There are many people who can decide how to divide your property.
You and your spouse may decide how to divide your property and then incorporate
it into an agreement. Your agreements may be arrived at either independently,
with the help of lawyers or through mediation.
An arbitrator may decide how to divide your property based on either yours
and your spouse’s wishes or based on the provisions found in the
Family Law Act.
Or the court may decide how to divide your property if you and your spouse
cannot reach an agreement through mediation or arbitration. The courts
will defer to an agreement between the both of you or the court will enforce
the provisions in the Act.
Q: How does division of assets differ for common-law couples?
For common-law couples, there is no entitlement to division of property
and assets, as there is with married couples. Part 1 of the
Family Law Act, which provides for the equal division of financial gains made during
a marriage, applies
only to married couples. This means that each common-law partner is entitled
only to what he or she brought into the relationship or acquired during it.
The Supreme Court recently affirmed that the failure to extend property
equalization regimes to unmarried, cohabiting spouses is constitutionally
valid. Unmarried couples seeking such protections are free to marry or
to form their own contracts providing for such division.
If you feel that you have contributed extensively to the value of a certain
asset that belongs to your partner (a home in which you lived, or a pension
or savings account, for example), and that it is therefore unjust for
your spouse to retain the full value of that asset, you can make a claim
for a constructive trust, to remedy unjust enrichment. A constructive
trust gives the beneficiary a right to property in a particular asset,
such as the matrimonial home. See the article
Common-law Relationships and Division of Property for more details.
Litigation in this area can be difficult and complex. If you want to pursue
this type of claim, you should consider retaining a lawyer experienced
and knowledgeable in this area. Unjust enrichment claims are very fact
specific, and an experienced lawyer will best be able to make the arguments
necessary to support your claim.
See the article
Common-law Separation for more information about the rights of common-law couples upon separation.
Q: Can I get more of the assets if my spouse cheated on me?
No. Conduct during the marriage and the reason for its dissolution are not
relevant to the division of property. Canada has a “no fault”
divorce system, meaning that the court will not consider conduct within
the marriage when making decisions regarding separation, divorce, support,
child custody and access, or any other matter arising from your relationship breakdown.
If your spouse acted unconscionably in regard to certain assets, for example,
by lying deliberately, depleting assets before separation, or recklessly
incurring debts (for example by gambling), or lying about debts or liabilities
at the time of marriage, section 5(6) of the
Family Law Act provides that the court has discretion to vary the equalization payment
if equal division of assets would be unconscionable. That unconscionability,
however, must relate to one of the specific examples listed in that section,
or other circumstance “relating to the acquisition, disposition,
preservation, maintenance or improvement of property.” Conduct not
related to property, such as cheating, or even cruelty, do not entitle
the other spouse to a larger share of the net family property.
Q: Do I have to go to court?
If you do go to court to have your property matters decided, the court
will equalize your family property in accordance with the
Family Law Act. Under s. 4(2), any property that the spouses specify in a domestic contract
should be excluded from valuation date property, will be excluded. Otherwise,
the court does not have discretion, except in exceptional circumstances,
to deviate from the property equalization regime in accordance with your wishes.
There is no obligation for you and your spouse to go to court, or to divide
your net family property as it would be divided under the
Family Law Act. You are free to decide on the division of your property as you choose,
and then incorporate your decisions into a separation agreement formalizing
your arrangement. You can create your own separation agreement, or seek
the help of lawyers. It is advisable that you get legal advice before
finalizing any property sharing agreement, particularly if the marriage
has been a lengthy one and you have built up considerable assets during
Mediators can also help you arrive at an agreement, or an arbitrator can
decide how to divide your property, either by applying the
Family Law Act or based on your wishes.
Q: If my spouse is spending money recklessly from our joint account during
separation, what remedy do I have?
Under the law, if you are married and are seeking an equalization of net
family property, money in joint accounts is half yours, and your spouse
is not allowed to spend your half of the money. If you think your spouse
is spending your joint funds recklessly after separation, you have a couple
of options as to how to deal with this issue.
The first is to wait. If you have a court date coming up in which the court
will deal with the equalization of net family property, or if you and
your lawyers or a mediator are in the process of negotiating an equalization
of property, you should keep careful records of the balance of the joint
account at the date of separation, your spending from that account, if
any, and your spouse’s withdrawals. Then, when it comes time to
equalize property, you can ensure that the court, or the lawyers or mediators,
use the separation date balance to calculate the equalization payment.
In other words, if the balance of that account was $50,000 at the date
of separation, then half of that would be considered yours for the purposes
of all calculations. If your spouse has since spent $10,000, that does
not affect the $25,000 that would still be counted as yours. Your spouse
is essentially only spending their own money, and since the spending took
place after separation, it will have no effect on the actual calculation
of net family property.
However, if your spouse’s spending is depleting not only their half
of the account, but also yours, or if you think their spending will interfere
with their ability to pay you the equalization payment you will be entitled
to, then you should act now.
If you have not yet sought equalization of net family property, you should
do so immediately, and at the same time, apply to the court for a non-depletion
order under s. 12 of the
Family Law Act (FLA). Under that section, the court can order either that the spouse deliver
up specific assets to the court for possession and safe-keeping, or that
the spouse refrain from depleting assets. The purpose of this section
is to ensure that there will be funds available to make any required equalization
payment once it is ordered. The court will act under this section if it
believes there is a real risk that the spouse’s spending will frustrate
the equalization process.
If you have already applied to the court for equalization, you can also
now apply under section 10 of the FLA for a determination of a question
of title. In other words, you can ask the court to determine that you
own the property your spouse is depleting. At the same time, you can apply
for a non-depletion order under section 12, as indicated above. That way,
if the court determines that you own funds your spouse is spending, it
will simultaneously order your spouse to refrain from depleting them.
If you have not been able to prevent your spouse from depleting assets
to which you are entitled, then when it comes time for the court to calculate
equalization, you should apply under s. 5(6) of the FLA to vary the equalization
payment to take into account your husband’s or your wife’s
post-separation depletion of assets. If you can show to the court that
under the equalization calculation you are being credited for having assets
which in fact your spouse has since depleted, the court can order the
spouse to repay your half of any assets that were depleted. The court
can order a higher equalization payment to take into account the inappropriate
spending that took place post separation, or, if you would owe your spouse
money under the equalization process, the court can reduce or eliminate
your need to pay your spouse, in order to compensate for the spending
that took place.
Q: Is division of property / assets always 50/50?
Normally, the division of property is to share in the increased value of
the assets during the marriage. This occurs by the party with the greater
growth in value paying half the difference to the person with the lower
growth. There are some exceptions including but not limited to those contemplated
in s. 5(6) which allow the court to order an amount that is either more
or less than one-half the difference between the net family properties.
Once the calculation is complete the court will consider any other circumstances
relating to the conduct or situation of the parties in order to make a
determination as to whether or not a s.5(6) variation would be appropriate.
The factors the courts will use when considering a deviation from a 50/50 division are:
spouse’s failure to disclose to the other spouse debts or liabilities
existing at the date of the marriage;
debts and liabilities claimed in reduction of a spouse’s net family
property that were incurred recklessly or in bad faith
the portion of a spouse’s net family property that is made up of
gifts given by the other spouse
a spouse’s intentional or reckless depletion of his or her net family property
the length of the marriage – It may be that an equalization payment
would be disproportionately large in relation to a marriage that lasted
less than 5 years.
if a 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.
Q: I think my spouse is spending our money recklessly and extending our
line of credit. Is there anything I can do to stop him/her?
Yes, there is. You can bring an application under s. 7(1) for equalization of property
pursuant to s. 5(3) due to the improvident depletion of your spouse’s
net family property.
Essentially, this section will allow you to bring the claim for equalization
despite the fact that you and your spouse are still cohabiting. However,
in order for the claim to be successful, there must be a “serious
danger” of improvident depletion.
You should be aware of the fact that an equalization payment will only
be made once, therefore if you and your spouse do eventually decide to
separate and/or divorce you cannot bring an application under s. 7(1)
for a second equalization as only one is permitted. See: s. 5(4).
Q: My parents gave us significant money for our down payment on our home.
Can I get that back?
It depends on the status of your relationship.
Firstly, if the down payment was given to you by your parents to fund the
acquisition of a home that eventually became your matrimonial home, i.e.
the home in which you lived throughout your marriage and at the time of
the separation, then you cannot get the money back.
With matrimonial homes, the couple must share the full value of the property
regardless of who paid for it or owns it. Pursuant to the s. 4(1) definition
of net family property and paragraph 1 in the s. 4(2) exclusions a matrimonial
home is never excluded from the calculations leading to an equalization payment.
If instead you and your partner are common law and not legally married
then you may make a claim for a resulting trust so that the value of your
parents’ contribution can be returned to you.
A resulting trust contemplates that one party financially contributes to
the acquisition of a piece of property, in whole or in part, and as a
result becomes the beneficial owner of the property. The other party (or
parties), instead, is given legal title to the property and hold it in
trust for the beneficial owner. Moreover, there was a common intention
that a resulting trust would arise based on the different contributions
made. Then, upon separation, the beneficial owner is entitled to an interest
or share in the value of the property proportionate to his or her contribution.
Therefore, if your parents contributed financially and legal title was
put in your name or your spouse’s name or is held jointly by you
and your spouse then your parents may be deemed part beneficial owners
of the property and can get their money back.
The same reasoning applies to a claim for a constructive trust except there
is no need for a common intention to be found and the parties must satisfy
the principles of unjust enrichment and show that there is a connection
between the contribution made and the property in question.
Lastly, you can make a simple claim for unjust enrichment. This will require
that you show that based on your parent’s contribution (a deprivation)
your spouse was unjustly enriched and there was no legal reason for the
enrichment and so they should be compensated.
Q: We were never married, but have lived common-law in a home that I purchased
after we had lived together. Is the house mine?
Yes, the house is yours but beware because if your common law spouse contributed
to the preservation or maintenance of that property through either financial
or non-financial means (i.e. cooking, cleaning, etc.) then he or she may
have a claim for unjust enrichment, constructive trust or a resulting trust.
The principles of unjust enrichment are:
an enrichment of one spouse
a corresponding deprivation of the other
no juristic/legal reason for the enrichment
A claim for
unjust enrichment will result in the compensation of your spouse for his or her contributions
which resulted in your enrichment and his or her corresponding deprivation.
A claim for
constructive trust, on the other hand, will result in your spouse gaining an actual ownership
interest in the property in question proportionate to the contributions made.
These contributions can be either financial or non-financial and in order
to be successful in a claim for constructive trust, your spouse will have
to satisfy the principles of unjust enrichment as well as evince some
sort of nexus between the contributions made and the property owned.
Lastly, your spouse may make a claim for a
resulting trust. Typically, this claim arises when there is a financial contribution made
to the acquisition or maintenance of property vesting a beneficial interest
in the individual who contributed and legal title solely in the other
individual. If a common intention can be found, based on the conduct of
the parties, then an interest accrues on the party without legal title
and a resulting trust arises.
Q: We have been separated for almost six years. Can I still get an equalization payment?
Yes, but beware of the fact that this may be your last year to apply to the
court for an equalization payment.
S. 7(3) imposes limitation periods on bringing a claim for equalization
and subsection (b) states that an applicant may bring a claim
“six years after the day the spouses separate and there is no reasonable
prospect that they will resume cohabitation.”
Also, if within the six-year period you and your spouse obtained a divorce
order then s. 7(3)(a) states that an application for equalization shall
not be brought after 2 years from the date of divorce. However, should
the period expire, you may still be able to bring an application pursuant
to s. 2(8) which allows for the possibility of obtaining an extension
from the court. You should note that it is rarely granted and the legislation
imposes a strict test which must be satisfied.
Meet Our Dedicated Team of Lawyers
Over a Century of Collective Experience
Andrew Feldstein graduated from Osgoode Hall Law School in 1992. Prior to focusing exclusively on family law, Andrew’s legal practice covered many different areas, including corporate commercial. One of Andrew’s fundamental objectives is to achieve those goals mutually and collaboratively, as set out by him and his client.
Veronica Yeung joined the Feldstein Family Law Group, P.C. as a summer student in 2014 and returned as an articling student in 2015. Following her call to the Ontario Bar in June 2016, Veronica was welcomed to the team as an associate lawyer.
Shana joined Feldstein Family Law Group P.C. as an articling student in 2017. Following her call to the Ontario Bar in June 2018, Shana was welcomed back to the firm as an associate. While completing her articles, Shana assisted with legal matters covering all areas of family law.