Matrimonial Property Rights

• Author: Julien D. Payne/Marilyn A. Payne
• Pages: 564-632

 

MATRIMONIAL

PROPERTY RIGHTS

A. PROVINCIAL AND TERRITORIAL LEGISLATIVE

DIVERSITY

Over thirt y years ago, the Supreme Court of Canada in Mu rdoch v. Mur-

doch concluded that a wife who had worked alongside her husband in the

f‌ields was not entitled to any interest in the r anch that had been origin-

ally purchased with his money. Her homemaking role and hard physical

labour on the farm counted for nothing. Se veral years later, the Supreme

Court of Canada saw the error of its ways and i nvoked the doctrine of

unjust enrichment to enable wives and unmarried cohabitants to share

in propert y acquired or preser ved by their part ners during cohabitation .

In the meantime, provincial legislatures introduced statutory reforms

to ameliorate the harshness of the Murd och decision so far as married

couples are concerned.

Every province and territory in Ca nada has enacted legislation to es-

tablish proper ty-sharing right s between spouses on ma rriage breakdown

or divorce and, i n some provinces, on death.

 (), R.F.L. (S.C.C.).(),R.F.L.(S.C.C.).

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

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

R.F.L. (d)  (S.C.C.). And see Ch apter , Section E.

 SeeSee Matrimonial Property Act, R.S .A. , c. M-; Family Relations Act, R.S.B.C.,

, c. , Part ; Marital Prope rty Act, C.C.S.M. c. M;Marital Proper ty Act,

564

565Matrimonial Property Rights

ree fundamental que stions require consideration in any attempt to

divide proper ty between spouses on the termination of t heir relationship.

ey are as follows:

(i) what kind of proper ty falls subjec t to division?

(ii) how is the proper ty to be valued? and

(iii) how wi ll the sharing of prop erty be achieved?

In some provinc es and territories, a wide judicial d iscretion exis ts

and distinction s are drawn between “family a ssets” that both spouses use

and “business” or “commercial” asset s 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 the value of propert y, as distinct f rom the property it self,

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

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

both of them.

Provincia l and territoria l matrimonia l property statutes usually ex-

clude premarital assets from div ision and also certain postma rital assets,

such as third-party g ifts or inheritances and da mages or monetary com-

pensation received by a spouse from a third part y as a result of personal

injuries.

Statutory proper ty-sharing reg imes are not dependent on wh ich

spouse owned or acquired the assets. Prior to ma rriage breakdown,

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

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

holding spouse from disposin g of or encumbering the matrimonial home

without the consent of his or her spouse.

Many issues re specting propert y sharing bet ween spouses remai n

unresolved by existing leg islation. For example, complicated valuation

and distribution problems can a rise with respect to the shari ng of em-

S.N.B. , c. M-.; Family Law Act, R. S.N.L. , c. F-, Part I (Matr imonial

Home), Part II (Matrimoni al Assets), Part IV (Domest ic Contracts); Matrimonial

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

mestic Contract s), Part III (Family Proper ty), Part IV (Family Home); Family Law

Act, R.S.O. , c. F., Part I (Fami ly Property), Part II (Matri monial Home), Part

IV (Domestic Contrac ts);Family L aw Act, S.P.E.I. , c. , Part I (Fam ily Prop-

erty), Part II (Fam ily Home), Part IV (Domestic Contracts), Civil Cod e of Québec,

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

Property and Su pport Act, R.S.Y. , c. , Part I (Family A ssets), Part  (Family

Home), Part , ss.  and – (Domes tic Contracts). Many of the aforementione d

statutes have been a mended from time to time.

566 CANADIAN FAMILY LAW

ployment pensions, other than the Canada Pension Plan, which is subject

to a splitting of credits on marr iage breakdown. Canadian cou rts are also

still g rappling with the pract ical problems of property sha ring when one

of the spouses is in business and the dissolution of that business would re-

duce or eliminate that spouse’s income-earning potential and cons equen-

tial ability to provide spousa l or child support on the breakdown of the

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

and other problems in their attempt to give ef‌fect to equa lity between

spouses in t he division of propert y or its value on marri age breakdown.

Because the relevant provincia l and territorial statutes dif‌fer ma rk-

edly in cont ent and approach, it is impossible to provide a comprehensive

analysi s of the diverse provi ncial matrimon ial property re gimes in the

following pages. e authors will consequently focu s on the Ontario stat-

ute, which represents the most comprehensive provincial legislation on

matrimonia l property rights i n Canada.

) Int roduc tion

In , the province of Ontario enacted the Family Law Reform Act to

ameliorate the hardship and injust ice arising under the doctrine of sep-

aration of proper ty, whereby each spouse reta ined his or her own prop -

erty on the breakdown or dissolution of ma rriage. Section  of the Family

Law Reform Act, empowered a court to order a div ision of “family

assets” a nd, in exceptional circ umstances, a div ision of non-family as sets

on marriage breakdown, regardless of which spouse was t he owner of the

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

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

and other assets ordina rily used or enjoyed by the family, but no interest

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

As of  March , Part I of the Family Law Act eli minated the

former distinction bet ween “family assets” a nd “non-family asset s” by

providing for an equalization of the value of all assets accumulated by

either spouse during the marriage in the event of marriage breakdown

or death.

 S.O.,c..S.O. , c. .

 R.S.O.,c.F..Forproposedchanges,seeOntarioLawReformCommission,R.S.O. , c. F.. For proposed changes, s ee Ontario Law Reform Commi ssion,

Report on Family Property L aw (including Executive Sum mary) (Toronto: Ontario

Law Reform Commis sion, ); see also Ontario Law Reform Comm ission, e

Rights and Responsib ilities of Cohabitants und er the Family Law Act (includ ing

Executive Summ ary) (Toronto: Ontario Law Reform Commis sion, ).