Spouse Who Made More Money Tries To Obtain Full Ownership Of Home

Written on behalf of Arbesman Hamilton LLP

The matrimonial home is among the most valuable assets a family has. Understandably, what happens the family home (as well as other property) when a couple goes through a separation or divorce can cause quite a bit of stress and concern. A recent decision issued by the Court of Appeal for Ontario looks at whether a spouse who earned a higher income can claim an unequal portion of the value of a matrimonial home.

The original trial

The couple were married on August 10, 2003 and separated on September 2, 2013. Throughout their marriage the wife worked as a teacher while the husband worked for a short time but eventually left his job to devote himself full-time to the parties’ family business of buying, fixing, and selling real estate. During this time the wife earned a higher income than the husband.

The only issue at the original trial was that of the equalization of net family property (“NFP”), and specifically as it applied to the matrimonial home, which experienced a significant increase in value since the parties separated. The wife was the only person named on the title of the home. She argued that because of this, as well as her status as the higher earner in the family, that she should be entitled to a greater share of the home than the husband.   

The outcome of the original trial saw the judge finding that the husband was a beneficial owner of the matrimonial home.

The wife appealed the original decision, suggesting that the trial judge erred on four grounds, with the main ground of appeal being that the trial judge erred in finding that (the husband) was a beneficial owner of the matrimonial home;

Beneficial ownership of the home

The court spent much of its written decision focusing on the wife’s argument that the husband should not be considered a beneficial owner of the family home. She argued the home was purchased solely in her name, and she paid a disproportionate share of the mortgage and carrying costs of the home during the marriage. She acknowledged that while she expected the value of the home on the date of separation to be equalized, she should be entitled to its entire post-separation increase in value.

The court agreed with the wife that if there were no resulting trust, she would be entitled to any money earned from the increase in the value of the home. The court looked to a 2015 Ontario Court of Appeal decision which held that in situations such as this, it is up to the wife to rebut the presumption of a resulting trust. The trial judge determined she did not, writing,

“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. (The husband) 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.

“[T]he court does not conduct itself with how parties conduct their affairs while cohabiting. I have not accepted [the wife’s] attempt to claim a greater portion of family assets based on a higher percentage of contribution by her during the 10-year relationship.

“The purpose of this section is to recognize that child care, household management and financial provision are the joint responsibilities of the spouses and that inherent in the marital relationship there is equal contribution, whether financial or otherwise, by the spouses to the assumption of these responsibilities, entitling each spouse to the equalization of the net family properties, subject only to the equitable considerations set out in subsection (6). [Emphasis added.]”

The court upheld the trial judge’s decision and recognized the husband as the beneficial owner of the family home. This case is an excellent reminder of the importance of being properly represented in family law matters. Had the wife had a lawyer, she likely would not have made the argument for an unequal division of property based on her higher income. The exceptional team of lawyers at Arbesman Hamilton LLP have built strong long-term relationships with our clients, keeping them well-informed about their options and their best way forward through whichever family law issues they are working through. Please call us at 416-481-5604 or reach us online to schedule a consultation today.