Difference between revisions of "Dividing Property and Debt in Family Law Matters"

Whether you're able to settle how property and debt are going to be shared by agreement, or if you're going to need a court order, it's important to understand how the ''[[Family Law Act]]'' works. If you're going to start a court proceeding, the court will be required to divide property using the rules set out in the ''Act''. If you're going to be able to settle your property issues, the ''Act'' will be used to measure the fairness of your agreement if either of you ever tries to get out of the agreement in the future.

Under the ''[[Family Law Act]]'', a person who is a "spouse" under s. 3 may apply, within the two-year time limit in s. 198, for a division of property under s. 94(1). Where another court may also make an order for the division of property, the court here must first determine whether it should go ahead under s. 106 and, if so, it must next determine what law it should apply under s. 108. However, where no other court may make an order respecting property, the court here may make orders dividing property and debt under Part 5 of the ''Act'' without any more complications.

#there is a ''real and substantial connection'' between this province and the court proceeding.

In other words, there is a real and substantial connection between this province and a court proceeding, which may let the court here make orders about the division of property and debt, if:

#the court proceeding includes a claim under the ''[[Divorce Act]]'' (the reason for this factor is that the ''Divorce Act'' requires a spouse to have lived in the province where they make  a claim under the ''Act'' for at least one year before the court proceeding is started).

#under s. 108(5), if neither of the first two circumstances apply, the law the court must use is the ''applicable internal law''.

Section 107 says how you figure out what the applicable internal law is:

In other words, the applicable internal law that should be used to divide property and debt between spouses is:

*the law of the place where the spouses most recently lived together,

*the law of the place where the spouses lived together the longest, or

*if the spouses never lived together, the law of the place where the spouse making the claim for the division of property normally lives.

In the right circumstances, the applicable internal law could be the ''[[Family Law Act]]''!

*the order ''must'' be made when a spouse asks for it, unless the other spouse can show that there are sufficient assets so that the claim to the property won't be frustrated if they happen to sell some of the assets,

In some cases judges find that the ''unequal contribution'' of one person, along with other factors, warrants unequal division. In other cases, unequal contribution is not enough to establish significant unfairness.

Under s. 96 of the ''[[Family Law Act]]'', the court may not make an order dividing excluded property between spouses except in two situations: if there's property outside the province that can't be divided under s. 109, discussed below; or, if it would be significantly unfair not to divide the excluded property in light of the length of the spouses' relationship or one spouse's contributions to the excluded property owned by the other spouse. Section 96 says this:

As we saw in the discussion about s. 95, it's hard to say what significantly unfair means. I expect that something that is significantly unfair is more unfair than something which is just unfair, yet is less unfair than something that is grossly unfair.

Division 6 of Part 5 of the ''[[Family Law Act]]'' has a complicated test that the court must apply to determine whether it can and should make orders dividing property and debt between spouses when another court could also make orders about the same people and the same property. This was discussed earlier in this section under the heading Determining jurisdiction.

The ways that a separation agreement can deal with the division of family property and family debt are virtually unlimited. Under the ''[[Family Law Act]]'', each spouse is presumed to keep the property they brought into the relationship and share in the property bought during the relationship as well as the increase in the value of any property brought in. Although spouses are presumed to be each half responsible for any debt incurred during the relationship, you can make whatever other arrangements you want, as long as both spouses agree to those arrangements and they're reasonably fair. In fact, s. 92 says this: