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

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==Initial Steps==

===Take Stock of Property and Debt===

===Make it Clear that You've Separated===

Under s. 81(b) of the provincial ''Family Law Act'', when separation happens each spouse takes a one-half in all family property as tenants in common, regardless of how the property was owned before separation, and becomes responsible for one-half of all family debt. This can be critical to protect your share of the family property from creditors, your spouse's bankruptcy or court orders made in other court proceedings.  

===Register Your Interest in Property===

Registering an interest in real property will stop the property from being sold and may prevent the property from being borrowed against. The two most common ways to do this are by filing a Certificate of Pending Litigation under the ''Land Title Act'' or an entry under the ''Land (Spouse Protection) Act'' with the Land Title and Survey Authority.

====Notices and Financing Statements under the ''Family Law Act''====

===Make Sure the Rent Gets Paid and the Lights Stay On===

==Financial Restraining Orders==

Rule 12-4 of the Supreme Court Family Rules gives the court the authority to make a general restraining order, also called an ''injunction'', to make someone to do something or not do something. The potential scope of these restraining orders is very broad, and can include, for example, a restraining order identical to that provided for in s. 91 of the ''Family Law Act'' as well as an order stopping someone from racking up debt by drawing on credit cards and lines of credit.

Rule 12-4 says little more that "the court can issue an injunction." A 1986 case of the British Columbia Court of Appeal, ''British Columbia v. Wale'', offers some guidance. In that case, the court held that someone applying for an injunction had to prove three things. In a family law context involving unmarried parties, these are that:

#you have a reasonable claim against assets owned by your spouse;

#your spouse has disposed or encumbered his or her assets or is likely do so; and,

Section 39 of the provincial ''Law and Equity Act'' does pretty much the same thing as Rule 12-4 of the Supreme Court Family Rules. Section 39 says this:

#you have a reasonable claim against assets owned by your spouse;

#your spouse has disposed or encumbered his or her assets or is likely do so; and,

===Applying for Restraining Orders Without Notice===

It's important to know that if you are applying for an injunction or restraining order without notice to the other spouse, the court will require that you make full and complete disclosure of all of the relevant facts, even of those facts that aren't in your favour. If it is discovered that you haven't made full disclosure, the court can set aside the injunction, make an award of costs against you, or make an award of damages to compensate the other party for any inconvenience caused by the injunction. In a 1986 Supreme Court case called ''Morin v. Morin'', this resulted in a spouse having the injunction cancelled and getting special court costs of the application.

==Debts, Bankruptcies and Third Party Claims==

#separate, to convert the ownership of all property to a shared ownership with your spouse as tenants in common;

#register a CPL against all real property in which your spouse has an interest; and,

#seize any asset put up as collateral on the loan;

#sue the debtor for the amount owing;

#put a lien on property owned by the debtor;

#garnish the debtor's wages;

#force the sale of the debtor's property to meet the debt; or,

#register a judgment against the debtor's property.

===Third Party Claims===

==Protecting Property Outside British Columbia==

#the courts of British Columbia generally cannot deal with real property located in other provinces or outside of Canada;

#the Supreme Court of British Columbia can deal with out-of-province assets that are movable, like RRSPs, stocks, bank accounts, chattels and what not, as long as the owner has attorned to the court's jurisdiction; and,

#the Provincial Court cannot deal with out-of-province issues at all.

===Immovable Property: Real Property===

====The General Rule====

In truly exceptional circumstances, it is possible to get an order stopping someone from disposing of real property located outside the province with something called a "''Mareva'' injunction". A ''Mareva'' injunction will stop someone from selling or encumbering assets outside of British Columbia, providing that certain conditions are met. (The name of this order comes from an old English case in which the relief was first granted, ''Mareva Compania Naviera S.A. v. International Bulkcarriers S.A.'') To qualify for this order, you must:

#show a strong case for your entitlement to a share of those assets;

#show that there is a real risk that the other party will dispose of those assets before a final order is made; and,

===Movable Property: Financial Assets===

The court can be reluctant to issue a s. 91 order that is intended to deal with assets located outside the province, since in most cases the courts of British Columbia cannot make orders about things located outside the province. In a 2002 case called ''Boyd v. Boyd'', the Court of Appeal confirmed that the court can make ''in personam'' restraining orders which are effective against movable assets located outside the province.