Preserving Assets: Non-Depletion or Non-Dissipation Orders
How can I prevent my spouse from selling their assets when they owe me an equalization payment?
Sometimes when a marriage ends, one spouse may start selling their assets or spending money recklessly. In these situations, it is possible to apply to the court for an order preventing your spouse from disposing of their property. These orders are known commonly as "restraining orders," "non-depletion orders," "non-dissipation orders," and "preservation orders."
What is the difference between a "restraining order" and "preservation order?"
A "restraining order" related to property is is brought under section 40 of the Family Law Act, and restricts a spouse's ability to sell property or otherwise deplete their assets. A "preservation order" is essentially the same.
The main difference is that a "preservation order" is brought under section 12 of the Family Law Act, and is specifically related to equalization payments. These orders are given to ensure that if an equalization payment is to be paid, there are enough assets available to satisfy that payment.
The terms "non-depletion" and "non-dissipation" are common terms used for orders restricting a spouse's ability to dispose of property or deplete their assets. These terms are used interchangeably to describe both "restraining orders" for property and "preservation orders."
If the court believes that it is necessary for the protection of the other spouse's interests, it may make an order restraining the depletion of a spouse's property, and may also order the spouse to deliver the property into the possession of the court for safekeeping.
How do courts determine whether to grant a non-depletion order?
Regardless of whether an application for a non-depletion order is brought under section 12 or section 40 of the Family Law Act, the courts will use the same test to determine whether to grant the order or not. They will generally look at the following three factors:
The relative strength of the plaintiff's case: The courts look at the situation as a whole, and determine the strength of the spouse's claim for equalization. If an equalization payment is likely, or has already been ordered, it will weigh in favour of the spouse asking for the order.
The balance of convenience or inconvenience: The court will consider the effects of granting, and not granting the order on each party.
Irreparable harm: The court will look at whether granting the order or not will cause one of the parties to suffer irreparable harm. This involves assessing the risk of one spouse depleting the assets to the point where there is nothing left for an equalization payment. If the court determines from the evidence that there is a real risk that this will happen, they will likely make a non-depletion order.