CANADA Law and Practice Contributed by: Heather Hansen, Shannon Beddoe, Maureen Edwards and Victoria Lunetta, McCarthy Hansen & Company LLP
compliance, and – in extreme cases – make a finding of contempt. An asset-holding party has the positive obliga - tion to disclose all worldwide assets and provide a value for the disclosed assets. In the case of complex assets, this may include an obligation to provide an expert opinion on the question of value. Once disclosure (including the value) is provided, it is open to the responding spouse to request further disclosure and/or obtain their own expert opinion with regard to the value. Sometimes the required information to value a spouse’s asset (or interest in an asset) requires production from third parties. The burden on who moves against the third party depends on the nature of the requested disclosure. If an asset-holding party is not able to obtain the required supporting documentation to value the asset, they may have an obligation to obtain a court order requiring third parties to release the necessary information to determine value. An example of this would be if the asset holder is a minority shareholder in a privately held corpora - tion and does not have a right of access to the working papers of the corporation. In this case, the spouse would have a positive obligation to move before the court as against the corporation to obtain the disclosure. If a responding spouse is not satisfied with the disclosure provided and wishes to pursue further or other disclosure, they are also free to ask the court to compel the asset-holding spouse (or third parties) to produce additional information. Trusts A spouse’s interest in a trust may be an asset that is valued and then equalised by the courts. Determining value of an interest in a trust is a
fact-finding exercise. The court will examine the following questions. • What position does the spouse have in rela - tion to the trust? Are they the settlor, a trustee or a beneficiary? • If the spouse is a trustee, do they have the power to remove other trustees at their dis - cretion? • Is the spouse a trustee and a beneficiary? • If the spouse or a related entity owned by the spouse is a beneficiary, have there been distributions to beneficiaries over the lifespan of the trust? • How did the spouse obtain their interest in the trust? In many jurisdictions in Canada, if the spouse obtained their interest by way of gift or inheritance, it may be excluded from the calculation of their net family property – regardless of the nature of their interest. Equitable trusts arising from unjust enrichment are remedies available both as a matter of com - mon law and, in some jurisdictions, by statute. In addition to the traditional equitable remedies of resulting and constructive trust, the Supreme Court of Canada has expanded the reach of equitable claims and created a common-law finding of Joint Family Venture (JFV). A JFV finding allows the court to expand the reach of traditional trust remedies when the nature and dynamic of the spouse’s contribution is not specifically tied to an identified asset. A find - ing of JFV requires the parties to have engaged in a joint economic enterprise. The determina - tion involves many of the traditional considera - tions for a constructive trust remedy but, again, relieves the trier of fact of the obligation to attach those contributions to a specific asset. This has been an important development for non-married spouses.
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