The Unequal Division of Family Property: Cosentino v Cosentino
Cosentino v Cosentino, 2015 ONSC 271
The following discussion will be limited to this case’s analysis on the issue of an unequal division of family property.
The parties in this matter married in 1978 and originally separated in 2006 for five months. The parties reconciled, but separated permanently in November 2007. There were two children of the marriage. The Wife brought an Application for the division of family property under the Family Law Act and sought unequal division of family property under section 5(6) of same. The wife sought an unequal division of family property as she stated, as per paragraph 2 of the decision, that the husband,
put improper pressure on her to reconcile in 2006, took advantage of the reconciliation to plan for the ultimate separation, depleted their joint assets in 2006-7, artificially reduced or hid his income in 2006 and later years, and used some of her money to acquire an investment property in his name after separation.
The Court commenced its analysis on the issue of an unequal division of family property by reciting section 5(6) of the Family Law Act which provides:
5(6) The court may award a spouse an amount that is more or less than half the difference between the net family properties if the court is of the opinion that equalizing the net family properties would be unconscionable, having regard to,
- A spouse’s failure to disclose to the other spouse debts or other liabilities existing at the date of the marriage;
- The fact that debts or other liabilities claimed in reduction of a spouse’s net family property were incurred recklessly or in bad faith;
- The part of a spouse’s net family property that consists of gifts made by the other spouse;
- A spouse’s intentional or reckless depletion of his or her net family property;
- The fact that the amount a spouse would otherwise receive under subsection (1), (2) or (3) is disproportionately large in relation to a period of cohabitation that is less than five years;
- The fact that one spouse has incurred a disproportionately larger amount of debts or other liabilities than the other spouse for the support of the family;
- A written agreement between the spouses that is not a domestic contract; or
- Any other circumstance relating to the acquisition, disposition, preservation, maintenance or improvement of property.
The Court stated that the threshold of section 5(6), that of unconscionability, is set very high, as per Serra v Serra, 2009 ONCA 105. The Court further cited, Merklinger v Merklinger (1992), 11 OR (3d) 233 (Ont. Gen. Div.), which held, “the result must be more than hardship, more than unfair, more than inequitable”. Further, a “general sense of outrage, absent a clear connection to the parties’ debts, liabilities, or property, is not sufficient” (paragraph 46).
The Wife in this matter argued that the “nature, extent, or duration of the extramarital affairs engaged in by the husband…came within the enumerated considerations in section 5(6)” (paragraph 47). However, morally objectionable or emotionally harmful conduct does not provide the Court with the grounds to exercise its discretion under section 5(6) of the Act, as there was “no evidence in this case that the husband’s affairs had any significant effect on the parties’ debts, liabilities, or property” (paragraph 49). The Court held that “section 5(6) was very tightly drawn specifically so as to exclude consideration of matrimonial misconduct such as this” (paragraph 49).
The Wife further submitted that the husband used threats to have her reconcile with him, and thereafter, drew improvidently on the parties’ joint line of credit. The Court found, given the evidence, that the husband did not use improper pressure, let alone duress, and found that the parties’ reconciliation in 2006 was genuine. As such, the Court dismissed the Wife’s argument and found that the husband’s conduct did not reach the threshold of unconscionability.
The Wife also submitted that the Husband ran up the parties’ joint line of credit in 2006 and 2007. Although the Wife characterized the Husband’s expenditures as unnecessary and unwise, she failed to demonstrate to the Court that such expenses were reckless or deliberate so as to deplete the net family property of the parties. In so finding, the Court held that this ground for an unequal division of net family property also failed.
The Court then continued its analysis to the final ground argued by the Wife for an unequal division of family property. The Wife asserted a “constructive trust interest…in relation to a three unit residential property acquired by the husband, in June 2008” (paragraph 63). The wife, as per paragraph 63:
claimed a 50% interest in the property, or I the alternative, monetary compensation, or in the further alternative, an adjustment in the NFP equalization under section 5(6) of the FLA, because some of her money went into the acquisition of the property.
The Court found that the best manner to address this issue was “nothing more than the usual post separation accounting that is done when one party draws more than the other draws on a joint line of credit, or one spouse alone pays expenses of the jointly owned former matrimonial home” (paragraph 74). In so finding, the Court found that the appropriate remedy was an accounting for the sum drawn and not an ownership interest or an unequal division of family property.
As a result of the above analysis, the Court dismissed the Wife’s claim for an unequal division of family property under section 5(6) of the Family Law Act.