Common Law Relationships and Net Property Division in Vancouver, BC
One of the cornerstones of Canadian family law, along with making decisions in accordance with the “best interests of the child,” is the “joint venture” model of the family. For several decades, high-level decisions of Canadian courts have considered the family’s economics as a cooperative affair, even if some family members’ contributions are not easily expressed in financial terms.
The Definition of “Spouse” in BC
British Columbia’s legislature, in defining “spouse” for the Family Law Act, includes people who have been cohabiting in a “marriage-like” (essentially, amorous) relationship for two or more years. Common-law spouses have the same entitlement to property equalization as do married couples.
Simplifying Property Division
In the simplest terms, upon the dissolution of a relationship, each spouse (or unmarried “spouse”) is entitled to keep the property they brought to the relationship, and then each partner is entitled to half of the accumulated gains. These gains are referred to as “family property.” If the values are negative, then the partners share the net liability equally. This is known as “family debt”.
Dividing property at the end of a relationship is not always simple. First, there are “exclusions” from family property. For example, gifts to a spouse, settlements, damages, and insurance payments for personal injuries, except portions of damages representing lost income.
CLM v MJS, 2017, BCSC 799 (CanLII) is a recent case that quickly escalated following the breakdown of a common-law couple. Here, the mother called the RCMP and Child Protective Services and allegedly poisoned the father (the court neither confirms nor denies this part of the proceedings). In terms of property division, the mother’s parents had gifted her cash to make a down payment on a home. The value of the home was excluded from net family property as it could be “traced” to the gift. However, as we will discuss next, the court ordered unequal division of the proceeds from the sale of the home, due to costs arising from the mother’s conduct and her incurring substantial debt.
Another complicating factor is the power of BC’s courts to deviate from the presumption of equal sharing. However, this power is quite limited; the equal division of property must be “significantly unfair.” Across Canada, courts avoid deviating from the presumption of equal sharing, and poor financial management in good faith will generally not displace it. Rather, it requires reckless conduct, hiding assets, or truly disproportionate investments of time and money.
A decision that ties together the concepts discussed above is EHH v CLM, 2017, BCSC 799 (CanLII). In this case, an unmarried couple lived together for nine years and, during that time, the Respondent, who left her job voluntarily, made substantial improvements to a property she brought into the relationship. As homes in Vancouver tend to do, the house value appreciated considerably, and a dispute arose as to who should be entitled to this gain, as each of them had invested time and money into the property. In this case, the court awarded the Respondent 70 percent of the increase in value as of the date of the trial, as her former partner had attempted to hide his assets and she had spent substantially more time and energy improving the property.
During the relationship, the Respondent also received a settlement for a “slip and fall” accident; however, in this instance, the settlement was not excluded, as the funds had been put into a joint bank account and then spent by the spouses, which courts assume to be a gift absent evidence to the contrary.
Seek Professional Advice
More complex assets (even pensions or assets outside of BC) and the existence of “domestic contracts” (which are agreements between family members) can complicate matters substantially. As such, we strongly recommend obtaining professional advice before acting, including before signing any documentation related to your net property division.
Call Valerie M. Little Law Corporation When You Need a Divorce Lawyer in Coquitlam
If you are concerned about the implications of BC’s unmarried spouse rules for your property and you would like to receive what you are entitled to after a separation in Vancouver, contact Valerie M. Little for legal help. Ms. Little can assist you with preparing a legal agreement between you and your former partner regarding your division of family property and any family debt. Or, you may need legal help if you are faced with a Family Law Act claim.
Arrange your consultation with Valerie M. Little, a family lawyer in Coquitlam with over 25 years of experience, by calling 604-526-3333 today.