Family Law

Family Property Division

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Disclaimer

The following is no substitute for advice provided by a lawyer specifically for you. It is intended only to help you understand that advice. No responsibility is taken for any problems arising except due to paid legal advice.

©1996 Jaques Law Office. All Rights Reserved.

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Introduction

Since 2005, we focus on Real Estate, Wills and Estates, and Small Business. We have left this web page in place as a public service.

Prior to 1978, Saskatchewan was a separate property regime. Even if you were married, both spouses had the capacity to own property separately from each other, or jointly if they chose, just as if they were strangers or business partners. At that time, to divide family property, normal doctrines like contract, gift, partnership, and so forth were used to decide which spouse owned what. There were presumptions to assist the court. Other doctrines like trusts, implied trusts, resulting trusts, constructive trusts were being expanded to address what was generally felt to be the unjust result that the husband often got all or most of the property.

The Matrimonial Property Act (now known as the Family Property Act) was passed in 1978. Essentially, it provides that Saskatchewan is still a separate property regime. But, on the application of either legally married spouse, a superior court judge is given the power to rearrange who owns what. The judge must begin with a presumption of an equal split between the parties, but can, in the right carefully described circumstances, move away from that presumption in order to do justice. The power to contract out of the regime is preserved, but limited, with special safeguards required.

It isn't the same as The Homestead Act. That Act gives a non-owning spouse veto power over any deal which would dispose or encumber the land which is the 'home quarter'. In other words, if the deal involves the land on which the parties live or lived as man and wife, then that land, up to one quarter section in size, is protected by the Act. The Act does not create any property interest however, or right to change any property interest. It just provides for the veto, and how it may be over-ridden.

Procedure

See our page on family law procedure. It is simply a specialized form of normal civil procedure.

Definition - First, Figure Out What Is The Property

Essentially, any property owned or controlled by either spouse, is matrimonial property. The exact definition is:

(h) "matrimonial property" means any real or personal property whatsoever, regardless of its source, kind or nature, that, at the time an application is made under this Act, is owned, or in which an interest is held, by one or both spouses, or by one or both spouses and a third person, and, without limiting the generality of the foregoing, includes:

(i) a security, share or other interest in a corporation or an interest in a trust, partnership, association, organization, society or other joint venture;

(ii) property over which a spouse has, either alone or in conjunction with another person, a power of appointment exercisable in his favour;

(iii) property disposed of by a spouse but over which the spouse has, either alone or in conjunction with another person, a power to consume, invoke or dispose of the property;

(iv) property mentioned in section 28;

It may seem trite, but property owned by a non-spouse, is not matrimonial property. Although many laws have an 'equivalent to married' clause, The Matrimonial Property Act did not until 2001. Unmarried cohabitants fell under almost the same legal regime that spouses did before this Act. But, if the divorce has been granted, and nobody has applied to split the property, it is too late!

Exclusions - Next, Take Out the Exempt Property

Property Brought Into The Marriage

Whatever you own when you marry, is exempt from the Act. You are entitled to take it with you when you leave the marriage.

That does not apply to goods acquired before the marriage by gift or inheritance which was intended to benefit both spouses.

Nor does it apply to the Matrimonial Home or to the Household Goods. Therefore, if you are planning to marry, don't cash in your mutual fund to buy a house till after the ceremony. The exact definition of these is:

(e) "household goods" means personal property that is ordinarily used, acquired or enjoyed by one or both spouses for transportation, household, educational, recreational, social or aesthetic purposes, but does not include heirlooms, antiques, works of art, clothing, jewelry or other articles of personal use, necessity or ornament or any personal property acquired or used in connection with a trade, business, calling, profession, occupation, hobby or investment;

(g) "matrimonial home" means property:

(i) that is:

(A) owned by or leased to one or both spouses, or in which one or both spouses have an interest including, without limiting the generality of the foregoing, an interest under a partnership or trust or an interest as a purchaser under an agreement for sale; or

(B) owned by a corporation in which one or both spouses have an interest where, by virtue of that interest, one or both spouses are entitled to occupy the property as a family home; and

(ii) that is or has been occupied by one or both spouses as the family home or that is mutually intended by the spouses to be occupied by one or both of them as the family home;

and that is:

(iii) a house or part of a house, including the land appurtenant thereto consisting of not more than sixty-five hectares;

(iv) part of business premises used as living accommodation;

(v) a trailer or vehicle commonly referred to as a mobile home, including the land appurtenant thereto consisting of not more than sixty-five hectares;

(vi) a unit or additional unit in a condominium plan or a replacement plan, as the case may be, as referred to in The Condominium Property Act, 1993, including the ownerís share in the common property as shown on that plan; or

(vii) a suite;

but, for the purposes of Parts II, III and IV, a matrimonial home shall also meet the requirements of matrimonial property as defined in clause (h);

Interspousal Agreements

Parties are permitted to exclude property from the operation of this Act. Commonly, people simply exclude what they are bringing into the marriage. As you can see, except in the case of the Matrimonial Home or Household Goods, this is already a part of the regime. Even so, the listing is a useful exercise, which may prevent future disputes.

However, you can also exempt future property, as you choose.

To actually exclude property, it must be a proper 'Interspousal Agreement', which has unusually high levels of formality. A separate lawyer must certify as to independent advice for each spouse. It must specifically refer to itself as an Interspousal Agreement and specifically refer to The Family Property Act (formerly known as the Matrimonial Property Act).

However, even if it is not a valid 'Interspousal Agreement', the court can consider the agreement, and give it whatever effect seems just. So it might still be significant.

Further, even if it is a valid 'Interspousal Agreement', it will have no effect if made under duress, coercion, or is challenged on one of the other traditional contract challenges.

Subsequent Property

Property acquired by the spouses after the application is made (Petition is issued), is not to be divided. Often, it isn't that simple. For instance, what if the spouse holds a stock at the time of the Petition, which doubles in value. Should that be different than if the stock split?

The time of evaluation of the property is not identical to the question of what the property is, but it is far from unrelated. The Act tells the judge to use the date of the Petition, or the date of the trial, or such other date as may be just. Most people feel that it should be the date of separation, and it is often settled on that basis. The Act states:

(l) "value" means the fair market value at the time an application is made under this Act, or at the time of adjudication, whichever the court thinks fit, or, where a fair market value cannot be determined, any value at the time an application is made under this Act, or at the time of adjudication, that the court considers reasonable.

Oddly, the Act provides that property earned after the marriage is ended is also exempt. That seems redundant. Nevertheless, the Act states that the following is exempt:

(c) property acquired after a decree nisi of divorce, a declaration of nullity of marriage or a judgment of judicial separation is made in respect of the spouses;

Tort Damages / Insurance Proceeds

(a) an award or settlement of damages in tort in favour of a spouse, unless the award or settlement is compensation for a loss to both spouses;

(b) money paid or payable under an insurance policy that is not paid or payable in respect of property, unless the proceeds are compensation for a loss to both spouses;

Traced Property

It sounds so simple. If the husband brings a 1978 Harley Davidson motorcycle into the marriage, he can leave with it. But what if he trades it for another? What if he sells it, and puts the proceeds into another? What if he sells it, puts the money into the joint bank account, and a few weeks later buys another for the same amount? What if it is a different amount? A different object? A household good, which would not normally be exempt?

What if the item appreciates or depreciates significantly?

The Act states that for property brought into the marriage, it is the fair market value at the time of the marriage which is exempt.

The income or appreciation is exempt, as is property for which an exempt item is exchanged. The Act states that the following shall be exempt:

(d) property acquired as a result of an exchange of property mentioned in this subsection;

(e) appreciation on or income received from and property acquired by a spouse with the appreciation on or income received from property mentioned in this subsection;

This traced property may not be the matrimonial home or household goods. Items acquired as a result of the exchange of items brought into the marriage are not subject to that restriction, but are restricted to the extent of the fair market value of those items at the time of the marriage.

In short, the Act is regrettably unclear, and such issues have been difficult to resolve.

Additions

Restore Inequitably Exempt Property

Even if the property is properly exempt, the judge can decide it just wouldn't be fair to keep it out of the 'pot', and can consider just about any reason for that purpose.

Restore Dissipated Property

Sometimes a spouse will try to cheat. The most common way is to hide the property. Well developed disclosure rules and the experience of the lawyers combats this. Next, sometimes a spouse will give the property to somebody else to keep till after it is all over. That is caught as matrimonial property, because the spouse still controls it.

But sometimes, the spouse will just give it away or use it up, solely to prevent the other spouse from enjoying it. In that case, it is considered dissipation. The court pretends that the property which is gone, still exists, and that it will be part of the dissipating spouse's share.

For instance. There is $100,000.00. Spouse A dissipates $50,000.00. The Court pretends that there is still $100,000.00, and that Spouse A already got his/her $50,000.00, so the remaining $50,000.00 goes 100% to Spouse B.

For another example. If Spouse A uses up the entire $100,000.00, the Court will order him/her to pay $50,000.00 to Spouse B, and Spouse B will have the benefit of the full arsenal of legal debt enforcement tools.

Determine the Division

The court must start with a presumption of a 50/50 split. The plain policy of the Act is that spouses will decide between themselves how each spouse will contribute, and they must have both been satisfied at one time. Therefore, there won't be any petty tallying of who earned what.

The court may move away from the 50/50 split for any of 19 reasons, including 'any other relevant fact or circumstance', if it would otherwise be 'unfair and inequitable'. However, in practice, the courts are reluctant to do so except in extreme cases, such as extremely short marriages to extremely wasteful or useless people. The factors are:

(a) any written agreement between the spouses or between one or both spouses and a third party;

(b) the length of time that the spouses have cohabited before and during their marriage;

(c) the duration of the period during which the spouses have lived separate and apart;

(d) the date when the matrimonial property was acquired;

(e) the contribution, whether financial or in some other form, made directly or indirectly by a third party on behalf of a spouse to the acquisition, disposition, operation, management or use of the matrimonial property;

(f) any direct or indirect contribution made by one spouse to the career or career potential of the other spouse;

(g) the extent to which the financial means and earning capacity of each spouse have been affected by the responsibilities and other circumstances of the marriage;

(h) the fact that a spouse has made:

(i) a substantial gift of property to a third party; or

(ii) a transfer of property to a third party other than a bona fide purchaser for value;

(i) a previous distribution of matrimonial property between the spouses by gift or agreement or pursuant to an order of any court of competent jurisdiction made before or after the coming into force of this Act;

(j) a tax liability that may be incurred by a spouse as a result of the transfer or sale of matrimonial property or any order made by the court;

(k) the fact that a spouse has dissipated matrimonial property;

(l) subject to subsection 30(3), any benefit received or receivable by the surviving spouse as a result of the death of his spouse;

(m) any maintenance payments payable for the support of a child;

(n) interests of third parties in the matrimonial property;

(o) any debts or liabilities of a spouse including debts paid during the course of the marriage;

(p) the value of matrimonial property situated outside Saskatchewan;

(q) any other revelant fact or circumstance;

The court must split the matrimonial home equally however, unless it is 'unfair and inequitable'. It sounds the same, but it must be due to 'extraordinary circumstances' or be 'unfair and inequitable' to the spouse with the children. In practice, it is much harder to get an unequal division of the matrimonial home.

Determine the Mechanics of Achieving the Division

In practice, the Court will generally announce the value of the matrimonial property and the percentage division, and it is then up to the parties to achieve that in an equitable way. Sometimes, to assist the parties, the Court will announce the evaluation of the major items of property.

If necessary, the parties may apply to the Court for further direction, but are unlikely to be satisfied with the result, as the Court has no way of considering issues like sentimental value or utility, and, we respectfully suspect, little patience for such difficult parties.

Normally, the Courts and the parties try to preserve the children's home, and any operating businesses. Since they tend to be the largest items of value, the party who receives them will typically also receive the lion's share of the debt, to reduce the amount of the difference which must be paid.

If a difference must be paid, there should be reasonable interest, and proper security.

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