Can A Husband Who Earned Less Income Than Wife Maintain Beneficial Ownership Of Home?

Written on behalf of Arbesman Hamilton LLP

When a couple goes through separation or divorce, it’s not uncommon for there to be disputes about who owns what, or who owes who money. Courts will often look towards finding an equalization of net family property (“NFP”) in which the courts assess the assets and debts of the couple and order one spouse to pay the other to equalize the value held by each spouse. This often includes the marital home, which is often sold, or purchased by one of the parties to the separation/divorce. In a recent case before the Ontario Court of Appeal, one party to the marriage sought to overturn a previous decision that found her husband to be the  beneficial owner to the marital home, even though it was held in her name alone.

A brief background summary

The husband and wife were married on August 10, 2003, and separated on September 2, 2013. During much of the relationship the wife earned a higher income. She was employed as a teacher, while the husband left work full-time in order to manage the couple’s hobby of buying, fixing, and selling houses. The couple’s home was held in the wife’s name alone. At trial, the husband was found to be a beneficial owner of the home, meaning he was entitled to any appreciation in the value of the home after their separation, which occurred three years prior to the trial.

At appeal

During appeal, the wife argued that the fact she contributed a disproportionate share of the mortgage and carrying costs of the home should have been sufficient to demonstrate that the intent of the parties from the beginning of their marriage was for the wife to be the sole beneficial and legal owner of the home. She accepted that the value of the home on the date of separation should be equalized, but that any increase in value since then should be enjoyed by her alone.

The court found that the trial judge did not make an error in determining the husband to be a beneficial owner. When situations such as this arise, the courts must apply a presumption of a resulting trust, meaning the husband was presumed to be a beneficial owner. It was then up to the wife to rebut this position. The court summarized the law, stating “The (Family Law) Act thus requires that the net family property of each spouse be shared equally upon marriage breakdown, based on a presumption that the spouses contributed equally during the marriage.”

In this case, the court agreed with the trial judge’s finding that the couple were involved in a joint financial venture, meaning the husband did contribute to the household. The original decision stated,

“the historic property dealings between these two parties from the date of marriage is inconsistent with any other conclusion but that they were involved in a joint financial venture. Mr. Gionet testified that they would purchase, fix and then sell properties, hopefully at a profit. Title to the properties was taken in the name of one or both or a company interchangeably. Funds to purchase the properties came from joint sources.”

The court found the trial judge’s conclusion to be “entirely consistent with the purposes of equalization under the Act,” which recognizes the contributions of those who work within the home, providing child care and household management.

The appeal was dismissed, though there was no award for costs, as the husband did not ask for any.

At Arbesman Hamilton LLP, our experienced and professional team of family law lawyers have an extensive knowledge of the family law system within Canada and Ontario. We offer our clients exceptional service through by combining big firm results with a small firm relationship. Our lawyers are forward-thinking, adaptable, and innovative. We work to protect our clients’ rights in a way that is meant to avoid costly litigation, but we will fight tirelessly on their behalf when necessary. Please call us at 416-481-5604 or reach us online to see how we can assist you in your family law matter.