“I agree with the respondent that the proper way to deal with the matter is to calculate the net family properties of each party, equalize them and then implement the equalization payment. Implementation is set out in sections 9 and 10.1 of the Family Law Act, R.S.O. 1990, c. F.3, the relevant sections of which read as follows:
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- (1) In an application under section 7, the court may order,
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(a) that one spouse pay to the other spouse the amount to which the court finds that spouse to be entitled under this Part;
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(d) that, if appropriate to satisfy an obligation imposed by the order,
(i) property be transferred to or in trust for or vested in a spouse, whether absolutely, for life or for a term of years, or
(ii) any property be partitioned or sold.
10.1 …
(3) An order made under section 9 or 10 may provide for the immediate transfer of a lump sum out of a pension plan but, except as permitted under subsection (5), not for any other division of a spouse’s interest in the plan.
(4) In determining whether to order the immediate transfer of a lump sum out of a pension plan and in determining the amount to be transferred, the court may consider the following matters and such other matters as the court considers appropriate:
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- The nature of the assets available to each spouse at the time of the hearing.
- The proportion of a spouse’s net family property that consists of the imputed value, for family law purposes, of his or her interest in the pension plan.
- The liquidity of the lump sum in the hands of the spouse to whom it would be transferred.
- Any contingent tax liabilities in respect of the lump sum that would be transferred.
- The resources available to each spouse to meet his or her needs in retirement and the desirability of maintaining those resources.
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As can be seen, even before the legislation was changed, the court was empowered to transfer property from one spouse to the other in order to satisfy the obligation imposed by the order. However, courts could seldom transfer pensions without the consent of the parties because of various statutes governing those pensions. Now s. 10.1 has been enacted in order to overcome that problem. That does not mean that a transfer of a lump sum will always be granted. In fact, the court has discretion and should consider the matters outlined in subsection (4) together with “such other matters as the court considers appropriate.”
Vogelsang J. considered the matter in Tupholme v. Tupholme, 2013 ONSC 4268. It is important to note that Vogelsang J. was dealing with whether or not a matrimonial home ought to be sold and therefore his comments with respect to the ultimate equalization payment are obiter. Nonetheless, he is a very respected judge and had this to say:
[16] In my view, Mr. Tupholme should not be able to force his wife to accept a deferred payment of a share of his pension to ease his own liquidity position in the face of the clear words of s. 9(1) of the Family Law Act. Also, in my view, there is no statutory onus on a spouse entitled to an equalizing payment to show that the new pension division mechanism brought into force by the Family Law Statute Amendment Act, 2009 S.O. 2009, c. 11, s. 26 should not be called into play in favour of immediate payment.
I agree with him that there is no presumption or statutory onus that an equalization payment will be made by a transfer of a lump sum out of a pension plan. Each case depends on its own facts.”