Spouses going through divorce fight over big property: houses, cars, boats,
and rare works of art. Smaller tag items, such as furniture, will come
out in the wash-cancel each other out in the equalization of net family property,
But sometimes, couples will fight over smaller items. Like the immortal
line said by Harry Burns in the 1989 Nora Ephron film
When Harry Met Sally: “Cause someday, believe it or not, you’ll go 15 rounds over
who’s gonna get this coffee table. This stupid, wagon wheel, Roy
Rogers, garage sale COFFEE TABLE.”
This week, Daniel Shak, ex-husband of professional poker player, Beth Shak,
launched a law suit against his former spouse. The object of the lawsuit?
Shoes. Louboutins. Well, a collection of Louboutins.
According to the
Huffington Post,
Mr. Shak is claiming that his ex-wife failed to report her 1,200-pair designer
shoe collection in their divorce proceedings three years ago. According to Mr. Shak, his ex-wife hid the shoes from
him in a “secret room” during their marriage.
Now you may be thinking, “shoes…really? How much could these shoes
really be worth?”
Mr. Shak estimates the shoe collection to be worth an estimated $1 million.
And he wants a cut; a 35% cut to be exact. That’s $350,000, quite
a substantial sum when you consider the fact that some homes aren’t
even worth that much.
In Ontario, section 5 of the
Family Law Act entitles the spouse with the lesser net family property to an equalization
payment from the wealthier spouse (of half the difference of between the
two spouses’ net family property). Assuming that Ms. Shak was wealthier
than her former husband, she would have owed him an equalization payment.
If the value of the shoe collection had been included in the calculation
of her net family property, the equalization payment owed would be substantially higher.
According to the
Examiner, Mr. and Ms. Shak’s settlement agreement implies that Mr. Shak would
be entitled to 35% of the shoe collection’s value (as opposed to the
legislated 50% normally ordered in an equalization of net family property).
Under Ontario’s equalization law, however, Mr. Shak would only be entitled
to the value of the shoes accumulated during the course of the marriage,
not any shoes brought into the marriage by Ms. Shak or shoes bought after
the separation (valuation) date.
But does Mr. Shak have a legal action against his ex-spouse three years
after their divorce proceedings? Legally speaking, he likely does.
The courts in Ontario do not take financial disclosure lightly. Often,
a spouse’s failure to give accurate financial disclosure will result
in cost consequences against that spouse. That means that a judge may
order that the spouse who fails to give accurate disclosure must pay a
portion or all of their spouse’s legal fees.
And, a settlement agreement may be set aside on the grounds that either
party did not make complete and accurate financial disclosure prior to
signing the agreement.
While Ms. Shak could make the argument that she was unaware that her shoe
collection would be considered “property” for the purposes of
equalization, this argument is weak at best. Prior to entering the professional
poker circuit, Ms. Shak ran a private vintage designer clothing business
for 10 years. In recent years, she launched a website dedicated to women’s
shoes. Both these facts indicate that Ms. Shak knew how valuable her shoe
collection was.
In the end, however, it will likely be difficult for Mr. Shak to prove
that his ex-wife “hid” the shoes from him over the course of
their marriage. A court may dismiss his action on the basis that this
claim should have been raised during the original action and that he had
knowledge of the shoe collection.
If the shoe fits, you should disclose it.