February 10, 2021
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.
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.
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