Unconscionability and Unequal Distributions

The case of Czieslik v. Ayuso dealt with equalization of spouses’ net family properties and the amount by which a spouse’s share may be varied in unconscionable circumstances. In this case, the Husband registered a mortgage on property solely owned by him in favour of a friend’s corporation. No monies were advanced to the Husband pursuant to the mortgage nor did the Husband make any payments on the alleged mortgage. When the property was sold the sale proceeds to the tune of $190,000.00 were used to discharge the corporation’s mortgage.

The trial judge found that the husband, by these actions, had intentionally depleted his net family property and that this conduct shocked the conscience of the court. The question then became what amount could the court award to the Wife under the variation provision of s. 5(6) of the Act. Applying a strict and literal approach, the trial judge determined that she was confined by the words of the section to awarding at most 100% of the difference in the parties’ net family properties. The Appellant’s net family property was $63, 919.00 and the Respondent’s $74,385.00. Thus, although awarding one party 100% of the difference of the Net Family Property, in actuality this only amounted to the wronged party receiving approximately five thousand more than had equalization been awarded.

Justice Lang scrutinizes the trial judges’ ruling, stating in paragraph 32 of the Court of Appeal decision that there “is simply no rational connection between unconciousable conduct and the amount of the “difference” between the parties’ net family properties.” Justice Lang went on to state in paragraph 33 that this “narrow interpretation” taken would “render the legislature’s remedy meaningless in many cases – for example, where there is unconciousable conduct, but the difference between the net family property values is very little.” Lang J.A. considers s.5(6) by looking at it in context with the purpose of the Act, holding that “an interpretation that gives the court the authority to award an amount up to the value of the offending spouse’s net family property accords most fully with the purpose and intent of the legislation.” (par 36).

The court concludes “that on a plain reading of the FLA, a court is not restricted in making s.5(6) award to the difference between the parties’ net family property, even when that difference is zero.[…] Accordingly, a court may award an amount that is greater than the difference between the parties’ net family properties.” (para 58).

Applying this new principle, the court made a new judgment that as a result of the Respondent’s unconiousable conduct of removing $190,000.00 from his net family property, the Appellant was entitled to $74,385.00 or the value of the Respondent’s net family property. Thus, rather than awarding the Appellant 100% of the difference of the net family property, which would have given the Appellant approximately $5,000.00 more than she would have received if equalization had been awarded, this interpretation of s.5(6) enabled the court to award the Appellant $74,385.00 more than she would have received had the Respondent not acted in such an unconiousable manner.

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