Getting security for your property & support claims 

October 13, 2017

By: Ashley Iyathurai

Disclaimer: The information contained in this article is general in nature and does not constitute legal advice. You should contact the Law Office of Jeff Jiehui Li, or another experienced family lawyer if you are concerned about your family law issues.

Under the Family Law Act, a party can take steps to secure his/her property or support claim. One tool that achieves this is a preservation or restraining order. In deciding whether or not to grant a preservation order, the court will consider: (1) how likely it is the party will receive an equalization payment, (2) the balance of convenience, (3) and the risk of dissipation. The spouse that is seeking the order bears the onus to prove, on a balance of probabilities, that the order is necessary in order to protect his or her interests.

How does the court assess the risk of dissipation? The courts have used different standards. In one case, the court considered whether or not there was a ‘real risk’ that assets could be dissipated. In Barbini v Edwards, however, the court noted that the order should be made “out of an abundance of caution.”

In considering the degree of risk, the court will also look to the spouse’s behaviour. In Fraser v Fraser, the court noted that the husband had admitted he had been hiding “significant amounts of taxable income from the government.” This led to the conclusion that the husband had the capacity to structure his finances so as “to reduce his financial obligations to others.”

The husband had also chosen to sell off the parties’ boat without the wife’s permission, or even notifying her. The husband sold the boat for significantly less than the purchase price. The husband had also made reference to possibly filing for bankruptcy. The court noted that the husband’s “open contemplation of such drastic measures” made it understandable why the wife was now concerned about whether she would actually receive any money owed to her.

In Bronfman v Bronfman, the husband had disposed of shares in the amount of $705,000, and had transferred his shares to an offshore company. The husband had not provided any explanation for this investment. The court noted that the husband’s actions raised the concern that he may have been intending to hide his assets. The court found that there was a real risk that the husband would dissipate his assets before the wife’s claim was decided. As a result, the court determined that there should be a preservation order.

Similarly, in Syed v Syed, the wife was seeking a general non-dissipation order. The parties were involved in a number of different businesses. The wife was concerned that the husband would leave Ontario and move to Pakistan. The husband’s behaviour called into question his motives. The court noted that the husband had a second family in Pakistan, had planned a trip to Pakistan, had arranged to increase the mortgage, had contacted third parties to undertake significant renovations, had stated he wanted to transfer the title to one of his properties to protect it from bankruptcy, had stated he was planning to deplete the companies and return to Pakistan, and had bought his second wife property and sent money to her.  In addition, the husband had disregarded previous court orders for financial disclosure. As a result, the court ordered that the non-dissipation order should remain in place.

If you are separating and are concerned that your spouse may be depleting or transferring assets, you should consult an experienced family lawyer to get advice about how to protect your interests.

 

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