March 8, 2024
Child Support Variations and Disability: A Case Study
In the realm of family law, navigating child support arrangements can be difficult, especially when circumstances evolve over time. In a recent B.C. Supreme Court case, A.E.P. v. L.E.P., 2024 BCSC 376 the father sought to alter the terms of child support for one of their children, A1, based on a declaration that the child was no longer a dependent. However, the mother, the other party, opposed the application citing A1’s disabilities and enrollment in a post-secondary program. Let’s delve into the complexities and implications of this case.
Background:
The couple shared two children, A1 and A2. In 2020, a final parenting order and a final order related to child support were established. These orders laid out the financial responsibilities of both parties concerning child support.
The Challenge:
The crux of the issue arose when the father sought to vary the child support terms, arguing that A1 was no longer a child of the marriage (the child was now 21 years old). This led to a court application to determine A1’s status and whether the child support terms should be revised.
The Divorce Act, in s. 2(1)(b) defines a child of the marriage to mean a child who is the age of majority or over and under the charge of the former spouses but “unable, by reason of illness, disability or other cause, to withdraw from their charge or obtain the necessaries of life”. The burden of proof fell on the applicant mother to demonstrate that A1 remained a dependent.
Where there is an issue as to whether a child is disabled, a court has clarified that “charge” in the context of disability includes “care, custody, responsible possession”. To establish that a child is unable to withdraw from the charge of his or her parents due to illness or disability, medical evidence is required.
As to whether a child’s post-secondary educational pursuits are a valid reason to continue support, the court considered whether the child’s educational pursuits are reasonable. The educational pursuit usually has to be full-time, but there are exceptions; the court can consider the overall circumstances when deciding whether full-time attendance is needed to qualify the child for ongoing support. Part-time studies could still mean a child is still entitled to support in light of the context of the surrounding circumstances.
Evidence and Analysis:
A1 had a history of ADHD and specific learning disabilities, which significantly impacted his academic journey. Despite challenges, A1 pursued post-secondary education in computer graphic design at BCIT. However, he enrolled in a reduced course load due to his disabilities, aligning with professional recommendations for his success.
The court examined various factors, including A1’s educational background, career plans, ability to contribute to his support, age, past academic performance, and parental planning for his education. It acknowledged A1’s struggles and efforts to overcome them, ultimately recognizing his status as a dependent based on his ongoing pursuit of education despite his disabilities. The court said:
“In my view, the fact that A1 is not taking a full course load is contextualized by the circumstances of his learning disabilities. There are clear professional recommendations that he obtain accommodations to address his disabilities. There is also a recommendation that A1 would benefit “from a reduced course load to maximize his ability to be successful”….” [at para 30]
“In my view, given A1’s particular circumstances, his current course load, being two courses per semester, is the same as what would otherwise be a full course load for a student without his learning disabilities. If I were to conclude otherwise, it seems to me that A1 would be unfairly penalized for purposes of considering his eligibility for continued child support because of the fact that his learning disabilities require accommodations, such as a reduced course load. ” [at para 33]
Implications and Conclusion:
The court’s decision underscores the importance of considering individual circumstances when determining whether a child is still entitled to ongoing child support, especially when disabilities are involved. It underscores the importance of thorough assessment and consideration of individual circumstances to ensure fair and equitable outcomes. It also emphasizes the need for accommodations to maximize the potential for success in education and future employment.
NOT LEGAL ADVICE. Information made available on this website is for information purposes only and is not legal advice. Do not rely on this information, nor take or fail to take any action, based upon this information. Do not disregard professional legal advice or delay in seeking legal advice because of something you have read on this website. Contact me here to discuss any specific legal issues.
March 8, 2024
Navigating Complex Financial Terrain in Family Law: Lessons in Fairness
In the realm of family law, cases often present challenging financial issues, and Healey v. Healey 2024 BCCA 68, a recent Court of Appeal case, is no exception. This legal saga delves into the complexities of property division, exclusions, and support obligations within the context of a long-term marriage. The Court of Appeal’s decision in this case not only highlights the challenges of equitable distribution but also raises questions about the interpretation and application of the Family Law Act.
The crux of the matter lies in the unequal division of family property. The trial judge’s decision to split the assets equally was overturned by the Court of Appeal due to several compelling reasons. Firstly the husband, benefiting from extensive exclusions, exited the union with a significantly larger share of assets compared to the wife (16 million to $2.2 million). Moreover, the husband had utilized his excluded property to finance the family’s lifestyle throughout the marriage, further complicating the financial landscape and the interpretation of fairness.
These factors, while not explicitly outlined in the unequal division provisions set out in section 96 of the Family Law Act, prompted deliberation on their relevance in determining equitable distribution. The Court’s decision to reverse the equal division underscores the unpredictability of outcomes where significant judicial discretion is involved in the interpretation of the legislation.
One of the notable remedial actions taken by the Court was granting the wife an additional $1,000,000 in property. However, the rationale behind this specific amount, achieving a 65/35 split in favor of the wife, was not explained nor analyzed. This lack of clarity opens the door to speculation about alternative remediation measures, how they might be consistently applied in the future, and their effectiveness in addressing the underlying unfairness.
The Court’s decision in Healey v. Healey underscores the importance of a nuanced understanding of financial intricacies in family law matters. While the Family Law Act provides a framework for property division and support obligations, the interpretation and application of its provisions remain subject to judicial discretion. As such, legal practitioners and their clients must navigate these complexities with caution, recognizing the potential implications of financial decisions made during marriage and separation.
The case serves as a reminder of the evolving nature of family law and the ongoing need for clarity and consistency in its application.
NOT LEGAL ADVICE. Information made available on this website is for information purposes only and is not legal advice. Do not rely on this information, nor take or fail to take any action, based upon this information. Do not disregard professional legal advice or delay in seeking legal advice because of something you have read on this website. Contact me here to discuss any specific legal issues.
March 6, 2024
B.C. Family Law Changes: Companion Animals/ Pets
As discussed in our previous blog post, in 2023/2024 there have been various changes to the B.C. Family Law Act. Schon Family Law strives to provide clients with the most current family law developments in order to provide the best legal advice and guidance. This blog is the first of a series describing the changes to the Family Law Act over the past year.
We all know that Fido is a family member, but up until recently, he was treated simply as property – no different than your Vitamix blender or a bank account. On January 15, 2024, changes to the B.C. Family Law Act came into effect. These changes concern what is defined in the Family Law Act as “companion animals.” Companion animals are those animals that people keep as pets and are not used for industry (such as farming) or service (such as a guide dog). These changes will assist people with determining ownership and possession of companion animals following a separation.
Previously the factors that determined who kept companion animals after separation were the same as those for dividing other types of property. The new changes recognize that living animals are distinct from other types of property and must be dealt with differently, including with consideration of the companion animal’s well-being.
Not only do these changes recognize the well-being of animals, but the changes are also children-focused and continue to put children’s best interests at the forefront. That is the court must consider the children’s relationship with pets when deciding who will have possession and ownership of the companion animal.
Families are of course still encouraged to resolve ownership of pets by settlement outside of court. If spouses agree on their own outside of court, they can agree to jointly own the pet, share possession of the pet, or give one spouse exclusive ownership or possession of the pet. However, if spouses cannot agree, they can ask the court to decide, and if the court does decide, only one person will be awarded possession or ownership.
In considering to whom they will grant ownership and possession of the companion animal, the B.C. Supreme Court must consider the following factors:
(a)the circumstances in which the companion animal was acquired;
(b)the extent to which each spouse cared for the companion animal;
(c)any history of family violence;
(d)the risk of family violence;
(e)a spouse’s cruelty, or threat of cruelty, toward an animal;
(f)the relationship that a child has with the companion animal;
(g)the willingness and ability of each spouse to care for the basic needs of the companion animal;
(h)any other circumstances the court considers relevant.
An order respecting a companion animal must not
(a)declare that the spouses jointly own the companion animal, or
(b)require the spouses to share possession of the companion animal.
Sections 95 [unequal division by order] and 96 [division of excluded property] do not apply to the making of an order respecting a companion animal.
These new changes mean that even if one spouse owned the animal before the relationship began, the court may not determine that the pet is that spouse’s excluded property. The court can award the pet to the other party after the condition of the above-listed factors, which the court cannot do with other types of property.
These changes will provide more clarity for families who are going through a separation and one of their family members has four legs.
NOT LEGAL ADVICE. Information made available on this website is for information purposes only and is not legal advice. Do not rely on this information, nor take or fail to take any action, based upon this information. Do not disregard professional legal advice or delay in seeking legal advice because of something you have read on this website. Contact me here to discuss any specific legal issues.
March 6, 2024
Navigating Changes in Family Law: A Deep Dive into the Family Law Amendments
Navigating Changes in Family Law: A Deep Dive into British Columbia’s Bill 17 – Family Law Amendment Act, 2023
In the ever-evolving landscape of family law, legislative changes often reflect society’s evolving understanding of relationships, responsibilities, and rights. One such significant development is Bill 17, passed by the Legislative Assembly of the Province of British Columbia, which makes changes to the B.C Family Law Act. Let’s delve into the key amendments introduced by this bill and their potential implications:
- Recognition of Companion Animals
One notable amendment introduced by Bill 17 is the recognition of “companion animals” within the Family Law Act. Defined as animals kept primarily for companionship, this inclusion acknowledges the emotional significance of pets within familial relationships. However, certain exclusions apply, such as guide dogs, animals kept for business purposes, or those kept for agricultural reasons.
This amendment signifies a shift towards recognizing the welfare of companion animals in family disputes, particularly during separation or divorce proceedings. It empowers courts to consider factors such as the animal’s welfare, caregiving responsibilities, and any history of family violence when determining ownership or possession. More to follow on this in a following blog post.
- Property Ownership Presumptions
Bill 17 introduced amendments aimed at clarifying property ownership presumptions between spouses. Specifically, the rule of law applying presumptions of advancement or resulting trust is eliminated in questions concerning property ownership. This change ensures a more equitable approach to property division by eliminating outdated legal presumptions that may not reflect the contributions of each spouse accurately.
Moreover, the amendment to Section 85 reinforces the exclusion of certain properties from family property, even in cases where legal or beneficial ownership is transferred between spouses. This provision ensures that excluded property remains exempt from division, promoting fairness and clarity in property disputes. (Note: excluded property can still be divided by a court – see #3 below).
- Division of Excluded Property
The amendments to Section 96 outline criteria for the division of excluded property, emphasizing fairness and practicality. Courts are empowered to order the division of excluded property under specific circumstances, such as the inability to divide family property located outside British Columbia or significant unfairness in the absence of division.
This provision balances the interests of both spouses while considering factors such as the duration of the relationship, direct contributions to property preservation, and the terms of any agreements between spouses.
Implications and Considerations
The Bill 17 amendments represent a significant step towards modernizing family law in B.C., emphasizing fairness, clarity, and the welfare of all parties involved. By recognizing the emotional and practical significance of companion animals, clarifying property ownership presumptions, and streamlining the division of assets, the amendments introduced by this bill aim to promote equitable outcomes in family disputes.
However, the practical implementation of these amendments may pose challenges, particularly in cases involving complex financial arrangements or contentious relationships. Legal practitioners, policymakers, and stakeholders must navigate these changes diligently and with awareness.
In conclusion, the Bill 17 amendments herald a new era in family law in B.C., marked by greater recognition of evolving familial dynamics and enhanced protections for all parties involved. As these amendments come into effect, it is essential to monitor their impact, address any challenges that arise, and continue striving towards a more just and equitable legal framework for families in the province.
NOT LEGAL ADVICE. Information made available on this website is for information purposes only and is not legal advice. Do not rely on this information, nor take or fail to take any action, based upon this information. Do not disregard professional legal advice or delay in seeking legal advice because of something you have read on this website. Contact me here to discuss any specific legal issues.
May 31, 2021
Love in the virtual world: Can a spousal relationship be formed online?
Vancouver & North Vancouver family lawyer discusses spousal and “marriage-like” relationships that may occur in the virtual world
In a previous blog post, I discussed the possibility that people who are not physically living together full-time but share their lives in some meaningful way may be found to be spouses under or Family Law Act.
A recent BC Supreme Court decision suggests that it may even be possible for a spousal relationship to take place in the virtual world.
In the case of Han v Dorje 2021 BCSC 939, Ms. Han applied to amend her notice of family claim to seek spousal support. The issue was whether Ms. Han and Mr. Dorje lived in a marriage-like relationship so as to give rise to a potential entitlement to spousal support.
The question the court grappled with is: can a secret relationship that began online and never moved into the physical world be like marriage-like?
In this case, the parties did not live together and they only met in person four times: twice very briefly in a public setting; a third time in private, when Ms. Han says Mr. Dorje sexually assaulted her; and a fourth and final occasion, when she informed Mr. Dorje she was pregnant with his child.
Ms. Han claimed that what began as a non-consensual sexual encounter evolved into a loving and affectionate relationship. That relationship occurred almost entirely over private text messages. The parties rarely spoke on the telephone, and never saw one another during the relationship, even over video. Ms. Han says they could not be together because Mr. Dorje is forbidden by his station and religious beliefs from intimate relationships or marriage, but that they formed a marriage-like relationship that lasted from January 2018 to January 2019.
The facts
Mr. Dorje is a high lama of the Karma Kagyu School of Tibetan Buddhism. He has been recognized and enthroned as His Holiness, the 17th Gyalwang Karmapa. His true home is in Tibet, but he currently resides in India.
Ms. Han is a former nun of Tibetan Buddhism. In October 2016, Ms. Han began a three-year, three-month meditation retreat at a monastery in New York State. Mr. Dorje was present at the retreat twice during the time Ms. Han was at the monastery.
Ms. Han made various allegations in court, including the following:
- On October 14, 2017, Mr. Dorje sexually assaulted her in her room at the monastery, and that she became pregnant from the assault.
- Dorje provided Ms. Han with his email address and a cellphone number, and, according to Ms. Han, said he would “prepare some money” for her.
- Ms. Han abandoned her plan to become a nun, left the retreat and returned to Canada. She never saw Mr. Dorje again.
- After Ms. Han returned to Canada, she and Mr. Dorje began regular communication over an instant messaging app called Line. They also exchanged emails and occasionally spoke on the telephone.
- The parties expressed care and affection for one another in their text communications. The parties wrote in a private shorthand, sharing jokes, emojis, cartoon portraits and “hugs” or “kisses”.
- Ms. Han expressed concern that her child would be “illegitimate”. She appears to have asked Mr. Dorje to marry her, and he appears to have responded that he was “not ready”.
- 2018, Mr. Dorje transferred funds in various denominations to Ms. Han as follows:
- a) $50,000 CDN to deliver the child and for postpartum care, she was to receive at a facility in Seattle;
- b) $300,000 CDN for the first year of the child’s life;
- c) $20,000 USD for a wedding ring, because Ms. Han wrote “Even if we cannot get married, you must buy me a wedding ring”;
- d) $400,000 USD to purchase a home for the mother and child.
On June 19, 2018, Ms. Han gave birth to a daughter in Richmond, B.C. On September 17, 2018, Mr. Dorje wrote via text, ”Taking care of her and you are my duty for life”.
Ms. Han’s expectation was that the parties would live together in the future. She says they planned to live together. Those plans evolved over time. Initially, they involved purchasing a property in Toronto, so that Mr. Dorje could visit when he was in New York. They also discussed purchasing property in Calgary or renting a home in Vancouver for that purpose. Ms. Han eventually purchased a condominium in Richmond using funds provided by Mr. Dorje.
Ms. Han deposes that the parties made plans for Mr. Dorje to visit her and meet the child in Richmond. In October 2018, however, Mr. Dorje wrote that he needed to “disappear” to Europe.
In January 2019, Ms. Han lost contact with Mr. Dorje.
The court’s analysis
The court stated that to claim spousal support, Ms. Han must prove that she lived with Mr. Dorje in a marriage-like relationship (note the two-year onus was not required as they have a child).
The determination of whether a couple lives in a marriage-like relationship is a fact-specific inquiry that judges must make on a “holistic” basis, having regard to all of the evidence. There are certain common factors that most marriage-like relationships have (although these factors are not all present in all cases). Namely, the couple:
- Physically reside together or in some way.
- Are intimate and/or have sexual relations.
- Conduct domestic duties together.
- Socialize together and represent themselves as a couple.
- Have a level of economic interdependence/support and they may share expenses and/or finances.
The judge found that although the only factor present, in this case, was economic support, and that the money Mr. Dorje provided to Ms. Han at her request was an expression of his commitment to her in circumstances in which he could not commit physically. The payment of money could be seen as a promise of continued emotional and financial support for Ms. Han, or, in Mr. Dorje’s own words, “Taking care of her and you are my duty for life”.
The court did not find it significant that Mr. Dorje agreed to provide funds for Ms. Han to purchase a wedding ring given she demanded and it was not a mutual symbol. That said, the court found it was relevant that Mr. Dorje provided $20,000 USD to Ms. Han for something she wanted that was of no benefit to the child.
The court held that the parties appear to have expressed genuine care and affection for one another. They appear to have discussed marriage, trust, honesty, finances, mutual obligations and acquiring family property. These are not matters one would expect Mr. Dorje to discuss with a friend or a follower, or even with the mother of his child, without a marriage-like element of the relationship.
The court’s conclusion
In conclusion, the court stated that the definition of a spouse in the Family Law Act does not require that the parties live together, only that they live with another person in a marriage-like relationship. In Ms. Han’s case, however, almost all of the traditional factors are missing. The fact that Ms. Han and Mr. Dorje never lived under the same roof, never shared a bed, and never even spent time together in person will militate against a finding they lived with one another in a marriage-like relationship. However, the traditional factors are not a mandatory checklist that confines the “elastic” concept of a marriage-like relationship.
As stated by the court, if the COVID-19 pandemic has taught us nothing else, it is that real relationships can form, blossom, and end in virtual worlds.
Ms. Han was given leave to amend her pleadings.
What’s the takeaway?
It appears that the court’s becoming exceedingly more open to more liberal interpretations of what it means to spouses living in a “marriage-like” relationship. This progressive approach may have received a boost from the COVID-19 pandemic as people have sought connection through the virtual world. What this means is that couples who would not normally fit into the mould of a marriage-like relationship may in fact be in one, which has significant legal implications if they separate. Therefore, it is prudent that if you are in any relationship, you should consult a family law lawyer to discuss your potential rights and obligations.
NOT LEGAL ADVICE. Information made available on this website is for information purposes only and is not legal advice. Do not rely on this information, nor take or fail to take any action, based upon this information. Do not disregard professional legal advice or delay in seeking legal advice because of something you have read on this website. Contact me here to discuss any specific legal issues.
May 27, 2021
Family Law Agreements Part 2: Can you rely on them?
Vancouver & North Vancouver family law lawyer discusses the reliability of family law agreements
In my last blog, I discussed the circumstances under which a family law agreement may be set aside. Recently, the BC Court of appeal in Dhaliwal v. Dhaliwal, 2021 BCCA 72 grappled with this issue – namely- whether to set aside the terms of a marriage agreement.
In this case, Mr. Dhaliwal and Ms. Dhwaliwal were married for approximately ten years. The parties each had their own career at the time they met, and this was a second marriage for both of them. Ms. Dhaliwal moved from India, where she had an established academic career, to Richmond, BC, with her 13‑year‑old son to live with Mr. Dhaliwal. Mr. Dhaliwal was a widower and had three children who were adults when he married Ms. Dhaliwal. He had significantly more assets than Ms. Dhaliwal. He was 56 and she was 43 years old when they married.
The marriage agreement provided that the parties would retain the property they brought into the marriage as well as any increase in value. Instead of the usual division of family property, Ms. Dhaliwal would receive a lump sum which increased based on the duration of the marriage. The marriage agreement precluded spousal support. The agreement and marriage occurred at a time when the applicable family law legislation was the predecessor legislation of the current Family Law Act, being the Family Relations Act (the “FRA”). Mr. Dhwaliwal did not disclose all of his assets in the marriage agreement.
From Mr. Dhaliwal’s perspective, the agreement was intended to keep the parties’ assets separate. He had acquired significant assets before marriage, and he wanted to keep these for himself and his children’s future.
They separated after ten years and as a result, Mr. Dhaliwal was required under the agreement to make a lump-sum payment of $450,000 to Ms. Dhaliwal. Ms. Dhwaliwal applied to the BC Supreme Court to set the agreement aside as she wanted a larger payment.
In considering its enforceability, the trial judge identified the two-stage test described in Miglin v. Miglin 2003 SCC 24 (more fully discussed in my last blog): (1)whether the agreement was fair at the time of its making, and (2) whether it is fair now, at the time of its operation.
A court may intervene to override a domestic contract where vulnerability or a flaw in the negotiation process has occurred. The court must consider whether there were any circumstances of oppression, pressure, or other vulnerabilities.
Regarding the first stage of the test, the trial judge concluded that the circumstances were fair. While the respondent had not fully disclosed the value of all of his assets, the claimant received independent legal advice and was aware that she could seek more information, but chose not to. Further, she was concerned about her ability to acquire a home should their relationship end, which contributed to the lump sum payment structure. This demonstrated an ability to negotiate the agreement. The trial judge put particular weight on the claimant’s receipt of independent legal advice and ultimately upheld the agreement’s fairness at the time of its making.
The next step required the trial judge to consider the fairness of the agreement at the time of the trial. The trial judge considered the statutory factors set out at s. 65(1) of the FRA for the reapportionment of family property. Of particular importance to the trial judge’s analysis was that virtually all of the respondent’s assets had been acquired well before the marriage and that the claimant had not made any significant contribution to the respondent’s assets or career. Further, there had not been any unforeseen change in circumstances. The judge also considered that the receipt of spousal support supported the fairness of the agreement.
The Court of Appeal upheld the trial judge’s conclusion on the first stage of the analysis. However, the Court of Appeal found that the trial judge had overlooked two key facts in reaching her conclusions that the operation of the agreement at the time of trial was in line with the parties’ original contemplations.
The judge did not consider that the basis for the lump‑sum payment to Ms. Dhaliwal, as stated in the agreement was to enable Ms. Dhaliwal to purchase a home. The judge did not mention the specifics regarding the value of the family home which had dramatically increased from a value of $875,000 at the time of the agreement to a value of $1,900,000 at the time of trial. In other words, the family home value increased by just over 100%– an increase which, as found by the trial judge, was “in line” with the housing market in the Lower Mainland during this time.
There was no evidence or finding that the parties contemplated the dramatic increase in value when contemplating that the lump‑sum payment provided for in the agreement would enable Ms. Dhaliwal to acquire a home.
Leaving the agreement unaltered would mean that Mr. Dhaliwal would be the sole beneficiary of the windfall increase in value of the family home, despite the facts that the growth in the real estate market occurred during the marriage and had a disproportionately negative impact on Ms. Dhaliwal’s ability to acquire a home.
The Court of Appeal said the exceptionally large increase in the value of residential real estate in the Lower Mainland over the course of the parties’ marriage, relative to the clear goal of the lump‑sum payment provided for in the agreement, was such a significant factor in considering whether the outcome of the agreement operated fairly that it had to be considered by the judge.
The court of appeal also found that the trial judge erred in assuming that the parties contemplated the scale of disparity in the parties’ financial circumstances at the marriage breakdown, given that the respondent had not disclosed the full scope of his wealth at the time the agreement was made.
The Court found that the agreement was significantly unfair, but that this unfairness could be remedied by allowing the claimant to share equally in the increase in value of the family home. This resulted in an increase in the lump sum payment payable to the claimant from the $450,000 provided for in the agreement to $525,000.
So, what is the takeaway?
Although courts will make their best efforts to uphold family law agreements, if circumstances exist at the time of separation that were not contemplated or planned for by the parties at the time they negotiated the family law agreement, then the court may set the family law agreement aside to achieve fairness. Further, this decision highlights the importance of financial disclosure in a family law agreement – if a party fails to disclose assets at the time the family law agreement is negotiated, the agreement is vulnerable to being set aside in the future. Lastly, this case is a good reminder that a spouse having legal advice at the time of signing does not bulletproof the agreement – if the agreement is significantly unfair or flawed in other ways (see a full listing of these factors in my last blog), the fact that spouse received independent legal advice may not prevent it from being set aside.
If you are going to enter into a family law agreement of any sort, make sure that both you and your spouse are entering into the agreement on mutually acceptable terms, intentionally and with full and accurate financial disclosure. Make sure that you each have the opportunity to obtain adequate independent legal advice and that you and your spouse put your mind to the possible circumstances that may unfold in the future and how you intend your agreement to address those changing circumstances.
NOT LEGAL ADVICE. Information made available on this website is for information purposes only and is not legal advice. Do not rely on this information, nor take or fail to take any action, based upon this information. Do not disregard professional legal advice or delay in seeking legal advice because of something you have read on this website. Contact me here to discuss any specific legal issues.
April 27, 2021
Family Law Agreements Part 1: Can you rely on them?
Vancouver & North Vancouver family law lawyer discusses the reliability of family law agreements
The goal of entering into a family law agreement is to achieve certainty, predictability, and finality, whether that be through a cohabitation/marriage (“prenuptial”) agreement with a new partner or a separation agreement with your ex.
A cohabitation/marriage (“prenuptial”) agreement will typically deal with the division of assets upon a possible separation and may also deal with spousal support. A separation agreement will often deal with all issues arising in a family’s situation, including parenting arrangements, property and debt division, child support and spousal support.
However, sometimes family law agreements may be set aside or varied by the BC Supreme Court if challenged by a spouse at a later date. Under the Family Law Act, our current provincial family law legislation, on an application by a spouse, the BC Supreme Court may set aside or vary a family law agreement if:
a. A spouse fails to disclose significant property or debts or other information relevant to the negotiation of the agreement. For example, a spouse fails to disclosure certain bank accounts or property owned in another jurisdiction, either intentionally or because they simply forgot.
b. A spouse takes improper advantage of the other spouse’s vulnerability, including their ignorance, need or distress. For example, one spouse convinces the other spouse that they do not need to speak to a lawyer before signing the agreement.
c. A spouse does not understand the nature or consequences of the agreement. For example, a spouse has language barriers that prevent them from understanding the deal that they are entering, or otherwise have a limited knowledge of the financial terms of the agreement.
d. Other circumstances that would, under the common law, cause all or part of a contract to be voidable. The other circumstances under common law are:
1. Unconscionability: the agreement is obviously and seriously unfair to one of the spouses. For example, a party takes advantage of a power disbalance to craft a deal that deprives a party of their basic legal rights.
2. Misrepresentation: A party signs the agreement on the basis that misleading information had been provided. For example, a party may state that the value of a certain asset is less than it is, or that their income is lower than it is.
3. Undue influence: A spouse takes advantage of a position of power over the other spouse. For example, a spouse who has more knowledge of the family’s finances may convince the other spouse to enter into a “bad deal” based on their limited information.
4. Duress: There was some pressure or stress on one of the spouses which resulted in them signing the agreement. For example, one spouse pressures another or makes threats in order to get them to enter into the agreement.
The BC Supreme Court may also set aside a family law agreement if the agreement is significantly unfair. For example, if a significant period of time has passed since the agreement was made and terms no longer operate fairly, the agreement may be set aside or varied. Further, if the spouses seemed to conduct their lives in disregard of the agreement, the court may set it aside or vary it.
So how does the Supreme Court determine whether to set aside or vary a family law agreement?
There have been a few important cases from the Supreme Court of Canada on when a court may set aside an agreement. In Miglin v. Miglin 2003 SCC 24, the Supreme Court of Canada prescribed a two-stage test (the “Miglin Test”) that a court must apply if a family law agreement is challenged.
Stage one – There are two parts to this first stage.
(1) The first part requires the court to consider the circumstances under which the agreement was negotiated and executed. A court may set aside family law agreement where one spouse was vulnerable or there was some unfairness or a flaw in the negotiation process (such as the circumstances discussed above in a-d and 1-4).
It should be noted that independent legal advice can assist in protecting against vulnerabilities and unequal bargaining power. However, independent legal advice is not a complete answer and does not always prevent an unfair agreement from being set aside. For example, unfairness resulting from a power imbalance (including the amount of funds available to one of the spouses to fund the negotiation process), lack of full disclosure, time pressure, or mental health issues may not be mitigated by independent legal advice. So just because both spouses have had legal advice, the family law agreement is not necessarily bulletproof!
(2) The second part asks whether the agreement substantially complied with the law at the time it was made.
If the agreement fails the first stage of the Miglin Test, then it may be set aside in whole or in part and the Family Law Act and the Divorce Act will apply. If the agreement does not fail the first stage, it will proceed to the second.
Stage two.
At the second stage, the court must assess whether the agreement still reflects the original intentions of the parties and the extent to which it is still in substantial compliance with the law. The party seeking to set aside the agreement will need to show that these new circumstances were not reasonably anticipated by the parties, and have led to a situation that cannot be condoned. Some degree of change in the circumstances of the parties is always foreseeable, as agreements are future-oriented the court will presume that spouses are aware that health, job markets, parental responsibilities, housing markets, and values of assets are all subject to change. It is only where the current circumstances represent a significant departure from the range of reasonable outcomes that the court may set aside the agreement.
So, what is the takeaway?
The BC courts believe that spouses should be free to choose to structure their affairs in a number of different ways, including “unequally”, and courts are reluctant to second-guess the agreements that spouses enter into. One should never enter into a less-than-favourable deal on the assumption that they can simply “deal with it later” by applying to the court for a better deal at a later date – BC courts will make their best efforts to uphold family law agreements, so make sure that your deal is acceptable to both you and your spouse. That said, courts will only intervene when necessary.
If you are going to enter into a family law agreement of any sort, make sure that both you and your spouse are entering into the agreement on mutually acceptable terms, intentionally and with full and accurate financial disclosure. Make sure that both parties have the opportunity to obtain adequate independent legal advice and be sure that you and your spouse put your mind to the possible circumstances that may unfold in the future, and how you intend your agreement to address those changing circumstances.
NOT LEGAL ADVICE. Information made available on this website is for information purposes only and is not legal advice. Do not rely on this information, nor take or fail to take any action, based upon this information. Do not disregard professional legal advice or delay in seeking legal advice because of something you have read on this website. Contact me here to discuss any specific legal issues.
April 14, 2021
How to Lose your Excluded Property Part 1: Transfer Excluded Property into Joint Names
Vancouver & North Vancouver family lawyer discusses how to lose your excluded property
In a previous blog post, I discussed the ways that a spouse may lose their excluded property resulting in them having to share that property with their ex-spouse if they separate. A common way for a spouse to lose their excluded property is to transfer the excluded property into joint names.
For example, you may lose your excluded property by transferring it into real estate jointly held with your spouse (that is, property owned in “joint tenancy”); a bank account jointly owned with your spouse; a vehicle joint registered in your name with your spouse, or other property which is jointly owned.
As I have previously discussed, there are eight categories of excluded property listed in the Family Law Act. Some common types of excluded property are:
- Property owned by a spouse prior to the spousal relationship. For example, your equity in the family home that you owned prior to becoming spouses.
- Gifts to one spouse from a third party. For example, a gift from your parent to you for the down payment of real estate.
- Inheritances received by one spouse. For example, your grandmother passes and leaves you a cash inheritance.
- Personal injury settlements and insurance settlements (not attributed to the loss of income).
In the recent BC Supreme Court case of Basi v Basi, 2021 BCSC 421, the court confirmed that if a spouse transfers excluded property into joint names, but does not take steps at the time of the transfer to ensure that their excluded property will be returned to them at separation, and the court cannot otherwise find evidence of an intention to keep the excluded property separate, the excluded property will be lost and shared with the other spouse. For example, if there is evidence that the spouses at the time of transfer were “coming together” with the intention of commonly owning property, and they do not discuss what will happen if they break up, the excluded property will likely be lost.
If, however, a court can find evidence that a spouse did not intend to make a gift, then the transferring spouse may be able to keep his excluded property. Such evidence may include, for example, an oral agreement between the spouses that the excluded property would be returned upon separation, or some other circumstantial evidence of intention to keep the property separate.
In Basi v. Basi the parties began cohabiting in May 2005, were married in May 2007 and separated in July 2016. When the parties met in 2004 Ms. Basi was living in a rental suite and Mr. Basi was living in a house he co-owned with his mother (the “First House”).
On September 1, 2006, the parties began living together in a home they purchased together in June 2006 (the “Second Hose”).
The parties separated on July 13, 2016, and at that time owned a property (the “Third House”). Mr. Basi, amongst other claims, claimed $207,930 of his excluded property was used to purchase the Second House. Specifically, a $10,000 deposit that was paid towards the purchase of the Second House (which Mr. Basi said was derived from a line of credit secured against the First House) and $197,930.27 from the sale proceeds of the First House that was used as the down payment for the Second House.
It should be noted that in 2006 Ms. Basi received approximately $101,000 as her share of the family assets from her previous marriage.
Mr. Basi says the parties agreed he would provide the funds to purchase the Second House, and that Ms. Basi would provide her $101,000 as a contribution towards future household expenses, and not towards the acquisition of the Second House. Ms. Basi stated that she provided her $101,000 to Mr. Basi as her contribution to the purchase of the Second House, being half of the approximately $200,000 the parties put towards its purchase.
The court’s finding
After considering all of the evidence, the court found that Mr. Basi lost his exclusion for the following reasons:
During his testimony, Mr. Basi described the purchase of the Second House as the parties’ “coming together” to buy something after both the First House and Ms. Basi’s former family residence had been sold. Such a description was inconsistent with the suggestion that Ms. Basi made no contribution towards the purchase of the Second House.
(1) The parties took title to the Second House as joint tenants, evidencing their intention to jointly purchase the property.
(2) The parties had no discussions about how their respective financial contributions would be treated or about what would happen to their family property upon the breakdown of the relationship until the year leading up to their separation.
(3) Over the course of their relationship, the parties worked jointly to improve first the First House, then the Second House, and finally the Third House. Each contributed what they were able towards the household expenses. They equally took on the debt associated with both the Second House and the Third House.
(4) At the time the Second House was purchased, there was no acknowledgment by Ms. Basi that Mr. Basi’s contribution was to remain his exclusive property.
So, what’s the takeaway?
If you have excluded property that you do not want to share with your spouse if you separate, the safest thing to do is to keep it in your sole name. However, if you do decide to place excluded property into joint names with your spouse, make sure you document an express intention to keep the excluded property separate in the event you separate. My recommendation is that you enter into a marriage or cohabitation agreement (also known as a “prenuptial agreement”) which clearly states you and your spouse’s intentions with respect to excluded property. You can learn more about marriage or cohabitation agreements (also known as a “prenuptial agreement”) here and you can contact me here to book your free consultation.
NOT LEGAL ADVICE. Information made available on this website is for information purposes only and is not legal advice. Do not rely on this information, nor take or fail to take any action, based upon this information. Do not disregard professional legal advice or delay in seeking legal advice because of something you have read on this website. Contact me here to discuss any specific legal issues.
February 27, 2021
Unequal Division of Family Property Part 2: Unequal Contribution and Bad Behaviour
Vancouver & North Vancouver family lawyer discusses the unequal division of family property
Can unequal contribution and bad behaviour lead to unequal division of family property? It just might.
As I have discussed in my previous blog post found here, family property is generally shared by spouses equally if they separate. Family property is all property earned or acquired by one of the spouses during the “spousal relationship.” I discuss the defining features of spousal relationships here.
Family property can only be unequally divided if it is “significantly unfair” to divide it equally. To clear the high hurdle of significant unfairness, there must marked, prolonged, and intentional or unexplained disparities in contribution to family burdens. Unequal division requires something objectively unjust, unreasonable, or unfair in some important or substantial sense.
Under the Family Law Act there are nine listed circumstances in which family property can be unequally divided. Although this list of factors was supposed to introduce certainty into our family property law, there is a catchall provision that allows courts quite a bit of discretion when deciding if they want to unequally divide property. In the recent case Vancouver BC Supreme Court case of Chang v. Chang 2020 BCSC 1783, the “other factor” warranting unequal division was the lack of contribution of one spouse and most surprisingly, his bad behaviour.
In this case, Ms. Chang and Mr. Chang were married for 27 years prior to separating in 2017. Over the course of their relationship, Ms. Chang undertook the majority of the childcare, household and financial responsibilities for the family. Further, Mr. Chang displayed concerning behaviour throughout the relationship.
- On the date of the parties’ separation Mr. Chang, Ms. Chang and one of their sons got into an altercation. As a result of that altercation, Mr. Chang entered into a recognizance that included a provision that he have no contact with Ms. Chang or the parties’ sons.
- For the 10 years leading up to the parties’ separation, Mr. Chang reported low total annual incomes. He was unemployed during significant periods during the marriage and he was not always motivated to search for work. He often left jobs voluntarily.
- Mr. Chang was always the primary caregiver to the parties’ sons and was responsible for most of the housekeeping duties.
- Mr. Chang testified that she feared leaving their sons solely in Mr. Chang’s care as he lacked patience and he angered easily. When angry, he would yell and call their sons names. Mr. Chang would also raise his hand threateningly as if to hit them. Ms. Chang gave many examples of Mr. Chang’s questionable behaviour and angry outbursts towards their sons.
- Mr. Chang’s history of inappropriate behaviour also extended to his relationship with Ms. Chang. He taunted and belittled her, especially about her work. Mr. Chang told her that City workers were lazy.
- Mr. Chang mistreated the family dog.
- Mr. Chang was a hoarder. He filled all of the main rooms, hallways, garage and exterior storage sheds at the Family Home with his purchases, collections and possessions. Many areas inside the family home appeared virtually impassable due to massive piles of Mr. Chang’s possessions. For example, in the basement recreation room, there were stacks of boxes and possessions nearly filling the room, except for a narrow pathway. As a result Ms. Change was too embarrassed to invite friends over.
- Mr. Chang undertook a renovation of the downstairs bathroom. He demolished the shower stall but never replaced it. Mr. Chang’s bathroom renovation effectively reduced the total working showers from two to one.
Based on the above facts, the court unequally divided the family home in Ms. Chang’s favour by providing Mr. Chang with only 25% of the equity.
The court’s decisions was based on: (1) Mr. Chang’s lack of contribution vis-a-vis Ms. Change; and (2) the bad behaviour of Mr. Chang.
Lack of contribution
The court found that there was evidence of significant disparities in contribution to family burdens, such as childrearing and household duties, which were intentional and unexplained. Mr. Chang’s renovations were detrimental to the family home. He also spent his limited earnings on his own personal, discretionary expenses for items such as memorabilia and spare tools, before he contributed anything to family expenses. He deliberately prioritized his own spending needs above the financial needs of his family. Mr. Chang spent prolonged periods underemployed or unemployed. He provided no reasonable explanation for his lack of employment, his lack of motivation to work, or his failure to make a greater financial contribution to the marriage.
Bad behaviour
In addition to Mr. Chang’s deliberate pattern of lesser contribution to financial, childrearing and household duties, the court held that that the bad behavior of Mr. Chang also warranted unequal division, namely:
- Mr. Chang’s history of inappropriate behaviour such as bullying, threatening and denigrating talk directed at Ms. Chang and the parties’ sons, which made Ms. Chang fearful of ending their relationship earlier; and
- Mr. Chang’s long use of the Family Home as a place to hoard massive quantities of his possessions, which deprived his family of the full use and enjoyment of the Family Home.
What’s the takeaway?
If one spouse has contributed significantly more to the relationship in terms of finances, child-rearing and household duties, a court may decide to unequally divide family property. Further, if one spouse engages in a repeated pattern of inappropriate, self-focused and bullying behaviour, they just might be punished for it by having family property unequally divided, to their detriment.
The likelihood of this occurring can only be assessed on a case-by-case basis and thus it is very important to consult a Vancouver family property law lawyer to discuss the likelihood of an unequal division occurring in your case. You can contact me here to book a free consultation to discuss your unique situation.
NOT LEGAL ADVICE. Information made available on this website is for information purposes only and is not legal advice. Do not rely on this information, nor take or fail to take any action, based upon this information. Do not disregard professional legal advice or delay in seeking legal advice because of something you have read on this website.
February 10, 2021
Unequal Division of Family Property Part 1: Short Relationships and Unequal Financial Contribution
If one spouse owns the family home, contributes more money and the relationship is short, will family property be divided equally?
A common situation is this: a couple moves in together and only one of them owns and financially maintains the family home. They are together for a few years (as least two) and then they separate.
As I have discussed in my previous blog post found here, family property is generally shared by spouses equally if they separate. Family property is all property earned or acquired by one of the spouses during the “spousal relationship.” I discuss the features of spousal relationships here.
When B.C.’s Family Law Act was enacted in 2011, it was supposed to bring some certainty into how family property is divided. That is, family property is presumed to be equally divided 50/50, regardless of the contribution of each spouse. Further, under the Family Law Act, family property can only be unequally divided if it is “significantly unfair” to divide it equally – and the courts have said this is a high bar.
To meet the “significant unfairness” test, the court must be satisfied that there exists “something objectively unjust, unreasonable or unfair in some important or substantial sense” which requires the family property to be divided unequally.
After the enactment of the Family Law Act, family law lawyers thought that courts would unequally divide family property only in rare circumstances, but we have seen more unequal division cases than expected – in fact, unequal division cases are on the rise in British Columbia.
Is a short relationship where only one of the spouses owned and financially maintained the family home one of these “significantly unfair situations” that warrants unequal division?
It seems so.
A court may unequally divide family property if it would be significantly unfair to divide it equally based on the short duration of the relationship and “any other factor” that may lead to significant unfairness. The contribution of each spouse has been considered by the courts within the “any other factor” consideration for an unequal division.
Below I will discuss short relationships and unequal contribution as a basis for unequal division.
Short relationship
We have seen unequal division by the courts in cases where the spouses have relatively short relationships. Specifically, a relationship of approximately 4 years or less has been a factor that has been given considerable weight in supporting unequal division cases. In Vancouver, we saw quite a few unequal division cases in short relationships due to the dramatic rise in the Vancouver real estate market. This led to a significant increase in the value of the matrimonial homes in a short period of time, with little or no contribution of the non-owning spouses. The courts saw the 50/50 split of the increase in the value of the family home as a windfall to the non-owning spouse, and thus significantly unfair.
Lack of contribution
In several BC cases, the court has also reapportioned the increase in the value of a property to the spouse that owned the property before the relationship began and was responsible for virtually all of the payments towards the down payment, mortgage, taxes, and the ongoing household expenses of the property before and during the relationship. Unequal division based on lack of contribution is most often tied to the short length of a relationship, as relative contribution becomes less significant in longer relationships where the spouses’ lives are more intertwined.
Recent BC court case on unequal division
Recently another B.C. court unequally divided the family home based on the short length of the relationship and the non-owning spouse’s lack of contribution.
In the recent Vancouver BC Supreme court case of Chapman v. Cuthbert 2021 BCSC 1, the parties were in a common-law relationship for approximately 2.5 years, which ended with separation in November 2017. The main issue in dispute was the division of the matrimonial home. Mr. Cuthbert owned the family home before the relationship, and the couple lived in the home during their relationship. The increase in equity in the family home during the spousal relationship was $196,505.02, and this was attributable to market forces rather than any specific contribution by either of the parties towards the family home.
Mr. Cuthbert asked for an unequal division of the family home on the basis that equal division would be significantly unfair due to the short length of the relationship; because he owned the matrimonial home before the relationship; and was the sole person on the mortgage to the home, made all the mortgage payments, took care of all of the property-related expenses, and a substantial portion of the parties’ joint living expenses.
Ms. Chapman sought an equal division of the family home under the Family Law Act.
The court found that the family home should be divided unequally. The court awarded Mr. Cuthbert 80% of the increase in the value of the family home and Ms. Chapman 20% of the increase in the value of the family home.
The court stated that the greatest factor which resulted in the unequal division was the short duration of the relationship between the parties (2.5 years). The court also found that the unequal contribution of the parties meant it was unfair to divide the family property portion of the family home equally. Namely, the asset was purchased with Mr. Cuthbert’s money, he paid for all the house-related expenses, and he was the only person who put his money and credit at risk by being solely on the title for the mortgage.
What’s the takeaway?
If the family home has increased in value during the relationship but one spouse owned the family home before the relationship, has contributed to most of the expenses and the relationship was relatively short, there is a reasonable likelihood that the equal division of family property division provisions will not be followed, and family property will be unequally divided. The likelihood of this occurring can only be assessed on a case-by-case basis and thus it is very important to consult a Vancouver family property law lawyer to discuss the likelihood of an unequal division occurring in your case.You can contact me here to book a free consultation to discuss your unique situation.
NOT LEGAL ADVICE. Information made available on this website is for information purposes only and is not legal advice. Do not rely on this information, nor take or fail to take any action, based upon this information. Do not disregard professional legal advice or delay in seeking legal advice because of something you have read on this website.
