DIVIDING FAMILY PROPERTY IN BC
Division of property is governed by the Family Law Act with the presumption that family property is to be divided equally between the parties with some exceptions. One such exception is excluded property. Section 85 of the Family Law Act allows for property to be excluded from property division except for the increase in value. Excluded property can be created in three ways: 1. Property owned before the relationship began; 2. Property gifted to one spouse alone during the relationship; and 3. Property inherited during the relationship by one spouse alone. Nothing will be divided if the property has gone down in value during the relationship. However, the increase in value will be divided should the value of the property appreciate during the relationship. The legislature’s goal of creating excluded property is that each party will keep their own property and share only that property was from the relationship.
How does one prove that their property is excluded? The Court of Appeal recently held in Shih v. Shih that civil standard of proof on a balance of probabilities is the standard to determine if property is excluded and that there is no requirement to prove that one owned the excluded property to a standard of precision or mathematical certainty. However, the onus to prove that property is excluded is on the person making the claim. The person coming to court claiming that property is excluded under the Act must do so with clear and cogent evidence, but this does not need to include documentary evidence, although, of course, such evidence is very helpful both to the court and the person making the claim. The person claiming excluded property will also be required to prove the value of the excluded property at the time of acquisition or the beginning of the relationship, whichever is the relevant moment in time.
Excluded property can be traced to new properties, but once again, there must be proof that the funds from the sale of one piece of property were used to purchase another. Excluded property can also lose its status as excluded property if one spouse gifts it to another which can be accomplished merely by registering the property into the other spouse’s name, as was found in V.J.F. v. S.W.A., a decision of the BC Court of Appeal.
A GIFT TO ONE PERSON OR TWO
One of the biggest problems facing spouses contesting the division of property is proving whether a gift was a gift to one spouse or both spouses. This is particularly difficult around gifts of cash to purchase real estate or gifts of real estate itself. The BC Court of Appeal recently held in Cabezas v. Maxim that there is a presumption that real estate (or funds gifted towards the purchase or maintenance of real estate) gifted to one spouse is a gift to both spouses, unless the presumption is rebutted with evidence that the person making the gift only intended at the time of the gift to give the gift to only one spouse.
GET LEGAL ADVICE
It is important that one should know one’s legal rights and obligations regarding property division when entering a relationship or deciding to make a gift of excluded property to their spouse during the relationship. Transferring property into the name of their spouse, regardless of the donor’s intention, will forever change the status of excluded property – something to consider in today’s real estate market where individual properties may be worth millions of dollars, such as in the V.J.F. case.
AVOIDING FUTURE PROBLEMS – GIFT GIVING
If you are a parent considering making a gift of valuable property to your son or daughter and you intend to only make that gift to your child and not their spouse then a lot of confusion can be eliminated by providing a notarized gift letter to the recipient stating the name of the recipient of the gift and why you are making the gift (i.e. early inheritance). In the absence of such a letter, it may be difficult for the recipient of the gift to prove that it was only a gift to them.
AVOIDING FUTURE PROBLEMS – MARRIAGE AND COHABITATION AGREEMENTS
Marriage or cohabitation agreement are very useful tools to avoid future litigation. A marriage agreement is entered into either at the start of or during a marriage, where as a cohabitation agreement is entered into while the parties are living together. It is important to remember that people who are cohabitating for more than two years have the exact same legal rights and obligations regarding spousal support and property division as married people. Cohabitation and marriage agreements typically set out the presence of any excluded, how that property is to be treated upon separation, and whether there are any restrictions or waiver of spousal support.
When parties are cohabitating or getting married, an agreement setting out the terms of property division, should the relationship end, can reduce the need for future litigation. The agreement should identify the excluded property of each party and very importantly, identify the value of the property at the time the relationship began. If excluded property is acquired during the relationship, then the property schedules attached to the agreement should be amended to reflect the newly acquired property and its value at the time of acquisition. It is up to you and your spouse as to whether you wish to agree to follow the Family Law Act’s requirement to only share the increase in value or come to some other arrangement.
Recording the value of excluded property in a marriage agreement establishes an easy record for the parties to reference should it become necessary in the future to determine the increase in value of any excluded property.
For more information on marriage agreements, separation agreements, and property division, please contact the John Nelson Law Corporation for a private consult.
JUDICIAL CASE CONFERENCE: THE NEXT STEP IN THE FAMILY LAW PROCESS
A Judicial Case Conference may well be one of the most frustrating steps in family law litigation as it is the step in between filing a Notice of Family Claim and seeking pre-trial relief. The frustration comes from a forced waiting period, as there needs to be a minimum of 30-days notice to the other side, and neither side can make applications to the court before the JCC except in limited circumstances. The hard part is the wait.
THE PURPOSE OF JCC
The legislature has mandated that parties attend a Judicial Case Conference in the hopes that parties can come to solutions on their own before parties become entrenched in their litigation positions. A war of affidavits, with hard words each describing the other party, are rarely conducive to settlement. The legislature’s hope is that a JCC can divert parties away from a litigation war in which nobody wins, including the children, if this can be done before a series of pre-trial applications.
A JCC is usually one and half hours in length and is overseen by a Judge or Master (a type of Judge) of the Supreme Court. The purpose of the JCC is two-fold: find settlement on either interim or final issues and prepare the parties for trial in the absence of a settlement. A pre-requisite for attending a JCC is that each party has to exchange their financial statements, a type of court form disclosing a party’s finances. Parties must serve one week before the JCC their financial statements, known as Form F8, upon the opposing party.
WHO SPEAKS AT A JCC
Your lawyer will do most of the talking on your behalf, however you are allowed to speak directly to the Judge or to your ex-spouse, unlike in court where only your lawyer can speak to the Judge on your behalf. The JCC may take place in a conference room or a court room depending on the courthouse. If the JCC takes places in a courtroom, the parties and the Judge may sit around a table away from the bench while other Judges prefer to conduct a JCC from the bench. The JCC is recorded but only for the benefit of referencing any orders made and a transcript can only be released by court order. It is only in the rarest of circumstances that the court will allow a transcript to be made of the JCC since the purpose of a JCC is to foster candid dialogue. You should attend the JCC wearing business casual dress. While the court considers JCCs to be “informal” that doesn’t mean you shouldn’t treat the JCC seriously and speak respectfully to your ex-spouse, counsel, and the Judge. The Judge may ask questions directly of you. A Supreme Court Justice is addressed as “my lady” or “my lord” and a master is addressed as “your honour.” While a JCC brief might be useful for identifying issues and positions between counsel, the brief itself is of limited value with the Judge because it cannot be given to the Judge beforehand unlike a Settlement Conference Brief.
RESTRICTIONS ON THE ORDERS MADE AT A JCC
A Judge can only make substantive orders at a JCC by the consent of both parties. Substantive orders are orders pertaining to the main litigation issues: division of property, spousal support, child support, parenting arrangements, etc. A Judge cannot make substantive orders at a JCC unilaterally, as this is forbidden under the Supreme Court Family Rules. Recently, the British Columbia Court of Appeal in Morales v. Puri held that “it is axiomatic that Judges, like everyone else, are obliged to follow the law.” It is only by consent that parties may enter into substantive orders at a JCC.
Consent orders are a possibility as a Judge has a specific mandate to act as a mediator and to attempt to broker a settlement. One thing that the Judge can do at a JCC is to give a non-binding opinion as to the strength of one’s case, which sometimes can be enough for a party to decide to settle. You don’t need to worry about what is said at a JCC, as they are protected by settlement privilege. This means that what is said at a JCC either by a Judge or by the parties cannot be repeated outside of the JCC.
A Judge can make procedural orders unilaterally at a JCC, including: ordering a party to attend the Parenting After Separation course, authorizing the amendment of court documents, ordering that particulars be provided regarding court documents that initiated the litigation, ordering document production, ordering examinations for discovery, reserving a trial date, setting down a trial management conference, making orders respecting the timing of events, and making any other procedural order or giving direction that will further the object of the Rules.
The object of the Rules is to help the parties resolve the legal issues in family law case fairly and in a way that will take into account the impact that the conduct of the family law case may have on a child and minimize conflict between the parties and secure the just, speedy and inexpensive determination of every family caw case on its merits in a way that is proportional to the interests of any affected child, the issues in dispute, and the complexity of the case. In other words, most family law litigation is the exact opposite of what the legislature would like litigants to do.
CAN I GO TO COURT BEFORE THE JCC?
The JCC can be waived if there is a pressing reason to do so, such as if one of the parties is in a dire economic position and there is an urgent need for spousal or child support. Failure of counsel to respond to correspondence seeking JCC dates may be sufficient reason to waive the JCC requirement.
Some orders can be sought before a JCC and without a JCC waiver: a consent order on any issue, an order restraining the sale or disposition of property, an ex-parte (emergency) order usually pertaining to children, an application to change, suspend, or terminate a final order, an application to set aside or replace part or all of an agreement, or an application to change or set aside the determination of a parenting coordinator.
MAKING THE MOST OF A JCC
A JCC does not have to be an empty gesture while waiting to go to court. A JCC is an opportunity to explore settlement. Given the very expensive nature of family law litigation, any opportunity to find a solution is one that should be taken seriously. Parties have control of their own destiny until they hand it over to a Judge, who may or may not rule in their favour. A JCC is simply the first step towards the end of litigation, whether that is through settlement or trial. One option to consider at a JCC, if negotiations are going well but there is not enough time to conclude negotiations, is to set down a Settlement Conference. A new procedure is often done in front of a different Judge but you can ask the JCC Judge if they would be willing to be the Settlement Conference Judge. Steps for success at a JCC include: filing and serving your financial statement on time, writing out a list of your objectives you wish to achieve at the JCC, and having a positive attitude. A JCC is often the first substantial contact a person will have had with their ex-spouse in a while and it can be nerve wracking. A smile and a handshake can go a long way to setting the right tone for success at a JCC.
For more information family law litigation and representation at a JCC, please contact the John Nelson Law Corporation for a personal consultation.
OBLIGATION OF A STEP PARENT TO PAY CHILD SUPPORT
By the time people enter their second major relationship of their lives, there is often children from another relationship. Whether the relationship is marriage or marriage-like, step-children are a fact of life. Unfortunately, despite the best of intentions, second marriages can end and with the dissolution of the relationship comes the question: Is there a legal obligation owed to step-children? The answer is yes there are legal obligations to those children, but with some exceptions. The law regarding the child support obligations of a step-parent is set out in sections 147 – 149 of the Family Law Act.
WHEN A STEP PARENT DOES NOT HAVE TO PAY CHILD SUPPORT
A step-parent has no child support obligation if the natural parent is unable to provide child support, either in part or in full. A step-parent’s duty to provide child support is secondary to that of guardians and natural parents of the child.
A step-parent has no child support obligations if an application is not made within one year of the last time the step-parent contributed to the child’s support.
A step-parent has no child support obligations if support of the child was for less than one year in duration.
A step-parent has no child support obligations if the step-parent is still in a relationship with the step-child’s parent. Or in other words, a claim for support cannot be made against the spouse of a person who is to pay child support.
WHEN CHILD SUPPORT IS TO BE PAID BY A STEP PARENT
Child support is to be paid to an ex-spouse for a step-child where the step-parent paid towards the support of the child for more than a year, it has been less than one year since the step-parent paid towards the step-child’s support, that the natural parent of the child (from whom the parent seeking support was originally in a relationship with) cannot be found or cannot meet their support obligation, and the step-parent is separated from the step-child’s parent. There will be an obligation to pay child support where a separation agreement or order of the court recognizes the step-child as a child of the marriage.
Child support may be set at the Federal Child Support Guidelines amount or it may be pro-rated if some portion of support can be ordered against the natural parent. Support may be ordered at $0 where the court finds the step-parent has met their obligation to support the child given the circumstance of the relationship (i.e. consideration of the standard of living during the time the child lived with the step-parent as well as the length of time the child resided with the step-parent)
OBLIGATIONS TO PAY CHILD SUPPORT DURING UNIVERSITY YEARS
The obligation to pay child support and post-secondary educational expenses will continue after a child’s 19th birthday under either the Divorce Act or the Family Law Act if the child is attending university or similar, subject to certain requirements. The obligation to pay a part of post-secondary educational expenses applies to step children. In the recent Court of Appeal decision of Shaw v. Arndt, 2016 BCCA 78, the court held that being a stepparent does not relieve oneself of a child support obligation and that a lack of a relationship between the child and a step-parent, as the sole ground for ending support obligations, would not end support except in truly egregious cases of misconduct by a child against a parent. Simply put, child support must be paid by a stepparent where a child’s natural parent cannot meet their child support obligations, the adult child is attending university and any breakdown in the relationship between the child and the stepparent is merely unsatisfactory as opposed to egregious behaviour on behalf of the child.
For more information about either claiming child support or responding to a claim for child support as a step-parent, please contact the John Nelson Law Corporation for a private consult.