At a recent Trusts and Estates Brown Bag Lunch (held on the third Tuesday of most months at various locations: see the OBA web page, here), we discussed the case of Egan v. Burton, 2013 ONSC 3063 (CanLII).
There, in the context of a family law proceeding, the issue was whether a cottage was a matrimonial home, thereby affecting the spouses’ Net Family Property and equalization. If the cottage was a “matrimonial home”, then the husband, who owned the cottage, would not get the credit for the value of the cottage at the time of marriage.
The court held that a two-part test should be applied to determine whether the cottage was a “matrimonial home”. Firstly, was the cottage ordinarily used by the spouses, and secondly, was it used as a family residence.
Here, the court found that the first part of the test was met: the cottage was used by the spouses. However, with respect to the second part of the test, the court found that the wife never treated the cottage as a family residence. The wife treated the cottage differently than the family home. She made no contribution to the operation or maintenance of the cottage. She did not show the same interest in the cottage that she showed to the home. “If she had been asked prior to separation about her intention regarding the cottage, I am satisfied that she would have said that it was his cottage and his alone.” Here, unlike other cases where the cottage was found to be a matrimonial home, there was no evidence of an intention to treat the cottage as a family home.
In the estates context, in advancing or defending a claim for equalization under s. 5(2) of the Family Law Act, consideration should be given to not only the use of a secondary residence, but also the intention of the parties and how the second residence was treated by them.
Thank you for reading.