Case Number

LCA 8791/00

Date Decided

12-13-2006

Decision Type

Appellate

Document Type

Full Opinion

Abstract

Facts: The third respondent, in the course of his business, drew a cheque in favour of the first and second respondents. The cheque was dishonoured. The first and second respondents applied to the Enforcement Office and attached the residential apartment that was registered solely in the name of the third respondent. The appellant subsequently filed an action for a declaration that she was entitled to half the apartment by virtue of the joint ownership rule. The first and second respondents counterclaimed, arguing that if the appellant was entitled to half the apartment, she was also liable under the joint ownership rule for half the debts of the third respondent. Both the Family Court, in the first instance, and the District Court, on appeal, held that the appellant was entitled to half the apartment by virtue of the joint ownership rule, but she was also liable for half the third respondent’s debts by virtue of the same rule. The appellant sought leave to appeal to the Supreme Court, and leave was granted.

Held: The joint ownership rule distinguishes between purely family assets (and especially the residential apartment), and other assets. With regard to purely family assets and liabilities, the joint ownership crystallizes when the conditions for joint ownership — a sound relationship and uniting their efforts — are satisfied. With regard to all other (not purely family) assets and liabilities, the joint ownership crystallizes only when there is a ‘critical event’ in the marriage, such as the death of one of the parties or a crisis in the marriage that significantly endangers the relationship between the spouses. In this case, the marriage between the appellant and the third respondent had not reached a critical event. Therefore although the appellant was entitled to half the apartment under the joint ownership rule, she was not responsible for half of the third respondent’s business debts since no critical event in the marriage had occurred.

Appeal allowed.

Keywords

Family Law -- Marital property, Property -- Attachment

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