Upon the breakdown of a marriage through separation or divorce, what happens to the matrimonial home can be one of the more difficult issues to navigate. Not only can there be a great deal of emotional investment into the home, with both parties feeling strong ties to it, but a home can often be a couple’s most valuable asset. A recent decision from the Court of Appeal for Ontario looked at a situation where one spouse was ordered to transfer a 50% interest in the home to the other.
The issue and the original trial
The original trial dealt with the issue of the matrimonial home. The outcome of the trial resulted in the husband’s obligation to pay the wife an equalization payment of $226,670. The trial judge also ordered that after a fair market assessment of the home, the husband had the “right to conclude the purchase” of the wife’s interest in the home within 30 days of that decision. The wife appealed the decision, asking instead to have the house sold and its net proceeds divided.
The husband refused to participate in the hearing, stating that he is not the proper respondent, and that instead, the trial judge should be asked to defend their decision. The court of Appeal disagreed with that, stating “trial judges do not defend their decisions on appeal. The respondent is entitled to defend the trial judge’s order. In any event, the appellant bears the burden of establishing that the trial judge’s decision should be varied on appeal.”
The decision on appeal
The court concluded, after referencing a 1992 decision from the Court of Appeal for Ontario, that the trial judge’s decision as it relates to the right of first refusal on the purchase of the home should be overturned. The court explained that a right of first refusal is a “substantive right,” explaining that it has an economic value to it. This means it falls outside the boundaries of what is reasonably necessary in order to implement the order for the sale of the home. This is because a right of first refusal distorts the market, not allowing for the husband to compete against other would-be purchasers of the house, thereby possibly reducing the sale price and depriving the wife of money that she would otherwise receive if the home was sold on the open market.
The court determined that without the wife’s consent, the trial judge should not have allowed a right of first refusal. The court’s decision concluded that if the husband wanted to purchase the matrimonial home, he must do so in competition with other buyers.
In addition to being a significant asset, the matrimonial home is usually associated with deep emotional ties. At Gelman & Associates, we will provide compassionate, forward-thinking guidance to our clients while aggressively pursuing their legal interests. Call us at (844) 736-0200 or contact us online.
