The most widely read magazine for Canadian lawyers
Issue link: https://digital.canadianlawyermag.com/i/50802
until the very last minute to seek a variation in support payments. She also says everyone who is going through a divorce must also understand they may no longer have the lifestyle they were accustomed to. One phenomenon she has noticed recently, in terms of sepa- rations, is the type of debt people are carrying. She calls it the "keeping-up- with-the-Jones'" debt. Herbert says people need to think about just how cutthroat they need to be right now. He says it is a time for sober second thought before people go at their former spouses in a high-conflict divorce. Another wrinkle on the division of assets question is the recent Ontario Court of Appeal ruling in Serra v. Serra. Harold Serra was the owner-operator of a textiles plant in Ajax, Ont. When he and Barbara Serra separated in 2000, the plant was healthy, however, the plant's viability tanked due to competition from Asia, according to Harold Serra. Barbara Serra claimed her ex-husband had squirreled away assets, and refused to sell the couple's Florida condo. At the time of valuation, the condo was worth $2 million. However, it doesn't take a real estate speculator to understand that, since then, U.S. property values have fallen off greatly. Harold Serra appealed the case to the Ontario Court of Appeal after Ontario Superior Court Justice Thea Herman ruled in 2006, "that neither the decline in the value of the company nor Ms. Serra's post-separation conduct consti- tute circumstances that would render the equal division of net family property unconscionable, within the meaning of s. 5(6) of the Family Law Act." The Ontario Family Law Act s. 5(6) states that "the court may award a spouse an amount that is more or less than half the difference between the net family properties if the court is of the opinion that equalizing the net family properties would be unconscionable." The appeal court disagreed with the Superior Court and in a unanimous ruling stated the loss of assets should be considered in the divorce settlement. Justice Robert Blair wrote, "the trial judge erred in refusing to take into www. C ANADIAN Law ye rmag.com M ARCH 2009 43 hildview_CL_Mar_09.indd 1 2/10/09 8:59:04 AM account the market-driven downward impact on the value of Mr. Serra's inter- est in Ajax Textile, in combination with the other factors mentioned above, in considering the application of s. 5(6) of the Family Law Act. These are all factors to be considered in the s. 5(6) analysis." Yates says the appeal court ruling acknowledges that the law does not live in a vacuum by saying, "the market is not doing so well, so let's stop pretend- ing that this law lives in this nether world where we don't look at anything like a drop in the market of a company folding." While she says the ruling opens the door for those unduly affected by financial issues beyond their control, it doesn't amount to a total sea change in family law. She says what the judges are saying is that "we've been reading [the act] too narrowly." Family law lawyers in Alberta have also been musing about a possible change in their system that decides mar- ital assets. The Matrimonial Property Act of Alberta specifies that division happens at the time of trial. The Alberta Law Reform Commission is looking at whether this should be changed to an earlier date — the time of separation, for example — and some lawyers believe this movement, like the economy, and also because of it, will slow. GOOD PARENTS PAY: www.mcss.gov.on.ca/mcss/english/pillars/familyResponsi- bility/debtors/list.htm SERRA V. SERRA ONTARIO SUPERIOR COURT: www.canlii.org/en/on/onsc/doc/2007/2007ca nlii2809/2007canlii2809.html SERRA V. SERRA ONTARIO COURT OF APPEAL: www.ontariocourts.on.ca/deci- sions/2009/february/2009ONCA0105.pdf; ALBERTA MATRIMONIAL PROPERTY ACT REVIEW: www.law.ualberta.ca/alri/ Work-in-Progress/Current-Projects/Matrimonial-Property-Act-Review.php; ONTARIO FAMILY LAW ACT: www.canlii.org/on/laws/sta/f-3/20040802/whole. html#P268_15202