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
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.
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 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.
January 26, 2021
Can you lose your excluded property if you separate from or divorce your spouse?
As I mentioned in my last post, there are eight categories of excluded property 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).
A common question for Vancouver family law lawyers is: If you have excluded property, and if you and your spouse separate or divorce, you get to keep your exclusion, right?
January 7, 2021
Family Law Property Rights: an often Misunderstood and Contentious Subject
In Vancouver, family property division, family debt division and excluded property division are governed by the laws in the Family Law Act. These laws apply to those couples who meet the definition of “spouses” in the Family Law Act. Spouses are those couples who have been “living in a marriage-like relationship” for a period of two years or more.