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Family - Equalization (2). Robson v. Pellerin
In Robson v. Pellerin (Ont CA, 2025) the Ontario Court of Appeal considered family law equalization:[11] The trial judge’s approach is consistent with the jurisprudence of this court. This court has approved the approach described in Poole v. Poole (2001), 2001 CanLII 28196 (ON SC), 16 R.F.L. (5th) 397 (Ont. S.C.), at paras. 35-36:Even though a debt may have a specified face value, if the evidence indicates that it is unlikely that the promissor will ever be called upon to pay the debt, the value of the debt should be discounted to reflect that reality.
There is a compelling reason for taking this good hard look at the reality of the situation. A debt constitutes a credit in the equalization calculation, and reduces the net family property of the spouse claiming the debt. This has a direct impact on the equalization payment due, by either reducing the amount that party has to pay to the other (if he has the higher net family property), or increasing the amount that he will receive (if his net family property is lower). Fairness dictates that he should not receive a credit for a debt, with the financial benefits that flow from that credit, if he will never be called upon to pay the debt. See Cade v. Rotstein (2004), 2004 CanLII 24269 (ON CA), 50 R.F.L. (5th) 280 (Ont. C.A.), at paras. 7-8.
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[19] The process for calculating net family property for the purpose of equalization is strictly defined by the FLA. Section 4(1) of the FLA defines “net family property” as:the value of all the property, except property described in subsection (2), that a spouse owns on the valuation date, after deducting,
(a) the spouse’s debts and other liabilities, and
(b) the value of property, other than a matrimonial home, that the spouse owned on the date of the marriage, after deducting the spouse’s debts and other liabilities, other than debts or liabilities related directly to the acquisition or significant improvement of a matrimonial home, calculated as of the date of the marriage[.] [20] This definition specifically requires a spouse’s property to be calculated as of the valuation date and “as of the date of the marriage”.
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[22] This conclusion is driven by the factual findings of the trial judge and the provisions of the FLA. The specificity of the definition of net family property in the FLA is intended to promote certainty, predictability, and finality in the resolution of property issues at the end of a marriage: Serra v. Serra, 2009 ONCA 105, 93 O.R. (3d) 161, at para. 56. It is precisely for this reason that the threshold for departure from strict application of the formula, which the FLA itself contemplates under s. 5(6), is exceptionally high. As Blair J.A. states at para. 47 of Serra: “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’[.]”
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