Gains v. Jackman – When parents fund the purchase of the Matrimonial Home

This case deals with a very familiar set of facts but yields an unconventional result compared with other cases of its kind. In this case, the Wife’s parents assisted the parties when they first married by purchasing their home for them. Although the house was legally in the Wife’s parents’ names, the parties made the mortgage payments and saw to all necessary repairs and other issues relating to the house. When the parties separated, however, the Wife and her parents claimed that the home was not an asset of the marriage and, as such, its value should not have been split between the parties. The Wife and her parents argued that she and the Husband were merely paying rent to the parents, who were the true owners of the home.

The Court did not accept the argument of the Wife and her parents as there was some crucial documentation that they failed to produce to the Court. Furthermore, the Court placed significant weight on the fact that the couple had paid all the closing costs associated with the purchase of the home, made the mortgage payments, and otherwise conducted themselves as if they were the true owners of the home. Friends and other relatives testified that the parties referred to the house as their own and, when the Wife was asked to summarize her assets in the 1999, she included the home therein. The Court also found it important that the couple placed significant financial strain on themselves in order to make weekly mortgage payments for the home. In light of the foregoing, the Court found that the couple owned the home by way of constructive trust and, as such, the value of the home was to be split between them. Out of the proceeds of the sale, the parties were to reimburse the Wife’s parents for their contributions to renovations and other necessary activities required for the upkeep of the home. This decision is a very important one for any couple whose parents purchase their home on their behalf.

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