed to.
All of this correctly led the trial judge to find that a full equalization of NFP was unconscionable, the Appeal Court found. The threshold for unconscionability under the Family Law Act is high; it is more than mere “unfairness”. The Court added:
The high bar for unconscionability precludes trial judges from undertaking a minute parsing of the parties’ relative contributions to the marriage. It also promotes the goal of certainty in family law disputes.
Although the FLA’s reference to marriages of less than five years was relevant to whether full equalization may be unconscionable, in this case the trial judge applied the pertinent criteria to the facts, and had come to a reasonable conclusion. As the Appeal Court noted:
We do not agree that the trial judge made any error in the exercise of her discretion. Although applying a mathematical formula based on the length of the marriage provides the benefit of certainty, neither the Act nor relevant case law requires the trial judge do so.
The trial judge’s decision to award the wife 10 percent of a full equalization was a reasonable one that flowed from the facts presented to her. The Appeal Court dismissed the wife’s appeal.
For the full text of the decision, see:
Booth v. Bilek, 2021 ONCA 128
