WHAT IS IT ABOUT?
Brief History: The 1975 decision of the Supreme Court of Canada in Murdoch v Murdoch,  1 S.C.R. 423, concerned an Alberta couple who had married in 1943 and separated in 1968. During their marriage, the Murdochs had accumulated property in Mr. Murdoch’s name, including farmland. After the separation, Mrs. Murdoch claimed an interest in the land.¹
The Alberta Court of Appeal and then the Supreme Court of Canada held that she had no interest in the land, as there was no evidence that the couple had a common intention that the land would belong to both. Ms. Murdoch spent decades helping Mr. Murdoch accumulate assets – but she was entitled to nothing. There was no statute law to protect her, and the common law (judge-made law) did not step in to assist.
Looking back from 2022, the result in Murdoch seems harsh and unjust. Indeed, even at that time, attitudes in society were changing. The law soon started to change. In Rathwell v Rathwell,  2 S.C.R. 436, the Supreme Court of Canada granted a wife an interest in property – but on narrow grounds involving Mrs. Rathwell’s cash contributions to the purchase of property and evidence of the couple’s intentions.
On January 1, 1979, the Matrimonial Property Act came into force in Alberta. To access relief from the Court, a married spouse no longer had to prove a common intention to jointly own or directly contribute to acquiring property. Since then, it has been presumed that spouses work together to build their economic life and are entitled to share in the fruits of their efforts.
But the new statute law only applied to married couples. In a series of decisions starting with Pettkus v Becker,  2 S.C.R. 834, and leading up to Kerr v Baranow,  1 S.C.R. 269, the Supreme Court of Canada, using concepts such as “unjust enrichment” and “constructive trust,” expanded the property rights and obligations of unmarried spouses, to the point that they came close to those of married spouses where the claimant spouse could prove that there had been a “joint family venture.”
However, as reflected in Walsh v Bona,  4 S.C.R. 325, the Supreme Court of Canada has never required the provinces to legislate the same property rights for married and unmarried spouses. In 2018 the Government of Alberta intervened anyway, enacting amendments to the
Matrimonial Property Act (which became the Family Property Act) extended statutory property sharing to unmarried spouses who separated in 2020 or later.
As discussed further below, it is an oddity of Alberta law that it is not only spouses who can make claims under the Family Property Act (FPA) as defined in the Adult Interdependent Relationships Act; anyone who is or was (subject to the limitation periods) an Adult Interdependent Partner (AIP).²
Who Can Make a Claim?
Claims under the FPA can be made by separated married spouses, by separated AIPs, and by the survivor after the death of one spouse or AIP. The Alberta legislature created the legal category of AIP in 2002 to comply with Supreme Court decisions that, in certain areas, prohibited discrimination between opposite and same-sex and married and unmarried couples.
To avoid referring to same-sex couples, the province created a broader category encompassing all pairs of people who share their lives in meaningful and economically significant ways. In practice, most people who make claims as AIPs are people who live in what we tend to call “common law” relationships, either after at least three years of cohabiting or having had a child together.
The necessary connections with Alberta must exist for a claim to proceed under the FPA. The options are:
- The habitual residence of both parties is in Alberta;
- The last joint habitual residence of the parties was in Alberta;
- If neither of the two conditions above exists, the parties were both habitually resident in Alberta at the time they married or became AIPs; and
- For married parties, if a Statement of Claim for Divorce has been filed in Alberta.
For married parties, the Alberta jurisdiction is potentially broader, as jurisdiction under the Divorce Act (Canada) exists if one party has been habitually resident in Alberta for one year before the start of the claim.³
What Is the Property that Is Divided Under the FPA?
Property to be divided under the FPA includes both assets and liabilities. To be the subject of a claim under the FPA, the property must be something that belongs to one or both of the parties and is capable of being valued. Some property types are apparent to most people: homes, land, household contents, cash, shares (in publicly traded companies and private corporations), bonds, mutual funds, and RRSPs.
Others are less obvious, such as interests in employee pension plans, beneficial interests in trusts, intellectual property rights (patents, copyrights, and trademarks), stock options or restricted share units issued by employers (whether vested or not), travel points, the cash value of whole life insurance policies and rights under other contracts.⁴
What Is Done with Property Under the FPA?
How property is handled under the FPA depends on which of 3 categories created by Section 7 of the Act it falls into. These categories are:
- Exempt Property
- Distributable Property
- Divisible Property
Exempt Property (Section 7(2) of the FPA)
Only some value held by parties at the time of trial is divided between them. Property that is not shared is known as “Exempt Property.” The new wording of the legislation is complex, as it has to accommodate various relationship circumstances and timings covered by the FPA. Still, in basic terms, it is the following property that is exempt:
- Property acquired during the relationship by a gift from a third party;
- Property acquired during the relationship by inheritance;
- Property acquired before the relationship;
- An award or settlement received during the relationship for damages in tort (e.g., personal injury), unless the damages are in compensation for a loss to both parties; and
- Proceeds received during the relationship of an insurance policy that is not insurance in respect of the property (e.g., life insurance) unless the proceeds are in compensation for a loss to both parties.⁵
Distributable Property (Section 7(3) of the FPA)
In general terms, the distributable property includes:
- Increases in the value of exempt property or property traceable to exempt property;
- Property acquired with income from exempt property;
- Property acquired after the relationship is formally ended, such as by a divorce or becoming “former AIPs” (which is defined in the legislation);
- Property received by one party as a gift from the other during the relationship.
This section deals with the property (assets and debts) that couples accumulate from scratch through their efforts during their relationships. For most people, that is all or most of what they have. This property is divided by default 50/50.⁶
1. LESA Library, ed (Edmonton, 2022).
2. LESA Library, ed (Edmonton, 2022).
3. LESA Library, ed (Edmonton, 2022).
5. LESA Library, ed (Edmonton, 2022).