Matrimonial Property Rights

• Author: Julien D. Payne/Marilyn A. Payne
• Pages: 444-506

 

MATRIMONIAL

PROPERTY RIGHTS

A. PROVINCIAL AND TERRITORIAL LEGISLATIVE

DIVERSITY

Approximately th irty yea rs ago, the Supreme Cour t of Canada in Mur -

doch v. Murdochconcludedthatawifewhohadworkedalongsideher

husbandinthef‌ieldswasnotentitledtoanyinterestintheranchthat

had beenoriginally purchased with his money. Herhomemaking roleand

hard physical labour on the farm counted for nothing. Several years later,

the Supreme Court of C anada saw the error of its ways and invoked the

doctrine of u njust enrich ment to enable wivesand unmarried cohabit-

antsto share in property acquired or preser ved by their par tners during

cohabitation. I n the meant ime, provinc ial legis latures int roduced stat u-

tory reforms to amel iorate the harsh ness of the Murdoc h decision so far

asmarriedcouplesareconcerned.

Every province a nd territory in Canada has enac ted legislat ion to es-

tablish proper ty-sharing rights b etween spouses on marri age breakdown

or divorce and, in some provinces, on death.

 (),R.F.L.(S.C.C.).

Rathwell v. Rathwell (), R.F.L. (d)  (S.C.C.).

Pettkusv.Becker(),R.F.L.(d)(S.C.C.);Sorochan v. Sorochan ( ), 

R.F.L.(d)(S.C.C.). AndseeChapter,sectionE,“PropertyRights.”

 See Matrimoni al Property Act, R.S.A. , c. M-; Fami ly Relation s Act, R.S.B.C.,

,c.,Part;Marital Propert y Act,R.S.M.,c. M;MaritalP roperty



Matrimonial Property Rights

ree funda mental questions requ ire consideration in any attempt t o

divide propert y between spouses on the t ermination of their relation ship.

ey are:

i) what k ind of propert y falls subject to divi sion?

ii) how is the property to be va lued? a nd

iii) how will the sharing of propert y be achieved?

In some province s and territories , a wide judicial discretion ex ists

and distinctions are drawn between “family assets” thatboth spouses use

and “business” or “commercial” assets that are associated with only one

of the spouses. In others, no such distinctions exist. In most provinces

and territories, the courts are empowered to divide specif‌ic assets. In

Ontario, it is t he value of propert y, as distinc t from the propert y itself,

that is shared; all assets must be valued and each spouse is presumptively

entitled to an equal share in the value of the assets acquired by either or

both of them.

Provincia l and territorial matrimon ial propert y statutes us ually ex-

clude pre-marital assets from division and also certain post-marital as-

sets,suchasthirdpartygiftsorinheritancesanddamagesormonetary

compensation recei ved by a spouse from a th ird part y as a result of per-

sonal injuries.

Statutory proper ty-shari ng regimes are not dep endent on which

spouse owned or acqui red the asset s. Prior to marri age breakdown,

however, the control and management of an asset is legally vested in the

owner. Provincial and territorial statutes, nevertheless, prohibit a title-

holdingspouse from disposing ofor encumbering the matrimonial home

withouttheconsentofhisorherspouse.

Many issues respecting proper ty shar ing between spou ses remain

unresolved by existing legislation. For example, complicated valuation

and distribution problems can arise with respect to the sharing of em-

Act, S.N.B. , c. M-.; Fami ly Law Act,R.S.N.,c.F-,Part I (Matrimonial

Home), Part II (Matrimonia l Assets), Part IV (Domestic Contrac ts);Mat rimonial

PropertyAct, R.S.N.S. , c. ;Famil y Law Act, S.N.W.T. ,c . , Part I (Do-

mestic Contracts), Par t III (Family Property), Part I V (Family Home); Family Law

Act, R.S.O. , c. F., Part I (Family Property), Part II (Matrimonia l Home),Part

IV (Domestic Contrac ts);Fa mily Law Act, S.P.E.I. ,c. , Part I (Family Prop-

erty), Part II (Fam ily Home),Pa rt IV (Domestic Contracts), Civil Code of Québec,

S.Q.,c.,Book;Matrimonial Property Act, , S.S. , c. M--; Family

Property and Support Act,R.S.Y.,c.,Part I (Family Assets),Part(Family

Home), Part , ss.  & – (Domestic Contr acts). Many of the aforementioned

statutes have been amended f rom time to time.

 CANADIAN FAMILY LAW

ployment pensions, other than theCanada PensionPlan which is subject

to a splittingof credits on marriage breakdown. Canadian courts are also

still g rappling wit h the practica l problems of property sharing w hen one

of the spouses is in business and the dissolution oft hatbusiness would re-

duceor eliminate thatspouse’s income-earningpotential and consequen-

tial abil ity to provide spous al or child suppor t on the breakdown of the

marriage. For the most part, however, courts are coping well with these

and other problems in t heir attempt to give ef‌fec t to equalit y between

spouses in t he division of property or its v alue on marriage breakdown.

Because the relevant provinc ial and terr itorial statutes dif‌fer mark-

edly in content a nd approach, it is impossible to provide a comprehensi ve

analysi s of the diverse prov incial matr imonial proper ty regime s in the

following pages. e authors will consequently focus on t he Ontario stat-

ute which represent s the most comprehensive prov incial leg islation on

matrimonia l property rights in C anada.

B. FAMILY PROPERTY RIGHTS IN ONTARIO

) Introduct ion

In , the Province of Ontario enacted the Family Law Reform A ctto

ameliorate the ha rdship and injustice ar ising under the doc trine of sepa-

ration of propert y, whereby each spouse ret ained his or her own propert y

on the breakdownor dissolutionof marriage. Section  of the Family La w

Reform Act, empoweredacourttoorderadivisionof“familyas-

sets” and, in exceptional circumstances, a division of non-family assets

on marriage brea kdown, regardless of which spous e was the owner of the

assets. Generally speaking, a non-owning spouse would be granted an

equal share of the family assets, which included the matrimonial home

and otherassets ordinarily used or enjoyed by the family, but no interest

in business assets would be granted to the non-owning spouse.

As of  March , Part I of the Family L aw Act eliminated t he

former distinction between “family assets” and “non-family assets” by

providingforanequalizationofthevalu e of all assets accumulated by

 S.O.,c..

 R.S.O.,c.F..Forproposedchanges,seeOntario LawReformCommission,

Report on Family Property Law (i ncluding Executive Sum mary) ();s ee also

Ontario Law Reform Comm ission, e Rights and Responsibilities of Cohabitants

under the Family Law Act (including Exec utive Summary) ().