Can an Ontario Court Make an Order Dealing with Overseas Property?

Living room representing whether courts can decide title on foreign property like the matrimonial home

Written on behalf of Shariff & Associates

During a relationship, a couple may purchase or acquire an interest in property located outside of Canada. Under Ontario’s Family Law Act (also referred to as the “FLA”), a matrimonial home is one that is ordinarily occupied by the spouses as their family residence and are restricted to homes in the province. However, upon divorce, the parties’ respective rights to foreign property may be in issue. Generally, Canadian courts do not have jurisdiction to decide the title to overseas property. However, there may be cases where the court can determine the personal rights of the parties.

Only Homes in Ontario Constitute ‘Matrimonial Homes’ Under Legislation

In Potter v. Boston the husband sought to appeal an interim order that granted the wife exclusive possession of a condominium for one week each month that was located in Florida and was solely owned by the husband. In the original motion, the wife did not seek an order for exclusive possession of the property, but she did seek an order that would allow her to continue to use the condominium. On appeal, the husband raised the issue of whether the property was a matrimonial home according to the definition in the Family Law Act, and whether the original judge exceeded her jurisdiction in granting exclusive possession of a property located outside of Ontario. However, the wife’s counsel argued the central issue was simply whether Ontario courts have jurisdiction to enforce rights to out of province property pursuant to their in personam jurisdiction, meaning the court’s ability to decide the personal rights of the parties.

It was clear that the judge on the original motion questioned her authority to make an order concerning the wife’s use of the Florida property. Here, the husband argued that the judge failed to rely on the correct legal test set out in the Family Law Act to determine that the condominium was a matrimonial home, and consequently whether exclusive possession of the property could be awarded. Section 18 of the Family Law Act establishes that a matrimonial home is one that is ordinarily occupied by the spouses as their family residence at the time of separation.

Based on the parties’ use of the Florida condominium, it likely did not qualify as a matrimonial home. However, the motion judge did not make a finding that it was a matrimonial home. This was significant, because the court’s power to grant exclusive possession of a matrimonial home under section 24 (1)(b) of the Family Law Act only applied to matrimonial homes in Ontario. Accordingly, properties outside of Ontario are not considered to be matrimonial homes.

Ontario Courts Do Not Have Jurisdiction Over Foreign Property

The central issue of Potter v. Boston was whether the court’s in personam jurisdiction could be used to grant exclusive possession over foreign property. The judge acknowledged that this remedy would be the only means the court had to require the husband to continue to allow the wife to use the condominium. Justice Healey noted that earlier cases held that Canadian courts do not generally “have the jurisdiction to make an order concerning right, title or interest to a foreign property”. However, in Macedo v. Macedo, the judge determined there was no jurisdiction to vest property, located in Portugal, in the wife who was not on title. Yet, the judge relied on in personam jurisdiction to order the husband to sell the property and share the proceeds with the wife.

While Ontario courts cannot make orders affecting the title or interest to foreign land, Ontario courts can “enforce rights affecting land in foreign countries if those rights are based on contract, trust or equity, and the defendant resides in Canada”. This is an exercise of a court’s in personam jurisdiction, and as Justice Healey explained it is an exception to the overall rule that Ontario courts “have no jurisdiction to decide title to foreign lands”.

Criteria to Meet Before a Court Exercises its in personam Jurisdiction

In Catania v. Giannattasio, the Ontario Court of Appeal set out four criteria that need to be met before an Ontario court can exercise its in personam jurisdiction:

1. The court must have in personam jurisdiction over the defendant;

2. There must be some personal obligation running between the parties;

3. The jurisdiction cannot be exercised if the local court cannot supervise the execution of the judgment; and

4. Finally, the court will not exercise jurisdiction if the order would be of no effect in the foreign location where the property is sited.

In Potter v Boston, the wife argued that these four requirements were met, although no analysis was done by the motions judge. For example, the wife argued there was a personal obligation between the parties, such as an agreement that she would have monthly access to the property, however, there was no evidence the parties had any intention to create an agreement that went beyond the domestic arrangements during their marriage. No previous cases had dealt with the application of an in personam order to grant exclusive possession. Since the motions judge did not consider the requirements in Catania in making her order, there were grounds to doubt the correctness of that order.

Accordingly, the husband was granted leave to appeal the interim order.

Courts May Assume Jurisdiction Over Dispute if Certain Factors are Met

In Rees v. Shannon, claims related to the parties’ property were in issue, including the status of a condominium in Florida. The applicant brought a motion seeking to dismiss a claim relating to the condominium. He argued the court did not have jurisdiction to over the claim as the property was outside of Ontario. The parties had signed a marriage contract that covered the treatment of their property following divorce. For the respondent, the case concerned the interpretation of the marriage contract, which was a matter over which it did have jurisdiction.

The court looked to Club Resorts Ltd. v. Van Breda as a leading case on jurisdiction. That case set out factors that can establish a real and substantial connection between the litigation and Ontario courts that could permit an Ontario court to assume jurisdiction. The Ontario Court of Appeal had earlier determined that the ordinary residence of the parties at the time of separation was a connecting factor in family law disputes. The judge also accepted that another connecting factor was that the parties concluded a domestic contract in Ontario that was governed by Ontario law. The applicant cited Catania to suggest Ontario courts lacked jurisdiction over the matter. He further argued this was not an appropriate case to exercise in personam jurisdiction.

When it came to the matter of jurisdiction, Justice Akbarali found that the analysis extended beyond Catania, and that the Van Breda framework also applied. In any event, the judge accepted that using the Catania factors it was an appropriate case for Ontario to exercise in personam jurisdiction. Both parties were Ontario residents, and their domestic contract established a personal obligation between them. Looking to the third factor, the court could supervise the execution of a judgement because the court was not determining ownership interests in the condominium, but rather it was interpreting the agreement to discern whether the respondent had a contractual right to certain assets, including the condominium. Importantly, any monetary judgement that resulted could be enforced in the province. Finally, the evidence suggested that a Florida court might recognize and enforce an Ontario judgement.

Consequently, Ontario did have jurisdiction over the dispute.

Ontario Courts May Grant Order When Interpreting the Parties’ Obligations

As a general rule, Canadian courts do not have jurisdiction over property outside of Canada. However, this does not mean that courts cannot consider the foreign property when making an order. In personam jurisdiction may enable a judge to grant an order over the parties when determining their personal obligations.

Contact Shariff & Associates in Stouffville for Comprehensive Guidance on Property Division Matters

The experienced separation and divorce lawyers at Shariff & Associates work closely with clients to understand their needs and help them navigate complex issues arising from separation and divorce. Whether there are disputes over property division, parenting schedules, or support entitlement, our family law team ensures our clients’ rights are protected throughout the dispute resolution process and litigation when necessary. Our lawyers will review your circumstances and provide a realistic assessment of the options available to help you move forward. To speak with a member of our family law team regarding your property division dispute, contact us online or call us at 905-591-4545.