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MacLean Law’s award winning BC Excluded Property Tracing Lawyers constantly track developments regarding how BC courts deal with excluded property. Since the seminal BC Court of Appeal decision in VJF lawyers have closely watched how excluded property that is commingled into jointly owned property is dealt with. Is the exclusion automatically lost and if not when is it still excluded? A recent case helps provide some clarity for family law clients and BC Excluded Property Tracing Lawyers.

MacLean Family Law handles excluded family property disputes in BC from our 5 offices located in downtown Vancouver, Surrey, Richmond, Kelowna and Fort St John, BC. and  Calgary Alberta exempt property under the MPA .

Call us now at 1-877-602-9900 for advice on how to protect excluded or exempt property.

Top BC Excluded Property Tracing Lawyers know that putting excluded property into joint names is unwise. Since our new Family Law Act only came into force in 2013 owners of excluded property before that date whether pre-marriage property or gifts or inheritances received solely by one party had no idea that putting this property in joint names could be a financial catastrophe on separation.

BC Excluded Property Tracing Lawyers
BC Excluded Property Tracing Lawyers founder Lorne N MacLean, QC

Lorne N MacLean, QC founder of our BC and Calgary team of BC Excluded Property Tracing Lawyers, notes the recent case of Oleksiewicz v. Oleksiewicz 2017 BCSC 228 provides the current state of the law on issues of how BC excluded property is dealt with when it makes its way into a joint account or jointly owned piece of real estate.

BC Excluded Property Tracing Lawyers Explain Onus

BC Excluded Property Tracing Lawyers educate family law clients that the onus is on the person claiming the exclusion to provide proof that the property was excluded to begin with, in that it was owned before the relationship or received by gift or inheritance to them alone during the relationship and secondly that it still exists in its original form or that it exists in new replacement property.

Finally, our BC Excluded Property Tracing Lawyers know that when this excluded property gets placed in joint names or applied to a joint account or property then the owner of the excluded property’s intention becomes critical. BC Excluded Property Tracing Lawyers must address if there was an intent to keep it separate or to share it when it went into the jointly owned account or real estate.

The case points out that there is a difference when monies are applied to an already jointly owned property as opposed to being placed in the other spouse’s name solely or jointly from the start.

New Case Helps Guide BC Excluded Property Tracing Lawyers

Here is what the Oleksiewicz says on excluded property that was applied to jointly owned real estate with key portions highlighted for ease of the reader:

[50]         Under the FLA one spouse’s initial investment may fall under the excluded property if the party claiming the exclusion establishes, on a balance of probabilities, the basis for and extent of the exclusion with precision: see Shih v. Shih, 2015 BCSC 2108 at paras. 64 and 103-107, aff’d 2017 BCCA 37 [Shih], Lahdekorpi v. Lahdekorpi, 2016 BCSC 2143 at paras. 93-94.

[51]         In Shih, Warren J. described this process as follows:

[64]      Where it is asserted that excluded property has changed character, each link in the chain required to trace the property into a currently owned asset must also be established. Depending on the nature of the claim in question, this may mean, in practical terms, that it is impossible for a party to meet the onus without documentary evidence. For example, where the claim in question is a bank account that one party says pre-existed the relationship the court may conclude that a party’s viva voce testimony of the balance in the account at a particular point in time several years earlier is unreliable, and therefore insufficient to meet the onus, if not corroborated by a bank statement. On the other hand, where the claim in question is founded upon an unusually memorable event, such as an inheritance, the court may conclude that a party’s viva voce testimony as to the value of the inheritance is reliable without corroborating documents. In other words, in determining whether the onus has been met, the court will assess the credibility and reliability of the whole of the evidence tendered in the context of the specific case, but having regard for the precision mandated by the more formulaic approach of the FLA.

[58]         Before reaching a final conclusion concerning the exclusion of property in this case, it is necessary to address the question of the impact of the parties’ decision to hold title to the Home in joint tenancy on the result.

[59]         No presumption of advancement arises when one spouse’s investment is put into a property that is jointly owned by that person: see Hu v. Li, 2016 BCSC 2131. In that case, MacIntosh J. set out the correct approach to the presumption of advancement analysis when property from one spouse is transferred from one spouse to another. He said:

[39]        The analytical framework was expressed as follows in Wu v. Sun, 2010 BCCA 455 (CanLII) at para. 18:

The Supreme Court of Canada has made it clear in cases such as Pecore v. Pecore, 2007 SCC 17 (CanLII), [2007] 1 S.C.R. 795, that it is a question of fact as to what is the intention of a party transferring property to a third party for no consideration. In some circumstances, it may be appropriate to infer a resulting trust or a constructive trust, but the conclusion to be inferred in the individual case will depend on a consideration by the trier of fact of all the circumstances of the case. The trial judge in the present case concluded on his consideration of all the evidence that the mother, at the time of the transfer of the Drummond property from her to her son in 1999, intended to divest herself of ownership of the property and transfer that ownership to her son. In a recent case in this Court, Fuller v. Harper, 2010 BCCA 421 (CanLII), the Court, after referring to the comments of Mr. Justice Rothstein in Pecore, noted that the effect of any presumption of resulting trust only will be requisite after all the evidence and the surrounding circumstances in which the transfer was made has been weighed and considered by the trial judge. It is only if the trial judge is unable to reach a conclusion about the transferor’s actual intention at the time of the transfer that it may become necessary to apply such presumption to possibly tip the scales in favour of the transferor of property or the donor of funds. …

[Emphasis added.]

[40]        That passage underscores the test in Pecore, at para. 55, that the trial judge must “weigh all the evidence relating to the actual intention of the transferor.”  That is a factual inquiry. This Court’s primary task therefore is to examine all of the evidence in order to determine what Thomas and Anita intended in 1996 and 2004.

[60]         There was no evidence given by either party concerning the respondent’s intention in contributing the non-mortgage related funds to the purchase price. The claimant did not address this question at all during his testimony.

[61]         There is some evidence in the steps taken by the respondent when the Vicky was purchased and owned separately by her to the exclusion of the claimant up to separation. I conclude that this decision reflects the respondent’s clear intention when she used her personal injury settlement to firstly to buy the Vicky. At the time the house was purchased the respondent again used her accident settlement and I accept it is more likely than not that she intended to keep her interest in the deposit money separate from the claimant. I conclude that insofar as she did not intend to make a gift of the Vicky to the claimant, it is reasonable to infer that she also intended to retain her interest deriving from the settlement funds in the Home notwithstanding that it was registered in joint tenancy. The parties had purchased the house together; I presume both owners were required by their lender to be covenantors on the mortgage and joint tenants. I cannot infer that the respondent’s infusion of all of the cash used to purchase the house and registration of title as joint tenants was any indication of her intention to make a gift to him. It is most likely that title to the Home was registered in joint tenancy as a convenient means to reflect their shared use and ownership of the property and shared obligation under the mortgage but without any intention on the respondent’s part to abandon her interest in the property and make a gift of her settlement funds to him.

[62]         Thus, I conclude that the respondent’s contribution of $22,598.06 to the purchase of the Home is excluded property. The proceeds of sale of the Home are family property and will be divided after taking into account the other issues concerning debt, unequal division and the other others.

If you have a difficult BC excluded property case or Calgary exempt property case call our BC Excluded Property Tracing Lawyers immediately at 1-877-602-9900.

*(Top Choice Award (2014, 2016, 2017).