Today’s decision in Serra v Serra , 2009 ONCA 105 ruled that a post separation decrease in the value of assets may be taken into account in awarding an unequal equalization in a divorce case. Specifically, a market-driven decline in the value of the property may be taken into account in certain circumstances. The decision is complex and needs careful review but is of great importance in family law matters. Part of the decision read:
[44] At trial in LeVan, Justice Backhouse had concluded that the factors in s. 5(6) did not include post-separation changes in value, expressing the opinion (at para. 267) that if “the Legislature [had] intended that post valuation date increases and decreases in value might form the basis of a s. 5(6) application, I think it likely, given the frequency of these events, that it would have included a provision to this effect.” Here, the trial judge came to a similar conclusion. At paras. 135-136 she held:
Turning to the language of s. 5(6)(h) itself, a market-driven decline in value does not appear to come within the “acquisition, disposition, preservation, maintenance or improvement” of a property. This is to be contrasted to a situation in which the conduct of a spouse had an impact on the value of the property.
I conclude that the circumstances in which a court may order an unequal division of net family property under s. 5(6) do not include a market-driven decline in the value of the property.
[45] Respectfully, I disagree.
[46] In my opinion, a court may take into account a post-separation date change in the value of a spouse’s assets, and the circumstances surrounding such a change, for purposes of determining under s. 5(6) of the Family Law Act whether equalizing net family properties would be unconscionable. An order for an unequal division of net family properties is exceptional, however, and may only be made on such a basis (i) where the circumstances giving rise to the change in value relate (directly or indirectly) to the acquisition, disposition, preservation, maintenance or improvement of property (s. 5(6)(h)), and (ii) where equalizing the net family property would be unconscionable, having regard to those circumstances (taken alone or in conjunction with other factors mentioned in s. 5(6)).
5 comments:
I really hope this goes through. Right now, I have been struggling for the last 3 years with my ex. When he left I was only working part time and he was employed in a managers position making almost 5x as much as I was. He refused to pay me Spousal Support and only paid what the law required in Child Support (I have 3 children). Our house is a very old house and expensive to run (in excess of 80 years old).
He somehow cashed in one of our locked in pension funds and invested it in a company approx. 1 year after he left. 45 days later this company burnt and he was part of a group of 7 who collected the insurance from the fire. He collected in excess of $800,000.00
He is still unwilling to pay me any Spousal Support and has still not paid an Equalization amount that was due. I have the bank calling me approx. 3x per week (at home and at work... I have now had to return to full-time) about our "Joint Line of Credit" It exceeds the value of the house and the house was used as collaterol.
So as you can see, I have the exact opposite happening. Because he did not have an interest in the new company on the date that he left (even though we had discussed it....) the law says that I cannot share in the proceeds.
Can't figure out the justice here. Any ideas on how to tackle this?
I do have a lawyer at present who is very busy and working on it.
As an accountant, I cannot understand the Court of Appeal's decision. I would definitely appeal to the Supreme court.
Would the decision apply on the upside if Mr. Serra's business improved ? I doubt it.
I would also love to ask Harold Serra that if a customer of his owed him $4.1M and then the customer's financial situation worsened, would Mr. Serra accept $900K ? What would likely happen is either:
1. Mr. Serra would accept $900K with an IOU for the other $3.2M
2. Mr. Serra would force the customer into bankruptcy
Yes, I feel bad for Mr. Serra, but if he had just paid up after the separation, then none of this would have happened. Mrs. Serra did nothing wrong either, but she's now suffering.
[46] In my opinion, a court may take into account a post-separation date change in the value of a spouse’s assets, and the circumstances surrounding such a change, for purposes of determining under s. 5(6) of the Family Law Act whether equalizing net family properties would be unconscionable. An order for an unequal division of net family properties is exceptional, however, and may only be made on such a basis (i) where the circumstances giving rise to the change in value relate (directly or indirectly) to the acquisition, disposition, preservation, maintenance or improvement of property (s. 5(6)(h)), and (ii) where equalizing the net family property would be unconscionable, having regard to those circumstances (taken alone or in conjunction with other factors mentioned in s. 5(6)).
Someone I know told this case just made a man who gave a marital home to his stbx and she sold it, he bought a new home and was going to sell it, had not yet divorced, then began to sell it she claimed half the property, she never lived in it, and she got half. This was in Hamilton. This makes sense. The way the law is now hurts many families.
Good move on the courts part. Why? Because it means you can sep then never divorce go out and begin to buy new home new car and still never get a court order to pay support to a child and deplete assets legally.
The court recognized this.
http://www.thestar.com/news/gta/article/728452--divorce-now-while-you-can-still-can?bn=1
Good article on this out of the star. As a person in a divorce my ex has the money but he has refused anything so far even no money to divorce I did not understand the difference between a sep. agreement and and equalization agreement. His post sep party was deemed mine as well for not having a eqaulization agreement. I think if this information was made more clear in the family law act, there would be less people dragging divorces out.
My ex used his paycheck to buy an asset and that made the world of difference for me
The equalization payment was never paid in the Serra vs. Serra case and Mr. Serra has since passed approx. 1 yr after the decision. I'm afraid the real winners were, once again, the Lawyers and made a name for themselves. Let the truth be known.
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