Joint Accounts Between Spouses
Subsection 14(a) of the Family Law Act provides that property held by spouses in joint accounts shall be intended, in the absence of proof to the contrary, to be owned jointly. The presumption may be rebutted by the spouse who seeks to have such monies excluded from net family property (Belgiorgio v. Belgiorgio, 2000 CanLII 22733 (ON SC)).
In LeCouteur v. LeCouteur, 2005 CanLII 8726 (ON SC), the court held that the husband failed to rebut the presumption of resulting trust in respect of funds in a joint account that had “traditionally been used to carry out family decisions for funding special projects”, such as renovations.
In Belgiorgio, the court held that a joint bank account in which the husband deposited his inheritance was used for household expenses and purchases, and was commingled with household income. The court found that the inheritance lost its excluded character when it was placed in a joint bank account; it was his intention at the time he deposited the funds that was relevant.
In the recent Ontario Superior Court of Justice case of McLean v. Dahl, a husband sought a declaration that he was the sole owner of proceeds in a joint bank account in the amount of $94,565 at the date of separation.
The Court considered the following facts in arriving at a determination that the presumption of joint ownership was not rebutted:
- Both parties used the account as they saw fit; however, it was their practice to consult one another if major purchases were to be made;
- When the parties decided to grant a sizeable loan to friends, the funds came from the joint account. When the funds were repaid to the wife alone, she returned them to the joint bank account;
- When the parties decided to work on their marriage, they agreed to put these funds into a joint account on the condition that both their signatures were required to make a withdrawal;
- Mr. McLean intentionally transferred solely-held funds to the parties’ joint names;
- the spouses discussed major transactions using these funds;
- the parties shared the tax liability for income on these funds.
In summary, the Court observed that “…when the parties agreed to work on their marriage, after Mr. McLean closed the first joint account, they opened a second joint account into which each deposited monies in his or her control. This was the second time that Mr. McLean intentionally placed funds in Ms. Dahl’s control. It is obvious from his pattern of conduct that he intended her to have access to funds in joint accounts.”
Accordingly, the Court found that, “from the time that Mr. McLean added Ms. Dahl’s name to the account, she became a half-owner, and the parties were entitled to one-half the funds in the parties’ joint account in the amount of $47,282 each.”
Thanks for reading,
David Morgan Smith
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