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Difference between revisions of "Dividing Property and Debt in Family Law Matters"
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Dividing Property and Debt in Family Law Matters (view source)
Revision as of 20:01, 19 April 2013
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==Orders for the division of property and debt== | ==Orders for the division of property and debt== | ||
Under the ''[[Family Law Act]]'', a person | 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. | ||
The usual order under Part 5 is an order that decides which property is family property and which debt is family debt, and then divides them both equally. However, in some circumstances the court can divide family property and family debt unequally; in others the court can even divide excluded property between spouses. | The usual order under Part 5 is an order that decides which property is family property and which debt is family debt, and then divides them both equally. However, in some circumstances the court can divide family property and family debt unequally; in others the court can even divide excluded property between spouses. | ||
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===Determining jurisdiction=== | ===Determining jurisdiction=== | ||
A spouse who is married or has lived with his or her spouse in a marriage-like relationship can start a court proceeding in British Columbia and ask for orders about the division of property and debt. There's no rule | A spouse who is married or has lived with his or her spouse in a marriage-like relationship can start a court proceeding in British Columbia and ask for orders about the division of property and debt. There's no rule that says that a person who starts a court proceeding in British Columbia must live in British Columbia, but there must be some sort of connection with this province and the court proceeding. Maybe the other spouse lives here. Maybe the property or debt is here. Maybe British Columbia is where the spouses lived for most of their relationship. Either way, there must be some connection between the court proceeding and British Columbia. | ||
However, where another court might be able to make orders about the same people and the same property, the court here must decide: | However, where another court might be able to make orders about the same people and the same property, the court here must decide: | ||
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====Determining whether the court should make orders==== | ====Determining whether the court should make orders==== | ||
''You should skip this discussion if no court other than the court of British Columbia can make orders about you, your spouse and your property.'' | ''You should skip this discussion if no court other than the court of British Columbia can make orders about you, your spouse, and your property.'' | ||
Where another court might be able to make orders about the same people and the same property, s. 106(2) says when the court here can make an order under Part 5: | Where another court might be able to make orders about the same people and the same property, s. 106(2) says when the court here can make an order under Part 5: | ||
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#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 he or she makes a claim under the act for at least one year before the court proceeding is started). | #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 he or she makes a claim under the act for at least one year before the court proceeding is started). | ||
As if this wasn't complicated enough, even if the court can make an order because one of the s. 106(2) conditions are met, under s. 106(4) the court refuse to make orders for the division of property and debt. Section 106(5) says what the court must take into account in deciding to refuse to make orders: | As if this wasn't complicated enough, even if the court can make an order because one of the s. 106(2) conditions are met, under s. 106(4) the court can refuse to make orders for the division of property and debt. Section 106(5) says what the court must take into account in deciding to refuse to make orders: | ||
<blockquote><tt>(5) In determining whether to decline jurisdiction under subsection (4), the court must consider all of the following:</tt></blockquote> | <blockquote><tt>(5) In determining whether to decline jurisdiction under subsection (4), the court must consider all of the following:</tt></blockquote> | ||
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====Determining the law to apply when the court may make orders==== | ====Determining the law to apply when the court may make orders==== | ||
''You should skip this discussion if no court other than the court of British Columbia can make orders about you, your spouse and your property.'' | ''You should skip this discussion if no court other than the court of British Columbia can make orders about you, your spouse, and your property.'' | ||
Assuming, then, that the court here has decided that it has the authority to make orders for the division of property and debt because one of the s. 106(2) factors is met, and that it hasn't decided to refuse to make orders anyway under s. 106(4), the next thing to figure out is the law that the court should use in deciding how the property and debt should be divided under ss. 107 and 108. That law could be the law of British Columbia — Part 5 of the ''[[Family Law Act]]'' — or it could be the law of another place. | Assuming, then, that the court here has decided that it has the authority to make orders for the division of property and debt because one of the s. 106(2) factors is met, and that it hasn't decided to refuse to make orders anyway under s. 106(4), the next thing to figure out is the law that the court should use in deciding how the property and debt should be divided under ss. 107 and 108. That law could be the law of British Columbia — Part 5 of the ''[[Family Law Act]]'' — or it could be the law of another place. | ||
Section 108 is just as complicated as s. 106 was, but this is what it all comes down to | Section 108 is just as complicated as s. 106 was, but this is what it all comes down to: | ||
#under s. 108(3), if the spouses have an agreement that says the law of a particular place must be used, the law the court must use is the law of that particular place, | #under s. 108(3), if the spouses have an agreement that says the law of a particular place must be used, the law the court must use is the law of that particular place, | ||
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#under s. 108(5), if neither of the first two circumstances apply, the law the court must use is the "applicable internal law." | #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 what the "applicable internal law" is: | Section 107 says how you figure out what the "applicable internal law" is: | ||
<blockquote><tt>The applicable internal law for the purposes of section 108 [choice of law rules] is</tt></blockquote> | <blockquote><tt>The applicable internal law for the purposes of section 108 [choice of law rules] is</tt></blockquote> | ||
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Section 97 is the key to Part 5 of the ''[[Family Law Act]]'' and gives the court its general power to make orders about the division of property and debt. Under this section, the court may: | Section 97 is the key to Part 5 of the ''[[Family Law Act]]'' and gives the court its general power to make orders about the division of property and debt. Under this section, the court may: | ||
#make decisions about any issue concerning the ownership, possession or division of property or debt, | #make decisions about any issue concerning the ownership, possession, or division of property or debt, | ||
#make any order necessary to divide property or debt, | #make any order necessary to divide property or debt, | ||
#declare who should own or possess property, | #declare who should own or possess property, | ||
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=====Financial restraining orders===== | =====Financial restraining orders===== | ||
Under s. 91(1) and (2), the court can make some really important orders that are intended to freeze | Under s. 91(1) and (2), the court can make some really important orders that are intended to freeze any property that is at issue in the court proceeding, including family property and property that might be excluded property, until the property is finally divided by an order or an agreement. | ||
<blockquote><tt>(1) On application by a spouse, the Supreme Court must make an order restraining the other spouse from disposing of any property at issue under this Part or Part 6 [Pension Division] until or unless the other spouse establishes that a claim made under this Part or Part 6 will not be defeated or adversely affected by the disposal of the property.</tt></blockquote> | <blockquote><tt>(1) On application by a spouse, the Supreme Court must make an order restraining the other spouse from disposing of any property at issue under this Part or Part 6 [Pension Division] until or unless the other spouse establishes that a claim made under this Part or Part 6 will not be defeated or adversely affected by the disposal of the property.</tt></blockquote> | ||
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A couple of important points about this section deserve mention. | A couple of important points about this section deserve mention. | ||
#the order ''must'' be made when a spouse asks for it, unless the other spouse can show that there are | #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 he or she happens to sell some of the assets, | ||
#the order can be made without giving the other spouse notice of the application, and | #the order can be made without giving the other spouse notice of the application, and | ||
#the order includes not just "family property" but all property in dispute, including property that might be excluded property. | #the order includes not just "family property" but all property in dispute, including property that might be excluded property. | ||
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This is a powerful order and you should probably think about asking for this order if you are asking for a share of property. This is just a matter of being prudent. You may have no cause to believe that your spouse would do something that would jeopardize your interests, but it almost always pays to be cautious. | This is a powerful order and you should probably think about asking for this order if you are asking for a share of property. This is just a matter of being prudent. You may have no cause to believe that your spouse would do something that would jeopardize your interests, but it almost always pays to be cautious. | ||
Rule 12-4 of the Supreme Court Family Rules gives the court the authority to make a general restraining order, called an ''injunction'', to require someone to do something or not do something. The same authority is given to the court by s. 39 of the provincial ''[http://canlii.ca/t/8459 Law and Equity Act]''. See the | Rule 12-4 of the Supreme Court Family Rules gives the court the authority to make a general restraining order, called an ''injunction'', to require someone to do something or not do something. The same authority is given to the court by s. 39 of the provincial ''[http://canlii.ca/t/8459 Law and Equity Act]''. See the section [[Protecting Property and Debt]] for more information about protecting property. | ||
====Dividing property and debt equally==== | ====Dividing property and debt equally==== | ||
Under s. 81(a) of the ''[[Family Law Act]]'', "spouses are both entitled to family property and responsible for family debt, regardless of their respective use or contribution" | Under s. 81(a) of the ''[[Family Law Act]]'', "spouses are both entitled to family property and responsible for family debt, regardless of their respective use or contribution". Under s. 81(b), each spouse's share of the family property is presumed to be an "undivided half interest" and each spouse is "equally responsible for family debt". Section 97 gives the court the ability to make whatever orders are necessary to divide family property and family debt between spouses. | ||
Section 84 says what family property is: | Section 84 says what family property is: | ||