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Family - Equalization (2). Senos v. Senos
In Senos v. Senos (Ont CA, 2026) the Ontario Court of Appeal partially allowed a family law appeal, this brought against orders "which finally resolved the issues of spousal support, child support, and special/extraordinary expenses".
Here the court leaves the "impact of the [SS: family] corporation’s liabilities" (here, taxes) to the equalization determination, and not to be "paid out of her share of the proceeds of sale of the matrimonial home":3. The trial judge erred in holding the appellant personally liable for 50% of the tax debt of Seren
[33] The trial judge found the appellant personally liable for 50% of Seren’s tax liability, which the trial judge accepted was approximately $152,000 as of March 23, 2024. The trial judge ordered that the appellant’s liability be paid out of her share of the proceeds of sale of the matrimonial home. The only explanation provided for this order was that the appellant was the “joint owner of the company”.
[34] The appellant argues that the trial judge erred by overlooking the basic principle that a corporation is its own entity, separate and distinct from its shareholders. She further submits that a shareholder can have no liability for the debts of the corporation, except where a statutory or other basis exists to pierce the corporate veil.
[35] I agree. A bedrock principle of corporate law is that a corporation is a separate entity from its shareholders and a shareholder is not generally liable for the debts of the corporation merely by virtue of their ownership of shares of the corporation: Yaiguaje v. Chevron Corporation, 2018 ONCA 472, 141 O.R. (3d) 1, at para. 57, leave to appeal refused, [2018] S.C.C.A. No. 255. While there are various exceptions to this general rule (see, for example, the discussion in Yaiguaje, at paras. 64-83) no exception applies in the circumstances of this case. Nor did the trial judge suggest otherwise. Instead, she appears to have simply ignored entirely the legal distinction between a corporation and its shareholders in holding the appellant personally liable for 50% of the tax debt of Seren.
[36] This is not to suggest that the tax liability of Seren has no possible relevance to the resolution of the issues between the parties. It may be that one or both parties are personally liable for some portion of Seren’s tax liabilities pertaining to statutory payroll source deductions and/or HST remittances, if they were directors and/or officers at the material time: see e.g., X v. Y, 2016 ONSC 545, at paras. 271-84. Any liability in this regard would obviously affect their individual net family property calculations. Moreover, the corporation’s indebtedness, even if not a personal liability of either party, may affect the value of its shares, and thus may indirectly impact the calculation of either party’s net family property. But these are entirely different matters than treating Seren’s entire tax liability as a personal liability of either party, which is how the trial judge approached the issue. In my view, she erred in doing so.
[37] Therefore, I would set aside the order that the appellant is responsible for 50% of Seren’s purported $152,000 tax liability. The impact of the corporation’s liabilities, if any, will need to be properly determined when equalization is finalized.[2] . Senos v. Senos
In Senos v. Senos (Ont CA, 2026) the Ontario Court of Appeal partially allowed a family law appeal, this brought against orders "which finally resolved the issues of spousal support, child support, and special/extraordinary expenses".
The court considers when spousal support orders should be made, here in relation to equalization determinations:1. While final spousal support orders should generally only be issued after determining equalization, in the particular circumstances of this case the spousal support order should not be disturbed
[18] As the appellant points out, s. 15.2(4) of the Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.) requires that in making an order for spousal support, the judge must consider the total means of the parties: see also Leskun v. Leskun, 2006 SCC 25, [2006] 1 S.C.R. 920, at para. 29. Since the amount of any equalization payment will almost invariably affect each party’s means, a final support order should not be made until after equalization has been determined: Greenglass v. Greenglass, 2010 ONCA 675, 99 R.F.L. (6th) 271, at para. 44.
[19] Here, despite the fact that the trial judge declined to make an equalization order, she nevertheless made a final spousal support order. In addition to this alleged legal error, the appellant argues that there were inconsistencies in the respondent’s evidence regarding his income which were not addressed by the trial judge. The appellant also objects to the fact that the trial judge failed to consider whether she was entitled to share in the respondent’s higher annual income post-separation.
[20] I agree that the general rule is that equalization should be determined prior to making a final spousal support order. But in the particular circumstances of this case, it would be inconsistent with the primary objective of the Family Law Rules, O. Reg. 114/99, namely, to deal with cases justly, to revisit the spousal support order at this stage of the litigation.
[21] As the trial judge pointed out, this proceeding has been protracted and highly contentious, primarily due to the appellant’s unreasonable and bad faith conduct. In the trial judge’s retelling of the litigation history, the parties appeared before 9 different judges on more than 15 occasions. The appellant sought to strike the respondent’s pleadings five times. She brought 22 motions, some without notice, seeking a litany of relief, often on an urgent basis. The trial was adjourned four times at the appellant’s request. Throughout the litigation, the appellant’s primary focus was on proving that the respondent hid his true income and assets and was thus liable to pay spousal support at the elevated level mandated by the Interim Support Order. All of these claims were conclusively shown to be without merit at trial.
[22] The requirement to deal with cases justly includes “ensuring that the procedure is fair to all parties”; “saving expense and time”; “dealing with the case in ways that are appropriate to its importance and complexity”; and “giving appropriate court resources to the case while taking account of the need to give resources to other cases”: r. 2(3) of the Family Law Rules. Reopening the issue of spousal support at this stage in the litigation in order to first address equalization would be inconsistent with these objectives, since it would result in further delay and increased costs in a proceeding that has already gone on for far too long and at undue expense to both the parties and to the court. This is particularly the case because the parties have very limited assets and any equalization payment that might be ordered is likely to be quite modest. It is very unlikely that the eventual equalization payment will materially change the total means of the parties, which is what is relevant to determining the quantum of spousal support. . Robson v. Pellerin
In Robson v. Pellerin (Ont CA, 2025) the Ontario Court of Appeal considered family law equalization:[11] The trial judge’s approach is consistent with the jurisprudence of this court. This court has approved the approach described in Poole v. Poole (2001), 2001 CanLII 28196 (ON SC), 16 R.F.L. (5th) 397 (Ont. S.C.), at paras. 35-36:Even though a debt may have a specified face value, if the evidence indicates that it is unlikely that the promissor will ever be called upon to pay the debt, the value of the debt should be discounted to reflect that reality.
There is a compelling reason for taking this good hard look at the reality of the situation. A debt constitutes a credit in the equalization calculation, and reduces the net family property of the spouse claiming the debt. This has a direct impact on the equalization payment due, by either reducing the amount that party has to pay to the other (if he has the higher net family property), or increasing the amount that he will receive (if his net family property is lower). Fairness dictates that he should not receive a credit for a debt, with the financial benefits that flow from that credit, if he will never be called upon to pay the debt. See Cade v. Rotstein (2004), 2004 CanLII 24269 (ON CA), 50 R.F.L. (5th) 280 (Ont. C.A.), at paras. 7-8.
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[19] The process for calculating net family property for the purpose of equalization is strictly defined by the FLA. Section 4(1) of the FLA defines “net family property” as:the value of all the property, except property described in subsection (2), that a spouse owns on the valuation date, after deducting,
(a) the spouse’s debts and other liabilities, and
(b) the value of property, other than a matrimonial home, that the spouse owned on the date of the marriage, after deducting the spouse’s debts and other liabilities, other than debts or liabilities related directly to the acquisition or significant improvement of a matrimonial home, calculated as of the date of the marriage[.] [20] This definition specifically requires a spouse’s property to be calculated as of the valuation date and “as of the date of the marriage”.
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[22] This conclusion is driven by the factual findings of the trial judge and the provisions of the FLA. The specificity of the definition of net family property in the FLA is intended to promote certainty, predictability, and finality in the resolution of property issues at the end of a marriage: Serra v. Serra, 2009 ONCA 105, 93 O.R. (3d) 161, at para. 56. It is precisely for this reason that the threshold for departure from strict application of the formula, which the FLA itself contemplates under s. 5(6), is exceptionally high. As Blair J.A. states at para. 47 of Serra: “The jurisprudence is clear that circumstances which are ‘unfair’, ‘harsh’ or ‘unjust’ alone do not meet the test. To cross the threshold, an equal division of net family properties in the circumstances must ‘shock the conscience of the court’[.]”
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