BACKGROUND
The parties were married in October 1999 and separated in October 2019. There are no children of the marriage. However, both parties were married before and have children from their previous marriages.
The husband owned his own business, and the wife worked for her husband at his company. The husband gave the wife equity in the business, and she had significant control over same. In 2009, the business was sued. In April 2010, the husband transferred title of the matrimonial home to the wife. The parties closed the business around 2013. In October 2022, the wife opened her own consulting business.
ISSUES
The main issues in this case are:
- Did the husband gift the matrimonial home to the wife?
- Does the husband have the obligation to pay spousal support?
ANALYSIS
- Did the husband gift the matrimonial home to the wife?
The wife argues that the husband gifted the matrimonial home to her in order to (1) protect the home from creditors, and (2) protect the wife from the husband’s adult children and ex-wives. The husband agrees that he transferred the home in the wife’s name, but states that this was only done to protect the home from creditors. The husband maintains that he never intended to gift the home to the wife.
In general, a presumption of a resulting trust is the rule that applies to gratuitous transfers. When such a transfer is made, the onus will be on the transferee to demonstrate that a gift was intended. Otherwise, the transferee holds that property in trust for the transferor.
In order to establish a gift, the Court outlined 3 conditions that the wife had to satisfy: (1) the husband’s intention to make a gift, without consideration or expectation of renumeration; (2) the wife’s acceptance of the gift; and (3) a sufficient act of delivery or transfer of the property to complete the transaction.
In this case, it is clear that the wife accepted the transfer of title of the home, and title was delivered to her. So, the wife must establish, on a balance of probabilities, that the husband intended, at the time of the transfer, to gift the matrimonial home to her. If the wife cannot show this, then the husband will be the beneficial owner of one-half interest in the home and will be entitled to share in any post-separation increase in the home’s value.
The Court found that the husband transferred title of the matrimonial home to the wife to shield the home from the husband’s creditors due to the lawsuit against the husband’s business. However, the Court did not accept the wife’s position that the home was gifted to her.
The wife raised 2 points to defend her position. First, she argued that the husband did not ask to reverse the transfer of the home when the lawsuit was over, so the point of the transfer was not just to protect it from the lawsuit. Second, the wife was also a defendant in the lawsuit, so the home would not have been protected against creditors anyway.
The Court did not agree with the wife, as her argument that the husband was trying to protect her against his children and ex-wives is speculative. There is no evidence that the husband’s adult children claimed part of his estate or that the risk of an estate challenge was so high that he needed to transfer the home to her.
The Court also pointed out that the parties agreed that the transfer, at the time, was to protect the home from the lawsuit. Thus, even if this weren’t a perfect plan (because the plaintiff in the lawsuit could have enforced judgement against the wife and seized the home), the husband’s intention to gift is not present.
Thus, the Court found that the husband is a beneficial owner of one-half interest in the home.
- Does the husband have the obligation to pay spousal support?
In making a spousal support order pursuant to section 15.2(1) of the Divorce Act, courts shall take into consideration the condition, means, needs, and other circumstances of each spouse, including: (a) how long the spouses cohabited; (b) the functions performed by each spouse during cohabitation; and (c) any order, agreement, or arrangement relating to support of either spouse.
There are 3 parts to spousal support: entitlement, amount, and quantum.
Entitlement
There are 3 bases for spousal support: (1) contractual; (2) compensatory; and (3) non-compensatory. The wife seeks compensatory and non-compensatory support.
The goals of a compensatory award are to provide some compensation for economic loss or disadvantage experienced by the recipient spouse as a result of the roles adopted during the marriage or following separation. Compensatory spousal support also aims to compensate the claimant’s sacrifices and contributions that resulted in the payor’s economic benefits, for which the claimant has not been adequately compensated.
On the other hand, non-compensatory spousal support aims to (1) relieve any economic hardship of the spouses arising from the breakdown of the marriage, and (2) promote the economic self-sufficiency of the of each spouse within a reasonable period (Divorce Act, sections 15.2(6)(c)-(d)).
In this case, the wife worked exclusively for her husband’s business for about 15 years, and she was more than an employee in the business. This is because the husband gave her equity in the business, and she had significant control over same. Essentially, the wife made a significant contribution to the husband’s business. When the business closed, the wife used her own funds to pay some of the company’s debts. She also gained valuable work experience to be able to support herself when she started her own business in 2022.
Thus, the Court found that the wife is entitled to spousal support.
Quantum
The Spousal Support Advisory Guidelines (“SSAG”) provide guidance for the appropriate range of support according to the parties’ respective incomes.
In this case, the husband’s annual income of $61,000 and the wife’s annual income of $40,000 results in a SSAG range between $538 and $718.
The Court ordered spousal support in the low range because the wife had few economic disadvantages from the marriage, and she’s since overcome them. Essentially, the wife is able to meet her own needs from her own income.
Duration
The SSAG state that where the recipient’s age plus the duration of the relationship are greater than 65, spousal support for an indefinite period is appropriate. In this case, this test is met.
Thus, the wife is entitled to indefinite spousal support.
CONCLUSION
The husband is a beneficial owner in one-half interest in the matrimonial home. The wife is entitled to indefinite spousal support in the low range.