BC Court of Appeal confirms: unequal contributions not grounds to depart from presumption of equal division

BC Court of Appeal confirms: unequal contributions not grounds to depart from presumption of equal division

BC’s Family Law Act requires family property to be divided equally unless it would be “significantly unfair”. Does the fact that one spouse under contributed financially qualify as “significant unfairness”? British Columbia’s top court has confirmed in Khan v. Gilbert, 2019 BCCA 80 that differing contributions to household expenses does not allow the court to depart from the presumption of equal division.

Section 95 of the Family Law Act allows the court to unequally divide family property or debt if it would be significantly unfair. The term “significantly unfair” has received much judicial attention. Recently in Jaszczewska v. Kostanski, 2016 BCCA 286 Mr. Justice Harris provided a useful explanation on how the term is to be applied:

In Khan, a court unequally divided family property in favour of a wife and a husband received a 15% share of the family property on the basis he had earned significantly less over the parties’ relationship and had not contributed equally to the family finances.

[41]Clearly, the statutory intent is to constrain the exercise of judicial discretion. The test of “significant unfairness” imposes a more stringent threshold than the mere “unfairness” test of the FRA to allow unequal division by a court. As Mr. Justice Butler observed in Remmem v. Remmem2014 BCSC 1552 (CanLII), “significant” is defined as “extensive or important enough to merit attention” and the term refers to something that is “weighty, meaningful or compelling.” He concluded that to justify an unequal distribution “[i]t is necessary to find that the unfairness is compelling or meaningful having regard to the factors set out in s. 95(2)”: Remmem at para. 44. As the judge here noted at para. 162 of her reasons,the Legislature intended the general rule of equal division to prevail unless persuasive reasons can be shown for a different result. I agree.

Section 95 of the Family Law Act sets out the conditions a court may consider in unequally divide family property and the court in Khan noted this section was meant to limit the court’s discretion to reapportion family property. The section refers to career contributions (95(2)(c)) and to post-separation increases in value beyond market trends caused by one spouse (95(2)(f)) as factors the court may consider, but not unequal contribution to family property. On appeal, the court in Khan considered whether unequal contribution in this case was significantly unfair to award unequal division in favour of the wife. Mr. Justice Fenlon held it was not. The court affirmed that equal entitlement to family property is not a dollar for dollar comparison of contribution:

[36] In summary on this issue, in my respectful view the judge erred in principle in his approach to the reapportionment of family property, basing it on a dollar for dollar comparison of contribution to expenses which does not reflect the nature of marriage as a family venture. In most marriages, one spouse will earn more than another and therefore contribute more to the family finances. As noted at para. 43 of Jaszczewska, allowing relative contribution to become a regular consideration in the context of s. 95 would create uncertainty and complexity, contrary to the legislative objectives underlying the Family Law Act division of property regime.

If you have questions about how the Family Law Act applies to you or your situation, give the goodfirm a call: 604.264.5550

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