When spouses separate and head toward a trial over property division, an important financial question often arises: Can a spouse claim pre-judgement interest on equalization payments – and if so, from when?
The Ontario court tackled this question in the 2019 case Van Deslt v. Hronowosky (2019 ONSC 2569). In this case, the divorcing couple resolved most issues except one significant matter – the equalization of their Net Family Properties. Specifically, they disputed the valuation of several items, including the husband’s substantial pension. Ultimately, the court confirmed the husband owed his wife $563,560.23.
The wife sought pre-judgment interest calculated from the date she initially started legal action in 2017 until trial. The husband, attempting to minimize this liability, acknowledged the general entitlement to interest but argued that the court could adjust the amount based on circumstances.
Under the Courts of Justice Act, pre-judgment interest is typically awarded from the date the claim arose until the date of judgement. However, Ontario courts maintain broad discretion to adjust or deny such interest based on factors including:
- The paor spouse’s ability to access or realize the asset before trial;
- Whether the asset generated income before trial;
- Any delays caused by either party;
- Changes in interest rates;
- Any partial payments already made.
In Van Delst, the court noted delays caused by the husband’s requests for adjournments. However, it considered the wife’s initial claim as not explicitly including a divorce until she amended her pleadings over a year later, in September 2018. Recognizing the significance of this timing, the court awarded pre-judgment interest beginning from the date she added the divorce claim rather than the earlier initial filing.
Recent cases like Muraven v. Muraven (2021) reinforces that awarding pre-judgement interest is not automatic and heavily depends on case-specific factors. Courts continue to emphasize discretion and careful consideration of fairness to both parties.
Ultimately:
- Pre-judgment interest in equalization claims is common but not guaranteed.
- Timing and specificity claims can critically impact interest calculations.
- Courts balance multiple factors, especially conduct and delay, when determining pre-judgement interest.
Careful consideration and timely legal strategy can significantly influence outcomes regarding pre-judgment interest in family law matters.
Cases:
This blog has been updated from an original FamilyLLB.com blog posted in 2019.
