The Ontario Court of Appeal recently ruled that a wife whose husband had been having an affair may seek a larger share of net family property to offset the money the husband had spent on his lover. The Court was careful to note that the wife cannot use her suspicions of the husband’s misconduct to embarrass him or impugn his character, but that if his behavior had any impact on the former couple’s finances, there may be grounds to seek unequal division of net family property.
The parties were married for approximately twenty years, and had two children. They separated in 2013, after which the wife filed an application for divorce claiming custody, child support, spousal support, and an equalization of net family property.
After the initial application was filed, the wife discovered that the husband had been having an affair for ten years, had used male and female escort services, and had memberships to several adult fetish websites. On the basis that the husband had spent money on extra-marital activities, the wife amended her application to include a claim of “reckless depletion of net family property” and requested a larger share of net family property.
In response, the husband filed a motion to strike the wife’s amended application on the basis that her claims were “without merit, inflammatory, a waste of the court’s time and designed solely to personally attack [him]”.
The Original Decision
The original motion judge determined that the wife’s amended application was defective as she had failed to plead the facts necessary to support a claim for unequal division of family property. Specifically, she failed to show that the husband’s spending on his extra-marital activities had any effect on his overall financial position. The motion judge ultimately struck down the wife’s amended application.
The Court of Appeal Decision
The Court of Appeal found that the original motion judge’s decision reflected a “misunderstanding of the family rules” and held that the wife’s claim for unequal division of net family property was not defective for failure to plead material facts.
The Court of Appeal noted that:
Legislation, jurisprudence and the practice of family law have evolved over the last decades in an attempt to eradicate allegations of marital misconduct unrelated to financial consequences. Fault grounds for divorce are rarely used, having been replaced, in practice, with separation grounds. This approach recognizes that family litigation has the potential to leave families worse at the end of the case than they were at the beginning. It recognizes that resolution is the preferred outcome. Inflammatory allegations impede resolution.
With respect to the wife’s allegations regarding the husband’s alleged misconduct, the Court of Appeal stated:
The statements about the husband’s conduct are inflammatory. They are – in my view – there to provide a springboard to question the husband about his extra-marital conduct, not about his net family property. As Blair J.A. said in Serra v. Serra… it is the financial consequence of the conduct that is relevant, not the conduct itself [emphasis added]. Extended questioning of the husband’s conduct… that is unrelated to financial consequences would be inflammatory, a nuisance and a waste of time.
On the basis of the above, the Court of Appeal struck out the following paragraph from the wife’s claim:
[The husband] has had an ongoing affair since 2003. [The wife] has recently discovered that during the marriage not only did [he] have a mistress but he also hired various escort services (male and female) and had memberships to various adult websites. [The wife] requires a full accounting of all money spent by [him], directly or indirectly, on his mistress, the escort services and website memberships. [She] is also seeking an unequal division of net family property as a result of [his] reckless depletion of his net family property.
The above paragraph was amended to reflect the simple allegation that the husband had had a “ten-year affair”.
The Court concluded that the wife was free to pursue an unequal division of family property at trial.
Generally, married spouses are both entitled to an equal share of the net wealth accumulated by both spouses during the marriage (i.e. equalization of net family property).
In some circumstances, a judge may give one of the spouses a larger share of the net family property where that judge believes that equalization would be “unconscionable” because:
- A spouse fails to disclose debts or other liabilities that exist at the date of the marriage;
- Debts or other liabilities that were claimed in order to reduce a spouse’s net family property were incurred recklessly or in bad faith;
- A part of a spouse’s net family property consists of gifts made by the other spouse;
- A spouse intentionally or recklessly depletes his or her net family property;
- An amount that a spouse would receive is disproportionately large if the period of cohabitation is less than five years;
- One spouse has incurred a disproportionately larger amount or debt or liability than the other spouse in support of the family;
- There is a written agreement, other than a domestic contract, between the spouses;
- There is any other circumstance relating to the acquisition, disposition, preservation, maintenance, or improvement of property.
In this case, the Court of Appeal noted that the key aspect of the above is a spouse’s financial misconduct. Indeed, the family law system is set up in such a way that no matter how questionable or hurtful a spouse’s behavior or conduct during the marriage may have been, a court cannot compensate for that by awarding the other spouse a larger share of the net family property. The only way that an unequal award can be made is if the misbehavior or misconduct significantly affected the couple’s property, debts, or liabilities.
If you have questions about division of property or equalization, contact the experienced family law lawyers at Gelman & Associates. We provide our clients with clear guidance and all the information they need to make decisions about their assets following a separation or divorce. With offices in Aurora, Barrie, Downtown Toronto, Mississauga, North York and Scarborough we’re easily accessible by both transit or highway. Our phone lines are open Monday to Friday from 8 AM to 8 PM. Call us at (416) 736-0200 or 1-844-736-0200 or contact us online for an initial consultation.