Do you think you have a case for an unequal division of family property? Read this first.

Overview

Following a relationship breakdown you might be wondering whether you have a claim for an unequal division of family property. An order for an unequal division of family property or debt occurs when a 50/50 split of the family assets and debts would create unfair circumstances for one of the parties. These types of claims are exceptions and not the rule. The recent decision Wakefield v. Owen, 2018 BCSC 1160 focuses on a situation where in a relatively short relationship the husband claimed an unequal division of family property for two main reasons: the wife did not actually contribute to the family assets nor his business. The court did not accept his arguments and ordered for an equal division of family property.

 

Facts

In Wakefield v. Owen, the parties were in a common law relationship for 3.5 years from June 2012 to January 2016. The court determined that they separated on January 1, 2016. Both parties were in their fifties, both owned their own businesses, and had no children together. One of the main issues between the parties was whether the family property should be divided unequally in Mr. Owen’s favour.

 

The Law

Pursuant to s. 81 of the Family Law Act (“FLA”) all property and debt that is “family property” and “family debt “ is divided equally, regardless of each party’s contribution or use. However, if an equal division of the family property or family debt is “objectively unjust, unreasonable or unfair in a substantial sense, or will cause ‘significant unfairness,’” s. 95 of the FLA grants the court discretion to order an unequal division of property: Kumagai v. Campbell Estate, 2018 BCCA 24, para. 83. The Court of Appeal further noted that “significantly unfair” establishes a higher threshold for the person seeking an unequal division than simply “unfair.”

Therefore, a party claiming an unequal division of family property must demonstrate that equal division of the family property is “significantly unfair” pursuant to s. 95(1) factors before the court may order any reapportionment of family property. Section 95 of the FLA reads:

 

95   (1) The Supreme Court may order an unequal division of family property or family debt, or both, if it would be significantly unfair to

(a) equally divide family property or family debt, or both, or

(b) divide family property as required under Part 6 [Pension Division].

(2) For the purposes of subsection (1), the Supreme Court may consider one or more of the following:

(a) the duration of the relationship between the spouses;

(b) the terms of any agreement between the spouses, other than an agreement described in section 93 (1) [setting aside agreements respecting property division];

(c) a spouse’s contribution to the career or career potential of the other spouse;

(d) whether family debt was incurred in the normal course of the relationship between the spouses;

(e) if the amount of family debt exceeds the value of family property, the ability of each spouse to pay a share of the family debt;

(f) whether a spouse, after the date of separation, caused a significant decrease or increase in the value of family property or family debt beyond market trends;

(g) the fact that a spouse, other than a spouse acting in good faith,

(i) substantially reduced the value of family property, or

(ii) disposed of, transferred or converted property that is or would have been family property, or exchanged property that is or would have been family property into another form, causing the other spouse’s interest in the property or family property to be defeated or adversely affected;

(h) a tax liability that may be incurred by a spouse as a result of a transfer or sale of property or as a result of an order;

(i) any other factor, other than the consideration referred to in subsection (3), that may lead to significant unfairness.

(3) The Supreme Court may consider also the extent to which the financial means and earning capacity of a spouse have been affected by the responsibilities and other circumstances of the relationship between the spouses if, on making a determination respecting spousal support, the objectives of spousal support under section 161 [objectives of spousal support] have not been met.

 

Mr. Owen’s arguments

Mr. Owen advanced the following arguments in support for his position that an equal division of the family property would be significantly unfair to him:

  1. This was relatively short relationship;
  2. The matrimonial property was not purchased until 2014;
  3. He paid for most of the expenses during the relationship;
  4. He paid Ms. Wakefield a salary which was deposited into the parties’ joint account, however the joint account was an income-splitting vehicle and Ms. Wakefield performed no real work for Mr. Owen’s business;
  5. Post separation Mr. Owen made improvements to the matrimonial home and paid the mortgage, property taxes and home insurance; and
  6. Wakefield did not contribute to Mr. Owen’s other assets.

 

The Court’s Decision

The court did not grant an unequal division of family property for the following reasons:

  1. Both parties jointly purchased the matrimonial home during the relationship;
  2. Both parties put time, work and money into renovating the matrimonial property;
  3. Although Mr. Owen made greater financial contributions to the relationship, Ms. Wakefield made contributions that reflect a traditional gendered division of labour;
  4. Having represented to the Canada Revenue Agency that Ms. Wakefield was performing reasonable services in return for her salary, Mr. Owen now cannot deny the employment relationship;
  5. The financial assistance that Mr. Owen provided to Ms. Wakefield’s business was not different in character or magnitude than the assistance one spouse gives to the other in support of their career;
  6. Owen paid the expenses associated with the matrimonial home, he also had the benefit of living in it; and
  7. Wakefield made non-monetary contributions to the family.

 

Please note that apportioning family property and debt requires careful analysis. To discuss whether you may be entitled to an unequal division of family property, give Richter Trial Lawyers a call. Our contact number is 604.264.5550.

 

 

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