Unequal Division of Net Family Property
Introduction
The primary objective is to equally distribute the net family property, there are instances when the court may order an unequal division. This might seem contradictory, but the Family Law Act has established a series of factors that can justify such a decision.
Debts or Liabilities Existing at the Date of Marriage
The Family Law Act allows for an unequal division of net family property when a spouse fails to disclose debts or liabilities existing at the date of marriage. This factor has roots in the early 1970s when the spouse’s net property value at the date of marriage could not be a negative figure. Thus, spouses could pay off their pre-marriage debt post-marriage without it reflecting on their net family property. This factor is rarely relied upon today because this is no longer the case.
Reckless or Intentional Depletion of Net Family Property
Another factor that can lead to an unequal division of net family property is the reckless or intentional depletion of net family property. This can occur when a spouse transfers their property on a non-arms length basis to children, relatives, or a new partner, or when a spouse spends excessively, for example, on gambling or expensive vacations. The court will carefully scrutinize the circumstances to ascertain whether the depletion was legitimate or a sham.
A Short Period of Cohabitation
The last factor we'll examine is a short period of cohabitation. If the equalization payment would be disproportionately large in relation to a period of cohabitation under 5 years, the court can order an unequal division of net family property. This typically comes into play when one spouse brings the matrimonial home into the marriage. The courts will consider the circumstances as a whole when determining whether the spouse should be permitted a date of marriage deduction of either the full value or a portion of the value of the matrimonial home.
Disproportionate Debt in Support of the Family
Another condition where an unequal division of net family property can be ordered is in circumstances where one spouse has incurred a disproportionately larger amount of debt than the other for the support of the family (Family Law Act, s. 5(6)(f)). This discretionary factor is utilized in situations where one spouse has financially supported the family and has incurred debts in the process.
The Role of Written Agreements
An unequal division of net family property can also be ordered in circumstances where there is a written agreement between the spouses that is not a domestic contract (Family Law Act, s. 5(6)(g)). In practice this factor is typically not relied upon, since most written agreements between the parties are made in the form of a domestic contract.
Other Circumstances
The court also has the flexibility to order an unequal division of net family property in circumstances where any other circumstances relating to the acquisition, disposition, preservation, maintenance or improvement of property is present (Family Law Act, s. 5(6)(h)). This is effectively a broad provision that grants the court a greater ability to utilize their discretion to order an unequal division of net family property.
Conclusion
In conclusion, while the aim of the Family Law Act is to ensure an equal division of net family property, there are circumstances that can lead to an unequal division. This is to ensure that the division is not unconscionable, or in simpler terms, that it does not shock the conscience of the court or any individual’s sense of justice.
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