Preventing Dissipation of Calgary Family Property

Preventing Dissipation of Calgary Family Property is a key step taken in Calgary family property cases. Senior MacLean Law family lawyer Peter Graburn sets out how you can protect yourself. Calling one of our skilled senior Preventing Dissipation of Calgary Family Property lawyers immediately can say you millions.

Vancouver Mareva Injunction Preventing Family Property Dissipation

In Vancouver BC MacLean law obtained the leading international Mareva injunction in a multimillion dollar high net worth family case that BC lawyers now use as the leading precedent to help protect their clients. Our Devathasan case set the record for one of the largest family Mareva injunctions, highest spousal support and highest child support award of over $100,000 a month, as well as highest special costs award at roughly $1.5 million. Contact our Vancouver Mareva Injunction Preventing Family Property Dissipation today.

Calgary Preventing Dissipation of Family Property Lawyers 403 444 5503

As we have indicated in previous articles, division of Calgary family property in Alberta is not as simple as it may seem. In its simplest terms, division of family property includes dividing all family property (assets and debts) owned by the separating couple, after taking out all non-family (ie. exempt) property. The Supreme Court of Canada in Moge ([1992] 3 SCR 813) stated that the equitable distribution of family property was an essential aspect of providing for an equitable distribution of the economic consequences of marriage breakdown. So dividing family property that exists may be difficult enough.  But what about family property that no longer exists, or cannot currently be found (ie. is hidden)? That may be even tougher.

Calgary Family Lawyers 403 444 5503

The Alberta Family Property Act codifies the division of family property upon breakdown of a (married or “common-law”) couple’s relationship, under two sections: Section 7 creates a presumption of an equal distribution of non-exempt family property, unless it would not be just or equitable to do so, and; Section 8 provides a number of considerations that could lead to an unequal distribution of family property, including that “a spouse has dissipated property to the detriment of the other spouse”(s. 8(l)).  But what is “dissipation” of Calgary family property?

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Black’s Law Dictionary defines “dissipate” as “to destroy or waste, as to expend funds foolishly”. In the United States, dissipation of family property has been defined as “where a spouse uses matrimonial property for his or her own benefit and for a purpose unrelated to the marriage at a time when the marriage relationship was in serious jeopardy” see: Kothari v. Kothari, 255 NJ Super. 500, 506-07 (App. Div. 1992). Simply stated, dissipation of family property is where one spouse either uses or squanders joint family property for their own purpose or benefit not related to the relationship during their relationship, or transfers or hides family property in the process of separation and divorce. Simple, right? Not so much.

In Alberta, in the case of Cox v. Cox (1998 ABQB 987, the Alberta Court of King’s Bench outlined a framework for determining whether a spouse had dissipated matrimonial property, stating (at para. 46):

“From the case law one can distill the following principles:

1. Section 7 (4) creates a presumption of an equal distribution of non-exempt matrimonial property, unless it would not be just or equitable to do so.

2. Section 8(l) provides one of the factors that can lead to an unequal distribution where one spouse dissipates assets to the detriment of the other.

3. Dissipation does not necessarily result where an asset is worth less at trial than it was at separation. Dissipation requires a degree of intent although that intent does not necessarily have to extend to intentionally depriving the other spouse of a fair distribution of matrimonial property. It is sufficient if one spouse intends to dissipate the assets (usually for their own enjoyment), and that dissipation arises in detriment to the other spouse.

4. There must be actual detriment to the other spouse.

5. The law generally does not find dissipation if the reduction in assets was due to reasonable expenditures made on behalf of the family or to maintain existing matrimonial assets. However, the court will look to see if the spouse could have paid those expenses out of income rather than by depleting assets. Purely personal expenses which do not benefit the other party that are paid out of matrimonial property may also be considered dissipation (even though prior to separation they might have been matrimonial expenses).

6. If an asset is sold or otherwise reduced, the courts will not consider this dissipation if the proceeds can be traced to another asset. The replacement assets form part of the assets available for distribution.

7. If assets are sold for less than fair market value, the courts may determine whether the sale was done improvidently, hastily or fraudulently in deciding whether it was dissipation. If the sale is effected in accordance with pre-separation negotiations it may not be considered dissipation.

8. The total amount actually dissipated “to the detriment” of the spouse is one-half of the amount by which the asset was reduced.

9. Ultimately it is in the discretion of the trial judge, based on the consideration of all the facts, to determine whether or not dissipation exists.”

In the case of Metz v. Metz (2004 ACQB 528), Alberta Court of Kings Bench Justice B. Mahoney stated (at para. 37):

“Dissipation is another word for waste. Merely disposing of property is not dissipation. It is well established that to show dissipation there must be an element of bad faith or neglect. Foolish economic decisions, reckless or spiteful spending, pursuit of an illusory financial objective or squandering money on addictions are all examples taken from Alberta cases.”

Examples of Dissipation of Calgary Family Property 403 444 5503

So what are some examples of dissipation of family property. Dissipation can take many forms, but some of the more common include:

• Transferring, selling, depleting or destroying property – ie. in Service v. Service [1992] A.J. No 1116 (ABKB), a wife transferred the matrimonial home to her mother after the husband had made all the mortgage payments on it;
• Concealing or hiding property – ie. in Reid v. Reid [1993] 99 DLR (4^th) 722 (ABKB), a husband sold his business and put the proceeds into a trust account from which he paid his mortgage, legal fees, travel, spousal and child support and golf memberships;

● Large purchases or reckless investments – in Bakken v. Bakken [1992] 132 AR. 356 (ABKB) a wife who used $41,000 of a $43,000 RRSP to pay income taxes, legal fees and credit cards and purchase furniture and other expenses was found to have depleted assets as the money was “largely” used to pay her own personal debts. In Hauck v. Hauck (1991 ABCA 332) (ABCA), a manic depressive husband who lost $320,000 was found to have depleted assets as he had done nothing to stop the disastrous consequences of his actions;

• Lavish, extravagant spending – $10,000 trip to Australia when unemployed (McWilliam v. McWilliam (1989) 100 AR 65 (ABKB); $4,000 trip to England with non-exempt family property (McLeod v. McLeod 1989 AJ No. 1232 (ABKB);
• Spending family property on vices – alcohol, drugs, gambling, prostitution, affairs, etc.

As we said previously, dissipation involves the use (or misuse) of joint family property for the sole use and benefit of only one of the spouses.  But how do you try to prevent a spouse from dissipating family property.  Some tools include:

Certificate of Lis Pendens (CLP) – putting a form of lien on the family home if you are not a registered owner (see: Calgary Alberta Family Dower Rights )

Preservation (ie. “freezing”) Order – bring a Court Application so that bank accounts, investments, vehicles and other more liquid assets cannot be cashed in or sold;

Closing Lines of Credit – so they cannot be run up / maxed out;

Unequal Division of Family Property – making a claim for not only your half of the family property, but for a part of the remainder of your spouse’s property to make up for what they have dissipated.

Preventing Dissipation of Calgary Family Property isn’t simple and calling us immediately can help you avoid losing thousand if not millions of Calgary family property. If you have a Vancouver or international family law matter call ourVancouver Mareva Injunction Preventing Family Property Dissipation today.