In this estate matter, the court had to determine whether the fact that a wife no longer resided with her husband on the day before his death (the valuation date) changed the matrimonial home status of their home such that the husband's estate could deduct the value of the home when calculating his net family property for equalization purposes.
Background
The couple married in 1990 and resided together in a home owned by the husband. During the marriage, the wife developed Parkinson's disease and her condition deteriorated until assistance was required for nearly all aspects of her daily life. In July 2010, she moved into an assisted care facility as her condition made it impossible for her to remain in the matrimonial home. The spouses actively continued their relationship until the husband's death in April 2012; they conversed several times a day by telephone and he visited her at least once per week.
The home was registered solely in the husband's name and the estate sold it after his death. His Will left a 1/10th interest of the net proceeds to his wife, and the balance to children of his first marriage.
The court found that the value of the home owned by the deceased husband could not be deducted in the equalization calculation. The home was a matrimonial home and the couple was never separated as the facts demonstrate that they maintained their relationship until the husband's death.
Determining the Applicable Valuation Date
Under the Family Law Act the relevant valuation dates in this case is the earliest of either (s.4(1)(1.)) 'the date the spouses separate and there is no reasonable prospect that they will resume cohabitation,' or (s. 13(5)) 'the date before the date on which one of the spouses dies leaving the other spouse surviving.'
The court in Allison v Allison held that 'physical separation itself does not trigger a valuation date. There must be a separation with no reasonable prospect of a resumption of cohabitation.' In this case, the couple never ceased being a couple or married. Despite residing in different locations, they never lived their lives without the other. Their continued devotion to maintaining their relationship demonstrated no intention to separate. Thus, as the couple was not truly separated, the earliest valuation date to determine the status of the home was the date before the date the husband died.
Matrimonial Home Status of the Property
If the property was no longer a matrimonial home as of the valuation date, the estate could deduct its value from the equalization calculation. Pursuant toFLA sections 4(1) and 18(1), the property would be a matrimonial home if it was 'ordinarily occupied' by the husband and wife as their 'family residence' on the valuation date.
Here, Justice Gauthier held that requiring the wife to have been physically residing at the home on the valuation date would be an inequitable interpretation of sections 4(1) and 18(1) contrary to theFamily Law Act's objective of providing an orderly and equitable settlement of the affairs of the spouses. The wife resided in the matrimonial home for 21 years out of a 22 year marriage. She had no choice but to leave as a result of her deteriorating health. If not for her lack of physical capacity, she would have continued occupying the home. The home did not lose its status as a matrimonial home solely because the wife's condition forced her into institutional care.
The situation, according to Justice Gauthier, is analogous to Gray v Brusby; despite the necessary physical separation in 2010, the spouses remained together constructively until the husband's death in April 2012. As husband and wife were never factually separated as of the valuation date triggered by his death, the home retained its status as a matrimonial home. Thus, it could not be deducted from the deceased husband's equalization calculation.