Provincial matrimonial property legislation gives a spouse the right to apply to court for a matrimonial property order. The courts are given wide latitude in the kinds of orders that they can make to give effect to the division of assets.133The court may order that a spouse pay a sum
of money to the other spouse or that a security or charge be given on a spouse’s property to secure an obligation to pay. A court may also make an order vesting property in a spouse. The nature of the order granted and the timing of the events are of critical importance when the spouse who owns the assets goes bankrupt.
The Supreme Court of Canada in Maroukis v. Maroukis134examined the proprietary nature of a matrimonial property claim in bankruptcy. The Court held that the wording used in most models of matrimonial property legislation does not give a spouse any proprietary right to the property of the other spouse until the court makes an order vesting the property or creating some other proprietary right.135For this reason, the matrimonial property regimes are sometimes called deferred sharing regimes.
If a bankruptcy occurs before a court makes a matrimonial property order, the property of the owning spouse vests in the trustee in bankruptcy, and the court cannot thereafter make an order that gives the other spouse a proprietary right in this property.136Although matrimonial property legislation does not give the spouse any proprietary right before an order is made, the spouse may assert a proprietary claim to it on some other basis such as a resulting or constructive trust.137Many matrimonial property orders do not confer a proprietary right on a spouse who is entitled to a share of the property. This depends very much on the nature of order granted by the court. An order that merely requires that a spouse pay a sum of money to the other creates only a personal right that does not give the claimant any right in the other spouse’s property.138The order will have a proprietary effect only if it vests property in the claimant or if it creates a charge on the property to secure an obligation to pay. An order may transfer property to a spouse while also ordering him or her to pay a sum of money to the other spouse. The transfer in this case is conditional, so that no right is acquired in the property until the money obligation is satisfied. If the
spouse given the entitlement to the property goes bankrupt before satisfying the...