Treat Yourself! But Remember, It’s Not a “Third-Party Gift” if You Paid for It

By Rebecca Winninger, Senior Associate Research Lawyer, Lam Family Law*

The ONCA recently confirmed that when a spouse characterizes corporate shares as excluded property for net family property (“NFP”) purposes, it may not be enough that the shares themselves were gifted from a third party if the spouse was actually the original source of funding for the corporation.

In Najm v. Najm, 2026 ONCA 13 (CanLII), the husband wanted to exclude shares in a company called Safina Canada, a real estate holding company incorporated by the husband’s father. The husband and his brother inherited the business on the father’s death. The documentary evidence confirmed the father was the incorporator, and he transferred shares to the husband and brother during his lifetime and at death. However, there were no records showing that the father used his own funds to finance the company when it was incorporated, which the expert witnesses of both parties acknowledged. At the time of incorporation, the husband was aware of the concept of “excluded property”. The parties had already separated once, and consulted senior family lawyers. He had reason to take steps at that time to insulate himself financially from the wife’s claims, and had carefully documented the source of other excluded property (see the trial decision, 2024 ONSC 2053, at paras 122-125).