No Meaningful Ownership for Married Women

Our family property law comes from the English tradition, where prior to 1870, a married woman could not own any property, including land, money or objects. Anything she owned transferred to her husband upon marriage. (She could retain title to her real estate after marriage, but her husband had control over it.)

Wealthy families worked around this problem by creating family trusts. This is a vehicle by which the property is legally owned by a trustee but managed for the benefit of the married woman. The costs associated with family trusts made them generally unavailable to ordinary families.

Women Demand Ownership – The Rise of Separate Property

In the 1850s, women began agitating for law reform. After much debate, the Married Women’s Property Act of 1870 was passed. It only provided that the wife’s earned wages and property were her own property. In 1882, this law was extended to all property owned by a wife. In Canada, similar Acts were passed in the late 19th century in most provinces.

No Equal Division Upon Divorce or Death

Though each spouse could own his or her own property, for decades there was no legislation as to sharing assets upon divorce or death. To make a claim to the other spouse’s property upon divorce, a spouse had to rely upon common law doctrines, and these required the claiming spouse to prove she had made a financial contribution to the property owned by her spouse.

Provinces tried to compensate for this inequity with laws requiring alimony payments and laws permitting a spouse to stay in the matrimonial home after divorce or death of her husband.

Discretion to make “Any Property Order” on Divorce

It wasn’t until the 1970s that the provinces passed various matrimonial property acts which allowed courts to divide family property at the end of a marriage. The British Columbia  Family Relations Act of 1972, provided the court with discretion to make any property order that, in its opinion, should be made for the benefit of a spouse or child. However, in practice, the courts ignored the provision and proceed on the common law rules, namely, that entitlement to the property of the other arises only on the basis of financial contribution.

The Case of the Murdoch Ranch

Further reform was demanded in amidst the outrage arising from the landmark decision Murdoch v. Murdoch [1975] 1 S.C.R. 423. The Murdochs were Alberta ranchers who had been married for 25 years. The ranch was 480 acres and it was held in Mr. Murdoch’s name only. Mrs. Murdoch applied to court for an order that a portion of the ranch is granted to her. Mrs. Murdoch’s evidence included the following: “I worked outside with him, just as a man would, anything that was to be done.” Mr. Murdoch admitted to being absent from the ranch for five months a year on other business and he admitted that his wife looked after the ranch while he was away. Nevertheless, his evidence was that her hard work and contributions were “what the ordinary rancher’s wife does.” The trial judge ruled that despite her contributions, her work was that of “any ranch wife” which did not warrant awarding her a portion of the land. Her appeal to the Alberta Court of Appeal was denied. She appealed to the Supreme Court of Canada, where she was again denied a share of the property, again on the basis that her contributions were those of a typical ranch wife and such contributions do not give rise to a legal interest in real property. Later the same year, Mr. Murdoch applied for a divorce and Mrs. Murdoch applied for spousal support. She was awarded a lump sum spousal support award that was equal to approximately one-third of the value of Mr. Murdoch’s assets. The lump sum award was intended to give her secure income for life.

This case triggered an angry outcry for further reform that would require the courts to treat divorcing spouses equally under the law. Many provinces then passed new statutes designed to do so.

The Dawn of 50-50

British Columbia passed the Family Relations Act of 1979. It provided that upon divorce, no matter which spouse held legal title or ownership, each spouse became entitled to a half interest in each “family asset”. Under this system, some types of property were specifically defined as being “family assets,” and all other property was subject to a legal test which would determine if it was or was not a “family asset”. This model of property division became known as the “family purpose” model because the legal test was whether or not the property was used for a family purpose.

Under the Family Relations Act of 1979, there were no property rights for common-law spouses. This change did not occur until 2013 with the enactment of the Family Law Act in BC. Under the Family Law Act, common-law spouses living together in “marriage-like” relationships for two years or more automatically acquire rights to half the wealth accumulated during the couple’s cohabitation and also makes a spouse (married or not) automatically responsible for half the other’s debt.

Refining 50-50 and Simplifying the Family Property Test

The Family Law Act also moved from the “family purpose” model to an “excluded property” model. Rather than looking at each asset to see if it was used for a family purpose, family property by definition now includes: all real and personal property owned by one or both spouses at the date of separation unless the asset in question is excluded, in which case only the increase in the value of the asset during the relationship is divisible. The FLA lists specific property that is “excluded” from division. The objective of this change was to cut down on the judicial discretion required for the “family purpose test” (which caused unpredictable outcomes) and to make the law simpler to apply and understand.

Links:

Intriguing History – Series: Statutes of Law. Married Women’s Property Act 1870

http://www.intriguing-history.com/married-womens-property-act/

Quijano, Gina. “Matrimonial Property Law Reform in Canada: From Separate Property to Community Property with Joint Management – Principle v. Pragmatism.” Osgoode Hall Law Journal 13.2 (1975) : 381-405.

http://digitalcommons.osgoode.yorku.ca/ohlj/vol13/iss2/13

Jacobson, Peter. “Murdoch v. Murdoch: Just about what the Ordinary Rancher’s Wife Does.” McGill Law Journal 20:2 (1974): 308-325.

http://lawjournal.mcgill.ca/userfiles/other/3387139-jacobson.pdf

Mossman, Mary Jane. “ ‘Running Hard to Stand Still’: The Paradox of Family Law Reform.” Dalhousie Law Journal 17.1 (1994): 5-34

http://digitalcommons.osgoode.yorku.ca/scholarly_works/688/

The Family Law Act Explained, Part 5 – Property

http://www2.gov.bc.ca/assets/gov/law-crime-and-justice/about-bc-justice-system/legislation-policy/fla/part5.pdf