When can an Ontario court divide property unequally?

Only when an equal split of net family property would be unconscionable, judged against the factors in section 5(6) of the Family Law Act. Ontario's Court of Appeal calls that threshold exceptionally high: a result that is unfair, harsh or unjust is not enough. It must shock the conscience of the court.

How does an unequal division claim work in Ontario, step by step?

The starting point for married spouses is equal sharing. Section 5(1) of the Family Law Act entitles the spouse with the lower net family property to half the difference between the two figures. Section 5(6) is the only exception to that rule, and section 5(7) says the equal split is subject only to the considerations listed there. Our property division page sets out the general framework. A claim for an unequal share usually moves through these steps:

1. Do the normal calculation first. Each spouse's net family property is worked out under section 4. You cannot measure whether equalizing is unconscionable until you know what equalizing produces. Our page on calculating net family property shows how.
2. Find the factor. Match your facts to one or more of clauses (a) to (h) of section 5(6). The court's power is tied to those listed circumstances.
3. Raise it in the property claim. Equalization claims belong in the Superior Court of Justice: the Act's definition of "court" for the property part excludes the Ontario Court of Justice (s. 4(1)). Your claim for an unequal share should be set out in your application or answer, not raised for the first time at trial.
4. Prove it with documents. Unconscionability is decided on evidence. The sworn financial statements and the disclosure required by rule 13 of the Family Law Rules are usually where the proof starts.
5. Let the court weigh the whole picture. If the threshold is met, the court may award more or less than half the difference. The Court of Appeal has noted that the award is not limited to the difference between the net family properties.

The overall property process, from separation to order, is set out in our guide to how property is divided in Ontario.

The eight factors in section 5(6)

The list is short and specific. In Serra v. Serra, the Court of Appeal pointed out that only three of the factors involve fault by a spouse, four do not, and the last may or may not.

How high is the bar?

Very high, by design. Section 5(7) explains why: the law treats child care, household management and financial provision as joint responsibilities, with equal contribution by both spouses, financial or otherwise. Equal sharing follows from that premise. In Serra, the Court of Appeal said equalization is the general rule and that judicial discretion is severely restricted, though not eliminated. It described an unequal division as exceptional, and it made a distinction that matters in practice: showing that a factor applies does not, by itself, prove that equalizing would be unconscionable. Those are two separate questions.

The court in Serra also rejected the idea that only misconduct counts. The target, it said, is an unconscionable result, whether or not anyone behaved badly. In that case a spouse's main asset, shares in a textile business, lost most of its value after separation for market reasons he could not control, while he was bound by a preservation order and court-ordered payments. The court found that requiring him to pay more than his whole net worth would be unconscionable. Our guide to a business owned by one spouse explains how such assets are valued in the first place.

What can the court order once the test is met?

Section 5(6) lets the court award "an amount that is more or less than half the difference" between the net family properties. It does not say how much more or less. In Serra, one side argued that the court should move the payment only to the point where it stops being unconscionable. The Court of Appeal disagreed. It reasoned that an order just short of unconscionable would still be unfair, and courts do not set out to make unfair orders. Once the high threshold is crossed, the court decides what is just, fair and equitable on all the facts.

The result in Serra shows how that works. The court did not simply substitute the lower, later value of the business for the separation-date value. It fixed the outstanding payment at a figure above the purely mechanical recalculation, to reflect the 24-year marriage, the equal contribution of both spouses, and the chance that the business might recover. In other words, the remedy was a judgment call, not a formula.

How the adjusted amount is paid follows the usual rules in section 9. The court may order a lump sum, security such as a charge on property, instalments or a delay of up to ten years if needed to avoid hardship, or a transfer or sale of property to satisfy the order.

What changes the answer

• Debts. Three factors concern debts: hidden wedding-day debts (clause (a)), reckless or bad-faith borrowing (clause (b)) and a lopsided share of family borrowing (clause (f)). How debts enter the calculation is covered in our page on debts on separation.
• Short cohabitation. Clause (e) looks at the period of cohabitation, not just the marriage, and applies only where it was less than five years and the payment would be disproportionately large.
• Gifts and inheritances are a different route. Property received from a third person by gift or inheritance after the marriage is excluded under section 4(2), and the spouse claiming it must prove it (s. 4(3)). That is not an unequal division. Our page on excluded property covers it. Gifts between the spouses are what clause (c) addresses.
• Informal agreements versus domestic contracts. A domestic contract must be in writing, signed and witnessed (s. 55(1)), and property it excludes stays out (s. 4(2), para. 6). An informal written agreement is only a factor under clause (g). If an existing contract is the problem, read about setting aside a marriage contract or separation agreement.
• Depletion while still together. If there is a serious danger that a cohabiting spouse will improvidently deplete their net family property, the other spouse may apply under section 5(3) to equalize as if they had separated. After such an order, no further application under section 7 is allowed for that marriage (s. 5(4)).
• Who the law covers. Part I applies to married spouses, including some void or voidable marriages entered in good faith (s. 1(1)). Common-law partners have no equalization claim and so no section 5(6) claim; see property division for common-law couples.

A worked example

For example, imagine a hypothetical couple, Morgan and Taylor. Morgan owned a mortgage-free house worth $600,000 before the wedding, and the couple lived in it as the family home. They separated after two years of living together. On the valuation date the house is worth $650,000, and Morgan has no other property or debts. Taylor's net family property is $20,000.

Because the wedding-day deduction in section 4(1) does not apply to a matrimonial home, Morgan's figure includes the full value of the house. After two years together, Taylor would receive $315,000. Morgan could ask the court to award less under clause (e), since the cohabitation was under five years and the payment is large compared with it. Whether that meets the unconscionability test depends on all the circumstances, including what each spouse contributed and what else they have. The point of the example is only that clause (e) exists for situations like this; it does not predict an outcome.

Common mistakes about unequal division

• Treating "unfair" as enough. The Court of Appeal has said unfair, harsh or unjust results do not meet the test. A claim built only on a sense of unfairness is unlikely to succeed.
• Arguing about who caused the breakdown. The listed factors concern property and debts. Clause (h) is limited to circumstances relating to the acquisition, disposition, preservation, maintenance or improvement of property.
• Using section 5(6) for what is really an exclusion. An inheritance kept separate is excluded under section 4(2). Claiming it as a reason for unequal division confuses the issues and the burden.
• Thin evidence. A claim about hidden debts or reckless spending needs statements and records. Use the request process in rule 13(11) early; our page on financial disclosure explains it.
• Ignoring cost and time. A section 5(6) claim adds evidence, valuations and often trial time. Weigh that against the amount at stake; our page on what drives the cost of a property case lists the main drivers.
• Waiting too long. An equalization claim generally has to start within six years after separation or two years after a divorce, whichever comes first (s. 7(3)).

What to do this week

1. Write down, in date order, the facts that make an equal split seem wrong to you, and note which clause of section 5(6) each one fits.
2. Collect the documents that prove each fact: loan statements, transfer records, gift letters, purchase agreements or a written agreement between you.
3. Make a rough net family property calculation for both of you, so you can see the size of the equalization payment you are trying to change.
4. Check the dates: your marriage, when you began living together, when you separated and any divorce date.
5. If you think assets are being moved or spent now, raise it promptly; the court can make preservation orders under section 12.
6. Book a consultation to test whether your facts can realistically meet the unconscionability threshold before you spend on a valuation.

Frequently asked questions

Can I get more than half because I earned most of the money?

No, not on that basis alone. Section 5(7) treats financial and non-financial contributions as equal, and that premise is the reason for equal sharing. Higher earnings are not one of the listed factors.

Does an affair or bad behaviour in the marriage change the split?

Not by itself. The section 5(6) factors relate to property and debts, such as reckless borrowing or depleting assets. Conduct only matters if it connects to one of those property-related circumstances.

Can the court award more than the difference between our net family properties?

Yes, in a proper case. The Court of Appeal in Serra noted its earlier ruling that a section 5(6) award is not restricted to the difference between the net family properties.

What if an asset's value collapsed after we separated?

Values are fixed at the valuation date, but Serra allows a later change in value, and the circumstances around it, to be considered under clause (h). The court stressed that this makes the change a factor, not an automatic adjustment.

Our marriage was short. Is unequal division automatic?

No. Clause (e) applies only if cohabitation was under five years and the payment is disproportionately large compared with it, and the unconscionability test still has to be met.

Can we agree on an unequal split without going to court?

Yes. Spouses can settle on any division in a separation agreement, which must be in writing, signed and witnessed to be enforceable (s. 55(1)). Each spouse should have full disclosure before signing, or the agreement may later be challenged.

Sources

• Family Law Act, R.S.O. 1990, c. F.3, ss. 1(1), 4, 5, 7(3), 12, 55(1)
• Serra v. Serra, 2009 ONCA 105 (Court of Appeal for Ontario), paras. 46 to 67
• Family Law Rules, O. Reg. 114/99, rule 13