Can a husband’s creditor enforce payment of the husband’s debt against the matrimonial home owned by the wife if the husband has made some of the mortgage payments?
Sandra Gammon bought land from Henry Meyer’s development company. She built a house on the land. Mr. Meyer and Ms. Gammon began a common law relationship and they later married.
Mr. Meyer made the mortgage payments on the house over an eleven year period. His wife retained title to the house.
In the meantime, Carrie Vandokkumberg successfully sued Mr. Meyer. She tried to collect on her judgment, but was unsuccessful.
Ms. Vandokkumberg then asked the Supreme Court of British Columbia to make a declaration that Henry Meyer owned a half interest in the matrimonial home. If successful, Ms. Vandokkumberg would then be able to register her judgment at the Land Title Office against Mr. Meyer’s interest in the matrimonial home. She might then be able to get an order to have the home sold to pay Mr. Meyer’s debt to her.
Ms. Vandokkumberg’s argument is based on the law of resulting trust. If you contribute money to purchase property in someone else’s name, the law presumes that the person who gets the title owns the property as a trustee for your benefit to the extent of your contribution. The title holder has title on a resulting trust for the benefit of the contributor. (This is a presumption only. You may have contributed the money intending to make a gift, in which case the resulting trust will not apply.)
In the old days, before modern family law statutes provided for sharing of matrimonial property on the breakdown of a marriage, spouses commonly asserted resulting trust claims to property held in the name of their husbands or wives after separation. Nowadays, common law spouses make claims based on resulting trusts on the breakdown of their relationships.
What makes Vandokkumberg v. H. Meyer Construction Ltd., 2007 BCSC 1341 unique is that Mr. Meyer was not making a claim to an interest in the matrimonial home. It was his creditor who was asking the court to declare that Mr. Meyer had an interest in the home.
Mr. Justice Davies dismissed Ms. Vandokkumberg’s claim. Ms. Vandokkumberg conceded at the hearing that Mr. Meyer had not made a fraudulent conveyance. In other words Mr. Meyer had not transferred the home or made the mortgage payments for the improper purpose of avoiding paying his debt to Ms. Vandokkumberg. Although Mr. Meyer might have been able to assert a resulting trust claim on his own behalf, or if the marriage broke down, he might be entitled to an interest under the Family Relations Act, Mr. Justice Davies held that Ms. Vandokkumberg could not assert a claim on Mr. Meyer’s behalf to an interest in the matrimonial claim unless she could prove that Mr. Meyer had made a fraudulent conveyance of preference.