Vancouver Family Property Valuation During COVID 19 lawyers protect medium to high net worth family law clients in perilous times. Our lawyers have set records for high net worth property and support awards and are available to assist you now.
Vancouver Family Property Valuation During COVID 19 is a hot button issue. Trials and settlements during this COVID -19 pandemic are fraught with peril for both the business, stocks, and real estate owner and conversely the spouse seeking compensation. Should Vancouver Family Property Valuation During COVID 19 buyouts ignore the COVID-19 effect, fully account for the worst-case scenario, or divide the family property in specie or at a later date? In this blog by founder Lorne MacLean, QC you will see the valuation sweet spot may lay somewhere in the middle ground between “the sky is falling” and “everything is fine”. Ex-spouses may opt to remain as co-owners and share the risk and recovery in asset values.
Ex-spouses experiencing a decline in their financial circumstances during the COVID-19 pandemic must address the impact of such changes and exercise caution negotiating property settlements given the uncertain market conditions and potential changes in value on the family home stocks and family businesses. MacLean Law handles high net worth family property division cases and has set records for spousal support after $22 million in property and special costs were awarded to our client. We know how to protect our family law clients in Vancouver Family Property Valuation During COVID 19 disputes.
Vancouver Family Property Valuation During COVID 19 1 877 602 9900
In Vancouver Family Property Valuation During COVID 19 disputes, the party retaining family property such as real estate, investments, or the shares of a family business must make a compensation payment to their spouse. This owner will be motivated to have the business valuation reflect the full and most negative impact of COVID-19. Predictions of doom and gloom “COVID-19 has had a catastrophic effect on the business”, or “my company or real estate value has been completely devastated” are now routine in these stressful times.
Conversely, the party receiving the compensation payment for the business or real estate valuation would like to ignore or diminish the potential or real negative impacts of COVID-19. They will want to settle based on a valuation report prepared before COVID 19 struck. They and their lawyers will urge that the COVID-19 pandemic has had only a “minor or short-term impact on the business”, and thus a valuation update would be a “waste of resources resulting in an unnecessary delay in the proceedings”. Not a lot of cases exist in this area.
One recent Ontario case adjourned the decision on valuation pending arguments on the impact of COVID-19 on the valuation of family property. We all know what happened to the stock market recently where shares plummeted. So how can you protect yourself?
BC decisions have indicated that Consent Orders on property division that set values only to see assets skyrocket or decline after cannot be set aside as the law is clear a court decides what is fair at a point in time. Strategies to mitigate risk can include dividing assets in specie, putting assets up for sale now or at a set time in the future or each party remaining as half-owner, whether directly or indirectly by having one spouse hold the other’s interest “in trust” for them (see section 97 Of our Family Law Act).
CASE LAW – Vancouver Family Property Valuation During COVID 19
The case of A. M v M.S. 2017 BCSC 2061 shows that once you make a Consent Order you bear the risk of ups and downs not being able to be corrected for after settlement. In A.M v. M. S. the Court refused to allow a husband to renegotiate the settlement of a family home deal:
[57] A further difficulty for the respondent is that the issue in dispute under the divorce order relates to the provision about property. Section 215(1) of the FLA provides for a change in an order if there has been a change in circumstances since the order has been made. However, s. 215(2) states that “a court may not change, suspend or terminate an order” made under Part 5 (“Property Division”) except as provided in that Part. Section 93(5) is in Part 5 and it is discussed above.
[58] Section 93(3) is also in Part 5. It says an order or part of an agreement can be set aside or replaced where there are problems with disclosure of documents, improper advantage by one spouse over the other, a spouse did not understand the nature or consequences of “the agreement” and other common law grounds that would cause all or part of a contract to be voidable. The respondent’s application does not rely on s. 93(3) and nor is there evidence of any of the circumstances described there.
[59] The jurisprudence is consistent with the statutory restriction on review of orders involving property. Where a final order respecting property has been entered, the court has jurisdiction to vary it only in two narrow circumstances: where there has been a “slip” in drawing the order or where the order fails to express the manifest intention of the parties such that it requires the prevention of an injustice: Ting v. Wong, 2015 BCSC 1808 at paras. 12-21, citing Shackleton v. Shackleton, 1999 BCCA 704, at para. 12, Buschau v. Rogers Communications Inc., 2004 BCCA 142, at paras. 26-27; Sandhu v. Sandhu, 2012 BCSC 1183 at para. 54; and McLachlan v. McLachlan, 2013 BCSC 1733 at para. 114.
[60] Here there is no suggestion of a “slip”; the respondent’s challenge to the divorce order goes much further than that. He seeks a half-interest in the 2017 proceeds of sale from the Coquitlam property.
[61] While it is not specifically addressed, I take from the submissions of the respondent that the March 2016 order must be set aside because it fails to express the manifest intention of the parties and it, therefore, creates an injustice. As above, the focus of the respondent’s challenge to the divorce order is that the Coquitlam property has significantly increased in value since the order was made and he should benefit from that increase.
[62] I have considered this above and there is no evidence of a manifest intention or any intention that the parties intended that any future increases in the value of the property would be shared equally. The title to the property was supposed to be transferred to the claimant in July 2016 when she confirmed with the respondent that she had mortgage approval. I take from this that the claimant was to have the benefit of any increase in the value of the property, as well as take the loss for any reduction in the value.
[63] Other case law does not support the respondent’s submission. These were reviewed by Justice Fleming in McLachlan and they involved similar situations where the value of property changed after the issuing of an order: Gilpin v. Gilpin (1990), 1990 CanLII 1576 (BC CA); Akkor v. Roulston, 2009 BCSC 1584; and Hodgkinson v. Hodgkinson, 2004 BCSC 1630, aff’d 2006 BCCA 158.
[64] In Gilpin, Justice Lambert pointed out that “[c]ontinuing fairness is impossible to achieve. Fairness at a particular point in time is the legislative goal” (at pg. 259). This was under the former Family Relations Act, R.S.B.C. 1979, c 121. The Court noted at that time (i.e. before the FLA) that there were numerous judgments that made it clear that, as a matter of fairness, the valuation date should be the date of trial, unless there is reason for a contrary date (pg. 255). I note that some of these judgments involved situations where the value of family property had decreased since the previous agreement. I can find no principled reason for finding that an increase in value should have a different result.
Best Vancouver Family Lawyers 1 877 602 9900
Our high net worth and family business and family property division lawyers have an enviable track record of success.
We handle high net worth divorces and international Vancouver high net worth family property valuation cases and have 6 offices across BC and Alberta and Western Canada’s largest Mandarin and Cantonese speaking high net worth family property division team.
