Pensions: ‘unjust enrichment,’ survivor benefits, and equalization payments on instalment

In the case Symmons v. Symmons, the Ontario Court of Appeal decided an appeal from the wife who appealed an order requiring her to pay her husband an equalization payment of $117,514.00 and costs of $25,000.00. The Court in the end dismissed her appeal.

Background & Trial Court

The parties cohabitated for 5 ½ years and were married for 10 years.  During the cohabitation period, the parties moved to Ajax causing the wife to leave her place of employment. The parties settled all of their differences except for one:  the division of the husband’s pension. At trial, the judge valued each party’s interest in the pension and survivor benefits and concluded that the wife owed the husband an equalization payment as stated above.

The wife raised numerous issues on her appeal. Her overriding problem, however, was that the trial judge erred by not granting her a share in the amount of her husband’s pension interests that accumulated during the period the parties cohabited before marriage.

The parties’ pension interests were valued by experts, using the previous legislative regime that preceded the legislative reform of family pensions that came into effect on January 1, 2012. The trial judge accepted the following figures for the purpose of calculating the equalization payment:

  • The after tax capitalized value of Mrs. Symmons’ survivor benefits: $310,824
  • The after tax capitalized value of Mr. Symmons’ pension interests accrued during marriage: $75,795
  • The after tax capitalized value of Mr. Symmons’ pension interests accrued from the time the parties began cohabitating to the date of separation: $202,900

The wife urged the trial judge, to take into account the pension’s increase in value during the cohabitation period, on the basis of equitable principles. The husband argued that he should only be required to share the growth of his pension during the marriage, in accordance with s. 4 of the Family Law Act.

The husband’s position was ultimately accepted.

Court of Appeal

The wife claimed unjust enrichment, and stated that first, her and her husband were engaged in a joint family venture during the period of cohabitation. Second she stated that her husband was enriched by the parties’ move to Ajax because it allowed him to accrue more on his pension during the period of cohabitation.

Both the trial judge and the court of appeal concluded that there was no evidence that the husband made a promise to divide his pension inclusive of the cohabitation period, and as such it was held that there was no deprivation on the facts.

For the purposes of an unjust enrichment claim, the applicant party must demonstrate that one party has retained a disproportionate share of the economic fruits of their joint efforts. However, both Courts found that there was insufficient evidence to prove that the husband retained a disproportionate shares of the assets obtained as the result of their joint efforts, namely, the pension.

On her second ground, the wife claimed that the move to Ajax caused a deprivation to her and her business, however the court found that although she was required to change her employment during the period of cohabitation, the value of her business appeared to have increased significantly by the end of the relationship.

Furthermore, the Court found that the overall increase in each party’s net worth during marriage also undermined the wife’s claim for unjust enrichment.

As an alternative, the wife also tried to argue an unequal division of net family property under s. 5(6) of the Family Law Act. Under s. 5(6), where a court may award more or less than half the difference between the net family properties if equalizing would be unconscionable. The court dismissed this argument and stated that the “threshold of unconscionability under s. 5(6) is exceptionally high. A party seeking an unequal division must show that an equal division of net family property would ‘shock the conscience of the court’”: In this case, the court held that the equalization of net family property did not meet this standard.

Further, the wife appealed the trial judge’s decision that he should have allowed her to satisfy the equalization payment to her husband over a period of seven years. She argued that she cannot access her survivor benefits now and may not be able to for years and as such it would have been reasonable to allow her to pay in instalments. Usually, a party is required to make an equalization payment right away. However, s. 9(1)(c) of the Family Law Act gives the court discretion to order payments in instalments for a period of up to ten years, “if necessary to avoid hardship”.

The court was not satisfied that she had met the statutory standard of “hardship”. An important factor in deciding whether equalization should be paid in instalments is whether the payor spouse has funds available to pay a lump sum. As such, the court stated that the wife had assets in excess of $300,000 to satisfy the remaining payment and therefore declined to order instalment payments.

Andrew Feldstein

The Feldstein Family Law Group (FFLG) is one the largest family law firms that practices Family Law exclusively in Greater Toronto, with ten lawyers and counting. The boutique law firm has won the Top Choice Award for Family Law™ in Toronto for the past eleven years (2007 to 2017 inclusive).

Managing Partner Andrew Feldstein has been practicing family law for more than 20 years and frequently comments on Family Law issues through the media. The Feldstein Family Law Group offers vast written, video, and media resources on its website to those who find that they need to end their relationship.

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