One of the developing areas of BC family law involves Significantly Unfair Unequal Family Property Division. So how does unequal family property division work and what does “significantly unfair” mean? The Family Law Act established a new stricter test for the courts to depart from a presumptive 50/50 division of family property. BUT the famous quote from the movie Dumb and Dumber “so you are saying there is still a chance” applies. Lorne N MacLean, QC handles high net worth support and family property division cases and in today’s blog, he explains the current state of the law on unequal family property based on the latest BC Appeal and Supreme Court decisions.
Unequal division is unusual but Audra Bayer and Fraser MacLean of our firm won a recent 75/25 division before additional special costs were awarded which caused the result to be even more our client’s favour.
Established BC family property division principles
The established BC family property division principles on Significantly Unfair Unequal Family Property Division are:
- The entitlement to the presumption of equal division exists despite contributions towards or use of a property, but unequal post separation contributions can still be considered. Yet the courts still sometimes consider disparate contributions during the relationship!;
- A “notional” exercise of equal division of family property must be performed first to consider if equal division would result in significant unfairness;
- Non-disclosure or a lack of adequate financial disclosure can be considered as a factor in evaluating the overall appropriateness of unequal division of known family property; and
- Unequal division is intended to remedy significant unfairness but not necessarily to equalize parties financially.
- A court can use the date of separation instead of trial as a method of achieving unequal division.
Latest Developments
The BC Court of Appeal cases of:
- Kumagai, (date for valuation of family property is trial presumptively)
- Jaszczewksa (one cannot read the FLA as abolishing unequal contribution as a factor that may be relevant to reapportionment, although the circumstances in which it may be considered and relied on are intended to be much constrained.) and;
- Parton keep repeating that the new BC family property division test to get unequal family property division is the exception rather than the rule.
The term “significantly unfair” was recently summarized in July 2018 in Parton v. Parton, 2018 BCCA 273. Madam Justice Dickson stated:
[35] … the court may order an unequal division of family property if an equal division would be “significantly unfair”, having regard to the factors set out in s. 95(2). Section 95(2) provides a non-exhaustive list of factors for consideration with respect to significant unfairness, including the duration of the relationship and a spouse’s contribution to the career or career potential of the other spouse. In addition, s. 95(3) provides:
(3) The Supreme Court may consider also the extent to which the financial means and earning capacity of a spouse have been affected by the responsibilities and other circumstances of the relationship between the spouses if, on making a determination respecting spousal support, the objectives of spousal support under section 161 [objectives of spousal support] have not been met.
[36] The test for significant unfairness under s. 95 of the Family Law Act is more stringent than the unfairness test contained in the predecessor legislation. As Justice Harris explained in Jaszczewska at para. 42, to meet the significant unfairness test under s. 95 “something objectively unjust, unreasonable or unfair in some important or substantial sense” is required.
So You Are Saying There’s A Chance?
However the BC Supreme Court has released a number of decisions where the court found this strict test is not impossible to meet and courts have awarded Significantly Unfair Unequal Family Property Division.
The new Significantly Unfair Unequal Family Property Division case of T.A. v. B.A. Estate involved:
- a 30 year marriage with;
- a home made marriage agreement being made without independent advice but where there was no pressure and no material lack of disclosure or request to make disclosure;
- parties not remembering the agreement until late in the family action;
- the wife paying for most everything during the relationship; and
- the husband dying before trial
This new case acknowledged the higher threshold under the Family Law Act to get unequal division of family property but awarded reapportionment of family property based on unequal efforts and contributions, the fact a secret bank account was discovered and the reality that the husband had died before trial. The court cited the leading BC Appeal cases above and then held:
[71] Mr. Justice Harris in Jaszczewska v. Kostanski, 2016 BCCA 286, noted that the test of “significant unfairness” imposes a more stringent threshold than the mere “unfairness” test of the FRA to allow unequal division by a court: at para. 41……
[72] The parties were married for 30 years. The Village Green Condo which they lived in at the time of separation was acquired during their marriage from funds T.A. realized from the sale of the Wilma Street Condo and through financial assistance from her mother. B.A. was on title solely through the generosity of T.A., not through any objective evidence that he contributed in any way to either its purchase or its maintenance.
[73] T.A. paid for essentially all of the couple’s joint expenses, including those relating to the Village Green Condo, out of her own income. I accept her evidence that she could not recall the last time that B.A. paid her $250 at the start of the month under the terms of the marriage agreement. I accept her evidence that B.A. would give her small sums of cash, and perhaps occasionally cheques, which she would deposit into the 2-32 account, but his financial contributions were infrequent and anemic at best.
[74] T.A. shared with B.A. whatever gifts of money her family gave her. T.A. believed B.A. deposited that money into his own accounts and the records show that he transferred money from his 1980 Account into the Scotiabank Account. Whether or not T.A.’s gifts to B.A. are considered family property was not well developed at trial. I do, however, find that the Scotiabank Account was comprised of gifts as well as other income or benefits B.A. earned that should have been shared with T.A., at the very least to meet his $250 monthly obligation under the marriage agreement.
[75] T.A. worried about the couple’s finances and asked B.A. for money, but he claimed he did not have any. This was obviously untrue. While B.A. did not dispose of the money or substantially reduce its value, it is unquestionable that his duplicitous actions caused property that otherwise may have been family property to be adversely affected. A number of repairs and improvements to the Village Green Condo were detailed by A.K., all of which I accept as being necessary, and all of which I accept as being within B.A.’s ability to pay for.
[76] After considering the factors in s. 95 of the FLA, I am satisfied on a balance of probabilities that an unequal distribution of family assets should be made in favor of T.A. I award T.A. the proceeds of sale from the Village Green Condo [$380.000], and half of the present value of the Scotiabank Account [$257,000].
The net result was a 80/20 unequal division for the wife.
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