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Avoid These Excluded Property Mistakes

Did you know that since March of 2013 BC Common law marriage like relationships of greater than 2 years give common law spouses in BC the same family property division rights as married couples? The new regime shares most property equally that is acquired during these BC common law marriage like relationships. The starting value of  the Property brought into the common law or marriage like relationship is generally not shareable but the gain is. Normally, any gain is shared equally but the court has the power to unequally divide even the gain made during the relationship.

People often argue over whether they were in a marriage like relationship when the property division stakes become so high as unlike a marriage there may often be no clear starting date for the couple’s relationship. Our highly experienced family law department has offices across BC in Fort St John, Surrey, Kelowna and downtown Vancouver and you can call us toll free at 1-877-602-9900. Watch this video by Lorne MacLean, QC to learn more about whether you are in or out of a common-law relationship.

In The BC Supreme Court case of Williams v. Killey the court dealt with the determination of whether or not the couple was in a marriage like relationship and then unequally divided the family property in favour of the husband.

[1]             This is a claim arising out of a three-and-one-half year relationship of living together which the claimant alleges constituted a common-law relationship entitling her to remedies under the Family Law Act, S.B.C. 2011, c. 25, (“the FLA”) while the respondent denies that it constituted a common law relationship of at least two years.

Analysis and decision

[40]         The major issue in this case is whether the parties were in a common law relationship for a period of at least two years prior to separation.

[41]         Claimant’s counsel relies upon the judgment of Madam Justice Huddart in Takacs and Boucher v. Gallo (1998), 157 D.L.R. (4th) 623 where she adopted the seven part test of “spouse” set out in Molodowich v. Penttinen (1980), 17 R.F.L. (2d) 376 (Ont. Dist. Ct.)

[42]         However, I observe that on this issue Madam Justice Huddart was in dissent as Madam Justice Newbury, with Chief Justice McEachern concurring, said she read the comments of Lambert J.A. in Gostlin v. Kergin (1986), 3 B.C.L.R. (2d) 264, differently than had Madam Justice Huddart.

[43]         In her judgment, Madam Justice Huddart said as follows:

The test developed by Mr. Justice Lambert in Gostlin has two aspects. The first is the couple’s subjective intention. At 267-68, he commented:

So I would ask whether the unmarried couple’s relationship was like the relationship of the married couple in that the unmarried couple have shown that they have voluntarily embraced the permanent support obligations of s. 57. If each partner had been asked, at any time during the relevant period of more than two years, whether, if their partner were to be suddenly disabled for life, would they consider themselves committed to life-long financial and moral support of that partner, and the answer of both of them would have been “Yes”, then they are living together as husband and wife. If the answer would have been “No”, then they may be living together, but not as husband and wife.

The second is an objective test, set out at 268:

Of course, in the particular circumstances of any case, the answer to that question may prove elusive. If that is so, then other, more objective indicators may show the way. Did the couple refer to themselves, when talking to their friends, as husband and wife, or as spouses, or in some equivalent way that recognized a long-term commitment? Did they share the legal rights to their living accommodation? Did they share their property? Did they share their finances and their bank accounts? Did they share their vacations? In short, did they share their lives? And, perhaps most important of all, did one of them surrender financial independence and become economically dependent on the other, in accordance with a mutual arrangement?

[44]         On this issue, Madam Justice Newbury said as follows:

The starting point in this province for the analysis required in cases of this kind is the judgment of this court in Gostlin v. Kergin (1986) 3 B.C.L.R. (2d) 264, and in particular, the comments of Lambert J.A. at 267-8 which are quoted in Madam Justice Huddart’s judgment. I read those comments as focussing first on the intentions of the parties to live “as husband and wife”, or in a marriage-like relationship. Such an intention may or may not include financial dependence. The various “objective indicators” referred to in Gostlin were advanced as a means of divining those subjective intentions where the latter “prove elusive”. By the same token, of course, subjective or conscious intentions may be overtaken by conduct such that whilst a person living with another might not say he or she was living in a marriage-like relationship, the reality is that the relationship has become such. (para. 53)

Madam Justice Huddart analyzes Fitton as departing somewhat from Gostlin and as exemplifying the fact that financial intertwining and dependency between a couple may be sufficient to lead to the inference that the relationship is marriage-like “even in circumstances where neither party intended a lifetime commitment.” With respect, I do not think Fitton fairly bears that interpretation, nor that the Court intended to depart from Gostlin and its recognition that persons living together should not be forced into mutual commitments they do not want or intend. Braidwood J.A. referred at several points in his judgment in Fitton to the parties’ intentions and indeed his conclusion on the first branch of the statutory definition was that they had “intended throughout the relevant period to live together as husband and wife”. He then turned to the second question arising under the Yukon statute, namely whether the appellant had been dependent upon the deceased for maintenance and support. He found the trial judge had erred in the test he applied on this branch. That test had been expressed by the trial judge as follows:

But it is certain in this case that the plaintiff did not depend upon the deceased for her living expenses at any time. I am quite sure that if either the plaintiff or the deceased, when he was alive, had been asked whether one would look after the other in ill health or other change in circumstances, the answer would have been “No.” [at para. 32]

The Court in Fitton was of the opinion that dependence does not require an applicant to prove that “without the support of her partner during the period of cohabitation she would have been seriously deprived or even destitute.” [at para. 37] (para. 54)

In both Gostlin and Fitton, the question of whether persons were living together as spouses notwithstanding that they were not legally married involved the court in an examination of their intentions and not simply an objective assessment of whether their financial and living arrangements were “intertwined”. If the Legislature had intended the latter, it would have been an easy matter to so state. Objective factors will of course be relevant to determine the parties’ intentions as Lambert J.A. noted in Gostlin but those factors will rarely be determinative in and of themselves. Many combinations of people may live together and meet many of the criteria set forth in Molodowich v. Penttinen (1980) 17 R.F.L. (2d) 376 (Ont. Dist. Ct.), but without intending or in fact entering the kind of psychological and emotional union that one associates with marriage. (para. 55)

[45]         In addition in Austin v. Goerz, 2007 BCCA 586, Frankel J.A. stated at para. 58:

It is understandable that the presence or absence of any particular factor cannot be determinative of whether a relationship is marriage-like. This is because equally there is no checklist of characteristics that will invariably be found in all marriages. …

[46]         He went on to quote from Yakiwchuk v. Oaks, 2003 SKQB 124:

[10] Spousal relationships are many and varied. Individuals in spousal relationships, whether they are married or not, structure their relationships differently. In some relationships there is a complete blending of finances and property – in others, spouses keep their property and finances totally separate and in still others one spouse may totally control those aspects of the relationship with the other spouse having little or no knowledge or input. For some couples, sexual relations are very important – for others, that aspect may take a back seat to companionship. Some spouses do not share the same bed. There may be a variety of reasons for this such as health or personal choice. Some people are affectionate and demonstrative. They show their feelings for their “spouse” by holding hands, touching and kissing in public. Other individuals are not demonstrative and do not engage in public displays of affection. Some “spouses” do everything together – others do nothing together. Some “spouses” vacation together and some spend their holidays apart. Some “spouses” have children – others do not. It is this variation in the way human beings structure their relationships that make the determination of when a “spousal relationship” exists difficult to determine. With married couples, the relationship is easy to establish. The marriage ceremony is a public declaration of their commitment and intent. Relationships outside marriage are much more difficult to ascertain. Rarely is there any type of “public” declaration of intent. Often people begin cohabiting with little forethought or planning. Their motivation is often nothing more than wanting to “be together”. Some individuals have chosen to enter relationships outside marriage because they did not want the legal obligations imposed by that status. Some individuals have simply given no thought as to how their relationship would operate. Often the date when the cohabitation actually began is blurred because people “ease into” situations, spending more and more time together. Agreements between people verifying when their relationship began and how it will operate often do not exist.

I consider their marriage like relationship began soon after the claimant moved into his townhome on June 1, 2009 and they commenced a continuous common law relationship thereafter of approximately three and one-half years prior to separation on November 1, 2012.

The court went on to unequally divide the gain on the excluded property brought into the relationship. This approach is considered controversial given that at law the excluded properties’ value was already kept entirely by the husband.