The jurisprudence is clear that circumstances which are “unfair”, “harsh” or “unjust” alone do not meet the test. To cross the threshold, an equal division of net family properties in the circumstances must “shock the conscience of the court”.

In Cheung v. Lim 2020 ONSC 4387 Justice Mandhane heard an uncontested trial in which the Applicant sought a declaration that there be no equalization payment payable by either party pursuant to section 5(6). In that case the parties cohabited pre and post their wedding for less than five years. During their cohabitation and prior to their marriage, the Applicant received a cash gift of $100,000 from her mother which she used to purchase a condominium prior to marriage . Given Part I of the Family Law Act, as that property was the parties’ matrimonial home, that meant the Applicant would not receive a marriage date deduction for that gift in the calculation of her net family property.

In Cheung, Justice Mandhane considered the analysis conducted by Justice Heeney in a similar case, Kucera v. Kucera 2005 CanLII 12854, before granting the relief sought by the Applicant.

The Kucera Factors

In Kucera, Justice Heeney noted that:

Marriage is a form of partnership, and it is inherently fair that wealth accumulated during the life of that partnership should be shared equally.

Where the Family Law Act potentially becomes unfair is where the special provisions discussed above come into play. This is because the equalization process does not only share wealth accumulated during the marriage, but also shares the value of one specific asset, the matrimonial home, that was accumulated prior to the marriage. In very short marriages, this represents an unjustifiable windfall to the non-titled spouse. So long as the marriage is of a duration of less than five years, s. 5(6) is available to redress that unfairness.

• Whether the home was purchased before the marriage, and the contributions of the non-titled spouse;
• Whether the home was improved during the marriage in any way;
• Whether the titled spouse covered maintenance costs, as well as other living expenses for both parties;
• Whether the bulk of the presumptive equalization payment is a result of the value of the matrimonial home;
• Whether the non-titled spouse improved their financial position even without the presumptive equalization payment, including repayment of debts brought into the marriage; and
• Whether there were children.

• The home was purchased prior to the marriage;
• The Applicant was solely responsible for the mortgage and maintenance of the home;
• During the relationship, the Applicant used her line of credit to loan the Respondent money for his education, dental work and other personal expenses. At the time of the uncontested hearing, the Respondent owed the Applicant about $25,000;
• The Respondent’s contributions to the home were sporadic, at his sole discretion, and he received benefit from the payments he made (rent-free living for the duration of the parties’ relationship);
• The Respondent did not provide the court with any financial information/assets; and
• There are no children.

Concluding Remarks

As the Ontario Court of Appeal noted in the leading case on this issue, Serra, the operation of the Family Law Act may, at times, result in equal divisions which are “unfair,” but this alone is not sufficient to warrant a deviation from the property scheme set out therein. Rather, the operation of the Family Law Act must be “repugnant to anyone’s sense of justice”.

The result in Cheung and other such cases in which a court invokes section 5(6) may lead one to ask: Is the court engaging in an objective determination of what is unconscionable? Can it? The Court in Serra addressed this concern noting:

The scope of the exception in s.5(6) […] has been the subject of considerable controversy amongst family law professionals. This is perhaps because the exception appears to fly in the face of what is seen as the essential characteristic of present-day family law legislation in Ontario, namely, the promotion of certainty, predictability, and finality in the determination of support obligations and property division and the removal of judicial discretion […] in those areas to the extent possible. The great concern — as Mr. Epstein [counsel for the appellant in Serra] fairly acknowledged during oral argument — is to dispel any interpretation of the Family Law Act that might suggest the courts are empowered to deal with the division of family property on the basis of “discretionary fairness”. On this view, expanding the discretion in the hands of the judiciary in family law matters is anathema to Ontario’s legislative scheme and the development of any trend in that direction would be worrisome.

The Ontario Court of Appeal ultimately concluded that the above concern was “overblown,” especially on the facts of the case before it. The Court, it observed, does not impose one’s own assessment of fairness, but rather determines when unconscionability emerges. In other words, in determining the appropriate remedy for circumstances of unconscionability brought upon by the operation of the Family Law Act, the Court will only depart from the basic principle of equal division “to the extent necessary to avoid unconscionability”. But in the absence of objectively determined criteria, is it possible to achieve unanimity on what constitutes unconscionability?

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By: Tharmini Kuhathasan