“The appellant argues that the combined operation of ss. 10.1(3) and (5) precludes a lump-sum division when a pension is in pay. Some cases support this interpretation (see, for example, Jovanovic v. Jovanovic, 2013 ONSC 7132 (CanLII), [2014] W.D.F.L. 461, at para. 40). However, I would not read these provisions so restrictively, especially without clear statutory language that prohibits a lump-sum transfer when a pension is in pay.
Subsection 10.1(3) creates a general power to order an immediate lump-sum division. The availability of this permissive option is guided by the non-exhaustive criteria in s. (4). Subsection (5) addresses pensions in pay. In these circumstances, a judge may make an order for the division of pension payments, “but not for any other division of the spouse’s interest in the plan” (emphasis added). I do not read this section as prohibiting a lump-sum transfer for a pension in pay. Instead, s. 10.1(5) simply provides courts with another option – division of payments. However, just like s. 10.1(3), s. 10.1(5) only allows a judge to order one form of division – lump-sum or pension payments – not both, and not any other form of division of the interest.
The combined operation of ss. 10.1(3) and (5) leads to the following options. Before a pension is in pay, only a lump-sum division is available. This makes sense because there is no monthly payment stream to divide. Once a pension is in pay, a judge may choose between the two options, depending on all of the circumstances of the case. Whether or not a pension is in pay, the factors set out in s. 10.1(4) provide guidance.
The appellant’s restrictive interpretation of s. 10.1 potentially compromises an important goal of the FLA – to achieve a division of assets that is fair to both parties. In Best v. Best, 1999 CanLII 700 (SCC), [1999] 2 S.C.R. 868, Major J. said, at para. 109: “The choice of a method for settlement of the equalization obligation is highly contextual and fact-based. A payment method that is preferable in one case might be grossly unjust in another.” The interpretation favoured by the appellant would undermine this approach by precluding resort to an option (a lump-sum payment) that may be critical in achievi15ng a fair and just division of property.”