The Ontario Court of Appeal recently affirmed a decision in which the husband was found to be the beneficial owner of the marital home, even though the home was held in the wife’s name.
The couple married in 2003 and separated in 2013. The wife worked as a teacher throughout the relationship. The husband was employed at the beginning of the marriage but at a later point, he left his employment to devote his full-time efforts to the parties’ family enterprise of buying, fixing and selling real estate properties. The wife earned a higher income for most of the marriage.
The issue at trial was the equalization of net family property. The main point of contention was the value of the matrimonial home and whether it was held beneficially by both parties, or whether the wife was the sole owner because she alone was on title as the owner.
The trial judge found that the husband was a beneficial owner of the matrimonial home. As a result, the husband was ordered to pay the wife an equalization payment of almost $60,000. The trial judge awarded costs against the wife in the amount of $50,000.
On appeal, the wife argued that the trial judge erred in finding that the husband was a beneficial owner of the matrimonial home. She also argued that because she had contributed more to the assets of the marriage, she should be entitled to a greater share under anunequal division of the net family property pursuant to the Family Law Act (“FLA”).
At the outset, the court noted that the matrimonial home was purchased solely in the wife’s name. The wife argued that this fact and the fact that she contributed a disproportionate share of the mortgage and carrying costs should have been sufficient to demonstrate that the parties intended from the outset that she would be the sole beneficial and legal owner of the matrimonial home.
In reviewing the trial judge’s finding, the court found that the trial judge had correctly stated that the first step towards calculating any equalization payment is the determination of each party’s net family property, which includes resolving all questions of title to property including any trust claims advanced.
The court further found that the trial judge had correctly found that the wife had not rebutted the presumption of a resulting trust in favour of the husband and that he had gifted his interest in the property to her by stating:
“…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.”
The appeal court found that there was ample evidence at trial to ground this conclusion and there was no basis for intervention by the court.
Furthermore, the court stated that the FLA 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. The court then stated: “In giving effect to the legislature’s intent, it is not the role of the court to weigh the actual contributions made by each spouse or to ‘alleviate every situation that may be viewed as in some ways unfair or inequitable’”. As a result, the court explained that equalization is mandatory, subject only to the exception set out in the FLA and to the provisions of any applicable and valid domestic contract between the married spouses.
Finally, the court rejected the wife’s argument that the trial judge erred in failing to award her an unequal division of the net family property under the FLA. It stated that the test to be applied in ordering an unequal division of NFP is not “mere unfairness” but “a shock to the conscience”, which was not true of this case.
As a result, the court dismissed the appeal.
At Feigenbaum Law, our goal is to help you move forward following the breakdown of a relationship while retaining as much financial stability as possible and ensuring your children are provided for. Mark Feigenbaum is able to counsel his clients on all potential risks that may result from a family law dispute, not just those related strictly to the breakdown of a marriage. Contact Mark online or call him at (905) 695-1269 or toll-free at (877) 275-4792 to book a consultation.