Vancouver Unequal Family Property Division is explained by Lorne N. MacLean, QC founder of Vancouver’s best family law firm with 5 BC offices 604-602-9000.
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Vancouver Unequal Family Property Division
The recent BC Appeal Court decision of Janis v. Janis dealt with the vexing question of :
What date is used to value family property and how do you divide an asset that has increased substantially in value AFTER the parties separate?
As we will, see the reason for the gain in value matters in the end result. Gains through someone’s hard work might lead to that person getting a larger share through 2 different approaches. Gains in value through passive market conditions are unlikely to lead to someone getting more than half. To be clear, differing contributions DURING the marriage is now unlikely to lead to a successful Vancouver Unequal Family Property Division claim.
The recent BC Court of Appeal case dealt with two ways a court can achieve fairness when an asset increases in value after separation.
Using A Different Valuation Date To Effect Vancouver Unequal Family Property Division
A court can use the date of separation or a date somewhere between separation and the normal default valuation date which is the date of trial to divide property that has changed in value by someone’s efforts or lack thereof. This way, if a property has increased in value through someone’s hard work the earlier valuation date will give the non-diligent spouse a lesser share compared to the share awarded to the harder working spouse.
Allowing One Spouse To Get More By Ordering Vancouver Unequal Family Property Division
Secondly, a court can use the trial date but give someone unequal division so they get a larger share to reflect their sole or greater efforts AFTER separation.
NOTE we are talking about efforts after separation as differing contributions during marriage will almost never result in unequal division in someone’s favour.
What Is The Current Legislation Used For Vancouver Unequal Family Property Division?
Our new BC Family Law Act has specific sections dealing with unequal division of family property.
The test to succeed on getting more than half is now stricter than before but under the right circumstances a person can still succeed.
Our BC Family Law Act has Been in effect since 2013 and it states:
Unequal division by order
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
- equally divide family property or family debt, or both, ….
(2) For the purposes of subsection (1), the Supreme Court may consider one or more of the following:
(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;
So, What Did The Court of Appeal Decide On The Issue Of Vancouver Unequal Family Property Division?
In the official summary provided by the Court of Appeal the husband did not receive more than half of his business as he failed to prove the post separation gain arose solely because of his efforts after separation:
The appellant appeals the trial judge’s order for a compensation payment to the respondent based on the equal division of his business, and setting spousal support at $6,000 per month. The business, conceded to be a family asset, increased significantly in value after the parties separated, and the appellant seeks reapportionment in his favour. He also submits that the judge erred in setting a valuation date for the business that was after the parties’ separation. Held: The appeal is dismissed. The judge did not err in setting the valuation date. The valuation date for a compensation order, which may be adjusted in the interests of fairness, is the date of trial. The judge’s decision to value the company as of the date of the most recent valuation report was consistent with achieving a fair result. The judge did not err in failing to reapportion the business to the appellant. The increase in its value was the culmination of many years of effort and not the sole result of the appellant’s post-separation activities.
Here are the crucial parts of the Court’s decision that summarize how a court can achieve fairness for assets gaining or declining in value after separation and why it’s important to look at what the reason for the gain or loss is before deciding a Vancouver Unequal Family Property Division case.
[53] The necessity of flexibility in valuation dates for the purposes of achieving fairness was discussed by this Court in Stark v. Stark (1990), 47 B.C.L.R. (2d) 99. In Stark, the trial judge had held that there was to be an equal division of family assets, but a possibility that the family home had appreciated significantly in value between the triggering date and the date of trial. At 108-110, the Court said the following:
With regard to the valuation date, a difficult legal question arises. In many cases the triggering date and the valuation date are the same, or they are so close that the date will make no substantial difference in value. In other cases it may be unjust to tie the valuation date to the triggering event, such as where there is an increase or decrease in value of assets between the two dates.
… [I]f the parties are to enjoy an equal share in the asset fixed as a family asset as of the triggering date, and there is a significant change in the value at the date of trial (early and mid-1988) then the Court, in order to achieve fairness must either apportion the asset unequally or select a valuation date which achieves substantial fairness.
When a trial court is dealing with a family asset which is still in the possession of one of the parties, and which may then have a different value from what it was at some earlier stage of the proceedings, then fairness may require that it be valued as of the later date. …
[54] In summary, the foregoing authorities support the following propositions. When considering reapportionment under FRA s. 65, the presumptive valuation date is the date of the triggering event. When considering a compensation order under s. 66, the presumptive valuation date is the date of trial. However, the court retains the discretion to determine a different valuation date for the purpose of achieving fairness between the parties. Setting a different valuation date may be appropriate where there has been an increase or decrease in the value of a family asset between the triggering date and the date of trial. The conduct of one party as it relates to an increase or decrease in value may be a relevant consideration.
[55] I emphasize, however, that the ultimate goal is achieving fairness. Lotzkar indicates that a mechanical application of any of these principles is not desirable and may be antithetical to achieving a fair result.
