In Booth v Bilek (2021 ONCA 128), the Ontario Court of Appeal upheld a trial judge’s decision to award the Appellant Wife only 10% of a full equalization payment. This case deals with the fascinating area of section 5(6) of the Family Law Act which permits a Court to vary (often reduce) a spouse’s share of net family property if making equalization payment would be “unconscionable”.

Cases under 5(6) of the Family Law Act often involve married couples that cohabit for less than five years; where there are significant changes in someone’s net worth right after separation; or where there are people who dissipate assets in anticipation of separation (and engineer a much lower date of separation net worth for themselves). The provision essentially gives the Court discretion to redress obvious unfairness. But the threshold to cross to access such discretion is very high. You have to convince the court that applying equalization would result in something “unconscionable”.

The issue, in this case, was whether the trial judge erred in awarding the Wife only 10% of the equalization payment –$10,627.45 instead of $106,274.49. The parties had been married and separated after four years and four months of cohabitating. They had no children. He was almost 70. She was in her mid-40’s.

The Wife argued that the trial judge should have awarded full equalization, and made a mistake in thinking only 10% was just and equitable. She asked that either she be paid full equalization or 87% because this was the percentage of five years that they had cohabited. The Court of Appeal dismissed that position.

Firstly, once unconscionability is found, case law allows trial judges to fix an amount they view as reasonable. They are not required to stick to any mathematical formulas based on the length of cohabitation. Here the trial judge determined that equalization would be unconscionable. She could then fix an amount she viewed as reasonable.

Secondly, the length of cohabitation was not the only reason for reducing the Wife’s entitlement. The trial judge also took into account that the Wife had received $199,302.87 from her half of the proceeds from the sale of the matrimonial home even though she made no direct financial contribution to its purchase. She also received wedding rings and gifts amount to $87,000.00. Almost all of the NFP came from an investment to which she had contributed nothing. And if that were not enough, the Husband was now 69 and retired while the Wife was 46 and self-supporting.

The Court of Appeal reaffirmed that 5(6) of the Family Law Act provides a high threshold and precludes trial judges from parsing through each party’s relative financial contributions. But where the result would be unconscionable, a judge can rebut the presumption that married couples should equally share in each other’s growth during the marriage. In this case, the Wife was much better off financially after the marriage than prior to the marriage despite providing little if any financial contribution. It was justified to vary equalization.