Court File and Parties

COURT OF APPEAL FOR ONTARIO DATE: 20210302 DOCKET: C68248

Strathy C.J.O., Brown and Miller JJ.A.

BETWEEN

Clifford Alan Booth Applicant (Respondent)

and

Michelle Yvette Marie Bilek Respondent (Appellant)

Counsel: Paul D. Slan, for the appellant Shawn M. Philbert, for the respondent

Heard: February 8, 2021 by video conference

On appeal from the order of Justice Gisele M. Miller of the Superior Court of Justice, dated March 10, 2020.

REASONS FOR DECISION

OVERVIEW

[1] The parties, who were married, separated after four years and four months of cohabitation. There are no children of the marriage.

[2] The sole issue on this appeal is the equalization of net family property. Section 5(6) of the Family Law Act, R.S.O. 1990, c. F.3 (“the Act”) permits the court to vary a spouse’s share of net family property “if the court is of the opinion that equalizing the net family properties would be unconscionable”.

[3] Here, the trial judge declined to award the appellant an amount that would equalize the parties’ net family properties under s. 5(1) of the Act, given: (1) the extent to which the appellant’s net family property derived from gifts from the respondent; (2) that a full equalization payment would be disproportionate to the relatively short period of cohabitation, and (3) the parties’ respective financial contributions to the property they owned during their marriage.

[4] The trial judge awarded the appellant $10,627.45, or 10% of the full amount that would equalize the parties’ net family properties, namely $106,274.49. The appellant had already received approximately $200,000 from the sale of the matrimonial home.

[5] There is no dispute that the trial judge correctly identified the governing law. She considered appropriate factors under the legislative provision permitting a variation of share, as well as the relevant case law.

[6] The appellant argues, however, that the trial judge erred in concluding that: (1) full equalization would be unconscionable under s. 5(6) of the Act; and (2) 10% of the full equalization payment would be just and equitable. The appellant argues in the alternative that an unequal division of 87% would be appropriate, tracking the length of the marriage.

[7] As explained below, we do not agree that the trial judge erred either in finding that full equalization would be unconscionable, or in her exercise of discretion in setting the appropriate payment at 10% of the amount that would fully equalize the parties’ net family properties.

ANALYSIS

(a) Unconscionability

[8] The trial judge concluded that an award of full equalization would be unconscionable, per s. 5(6) of the Act, considering: (1) the extent to which the appellant’s net family property derived from gifts from the respondent; (2) the disproportion between full equalization and the duration of cohabitation; and (3) the fact that the respondent was almost the sole financial contributor to the property owned by the parties during the marriage.

[9] The trial judge found that the appellant had benefitted financially from the comparatively short marriage. The appellant received $199,302.87 as half of the proceeds of sale of the matrimonial home, despite having made no direct financial contribution to its purchase. Although the appellant contributed $16,000 to the cost of renovating the first matrimonial home, those funds had come from the sale of her condominium, which in turn had been entirely financed by the respondent before their marriage. The appellant had used the balance of the proceeds of sale of the condominium (approximately $33,000) to pay off her personal debt. The trial judge also found that the appellant had benefitted from the gift of wedding and engagement rings from the respondent, worth in excess of $87,000.

[10] The trial judge found that the difference between the parties’ respective net family properties at separation was attributable almost entirely to the growth of the respondent’s investments over the course of the marriage. The trial judge also noted that the respondent had not made any contributions to these investments during the marriage, meaning that none of the family income earned during the marriage had been used to finance them. The trial judge also found that at the time of trial, the respondent was 69 years old, retired and in addition to CPP and OAS, was living solely off the income generated by his investments. The appellant was 46 and had become self-supporting.

[11] The trial judge correctly observed that the threshold for unconscionability under s. 5(6) of the Act is high and not satisfied by a finding of mere unfairness: Serra v. Serra, 2009 ONCA 105, 93 O.R. (3d) 161, at paras. 47-48. The high bar for unconscionability precludes trial judges from undertaking a minute parsing of the parties’ relative contributions to the marriage. It also promotes the goal of certainty in family law disputes.

[12] For the vast majority of cases, s. 5(1) sets the default rule that upon marriage breakdown, the spouse whose net family property is the lesser of the two net family properties is entitled to equalization. This presumption can only be displaced where equalization would be unconscionable, as assessed using the criteria set out in s. 5(6) and guided by the purpose articulated in s. 5(7).

[13] Section 5(6)(e) of the Act specifically identifies that a period of cohabitation less than five years is relevant to whether full equalization may be unconscionable. This promotes certainty about equalization for marriages longer than five years. It also provides notice to parties who have been married for less than five years that a court may take a closer look at whether equalizing would be unconscionable in the specific circumstances of a shorter marriage.

[14] We do not agree that the trial judge erred in concluding that equalizing the parties’ net family properties would be unconscionable on the facts as she found them. She considered the relevant criteria, applied them to the facts before her, and came to a reasonable conclusion. The trial judge did misapprehend the appellant’s evidence of when she returned to the work force, which the respondent concedes. The appellant returned to full-time work in the last year of the parties’ marriage, and not after the parties had separated, as the trial judge found. Nevertheless, this error was not overriding. It did not bear on the factors that led the trial judge to conclude that equalization would be unconscionable. In particular, it did not bear on the trial judge’s finding that over the course of the relatively short marriage, the appellant made little contribution to the acquisition and maintenance of the matrimonial home (or other family assets), and received a sizable benefit from its sale.

[15] It is also relevant that the trial judge found that the appellant was much better off financially than she was at the beginning of the marriage, ‘with little if any financial contribution on her part’, while the respondent had become dependent for his living expenses on income from investments made prior to the marriage.

(b) Unequal division

[16] Having concluded that full equalization would be unconscionable, the trial judge ordered the respondent to pay the appellant 10% of the full amount.

[17] The appellant argues that the trial judge did not explain how she arrived at the figure of 10%, and that the reasons in this respect prevent meaningful appellate review.

[18] Furthermore, the appellant argues that the trial judge did not give appropriate weight to the length of the marriage. She contends that the trial judge ought to have applied a formula that pro-rates the equalization payment according to the length of cohabitation. As the parties cohabited for 52 months, the appellant argues that any unequal division should be calculated at 87% of full equalization (52/60 months), which would entitle the appellant to $92,458.80.

[19] We do not agree that the trial judge made any error in the exercise of her discretion. Although applying a mathematical formula based on the length of the marriage provides the benefit of certainty, neither the Act nor relevant case law requires the trial judge do so. As this court held in Gomez v. McHale, 2016 ONCA 318, 79 R.F.L. (7th) 305, at paras. 11-12:

In several cases, courts have looked at the actual period of cohabitation (e.g. 48 months) and then fixed an unequal division of net family property using that period as a percentage of the five year statutory period, i.e. 48/60 = 80 [percent])….

… Although a mathematical formula may be of assistance in some cases, we do not think that the motion judge erred by not applying it in this case. He did what s. 5(6) of the FLA requires. He looked carefully at the backgrounds of both parties, determined that an equal division would be “unconscionable”, and fixed what he regarded as a reasonable figure. We see no error in the motion judge’s approach. [Citations omitted; emphasis added.]

[20] Similarly, it was not an error for the trial judge to reason as she did, and not to apply the mathematical formula proposed by the appellant. Contrary to the appellant’s argument, the trial judge’s conclusion was neither unreasoned nor unjustified. Paragraph 37, which contains a bare statement of the trial judge’s conclusion, is not the whole of the analysis and must not be read as though it were unconnected to the preceding paragraphs that first recite the trial judge’s factual findings and then analyze the parties’ obligations using the criteria set out in s. 5(6). The trial judge’s ultimate conclusion – that the appellant is entitled to 10% of full equalization – was a reasoned conclusion flowing from the findings that preceded it. Her findings give an ample basis for understanding why she choose not to apply a mathematical formula, as was done in Zheng v. Xu, 2019 ONSC 865, 23 R.F.L. (8th) 436. The facts of that decision, although involving the dissolution of a marriage of similar duration, is dissimilar in many other relevant respects. Unlike in Zheng, the appellant’s only financial contribution to the matrimonial home (or any other family property) came from property that she had first received as a gift from the respondent. To have applied the time-weighted approach in this case would have required the trial judge to ignore the relevant differences between the two cases.

DISPOSITION

[21] The appeal is dismissed. Costs of the appeal are awarded to the respondent in the amount of $20,000 inclusive of HST and disbursements.

“G.R. Strathy C.J.O.” “David Brown J.A.” “B.W. Miller J.A.”