Court questions basis for vesting orders transferring entire property interests to spouse
The Ontario Court of Appeal has set aside vesting orders transferring full ownership interests in a family cottage and company shares to one spouse, finding that the motion judge failed to explain the basis for granting the orders.
In Schuringa v. Svetkoff, 2026 ONCA 682, the court allowed a husband's appeal against an order issued during family law proceedings involving his former spouse.
The parties separated in December 2020 and entered into a separation agreement in December 2022. The agreement required the husband to transfer 50 percent of his shares in a company to his former spouse and provided that their family cottage would remain jointly owned until a triggering event occurred.
In November 2025, the wife sought urgent vesting orders after learning that a creditor had initiated receivership proceedings involving her former husband and corporations associated with him.
The motion judge granted the application, vesting the husband's entire interest in the cottage and company shares in his former spouse. The order also directed that all proceeds from disposing of the assets go to her.
On appeal, the husband challenged the motion judge's jurisdiction to issue the vesting orders, the adequacy of his reasons and whether the orders improperly sought to defeat creditor claims in a prospective bankruptcy.
The appeal court identified uncertainty surrounding the statutory authority for the orders under the Family Law Act and the Courts of Justice Act.
It noted that the parties had already agreed on their property division and that the wife sought to enforce their separation agreement rather than pursue equalization.
The court also found that the motion judge's brief endorsement failed to explain why the wife should receive both assets in their entirety.
"Given the uncertainty relating to the motion judge's jurisdiction to make the orders he did, he was obliged to explain the basis for the vesting orders he issued, but he failed to do so," the court wrote.
The court declined to determine whether the motion judge lacked jurisdiction or whether the orders improperly defeated creditor claims.
It set aside the vesting provisions and the original costs award, ordering the wife to pay her former husband's appeal costs.
