“Section 12 of the Family Law Act, R.S.O. 1990, c.F.3 (“FLA”), provides the court with jurisdiction to make an interim or final order restraining the depletion of a spouse’s property it is considers it necessary for the protection of the other spouse’s interest under Part 1 of the FLA.
Given that neither party presented evidence on the record for this motion as to which party owes the other an equalization payment, I cannot determine whether the husband would be prejudiced if the wife were permitted to encumber and/or sell the matrimonial home and the investment property pending trial. The purpose of an order under s.12 of the FLA is to ensure that there are sufficient assets to make an equalization payment once the court determined such payment and makes an order under s.9 of the FLA: Lasch v. Lasch (1988), 64 O.R. (3d) 464, para. 13.
The onus is on the husband to establish the strength of his claim for an equalization payment in seeking to extend the existing preservation order and to obtain an order that the wife also preserve the investment property. As set out in Bronfman v. Bronfman, 200 CanLII 22710 (ONSC) by Sachs, J,
“A court will want to consider how likely it is that the plaintiff or petitioner will receive an equalization payment. It will also want to consider the effect that granting, or not granting, such an order will have on the parties. Under s.12, the agenda is to protect the spouse’s interests under the Family Law Act, so that if a spouse is successful in obtaining relief under that Act, there are assets available to satisfy that relief. Relevant to this exercise is an assessment of the risk of dissipation of the assets in existence prior to the trial.
…
There are certain cases where the factual record, and the applicable legal principles, make it very clear that a spouse will be entitled to an equalization payment in a particular amount. In such cases, considerable weight will be given by the court to this factor when deciding an interim application under s. 12, and perhaps less weight to the other factors. There are others where the facts and the law are disputed and complicated. … In such cases, the court will want to go on and give serious consideration to the other factors, being the balance of convenience and the risk of dissipation prior to trial. [Emphasis added.]
In Taus v. Harry, 2016 ONSC 219, Justice Gauthier held, at para. 35, that the test under s. 12 or s. 40 is the same: “The question to be asked is whether there is a real risk that the applicant’s equalization claim and claim for retroactive support could be defeated if the preservation/non-dissipation order is not made.” In that case, equalization had not been determined, with each party saying the other would owe a significant amount.
Price v. Price, 2016 ONSC 728 is an example where there was no evidence a significant equalization payment would be required. In fact, the applicant, who had obtained a preservation order on an ex parte basis, failed to show any likelihood that she would be entitled to equalization. Justice Timms set aside the preservation order. In doing so, he said (at para. 6), “The correct standard is the same one to be applied when determining whether to grant an interim injunction.”
In the more recent decision of Conforti v. Conforti, 2021 ONSC 1767 (CanLII), Chown J. found that the merits of the wife’s claim were weak and that there was no evidence that the husband would her a significant or even any amount of money. Further, there was no evidence to support her concern that the husband would hide or deplete assets. As a result, a preservation order was not made.”