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Court of Appeal Allows Application for Unequal Division of Property to Account for Money Husband Spent on Extra-Marital Affair

June 24, 2017

The Ontario Court of Appeal held that the wife who recently learned of her husband’s 10-year affair should not be precluded from seeking a bigger share of family property to reflect the funds he spent for his lover.

 

Frick v Frick, 2016 ONCA 799, is an important decision of the Ontario Court of Appeal which is expected to shape the way family law pleadings will be drawn. Justice Benotto, who is also a Chairperson of the Family Law Rules Committee, held that the Family Law Rules contemplate the discovery of new material facts after an application is filed, and allow for amendments to be made in light of such facts.

 

At the time of the divorce proceedings, the parties had been married for 10 years and had 2 children. The wife claimed custody, spousal and child support and an equalization of net family properties. Subsequently, she brought a motion seeking to amend her application to claim unequal division of family property because she had discovered the husband had been engaged in a 10-year affair. As a result, she wanted to argue that he had recklessly depleted his net family property which entitled her to an unequal division pursuant to section 5(6) of the Family Law Act. The motion judge took recourse to the Rules of Civil Procedure and held that the wife had not pleaded material facts showing that the husband’s spending had any effect on his financial position. He dismissed the motion to amend.

 

Justice Benotto, speaking for a unanimous Court of Appeal found that the motion judge was incorrect to eliminate the wife's section 5(6) claim at the pleading stage. She pointed out that family law litigation is different from civil litigation and the Family Law Rules do not require a statement of material facts relied upon. In family law cases it is not required that material facts are pleaded in the application because a party will often not know all of the facts supporting the claim. That is why the family rules provide stringent financial disclosure obligations. 

 

Although she acknowledged that there is a "high hurdle" to overcome for a claim to succeed under section 5(6) on the basis of marital infidelity, the claim cannot be eliminated at the pleadings stage. After the equalization payment is calculated, a determination of unconscionability may be be made. Justice Benotto struck portions of the wife's amended application in relation to particulars about the husband's conduct on the basis that they were "inflammatory, a nuisance and a waste of time." The focus should solely be on financial consequences not conduct. In this vein, Her Honour elaborated at paras 44 and 45 as follows: 

 

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.  

 

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 JA said in Serra v Serra, it is the financial consequence of the conduct that is relevant, not the conduct itself. [Citations omitted.]

 

For future cases, the Court indicated that in such circumstances, the proper cause of action is for an equalization payment. The wife was not required to plead section 5(6) for an unequal division as this section is not a separate cause of action.

 

Consequently, the discovery of the lengthy extra-marital affair entitled the wife to pursue a claim for unequal division and prove, based on financial disclosure, that the husband had recklessly depleted his assets to the level of unconscionability. This does not mean she is likely to succeed. Given the Court's warning that this is a high hurdle to overcome, this approach could be a waste of time and resources for the parties, unless the wife can establish on a balance of probabilities that the husband's spending was significant enough to constitute a reckless depletion of his net family property.  

 

 

 

 

 

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