Division of Property

Division of Property Entitlement FLA 3(1)(a) a person who is married to another person 3(1)(b)(i) a person who has lived with another person in a marriage-like relationship for a continuous period of >= 2 yrs 3(2) a former spouse Time limits – Married spouses – 2 years from the date of 198(2)(a)(i) the divorce order 198(2)(a)(ii) the marriage being declared null Unmarried spouses – 198(2)(9)(b) 2 years from the date of separation Family Law Act Explained, British Columbia, Part 5 & 6 FLA uses an excluded property model - involves less judicial discretion when identifying what assets need to be divided Division of Property applies to ALL married AND cohab x 2 yr couples - FRA did not include property/debt division for unmarried but in FLA they were included Newton v Crouch Bold move by BC to treat married and unmarried the same in 2013 FLA Ascription model! Limits autonomy, But it also provides protection for vulnerable people Makes assumption that people know ore about family law than they do Section 81 Equal responsibility - Subject to any agreement or order, spouses are both entitled to family property and responsible for family debt regardless of their respective use or contribution. Gets at interdependence of spouses. Influenced by concept of unjust enrichment. Section 84 Family property - all of the spouses’ debt and property at separation as family property unless it is excluded under section 85 of the Family Law Act. Not relevant if it was used for “family purposes” to be included Section 85 Excluded property The spouse claiming that property is excluded property has the burden of proof to prove it is excluded. • pre-and post- relationship property; • gifts and inheritances to one spouse; • settlements or damage awards, except that part meant to compensate both spouses or to replace wages; • non-property-related insurance proceeds, except that part meant to compensate both spouses or to replace wages; and • some kinds of trust property Section 86 Family debt - All debts incurred by either spouse during the relationship are to be equally divided. - There is an exception for debt incurred after the date of separation where it is to maintain family property. Section 87 how and when the value of family property and family debt is determined - establishes a valuation date that is either the date of an agreement or the date of a court hearing dividing the property. A different date may be selected by agreement or court order. Section 89 Orders for interim distribution of property - authorizes judges to make orders for interim distribution of property prior to final resolution of the issues to assist in making assets available to economically disadvantaged spouses who need them to achieve a fair division of family property. Section 90 Temporary orders respecting family residence - authorizes the Supreme Court, which has exclusive jurisdiction over property issues, to make a temporary order for a specified period of time for exclusive occupation of a family residence or exclusive use and possession of personal property stored at the family residence. Division 4 – Dividing Family Property and Family Debt Section 92 Spouses may make agreements respecting property division • dividing family property or family debt or both; • dividing property or debt unequally; • including property or debt that would not by statute be included; • excluding property or debt that would otherwise be included; and • choosing a different valuation method for family property or family debt. Spouses have autonomy to depart from the Family Law Act with respect to property division. Section 93 Basis for setting aside agreements respecting property division First: was the agreement procedurally fair at the time it was made, based on the criteria in section 93(3)? - If not, the court is to set it aside and make an order dividing property, unless the order that it would make would substantially the same as the agreement. Second: even if procedurally fair, the court may set aside the agreement and replace it with an order dividing property if the substance of the agreement is “significantly unfair” having regard to the limited criteria set out in section 93(5). - The criteria to determine if an agreement is procedurally flawed are whether: - a spouse failed to disclose significant property or debts - a spouse took improper advantage of the other spouse’s vulnerability - a spouse did not understand the nature or consequences of the agreement; and - other circumstances that would, under the common law, cause a contract to be voidable. - The criteria that the court must consider to determine if the substance of an agreement is “significantly unfair” is: - the length of time that has passed since the agreement was made; - the intention of the spouses; and - the degree to which the spouses have relied on the agreement. Section 95 Unequal division by order It is intended to create a higher threshold and make the test for unequal division stricter. - allows a court to use an unequal division of property to compensate for situations where spousal support is insufficient to meet the spousal support objectives. - changes the threshold for dividing family property unequally from whether it would be “unfair” not to do so to whether it would be “significantly unfair” not to do so. - limits judges’ discretion to divide family property unequally between spouses. Section 96 Division of excluded property • Provides judges with flexibility to divide excluded property, but only in very limited and defined circumstances • Excluded property may be divided only in two situations: o family property or family is debt located outside British Columbia and cannot practically be divided; or o it would be significantly unfair not to divide excluded property considering the duration of the relationship and a spouse’s direct contribution to the preservation, maintenance improvement or management of the excluded property. Trust property 84 FLA a spouse’s interest in trust property can be family property; 84(3) FLA family property includes any part of trust property THAT (a) spouse is beneficiary (b) spouse has power to tx (c) spouse can terminate trust ALSO IN W(SLM) v W(MRG) s 89 Orders for interim division of property s 90 Temporary orders respecting family residence s 91 Temporary orders respecting protection of property Asselin v Roy 2013 BCSC 1681 * If proven, an oral agreement is binding - Parties must provide evidence as to their financial situation - Not just Form A but a complete portrait of their assets throughout the time to decide on division of property Cabezas v Maxm 2016 BCCA 82 * If a gift is made to both spouses, it is family property - Primary issue was payments made by the respondents parents on the mortgage - Mortgage payments that were given to spouses by others - Is a gift to both spouses family property? Yes if it was intended to be for both F(VJ) v W(SK) 2016 BCCA 186 * S 104 is not a complete code - Principles from common law (above) and equity principles apply EQUITY WILL PREVAIL 104 (1)If there is a conflict between this Part and the Partition of Property Act, this Part prevails. (2)The rights under this Part are in addition to and not in substitution for rights under equity or any other law. Presumptions in Property - Rebuttable - Used when insufficient evidence to the contrary Presumption of resulting trust - Equity presumes bargains not gifts - Principle when giving something that a transfer without consideration it is presumed that a gift was not intended - Transferee (recipient) has to demonstrate that a gift was intended - In some contexts/circumstances, this rule does not apply (ie family law) Presumption of advancement - Materializes when a spouse gives or transfers property to their spouse - Or when a parent gives or transfers property to a child - In the family context courts have extended this to unmarried spouses as well (in BC, not all prov) - In this presumption, in family contexts, it is presumed to be a gift (presumption of resulting trust does not apply) Division of Pensions 84 (2) (e) subject to the limit of excluded property, pensions are included - if you had pension or RRSP prior to relationship, the prior value is excluded, but increase in value is included - If it starts while in the relationship, the whole thing is family property - Pensions are complicated assets, required to get expert evidence in practice