Can collaborative lawyers be found negligent for not setting a trial date?

 Can Collaborative Lawyers be Found Negligent For Not Setting A Trial Date? 

by Rena Chen and Jennifer Lin 

In the recent decision Banh v Chrysler, 2022 BCCA 74 (“Banh v Chrysler”), the Court of Appeal overturned the trial judge’s finding that it would be significantly unfair to divide property equally. 

The husband owned 3 rental properties in his sole name that experienced a significant increase in value after the separation. The husband was solely responsible for his rental properties. 

The parties were married on August 9, 2014, started cohabitating in October 2014, and separated on August 9, 2016; however, they did not get to trial until the end of December 2019.  Essentially, this was a 2-year relationship, but it took almost 3.5 years to get to trial. 

The trial judge ordered an unequal division of family assets by using the date of separation (instead of the date of trial) as the valuation date based on a number of factors, all of which the Court of Appeal determined were outside the scope of s. 95 of the Family Law Act (the factors that could lead to significant unfairness and unequal division) except for the short duration of the marriage. The Court of Appeal went on to conclude that the length of the relationship alone is not enough to support an unequal division of family assets, and awarded the wife one-half of the increase in value of the husband’s rental properties to the date of trial.

This case raises a few troubling conclusions:

1)     A short relationship alone is no longer enough to qualify as significantly unfair; and

 

2)     In situations of short relationships where one spouse owns more property than the other, this case effectively provides an incentive for the non-property-owning spouse to delay the trial for as long as possible (it is important to note that the husband’s lawyer raised this exact argument at the appeal, and the Court of Appeal dismissed the argument by simply stating that the Supreme Court Family Rules allows a party to set down trial). Meanwhile, the property-owning spouse faces the risk of owing the other spouse more and more money as time passes without a resolution, especially when considering the volatile nature of the Vancouver real estate market. 

 

We believe collaborative family lawyers are now faced with a difficult question: should we be alerting our own Mr. Banhs of the importance of setting a trial date as soon as possible, and if we do not, would it be grounds for a negligence claim? How does this fit into the collaborative frame

 

Proposed amendments to the Family Law Act (FLA)

Will clarify the law around pets, property and pensions to better meet the modern-day needs of separating couples.

Starting now, lawyers may wish to advise their clients on the ways that proposed FLA amendments in Bill 17-2023 (Family Law Act Amendment, 2023) ("Bill 17"), including the transitional provisions, could impact their clients' positions regarding excluded property, pension and pets. Our thanks to Nancy Cameron, K.C. and other colleagues working out of the New Look Business Centre for bringing this best practices consideration to our attention.

Proposed change #1:

As described by the government, one proposed amendment "would make it easier to equitably divide property by preventing the use of the outdated principle of the 'presumption of advancement' to decide how property is divided" under the FLA. A 2016 government discussion paper describes the presumption of advancement and FLA property division concept in greater detail. 

Bill 17's clause 3 adds a section that provides that certain common law rules are not to be applied respecting questions concerning spouses' ownership of property.

3 The following section is added:

Certain presumptions not to be applied

81.1 

(1) The rule of law applying a presumption of advancement must not be applied in questions respecting the ownership of property as between spouses.

(2) The rule of law applying a presumption of resulting trust must not be applied in questions respecting the ownership of property as between spouses.

Clause 4 of Bill 17 provides that property that is excluded from family property remains excluded even if ownership is transferred from a spouse to the other spouse.

4 Section 85 is amended by adding the following subsection:

(3) If a property is excluded from family property under subsection (1), the exclusion applies despite any transfer of legal or beneficial ownership of the property from a spouse to the other spouse.

6 Section 96 is repealed and the following substituted:

Division of excluded property

96 The Supreme Court must not order a division of excluded property unless

(a) family property or family debt located outside British Columbia cannot practically be divided, or

(b) it would be significantly unfair not to divide excluded property on consideration of the duration of the relationship between the spouses and one or more of the following factors:

(i) a spouse's direct contribution to the preservation, maintenance, improvement, operation or management of the excluded property;

(ii) the terms of any agreement between the spouses respecting the excluded property, other than an agreement described in section 93 (1) [setting aside agreements respecting property division], including but not limited to terms respecting the transfer of the excluded property;

(iii) if the Supreme Court makes a determination under section 95 (1) [unequal division by order] respecting significant unfairness, the extent to which the significant unfairness cannot be addressed by an unequal division of family property or family debt, or both.

Proposed change #2: 

Bill 17 includes updates to FLA sections that govern the division of pensions to bring them into alignment with the current practice of pension-plan administrators, as based on recommendations from a BC Law Institute report.

Proposed change #3:

If passed, the amendments will provide more guidance for parties and judges when determining how to address the ownership and possession of pets. The FLA will require consideration of factors such as each person's ability and willingness to care for the animal and the relationship a child has with it, as well as if there is a risk of family violence, the threat of cruelty to an animal, and more.

Transitional Provision

Bill 17's clause 24 sets out rules that apply respecting certain types of proceedings that were started before the coming into force of the amendments made by Bill 17 to the FLA. 

Transition – pre-existing proceedings

24 (1) In this section, "pre-existing proceeding" means

(a) a proceeding, under the Family Law Act, respecting property division that was started before the date on which this Act receives Royal Assent, or (b) a proceeding, under the Family Law Act, to set aside or replace an agreement respecting property division that was made before the date on which this Act receives Royal Assent.

(2) Unless the spouses agree otherwise,

(a) section 81.1 of the Family Law Act, as enacted by this Act, does not apply respecting a pre-existing proceeding, and (b) sections 85 and 96 of the Family Law Act, as those sections read immediately before the date on which this Act receives Royal Assent, continue to apply respecting a pre-existing proceeding.

Wording for the-above summary includes excerpts from the following two sources: 

Government news release:

Changes to Family Law Act will make it easier for separating couples | BC Gov News

Bill 17-2023 with explanatory notes

Bill 17 – 2023: Family Law Amendment Act, 2023 (gov.bc.ca)