The Unequal Division of Family Property: Significant Unfairness in BC Family Law
By Seamus Cowan, BC Family Lawyer
In family law, the division of property is often a complex and contentious issue. The objective is to ensure a fair and equitable distribution of assets between spouses or partners upon separation or divorce. However, in BC, there are notable concerns regarding the unequal division of family property, which has sparked considerable debate among legal professionals and the public. This blog aims to shed light on the significant unfairness that exists within the province and the need for reform to promote true equity.
Understanding Family Property Division in BC
BC follows a legislative framework known as the Family Law Act (“FLA”) for the division of property. Under the FLA, family property is generally divided equally between spouses or partners, regardless of individual contributions. The rationale behind this approach is to recognize the equal partnership of both parties during the relationship.
Section 95 of the British Columbia FLA specifically addresses the unequal division of family property. This section allows for a court to make an unequal division of family property if it determines that equal division would be significantly unfair in light of certain factors outlined in the FLA. These factors include:
- Economic disparity between the spouses resulting from the relationship or its breakdown.
- A spouse's contribution to the career or earning potential of the other spouse.
- The financial hardship that an equal division would cause to one spouse.
- Any other circumstances that the court considers relevant.
Section 95 of the FLA provides the court with discretion to depart from the default rule of equal division of family property if it determines that such a division would result in significant unfairness. This allows the court to consider the unique circumstances of each case and make a fair and equitable division of family property based on the factors outlined in the FLA.
It is important to note that the application of Section 95 and the determination of what constitutes "significant unfairness" is subject to judicial interpretation and discretion. Courts will consider the specific facts and evidence presented in each case to determine whether an unequal division is warranted based on the factors outlined in the FLA.
Factors of Significant Unfairness in BC Family Law
When a court considers an unequal division of family property due to significant unfairness under Section 95 of the BC FLA, it examines various factors to make a just and equitable determination. While the specific circumstances of each case will influence the court's decision, the following are common factors that courts typically consider:
- Economic Disparity - the court will assess the economic disparity between the spouses resulting from the relationship or its breakdown. This includes examining differences in income, earning potential, assets, debts, and financial resources. If one spouse is at a significant disadvantage compared to the other, it may be considered unfair to divide the family property equally.
- Contributions to the Relationship - the court will evaluate the contributions made by each spouse during the relationship. This includes both financial and non-financial contributions. Financial contributions encompass income, investments, inheritances, and property acquisitions. Non-financial contributions include homemaking, child-rearing, and support provided to the other spouse's career or education. The court will consider the extent of each spouse's contributions when determining the fairness of an equal division.
Financial Hardship - the court will assess whether an equal division of family property would cause financial hardship to one of the spouses. This involves examining the financial needs and resources of each party, including their ability to support themselves after the division of property. If one spouse would experience significant hardship compared to the other, the court may deviate from an equal division to alleviate the unfairness.
Debts and Liabilities - the court will consider the debts and liabilities of the parties when determining the division of family property. If one spouse is burdened with a disproportionately higher amount of debt, it may be unfair to divide the assets equally without considering the liabilities.
Length of the Relationship - the duration of the relationship is a relevant factor. In short-term relationships, the court may be more inclined to depart from an equal division if there are substantial pre-existing assets or if one party brought significantly more assets into the relationship. This recognizes that a brief relationship may not have afforded both parties an equal opportunity to contribute to the acquisition of family property.
However, in Banh v Chrysler, 2022 BCCA 74, the BC Court of Appeal allowed an appeal to overturn a lower court’s decision to vary the presumptive date for valuing family property (i.e. the date of trial) as a “reapportionment or unequal division of family property.” The parties were married for 2 years, and the date of trial was 2 ½ from the date of separation - 5 ½ years from the date of marriage. The lower court held it would be significantly unfair for a party to benefit in the increased value of excluded property up to the date of trial where the length of the marriage was only 2 years. The lower court ordered an unequal division of family property by identifying the date of valuation as the date of separation and not the date of trial. The Court of Appeal overruled the lower court’s reassignment of the date of valuation and held that a 2-year marriage is not so compelling short as to disentitle a party from sharing the value of the post-separation growth of excluded property.
Individual Needs and Circumstances - the court will consider the specific needs and circumstances of each spouse. This includes factors such as age, health, earning capacity, and future financial prospects. The court will aim to achieve a division that considers the individual needs of each spouse to ensure fairness and support their ability to move forward independently.
Any Other Relevant Factors - Section 95 of the FLA grants the court discretion to consider any other circumstances it deems relevant. This allows the court to address unique aspects of a case that may contribute to significant unfairness in the equal division of family property.
It is important to note that the court's determination of significant unfairness and the weight given to each factor will vary based on the specific facts and evidence presented in each case. A relationship of short duration is the most persuasive standalone factor for finding significant unfairness and an unequal division of family property under the FLA. However, to make a strong case for significant unfairness, the circumstances of a case should contain several of the factors discussed above and allow for a “stacking” of factors. The court's objective is to achieve a just and equitable outcome that considers the overall fairness of the division of family property considering the circumstances.
The skilled team of legal professionals at Crossroads Law are deeply knowledgeable in the subtleties of significant unfairness and the unequal division of family property under the FLA. We are dedicated to safeguarding your interests at every turn. To delve deeper into whether your situation would allow for an unequal division of family property, schedule a complimentary 20-minute consultation with any one of our seasoned family lawyers or mediators today!