Vancouver Excluded Family Property Lawyers at MacLean Law appreciate the guidance provided by our Court of Appeal in this week’s decision of Shih v. Shih. Our Vancouver Excluded Family Property Lawyers appreciate that the case provides crucial guidance for family lawyers and their clients in settling cases involving excluded property. Meet with us to ensure you have experienced Vancouver Excluded Family Property Lawyers guiding you.
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In Shih the Appeal Court found that the trial judge erred in setting out the legal test for establishing a claim to excluded property under s. 85 of the Family Law Act. The Court of Appeal ruled that The test does not require precision or mathematical certainty. Rather, the test requires proof on a balance of probabilities with clear and cogent evidence. Accordingly, the Court held Mr. Shih established his claim for excluded property related to the Bank of Montreal accounts and the proceeds of the mortgage of the West 4th Avenue property.
Lorne N. MacLean, QC, founder of our top ranked* Vancouver Excluded Family Property Lawyers notes his firm has been voted top Vancouver Excluded Family Property Lawyers for 3 out of the last 4 years winning back to back wards as Vancouver’s best family law firm for 2016 and 2017 as well as winning in 2014.
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Lorne N. MacLean, QC founder of MacLean Law’s team of Vancouver Excluded Family Property Lawyers handles high net worth and complex business, real estate, joint venture, partnership and professional practice disputes involving proving excluded property values at the start and end of relationships as well as dealing with tracing issues where excluded property has been sold and used to buy new property that the exclusion should still apply to.
Our Vancouver Excluded Family Property Lawyers warn that moving forward it is critical that parties keep track of starting values for excluded property and keep source documents showing what happened to this property throughout the marriage. Keeping exact track is difficult especially since a new Family Law Act regime now requires proof of the existence and historical values of property brought by one party into the relationship or received solely by them from a gift or inheritance, our old Family Relations Act diodn’t focus on.
Top Rated* Vancouver Excluded Family Property Lawyers Founder MacLean Explains Critical New Case
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Vancouver Excluded Family Property Lawyers know proving an asset should have its starting value excluded can get tricky as the onus rests on the person claiming the asset should be excluded and only the gain on it shared. Lorne N. MacLean has extracted the key portions of the judgment to help family law clients understand better how to protect themselves:
B. Mr. Shih’s Excluded Assets
[37] Before I address the question of Mr. Shih’s assets, it is first necessary to discuss the legal test that has been formulated for the determination of excluded assets.
[38] The judge had regard to the decision in Asselin v. Roy, 2013 BCSC 1681. In Asselin, the claimant advocated a “broad brush” approach to satisfy the burden of proof which is cast, by s. 85(2), on the spouse seeking to exclude property. The trial judge in Asselin rejected such an approach because he found it inconsistent with the approach “mandated by the Act.” In his opinion, a broad brush approach would not “foster the certainty that s. 85 seeks to achieve” (paras. 191–193).
[39] The judge in the case at bar did not read Asselin to invariably require documentary evidence to establish excluded property. However, she cited Asselin for the proposition that “more mathematical certainty from a clear evidentiary record is required” by the FLA (para 62). She then synthesized the approach to be taken as follows:
[64] The principle that emerges from the case law is that a broad brush or rough estimate approach to identifying excluded property is not appropriate and that a party claiming excluded property must establish, on a balance of probabilities, the basis for and extent of the exclusion with precision. 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 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. [Emphasis added.]
[40] The flaw I see in the Asselin analysis adopted by the judge is that it rests on the assumption that the FLA demands “precision” or “mathematical certainty”. I can see nothing in the Act that demands “precision” or “mathematical certainty” in the standard of proof for establishing a claim to excluded property.
[41] The inherent challenge which confronts litigants under the FLA is that in many relationships of any significant length, documents will have been destroyed and memories dimmed. A legal standard that demands mathematical certainty or precision risks defeating legitimate claims.
[42] In my opinion, the proper test for establishing a claim to excluded property under s. 85 of the FLA is the same as in any civil case – proof on a balance of probabilities. The requirement of certainty and precision in my view improperly tips the standard closer to the criminal standard of proof beyond a reasonable doubt.
[43] I do not quarrel with the proposition that, in order for a party to establish excluded property, he or she must do so with clear and cogent evidence. If documentary evidence is not available, the party bearing the onus of proof will need to testify as to their recollection of the transactions in dispute. That evidence will be scrutinized for credibility.
[44] However, in balancing the evidence as a whole, the trial judge must be permitted to draw reasonable inferences from evidence that is less than certain or precise in order to do justice between the parties.
[45] In P.G. v. D.G., 2015 BCSC 1454, Madam Justice Fenlon (as she then was) discussed the purpose of the excluded property model of the FLA and emphasized the need to fit with parties’ expectations of fairness.
[76] … In the British Columbia Ministry of Attorney General’s White Paper on Family Relations Act Reform: Proposals for a new Family Law Act, (2010), online: <http://www.ag.gov.bc.ca/legislation/shareddocs/fra/Family-Law-White-Paper.pdf> the reason for introducing an excluded property regime was described as follows (at 81):
The most compelling reasons for moving to an excluded property regime are to make the law simpler, clearer, easier to apply, and easier to understand for the people who are subjected to it. The model seems to better fit with people’s expectations about what is fair. They “keep what is theirs,” (such as pre-relationship property and gifts and inheritances given to them as individuals) but share the property and debt that accrued during their relationship.
