BC FAMILY LAW PROTECTS TAIWAN SECRET SAUCE
A new BC Supreme Court decision has recognized that a family business owned and operated by the husband’s parents is not a family asset subject to division between the husband and wife. Our top family lawyers won a similar case involving a valuable family business that was relied upon in this case. Contact us for more information.
In JL v. BL 2015 BCSC 2052 one of the main disputes concerned a family business: a cash-only restaurant specializing in a pork dish marinated in a mixture of Chinese spices. The husband’s father learned the process for the pork marinade, including the recipe of spices, many years ago in Taiwan and kept the secret of this prized sauce from everyone including members of his family.
The restaurant was owned by a company, and the true ownership of the company was in dispute at the BC Family Law trial:
- The shares of the company were registered to the husband;
- The husband had, long before the divorce proceedings started and shortly after he acquired the company’s shares, signed a declaration of trust, declaring that he held the company’s shares in trust for his father;
- On its face, and according to the family, the effect of the structure was that to the outside world the husband was the owner of the company, but the true owner of the company was the husband’s father;
- The accountant who set up the trust declaration testified that he understood that the husband held the shares in trust for not just the husband’s father, but in fact for both of his parents. The trust declaration being only in favour of his father reflected Chinese cultural norms;
- The wife alleged that trust declaration was a sham – that the husband did in fact own the company and therefore the restaurant.The BC Supreme Court Trial Judge summarized the principles of the three types of trusts commonly seen in BC Family Law: Express, Resulting, and Constructive, citing the recent case involving MacLean Law Xu v. Hu 2015 BCSC 1400 (where a family business was similarly protected, although the case is appealed on other grounds):
“[a] trust may be created in one of two ways: by intention to settle property by way of a trust or by imposition of law to secure a just result”.Trust law is extremely complicated, particularly in the context of BC Family Law. We strongly encourage you to seek legal advice to protect your family business even if you believe your son or daughter’s marriage will stand the test of time. Our MacLean Law family law department is BC’s largest with 17 lawyers working hard for our clients in over 4 offices across BC located in downtown Vancouver, Surrey, Kelowna and Fort St. John and we are fluent in Mandarin, Cantonese, Farsi, Punjabi, Hindi and Urdu and we handle Asian high net worth, South Asian high net worth international property and support disputes. Call us toll free at 1-877-602-9900 or request a consultation today.
