Short marriages and unequal division cases are on the rise in British Columbia under our new Family Law Act. Initially because of the excluded property provisions scheme in the new Family Law Act unequal division arguments regarding family property gains based on unequal contribution were thought to be reduced and restricted. However, this has not in fact actually happened. Gurdeep Khosa of our top-rated family lawyers based out of our Surrey office sets out how a new case allowed for an 80/20 division of the family property.
Short Marriages and Unequal Division
In Chapman v. Cuthbert, 2021 BCSC 1, the parties were in a common-law relationship for approximately 2.5 years. The main issue in dispute was the parties’ former matrimonial home. This fact pattern immediately raised the issue of short marriages and unequal division.
The Claimant sought an equal division of all family property. The Respondent took the position that due to the short duration of the relationship, and the Claimant’s lack of financial contribution during the marriage, she should only be entitled to 15% of the growth in equity of the former family home.
Under the Family Law Act (“FLA”), property owned by the spouses at the time of separation is categorized as either “family property” or “excluded property”.
Pursuant to s. 81 of the FLA, each spouse is presumptively entitled to an undivided half interest in all family property, regardless of their respective use or contribution: Jaszczewska v. Kostanski, 2016 BCCA 286 at para. 38. Section 95(1) of the FLA allows the court to order an unequal division of family property or family debt if it would be “significantly unfair” to equally divide such property or debt. Section 95(2) enumerates factors the court may consider in weighing an unequal division.
To meet the “significant unfairness” test, the court must be satisfied that there exists “something objectively unjust, unreasonable or unfair in some important or substantial sense” which requires the family property to be divided unequally: Jaszczewska at para. 42.
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The Court stated that:
[39] The court is guided in this endeavour by s. 95(2), which sets out relevant factors that can be considered to constitute significant unfairness. Included in these are a variety of factors such as: the duration of the relationship between the parties; the existence of an agreement between the spouses (other than one described in s. 93(1)); and a spouse’s contribution to the career or career potential of the other spouse. Section 95(2)(i) permits the court to also consider “any other factor” that may lead to significant unfairness.
In assessing the claim for Short marriages and unequal division, the Court noted that Mr. Cuthbert was the sole person on the mortgage to the 139A Street House, made all the mortgage payments, took care of all of the property-related expenses, and a substantial portion of the parties’ joint living expenses. According to Mr. Cuthbert, he had no expectations that Ms. Chapman would contribute towards the mortgage payments, utilities, property taxes, or other property-related expenses. This is because: the parties had always been responsible for their own debts; Ms. Chapman was making significantly less money than he was, and Mr. Cuthbert considered these expenses to be his exclusive responsibility as he solely owned the house. Because of Ms. Chapman’s limited finances, Mr. Cuthbert also did not ask or expect her to contribute equally to their joint living expenses.
In applying the short marriages and unequal division law applicable analysis to the case at hand the Court concluded that:
[65] Having regard to the whole of the evidence, I conclude that the circumstances in this case would make it significantly unfair to divide the Net Sale Proceeds of the 139A Street House equally between the parties.
[66] The greatest factor in this case which warrants a departure from the presumption of equal division is the short duration of the relationship between the parties. The parties’ relationship here lasted only two-and-a-half years (Emphasis added).
[68] Having said that, I do not consider unequal contribution as being solely determinative of whether an equal division would be significantly unfair in this case. However, when combined with the short duration of the marriage, I find that it would be significantly unfair for Ms. Chapman to receive an equal share of the Net Sale Proceeds of the former family home.
[70] I also accept that the increase in the value of the home was due largely to market forces. Yet the investment was made possible solely due to the respondent. The asset was purchased with Mr. Cuthbert’s money, he paid for all of the house related expenses, and he was the only person who put his money and credit at risk by being solely on title for the mortgage (Emphasis added).
[72] Accordingly, the Net Sale Proceeds of the 139A Street House should be reapportioned to 80% in Mr. Cuthbert’s favour, such that Ms. Chapman is entitled to 20%, or $39,301 as her share of this family property.
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