Matrimonial Property Rights

• Author: Julien D. Payne/Marilyn A. Payne
• Pages: 695-773

695695

Cha pter 13

Matrimonial Property Rights

A. PROVINCIAL AND TER RITORIAL LEGISLATIVE

DIVERSITY

Over forty years ago, the Supreme Court of Canada in Murdoch v Murdoch1

concluded that a wife who had worked alongside her husband in the elds

was not entitled to any interest in the ranch that had been originally pur-

chased with his money. Her homemaking role and hard physical labour on

the farm counted for nothing. Se veral years later, the Supreme Court of Can-

ada saw the error of its ways and invoked t he doctrine of unjust enrichment

to enable wives2 and unmarried cohabitants3 to share in property acquired

or preserved by their partners during cohabitation. In the meantime, prov-

incial legi slatures introduced statutory reforms to amel iorate the harshness

of the Murdoch v Murdoch decision so far as mar ried couples are concerned.

Every province and ter ritory in Canada has enacted legislation to estab-

lish property-sharing rights between spouses on marriage breakdown or

divorce and, in some provinces, on deat h.4

1 (1973), 13 RFL 185 (SCC).

2 Rathwell v Rathwell(1978), 1 RFL (2d) 1 (SCC).

3 Pettkus v Becker, [1980] 2 SCR 834, 19 R FL (2d) 165; Sorochan v Sorochan,[1986] 2 SCR 38.

And see Chapte r 3, Section E.

4 See Matrimonial Property Act, RSA 2 000, c M-8; Family Law Act,SBC 2011, c 25, Part

5; Marital Property Act, CCSM c M 45; Marital Property Act, SNB 1980, c M-1.1 ; Family

Law Act, RSNL 1990, c F-2, Pa rt I (Matrimoni al Home), Part II (Matri monial Assets),

Part IV (Do mestic Contracts); Matrimonial Property Ac t, RSNS 1989, c 275; Family L aw

Act, SNWT 1997, c 18, Par t I (Domestic Contracts), Par t III (Family Prope rty), Part IV

(Family Home); Family Law Act, RSO 1990, c F.3, Part I (Fami ly Property), Part II ( Matri-

monial Home), Part I V (Domestic Contrac ts); Family Law Act, SPEI 1995, c 12, Part I

(Family Prop erty), Part II (Fami ly Home), Part IV (Domesti c Contracts); Civil Code of

Canadi an family law696

ree fundamental questions require consideration in any attempt to

divide property between spouses on the termination of their relationship.

ey are as follows:

1) What kind of proper ty falls subject to div ision?

2) How is the property to be va lued?

3) How will the sha ring of property be achieved?

In some provinces and territories, a wide judicial discretion exists and

distinctions are drawn between “family assets” that both 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 ter-

ritories, the courts are empowered to divide specic assets. In Ontar io, it is

the value of property, as di stinct from the property itself, that is shared; all

assets must be valued, a nd each spouse is presumptively entitled to an equ al

share in the value of t he assets acquired by either or both of them.

Provincia l and territorial matr imonial property statutes u sually exclude

premarital a ssets from division and also certa in postmarital assets, suc h as

third-party gifts or inheritances and damages or monetary compensation

received by a spouse from a th ird party as a result of personal inju ries.

Statutory propert y-sharing regimes are not dependent on which s pouse

owned or acquired the assets. Prior to marriage breakdown, however, the

control and management of an asset i s legally vested in the owner. Provi ncial

and territorial statutes, nevertheless, prohibit a title-holding spouse from

disposing of or encumbering the matrimonial home without the consent of

his or her spouse.

Because the relevant provincial and territorial statutes dier markedly

in content and approach, it is impossible to provide a comprehensive analy-

sis of the diverse provincial matrimonial property regimes in the following

pages. e authors will consequently focus on the Ontario statute, which

represents the most comprehensive provincial legislation on matrimonial

property rig hts in Canada.

Québec, SQ 1991, c 64, Book 2 ; Matrimonial Property Act, 1997, SS 1997, c M-6.11; Family

Property and S upport Act, RS Y 1986, c 63, Part I (Fami ly Assets), Part 2 (Fami ly Home),

Part 4, ss 1 and 5 8–65 (Domestic Cont racts). Many of the aforementi oned statutes have

been amended f rom time to time. As to Fir st Nations communities c hoosing to create

their own m atrimonial rea l property laws, s ee Family Homes on Reserves a nd Matrimon-

ial Interests or Rights A ct, SC 2013, c 20; McMurter v McMurter, 2016 ONSC 12 25.

Chapter 13: Matrimonial Property Rights697

1) Introduction

In 1978, the province of Ontar io enacted the Family Law Reform Act5 to amel-

iorate the hardship and injustice arising under the doctrine of separation

of property, whereby each spouse retained his or her own property on the

breakdown or dissolution of m arriage. Section 4 of the Family La w Reform Act,

1978 empowered a court to order a division of “family assets” and, in excep-

tional circu mstances, a division of non-fa mily assets on marr iage breakdown,

regardless of which spouse 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 other assets ordinarily used or

enjoyed by the family, but no interest in business a ssets would be granted to

the non-owning s pouse.

As of 1 March 1986, Part I of the Family Law Act6 eliminated the former

distinction bet ween “family assets” a nd “non-family assets” by providing for

an equali zation of the value of all assets acc umulated by either spouse duri ng

the marri age in the event of marriage breakdow n or death.

2) Objectives of Family La w Act

In general terms, the fundamental objective of Part I of the Family Law Act

is to ensure that on mar riage breakdown or death each spou se will receive a

fair share, whic h will usual ly be an equal share, of the value of as sets accumu-

lated during the cour se of matrimonial cohabitation. u s, section 5(7) of the

Family Law Act provides as follows:

(7) e purpose of this section is to recognize that child care, household

management and nancial provision are the joint responsibilities of the

spouses and th at inherent in the marital re lationship there is equa l contri-

bution, whether na ncial or otherwise, by t he spouses to the assumption

of these responsibilities, entitling each spouse to the equalization of the

net family proper ties, subject only to the equitable considerations set out

in subsection (6).

is provision does not empower a cour t to deviate from the norm of equal

division in the absence of circumstances that justify a nding of uncon-

scionability within the meaning of section 5(6) of the Family Law Act.7 As

Hughes J, of the O ntario Superior Court of Justice, observed i n Janjua v Khan,

5 SO 1978, c 2.

6 RSO 1990, c F.3.

7 Brett v Bret t (1999), 46 RFL (4th) 433 (Ont CA ); Fielding v Fielding, 2015 ONCA 901. See,

generally, Sec tion A(10)(a), below in this chapter.