Whitfield v. Whitfield 2012 BCSC 965- Another long marriage BC property reapportionment case!
As discussed in our recent BC family lawyer blog articles we have written, British Columbia courts are increasingly relying on reapportionment in the division of BC family assets. Under the Family Relations Act (which expires on March 18, 2013) in British Columbia, equal property division between spouses in marriage dissolution is presumed. However, there are situations where such a division would be unfair, and, as a result, the property is reapportioned (divided unequally) in favour of one spouse. Traditionally, reapportionment was mostly used in marriages of short duration, yet recently the courts appear to be using reapportionment more liberally. The courts seem to be signalling the greater use of reapportionment as a tool to depart from equal property division see: R.E.Q. v. G.J.K. 2012 BCCA 146, Davies v. Davies 2012 BCCA 219, McIntire v. McIntyre 2012 BCCA 214 and Dyer v. Dyer 2012 BSCS 429. This week, in Whitfield v. Whitfield (2012 BCSC 965), the British Columbia Supreme Court followed that trend in awarding reapportionment in a long marriage of 17 years.
Mr. and Mrs. Whitfield were married in 1993 and separated in 2010. Shortly after their marriage, Mr. Whitfield became an RCMP officer stationed in Ontario. The couple purchased a home in Golden, Ontario with large assistance from Ms. Whitfield from a gift of money she received from her father. During the marriage, both parties were employed, but Ms. Whitfield always made less money than her husband.
In 2005, Ms. Whitfield’s father died; as a result, she inherited $720,000. At the time of trial, she had in liquid assets the sum of about $225,500 which was invested with Nesbitt Burns BMO.
Both parties agreed that the sale of the matrimonial house and Mr. Whitfield’s pension should be divided equally. Other than these two assets, Mrs. Whitfield argued that all other assets should be divided 73% to 27% in her favour. In support of that assertion, she stated she should be compensated for having deferred her career and to reflect the degree to which the assets were acquired with the benefit of her inheritance.
The court found that:
“there is no realistic evidence that Ms. Whitfield had to defer or abandon any career opportunity because of her marriage”. Furthermore, the court found that the inheritance money was used for family purposes:
In that I include the “advance on her inheritance” from her father to enable her to construct the home she built before marriage in Haliburton. In part, it was used to replace part of the income Ms. Whitfield used to contribute to the marriage. In part, it was used to help acquire chattels for their mutual use and pleasure. And, in part, it was invested in a manner that provided a measure of investment income.
Having found that all the property was in fact family assets, the court looked at section 65 (1) of the Family Relations Act on reapportionment:
65(1) If the provisions for division of property between spouses under section 56, Part 6 or their marriage agreement, as the case may be, would be unfair having regard to
(a) the duration of the marriage,
(b) the duration of the period during which the spouses have lived separate and apart,
(c) the date when property was acquired or disposed of,
(d) the extent to which property was acquired by one spouse through inheritance or gift,
(e) the needs of each spouse to become or remain economically independent and self sufficient, or
(f) any other circumstances relating to the acquisition, preservation, maintenance, improvement or use of property or the capacity or liabilities of a spouse,
the Supreme Court, on application, may order that the property covered by section 56, Part 6 or the marriage agreement, as the case may be, be divided into shares fixed by the court.
In assessing the above factors, the court noted that the marriage was relatively long 17 years. The court found that most of the expensive chattels that the couple owned were acquired after the inheritance. Even though, Mrs. Whitfield was going to receive $200,000 for compensation for her husband’s pension and $1,564 a month in spousal support, the marriage was a long one, and that her career was not adversely affected, the court still found that it “would be unfair to equally divide all assets between them.” The court reapportioned the assets other than the family home and the pension 60% in Mrs. Whitfield’s favour. The court ordered:
Thus, of the $431,500 of assets listed above, at 60%, Ms. Whitfield is entitled to assets having a value of $258,900 and at 40%, Cpl. Whitfield’s assets of a value of $172,600. With respect to those assets, therefore, if the distribution is to remain as I have directed, she must compensate him in the amount of $61,100.
It is now evident, that the court is using reapportionment when fairness demands it to avoid equal distribution. It is hard to see how the above factors in the case amount to “unfair”. However, in the new Family law Act coming into effect on March 18, 2013 reapportionment will be more difficult to obtain as a result of the new law that excludes the value of assets each spouse brings to the relationship and shares only the gain in net assets after taking into account debts as well. Under the new Family Law Act, a Judge still has the ability to make an order apportioning an unequal share of Family Property between the spouses if it would be “significantly” unfair to equally divide the Family Property. Under the old Act, equal division was just a presumption that could be rebutted taking into consideration the above listed factors; under the new Act, equal division is assumed unless it would be “significantly” unfair creating a much higher legal threshold.
If you have any questions regarding division of assets or the new Family Law Act please call Maclean Law toll free at 1 877 602 9900 to book an appointment. The assets involved in reapportionment cases may have significant value such as real estate, stocks, companies and professional practices, and, as a result, it is important to have a lawyer who knows how to properly assess whether a claim for more or less than half of the value of these assets is prudent. It is crucial that you get the right legal advice to protect your assets and provide for your family. A strategic approach needs to be implemented immediately and discretely to settle our client’s critical family matters quickly.
We have four offices across the province to service you located in downtown Vancouver, Surrey, Kelowna, and Fort St. John.
