Korman: We split up and our home value went up, now what?

It depends. The 2015 Ontario Court of Appeal case, Korman v Korman, offers guidance and insight to family law lawyers when answering this common question.

Specifically, what happens when the matrimonial home is registered only in the name of one spouse?

In Korman, the parties acquired the matrimonial home for approximately $560,000. Title to the matrimonial home was placed solely in the wife’s name to protect it from potential creditors due to the husband’s hiccup as an investment advisor. At the trial court level, the trial judge found that the husband transferred the house to his wife out of love, and as a gift. As such, the husband was entitled to his share in the value of the property up to and including the date of separation, the value being roughly $725,000. The husband argued, unsuccessfully at the trial court level, that he was also entitled to an equal share in any post separation increase in the value of the matrimonial home, being worth over $940,000 by the commencement of trial.

On appeal, the Court focused on presumptions of resulting trusts and whether the husband intended to gift his interest in the matrimonial home to his wife. In doing so, the Court turned to section 14 of the Family Law Act, which governs presumptions of a resulting trust. The essence of section 14 of the Act is that without clear proof that the interest in property was a gift or was intended to be a gift, the presumption of a resulting trust is not rebutted.

In this case, neither the wife, nor the husband’s evidence at trial suggested that the husband intended to gift his interest in the matrimonial home to the wife. In fact, the wife acquiesced at trial that the matrimonial home was registered in her name alone to protect it from potential creditors. Thus, the trial judge ignored the presumption of a resulting trust in favour of the husband. The Ontario Court of Appeal further stated that even absent the presumption of a resulting trust, no evidence at trial adequately supported a finding of a clear intention to gift. Thus, the husband was entitled to a one-half interest in the post-separation increase in value of the home.

So, it depends: was the intention to gift unequivocally a Valentine’s Day present, or to protect the family assets from creditors? The accompanying Valentine’s Day card better be specific.