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 a go, the Supreme Court of Canada in Murdoch v Murdoch1

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

was not entitled to any interest in the ra nch that had been originally pu r-

chased with h is money. Her homemaking role and hard physica l 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 un married cohabita nts3 to share in propert y acquired

or preserved by their pa rtners during coh abitation. 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 enacte d legislation to estab -

lish property- sharing r ights between spouses on ma rriage 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 i n any attempt to

divide propert y between spouses on the ter mination of their rel ationship.

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 terr itories, a wide judicia l discretion ex ists and

distinctions a re drawn between “ family ass ets” that both spouses use a nd

“business” or “commercia l” assets t hat are associated w ith only one of the

spouses. In others, no such d istinctions ex ist. In most provinces and ter-

ritories, the court s are empowered to divide spec i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-par ty gifts or i nheritances and da mages 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 as sets. Prior to marr iage breakdown, howeve r, the

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

and territoria l statutes, neverthe less, prohibit a title-holding spouse from

disposing of or encumb ering the matr imonial home without the consent of

his or her spouse.

Because the releva nt provincial and ter ritorial stat utes dier marked ly

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

sis of the diverse provi ncial matri monial property regimes in the follow ing

pages. e authors will conse quently focus on the Ontar io statute, which

represents the most comprehensive provinci al legislation on mat rimonial

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 Rights 697

1) Introduction

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

iorate the hardship and injust ice arising under t he doctrine of separat ion

of property, whereby each spouse reta ined his or her own propert y on the

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

1978 empowered a court to order a d ivision of “fam ily assets” and, in e xcep-

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

regardless of which sp ouse was the owner of the a ssets. Generally spe aking,

a non-owning spou se would be granted an equ al share of the fami ly assets,

which included the mat rimonial home and other a ssets 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 t he Family Law Act6 elimi nated 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, t he fundamental objective of Part I of the Family Law A ct

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 t his section is to rec ognize th at child care, hous ehold

management and  nancial prov ision are the joint resp onsibilities 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 responsibi lities, entitl ing each spouse to t he equaliz ation of the

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

in subsection (6).

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

division in the ab sence of circumstances t hat justify a  nding of uncon-

scionability w ithin the meani ng 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.