A Matrimonial Home In-Law

In Gains v. Jackman, a judgment released late last month by the Ontario Superior Court of Justice, Paul David-Gains who was involved in matrimonial litigation was awarded a 50% interest of his matrimonial home. While regularly such a judgment would be common procedure in Ontario, this case is unique because the home in which Paul was awarded 50% interest was actually owned by Gloria and Peter Jackman, his ex-wife’s parents.

His ex-wife, Elizabeth, along with her parents explained that the property was purchased by the Jackmans because Paul and Elizabeth failed to qualify for a mortgage. They argued that their intention was that Elizabeth and Paul would be living in the home as tenants.

The Court considered the following evidence:

(1) the closing funds for the house were provided by Paul and Denise;
(2) Mortgage payments on the house were being made weekly by Paul and Elizabeth (and that if they had no interest in the home, they would have elected a monthly mortgage payment, especially in light of their financial circumstance);
(3) Paul was making payments to Elizabeth marked “mortgage payments” not “rental payments”;
(4) When the couple briefly separated in 2002, Elizabeth made a list of her assets and included the home on the asset list; and
(5) Several witnesses, who were friends of the couple, testified that Paul and Elizabeth held themselves out to be owners of the home.

In taking the above into account, the Judge concluded that a constructive trust had been established, and that the property was in fact a matrimonial home as defined in the Family Law Act. Accordingly, in spite of his former-in laws being the registered owners, Paul was entitled to a one half interest in the property.

A full text version of Gains v. Jackman can be found here.

- Annie Noa Kenet, Toronto

Visit our Toronto Law Firm website: www.wiselaw.net

EMPLOYMENT LAW • CIVIL LITIGATION • WILLS AND ESTATES • FAMILY LAW & DIVORCE

Ontario Appeal Court Revisits "Matrimonial Home Exception" in Calculating Equalization of Net Family Property

What do the equalization provisions of Ontario's Family Law Act provide regarding a home that was owned by one spouse on the date of marriage, occupied by the parties as a matrimonial home thereafter, but sold prior to separation?

The Court of Appeal for Ontario briefly revisited this question in Gervasio v. Gervasio, a decision released last Thursday.

The Court reiterated that a deduction for the home's value on the date of marriage is, in fact, allowable, in calculating the net family property of its owner.

The Court affirmed its 1999 decision in Nahatchewitz v. Nahatchewitz, where it had noted that the matrimonial home "exception" under Section 18 of the FLA is applicable only to a property that continues to be occupied as a family residence on the date of separation.

If the property has been disposed of prior to separation, it does not qualify for this exclusion. The owner is thus entitled to deduct its value on the date of marriage - even if the proceeds of a sale of the property trace directly to a purchase of a successor home that is, in fact, occupied as a family residence on the separation date.

The Court's endorsement in Gervasio states:

...[The] respondent asserts that the trial judge erred by failing to afford him a deduction in the sum of $29,000 for his pre-marriage equity in the parties’ first home...

We are satisfied that the trial judge erred....

In respect of the respondent’s claim for a deduction on account of his equity position in the parties’ first home, we rely, in particular, on the decision of this court in Nahatchewitz v. Nahatchewitz, [1999] O.J. No. 3154.

In the 1999 Nahatchewitz ruling, Mr. Justice Gouge had stated, for the Court:

In this case, at the time of separation the Maurice Street property was not ordinarily occupied by the parties as their family residence. The fact that it had at one time prior to separation been so occupied is not enough to bring it within the legislative definition of matrimonial home.

I can find no policy basis to support the opposite conclusion for the Maurice Street property.

... the Family Law Act permits the husband to deduct the value of the Maurice Street property in calculating his net family property.

- Garry J. Wise, Toronto

Visit our Toronto Law Firm website: www.wiselaw.net

EMPLOYMENT LAW • CIVIL LITIGATION • WILLS AND ESTATES • FAMILY LAW & DIVORCE