The FLA sets out a regime for the division of property upon the breakdown of marriage. The formula is designed to calculate the growth of each spouse’s net worth from the date of the marriage to the date that they separate (referred to as the “valuation date” or “V-day”) and equalize the difference between them. To determine the difference, each spouse calculates his or her net worth on the date of marriage and on the valuation date. The increase is known as the net family property. Net family property is calculated by determining the spouse’s valuation date value (the value of all the…

Although assets are rarely sold on the very day of marital breakdown, they will eventually be sold even if it is only a deemed disposition on death. Capital assets owned at the date of marriage breakdown may have inherent contingent capital gains (or even recapture of depreciation deducted for accounting and tax purposes over the years) that will be triggered by their eventual sale. There are commissions relating to the sale of some assets, such as the matrimonial home. The courts have indicated that it is the onus of the owner of a taxable asset to establish when it is…

There are very limited circumstances under which the equalization payment can be other than as described above. When such an order is made it is called an “unequal” equalization. To obtain such an order, the result of the normal calculation must be “unconscionable,” that is, it must shock the conscience of the court in relation to certain specific conditions that are set out in s. 5(6) of the FLA. The finding of unconscionability and, thus, an order for unequal division of the parties’ net family property are extremely rare.

Absent an order for an extension of time, a claim for equalization cannot be brought after the earliest of six years after separation, two years after a divorce or judgment of nullity is granted, or six months after the first spouse’s death.

The courts permitted spouses to argue constructive and resulting trust principles, namely, that there had been an unjust enrichment on the facts in favour of the owning spouse that ought to be shared through a declaration that the property was equitably owned equally by both spouses. In Kerr v. Baranow, the Supreme Court of Canada introduced the concept of “joint family venture” as a way of proving unjust enrichment. The test for unjust enrichment has not changed (it still requires proof of enrichment or benefit to the defendant, a corresponding deprivation suffered by the plaintiff, and the absence of juristic reason for…

FLA (Part II) sets out several rights unique to matrimonial homes within the province. The dwelling must be used at the time of marriage breakdown as a matrimonial home, and its use need not be full-time but must be consistent with the normal use of such property. A matrimonial home cannot be sold or encumbered without the written consent of the other spouse, regardless of how title may be held. Without written consent, the sale or mortgaging may be set aside by a court.

A court may order that any property owned by either spouse be preserved during the course of litigation. It can be limited to the preservation of the value of property, which permits the owner to continue to treat the property in its usual fashion (such as buying and selling shares, running a company, or even selling or encumbering it) so long as the value remains intact in some form or other, pending final determination or settlement. The court can also order preservation of a specific property, forbidding it to be sold or encumbered in any way. Finally, the court can freeze assets…