This comment looks at two fairly recent decisions by the Ontario Court of Appeal, Townshend v Townshend (2012 ONCA 868) and Buttar v Buttar (2013 ONCA 617) with respect to the courts' handling of the exclusion of gifts under section 4(2) of Ontario's Family Law Act (RSO 1990, c F.3). In Ontario, gifts made by third parties outside the marriage to one spouse may be excluded from the calculation of a spouse's Net Family Property (NFP). Property may cease to be excludable if it is not kept separate or if it is used to the benefit of the family. In both Townshend and Buttar, the court had to grapple with fungible gifts and decide to what degree the gifts should be excluded from the NFP calculations. In both decisions, the courts relied upon a line of reasoning that placed too much weight on the intentions of the donor when deciding whether (or to what extent) to exclude the gifts while simultaneously undervaluing the subsequent behaviour of the donees after delivery of the gift. One worry these decisions raise is that, if donees of gifts may rely merely on the fact of a gift and not on their actions subsequent to delivery of the gift, litigants will become emboldened to find far more “gifts” among their property. Even more worrisome, however, is that the courts may be willing to grant exclusions regardless of post-delivery behaviour and thereby undermine the purpose of the NFP calculations: namely, as the preamble of the Family Law Act says, to allow the court to order an “equitable settlement of the affairs of the spouses”.
"Townshend v. Townshend & Buttar v. Buttar: Gifts, Exclusions, and Intentions"
Can J Fam L