26 September 2013

Supreme Court Publishes First Decision Dividing Property Under the FLA

Mr. Justice Harvey of the Supreme Court has just released his decision in Asselin v. Roy, a case in which the parties, a couple in a long term unmarried relationship, agreed to use the new Family Law Act to determine how their property and debt would be split between them. Frankly, I'm surprised that we've had a decision on this topic so soon, but the judgment is welcome nonetheless.

Much toner will be spilt chewing over the nuances of this decision, and, on the assumption that sharper minds than mine will have a better analysis than I, I will provide a summary overview only.

Background Facts

The parties began to live together, in British Columbia, in 1987 and separated in 2011. The respondent brought a number of assets into the relationship, namely the family home in BC, a property in Nova Scotia, a pension and an RRSP account. The claimant owned nothing.

In 1990, the parties signed a cohabitation agreement at the suggestion of the respondent. Given that both parties were leaving marriages when their relationship began, the suggestion was sensible. The agreement said that each of them would remain the sole owner of the property he or she owned, and that the only property they would share would be property bought in their joint names. Each of them agreed to waive his or her interest in the other person's property.

The respondent hired a lawyer to draft the agreement, and the parties signed it in the lawyer's office. At the trial, the claimant said that she had not seen the agreement before signing it, that didn't know why they were going to the lawyer's office until they got there and that she didn't have legal advice about the meaning and consequences of the agreement before signing it.

As time passed, the first family home was sold and used to buy a second family home, which was also registered in the sole name of the respondent. The claimant, who was then working as a teacher's assistant, contributed her salary and gifts from her parents toward the second family home, the purchase of furniture and various renovation projects. The respondent, who I'm sure also contributed to these expenses, used his salary and other income, and sizeable inheritance from his mother's estate to invest in real estate in Nova Scotia and cover all of the operating costs of the family homes. The claimant contributed more toward family expenses as her income improved. The parties maintained separate bank accounts throughout almost all of their relationship.

By the time the trial rolled around the respondent owned five properties in Nova Scotia, including the one he'd owned at the beginning of the parties' relationship, the second family home, investments, a violin collection, and other personal property including cash and a car. The parties jointly owned two other properties in Nova Scotia. The claimant owned some investments and an RRSP account she purchase with an inheritance from her mother, some other RRSPs and other personal property including cash and a car.

Apart from the mortgages secured against his various properties, the respondent owed credit card debt of $60,000 at the date of separation. The claimant held no debt, apart from her liability for certain mortgages.

Jurisdiction Under the New Act

As mentioned, at the beginning of the trial the parties elected to have the Family Law Act apply to determine the division of property and debt between them. (Technically, this could not have been an election under the transition rules set out in s. 252(2) as the property division rules of the old Family Relations Act never applied to unmarried spouses. It would have had to have been something like an agreed amendment of the parties' claims to plead relief under the new act.)

The parties's other election was that the court would also have the authority to make decisions about the property in Nova Scotia, under, I presume, s. 106(2)(b) which allows litigants to agree that the court has jurisdiction over property located outside the province and apply our local law to the division of that property under ss. 108(5) and 107(a).

Regardless of how the court assumed jurisdiction to apply the Family Law Act to the trial, it did. The court next determined that the parties were "spouses" as defined by s. 3(1)(b) of the act, having lived together in a marriage-like relationship for more than two years, and concluded that the property division rules applied to the parties.

The Law

The court described the purpose of the Family Law Act as creating "more certainty for litigants in the division of their assets," and observed that "the broad judicial discretion formerly available under the FRA has been replaced with a more formulaic approach to both the identification and division of family property." The court then reviewed the founding assumptions of the new act about the division of property:
  1. under s. 81(a), all property qualifying as "family property" is to be divided equally, and responsibility for all debt qualifying as "family debt" is top be allocated equally;
  2. under s. 95, family property and family debt can be divided unequally, but only if an equal division would result in "significant unfairness;"
  3. under s. 84, "family property" is all property owned by either or both spouses on the date of separation, and the amount by which any property excluded from the pool of family property has grown in value during the relationship; and,
  4. under s. 81(b), the date of separation is the date on which property is characterized as either family property or excluded property.
Comparing this new regime to the old act, the court said this:
"[160] ... Unlike the former legislation governing property division, there is no requirement under the Act to establish entitlement to an asset before its characterization as ‘family property’. There is no requirement of ordinary usage or contribution to the asset; rather the court merely has to determine that such property existed on the date of separation and at least one spouse owned it or had a beneficial interest in it."
Certainly, this seems much simply than the regime under the Family Relations Act, which required proof that property was "ordinarily used for a family purpose" to be a shared, "family asset." However, 
"[106] To implement the objectives [of the legislation], more mathematical certainty from a clear evidentiary record is required. Where inheritances are said to come into play, estate documents should be produced. Where exclusion of property is sought, on whatever basis, documents showing the value of property as at the time cohabitation commenced and at the date of separation will be critical in the assessment which the court is to perform. Where one party suggests, as is the case here, that excluded property has changed character into another asset, documents should be provided to allow the court to trace the transaction back to the property said to be excluded."
The point the court is making here is that the focus of the act has shifted from "ordinary use for a family purpose" to the dates that the spousal relationship began and ended, and, particularly in terms of excluded property, the value of property on the dates that the relationship began and ended.

The Agreement

The first issue for the court was whether the cohabitation agreement was binding on the parties. The respondent unsurprisingly took the view that the agreement was fair, except with respect to the family home. The claimant, on the other hand, argued that the agreement "was both unfairly constituted and significantly unfair in substance — in other words, the agreement was unfairly reached and, if the agreement was followed, the result would be unfair as well.

The court reviewed s. 93 of the new act, which sets out the reasons why the court can set aside an agreement about the division of property and debt, and summarized its effect as follows, with the particularly important bits in bold:
"[124] Seemingly, the proclamation and bringing into force of the Act heralds a new age for property division in the province of British Columbia. The tenor of the new Act appears to favour a less interventionist approach than its predecessor, the FRA
"[125] Section 93 contemplates a two-pronged inquiry as to the enforceability of an agreement. The first inquiry is directed at the formation of the agreement; the second stage, its effect. 
"[126] Even if the court determines the agreement was unfairly reached, there is still discretion to decline to set aside or vary the agreement if the result would not be substantially different from that which is contained in the agreement. s. 93(4) 
"[127] If an agreement was fairly reached, having regard the enumerated factors in s. 93 (3), the court must go on to consider whether the agreement is significantly unfair having regard to the enumerated criteria in s. 93(5). 
"[128] Judicial discretion has been modified, particularly as it relates to the assessment and enforceability of agreements. Under the previous legislation, a finding of unfairness based on one of an enumerated factors in s. 65(1) was sufficient to allow the court to, in effect, rewrite the parties’ Agreement to achieve the fairness found lacking in the original version. 
"[129] Critics of the legislation argued the threshold for judicial intervention was low, resulting in uncertainty which, in turn, encouraged litigation. 
"[130] Certainty is no doubt a desirable objective and parties should be encouraged, where mutually desired, to establish regimes of property entitlement which deviate from the statutory scheme. 
"[131] However, certainty should not trump either procedural or operational fairness as defined in s. 93."
Cutting to the chase, the court ultimately found the cohabitation agreement to unenforceable for want of procedural fairness, for four reasons:
  1. the claimant did not have legal advice before signing the agreement;
  2. the respondent's financial disclosure in the agreement was incomplete as he failed to provide values for the assets he owned at the time; and,
  3. the claimant therefore did not have the "necessary information to fully consider her position" in deciding whether to sign the agreement.
Having concluded that the agreement was procedurally unfair, the court then proceeded to divide the parties' property and debt.

The Division of Property

This exercise may have proved more troublesome than expected because of the quality and sufficiency of the financial evidence available to the court. The court noted various deficiencies in the information produced concerning: the value of the property existing at the date of cohabitation; the value of the parties' pensions at the date of cohabitation and at present; the value of each party's inheritances when received and at present; the parties' use of their inheritances during the relationship; and, the source of funds used to acquire property during relationship.

The court offered the following criticisms and the sort of evidence that would have been helpful:
"[169] Unfortunately ... neither party prepared a [schedule of assets and values] evidencing the assets or debt in existence as at the triggering event, [the date of separation] and, where appropriate, their value on that date. 
"[170] In the result, absent evidence at trial as to the identity and valuation of assets as at the date in question, I have relied upon the parties’ Form 8 financial disclosure statements in ascertaining the identity of various accounts not discussed in the evidence. If amongst them are accounts which did not exist as at [the date of separation] then such should be deleted from the following list of family assets. 
"[171] As to the value of the assets, those assets which are family property consisting of accounts and financial institutions subject day to day use, such as checking accounts, the valuation should be taken as at the date of separation. 
"[172] For those accounts representing long-term investments, specifically the RRSPs of each party found to be family property; those are to be divided in specie at the time of division unless it can be shown contributions were made post-separation. In such case, the amount of such contribution should be subtracted from the divisible portion of the asset."
Relying on the parties' financial statements and the evidence presented at trial, the court concluded that the excluded property consisted of the equity in the second family home attributable to the respondent's inheritance and the sale proceeds of the first family home, the savings accumulated by the claimant as a result of her own inheritance, and a portion of the equity in two of the Nova Scotia properties attributable to the claimant's inheritance. All other assets, the court concluded, were family property.

The court then addressed the question of whether it would be "significantly unfair" to equally divide the family property as required by s. 81. However, the question of what "significantly unfair" means has not yet been addressed by a court, and with this judgment will remain so:
"[251] ... I conclude that an equal division of the family property as earlier found would not be 'significantly unfair' to either party. 
"[252] In concluding this, I refer to the remarks of Justice Stewart who, in Jacobellis v. Ohio, (1964) 378 U.S. 184, famously stated: 
I shall not today attempt further to define the kinds of material I understand to be embraced within that shorthand description ["hard-core pornography"]; and perhaps I could never succeed in intelligibly doing so. But I know it when I see it, and the motion picture involved in this case is not that.
"[253] I, too, will leave to others to formulate an intelligible definition of 'significantly unfair' as that term is defined in section 95 and elsewhere in the Act
"[254] However, 'I know it when I see it' and this, save for my possible reservations concerning pension division, this is not 'it'."
Advice for Future Litigants

The court, it is clear, was vexed with certain aspects of the evidence before it, and offered these comments for other litigants:
"[104] Future litigants referencing this decision would be well advised to avoid some of the problems encountered by the parties in this litigation by preparing a Scott Schedule detailing the assets and liabilities of each party as of the date of separation."
A "Scott Schedule" is a chart that shows each asset and each debt that is at issue in a case and gives certain information about each item, including how it is owned, the date of purchase, the cost to purchase, present value, and each parties position on the item, if known.

It seems to me that the critical information with respect to property would be something like this:
  • Date of purchase, purchase price.
  • If brought into the relationship, value at the date of cohabitation or marriage, whichever is earlier.
  • If bought during the relationship, source of purchase funds and amount of contribution of each party toward purchase.
  • Amount and source of any funds contributed by either party to improvement of asset during relationship.
  • Value of property, and any associated debt, at date of separation.
  • Value of property, and any associated debt, at date of trial.
In the case of inheritances, court awards and gifts:
  • Date of acquisition, value when acquired.
  • Amount, if any, contributed to excluded property and family property during relationship.
  • Value at date of separation.
  • Value at date of trial.
In the case of debts:
  • If brought into the relationship, balance at the date of cohabitation or marriage, whichever is earlier.
  • If incurred during relationship, date incurred, amount incurred and reason incurred.
  • Value of any debt proceeds applied to or spent on excluded property and family property during relationship.
  • Balance outstanding at date of separation.
  • Amount of debt incurred to maintain family property after separation.
  • Balance outstanding at date of trial.
Finally, I should thank the brave lawyers who leapt in the deep end of the ocean to argue the first case on the division of property under the Family Law Act. You have helped us spot the sharks.

22 September 2013

Police Enforcement Under the FLA: A brief refresher

The issue of police enforcement of rights of parenting time or contact has come up a few times this last week, albeit in slightly unusual circumstances, and it seems that the issue could use some discussion.

Under the old Family Relations Act, you could ask for a "peace office enforcement" order under s. 36 if there was some concern that a person might fail to return the child at the scheduled time. Section 36 said this:
(1) If custody of a child is awarded to a person by an order made or enforceable under this Act and the person is denied the exercise of custody, a court may, on an application made without notice to any other person, order that the child be apprehended by a peace officer and taken to the person awarded custody.
You would also use this section to enforce an order for access made under the federal Divorce Act, which leaves enforcement problems to the provinces.

The same sort of order is available under s. 231 of the new Family Law Act, but there's a catch which I'll get to shortly. Section 231 says this:
(4) If satisfied under section 61 [denial of parenting time or contact] that a person has been wrongfully denied parenting time or contact with a child by the child's guardian, a court may make an order requiring a police officer to apprehend the child and take the child to the person. 
(5) If satisfied that a person having contact with a child has wrongfully withheld the child from a guardian of the child, a court may make an order requiring a police officer to apprehend the child and take the child to the guardian.
This sort of looks like the old Family Relations Act, just split into one term that applies when someone has been denied parenting time or contact and another term that applies when someone with contact refuses to give the child back, but there are some very important differences. First, there's the catch I mentioned. Section 231 also says this:
(1) This section applies if
(a) a person fails to comply with an order made under this Act, and 
(b) the court is satisfied that no other order under this Act will be sufficient to secure the person's compliance.
In other words, before the court can even think about making a police officer enforcement order under s-s. (4) or (5), it first has to be satisfied that (a) there has in fact been a breach of an order, and (b) there is no other means to secure the compliance of the breaching party. Unlike the Family Relations Act, you don't get to ask for the order in anticipation of a potential breach of a court order, there must have been an actual breach, and on top of that you also have to convince the court that nothing else will secure the party's compliance.

It gets somewhat more challenging for applications under s. 231(4), because to get a police officer enforcement order for a denial of parenting time or contact, you must firstly prove that there has been a wrongful denial of parenting time or contact under s. 61(1) — which the other side can argue is not wrongful for one of the reasons set out in s. 62(1) — and you must secondly prove that the remedies for the wrongful denial of parenting time or contact provided in s. 61(2) either haven't worked or won't suffice to secure the other party's compliance.

For applications under s. 231(5), although you don't need to jump through the s. 61(2) hoop — s. 61 only applies where a guardian has withheld parenting time or contact, and someone who has contact is not a guardian — you will need to prove that the general enforcement remedies available under s. 230(2) either haven't worked or won't suffice to secure the other party's compliance. Section 230 says:
(2) For the purposes of enforcing an order made under this Act, the court on application by a party may make an order to do one or more of the following:
(a) require a party to give security in any form the court directs; 
(b) require a party to pay
(i) the other party for all or part of the expenses reasonably and necessarily incurred as a result of the party's actions, including fees and expenses related to family dispute resolution, 
(ii) an amount not exceeding $5 000 to or for the benefit of the other party, or a spouse or child whose interests were affected by the party's actions, or 
(iii) a fine not exceeding $5 000.
Let me summarize.

Police enforcement where guardian withholds parenting time or contact, s. 231(4)

You cannot ask for police enforcement in anticipation that the guardian will withhold parenting time or contact.

Where a guardian has withheld parenting time or contact, to obtain a police enforcement order, you must prove that:
  1. you are entitled to parenting time or contact;
  2. the other person is a guardian of the child;
  3. the guardian has wrongfully withheld the child from you, contrary to an order for parenting time or contact; and,
  4. the specific enforcement remedies under s. 61(2) either haven't working in the past or won't work now, and no other order will secure the guardian's compliance.
Police enforcement where person with contact refuses to return child, s. 231(5)

You cannot ask for police enforcement in anticipation that a person entitled to contact will fail to return the child to a guardian.

Where a person with contact has failed to return the child to a guardian, to obtain a police enforcement order, you must prove that:
  1. you are the child's guardian;
  2. the other person has contact with the child;
  3. the other person has failed to comply with a court order that would require the person to return the child to you; and,
  4. the general enforcement remedies under s. 230(2) either haven't worked in the past or won't work now, and no other order will secure the person's compliance.

19 September 2013

Broken Engagements: Who gets the ring?

The CBC has reported on a ridiculously fractious former couple, under the descriptive headline "Estranged Couple Squares Off Over $16K Engagement Ring." (What's ridiculous is that at least one of them seems to think that it's cost-effective to start a lawsuit with such a low potential pay day.) Since engagements get broken all the time, you might wonder what the rules are, and actually it's pretty straightforward.

Under the old law of domestic relations, when a marriage proposal is accepted, a contract is formed. In fact, you used to be able to sue for breach of promise to marry. When the contract is breached, the person who breaches the contract is not entitled to the ring. In other words, if the proposer breaks it off, the other person gets to keep the ring; if the person accepting the proposal breaks it off, the proposer gets the ring back.

I wish this former couple the very best of luck in resolving their case for less than the replacement cost of the ring at issue.

18 September 2013

"Family Law for Professionals other than Lawyers": Parenting coordinators roster hosts training event

The BC Parenting Coordinators Roster Society has announced a three-day training opportunity for, as the title suggests, people other than lawyers. The course is intended to provide a general introduction to family law and will cover:
  • the historic and constitutional aspects of family law
  • dispute resolution in family law matters
  • the British Columbia court system
  • cohabitation and marriage agreements
  • separation and parenting agreements
  • the Divorce Act, the Family Law Act and the Child Support Guidelines
  • the Spousal Support Advisory Guidelines
  • custody and access under the Divorce Act and guardianship, parenting arrangements and contact under the Family Law Act
  • child support, including children's special expenses, and spousal support
  • the division of property and allocation of debt
  • family violence
The society's intention is that this course will meet the 21 hours of training in family law required by the Family Law Act Regulation for non-lawyers practicing as parenting coordinators, although I don't see why it wouldn't also count toward the 30 hours of training required for non-lawyers practicing as family law arbitrators.

The course will be taught by notable family law lawyers, including Craig Neville, Lisa Hamilton and Zara Suleman, and runs from 22 to 24 October 2013 at a cost of about $800. The course will be held at the Vancouver Masonic Centre at 1495 West 8th Avenue in Vancouver. Contact Stephanie Fabbro at 604-687-1133 for more information.

17 September 2013

CanLII Launches Awesome New Interface

CanLII, short for the Canadian Legal Information Institute and a project of the Federation of Law Societies of Canada, has just relaunched its website with a new and significantly improved user interface:

You can enter a Boolean or keyword search term from the main page; clicking on a particular province or territory will narrow your search accordingly. Clicking on the plus sign to the left of the search box expands the box to allow a more focussed search for a case or legislative text:

Your results will appear in a new page, with document hits sorted into four tabbed groups (everything, cases, legislation and commentaries), and a snapshot of the portion of the document in which the search term appears:

I've played around a bit with the new website and it's intuitive and really quite easy to use. CanLII has done a great job here, and, best of all, the website continues to be run free of charge. Thank you, Federation of Law Societies of Canada!

Update: 19 September 2013

Courthouse Libraries BC has published a blog entry with some genuinely useful information about using the new CanLII interface.

16 September 2013

Court Comments on Records Requirements for Guardianship Applications

Regular readers will recall that under the new Family Law Act, people who must apply to be appointed as a guardian of a child — remember that some people are automatically guardians — are required to prepare a specific form of affidavit with certain documents attached to it. Section 51 of the new act says this:
(1) On application, a court may
(a) appoint a person as a child's guardian ...
(2) An applicant under subsection (1) (a) of this section must provide evidence to the court, in accordance with the Supreme Court Family Rules or the Provincial Court (Family) Rules, respecting the best interests of the child as described in section 37 of this Act. ...
To figure out what evidence must be provided to the court, you have to look at Provincial Court Family Rule 18.1 if you're making your application in the Provincial Court, or Supreme Court Family Rule 15-2.1 if you're in the Supreme Court. Both rules say that:
  1. you must file a special affidavit, Form 34 in the Provincial Court or Form F101 in the Supreme Court, within a certain number of days of the hearing; and,
  2. "any records check, criminal records check or protection orders records check" attached to the affidavit must have been prepared within a certain number of days of the hearing.
To figure out what checks are required, you then have to look at the special affidavit. 

This overall arrangement is somewhat peculiar, as none of s. 51(2), PCFR 18.1 or SCFR 15-2.1 state that the records checks must be provided or explain the sort of checks that are required. This task is left to the affidavit forms and the affidavit forms are, in hindsight, not as clear as they could be. This is what PCFR Form 34 says on the issue (the text in italics is the instructions provided by the form) :
9 Attached to this affidavit and marked as Exhibit ______ is a copy of a British Columbia Ministry of Children and Family Development records check dated ______ . [Note that under rule 18.1, if there is to be no hearing for this application, this records check must be dated within 60 days of the date on which this affidavit is filed.] 
10 Attached to this affidavit and marked as Exhibit ______ is a copy of a Protection Order Registry protection order records check dated ______ . [Note that under rule 18.1, if there is to be no hearing for this application, this records check must be dated within 60 days of the date on which this affidavit is filed.]

11 Attached to this affidavit and marked as Exhibit ______ is a copy of a criminal records check dated ______ obtained from the ______ [name and location of police force or department from which the criminal records check was obtained]. [Note that under rule 18.1, if there is to be no hearing for this application, this records check must be dated within 60 days of the date on which this affidavit is filed.]
These ambiguities were before Judge Frame of the Provincial Court in Director and L.M.P. / L.M.P. v. K.P., a case involving a father who never resided with his child or regularly cared for the child, and accordingly was required to apply to be appointed as the guardian of his child. As the court put it,
"[2] During the course of the proceedings, the issue of [the father's] criminal record check arose. Clearly the criminal record checks conducted both by the Ministry of Children and Family Development, as well as the one obtained by [the father] pursuant to the family law legislation, do not disclose his criminal history. Thus, the issue arose whether a criminal record check was a mandatory or compellable requirement, what form of criminal record check was to be conducted, and what results are adequate for the purposes."
After reviewing the requirements of the act and the Rules of Court, the judge embarks on a very welcome discussion of the nature of police policies, and the available criminal record checks, their costs, their wait periods and their relative inadequacies. (This overview will be very helpful for anyone who must complete a Form 34 or Form F101, see paragraphs 12 to 39 of the judge's decision.) Here are the court's conclusions, with the particularly important bits in bold:
"[47] It is clear that in order to meet the purpose and requirements of the legislation, the criminal record check to be performed must include a vulnerable sector search [a special search that reports all police involvements, all information related to non-convictions and all charges regardless of what happened with them]. ... 
"[49] I am not satisfied that the existing legislation is sufficient to compel a person to obtain a criminal record check, much less the secondary fingerprint search. Where there is such a positive obligation upon an applicant to disclose such sensitive information, there ought to be mandatory language in some part of the legislation, be it the Family Law Act, the rules, or the regulations bringing the form into force. 
"[50] Furthermore, I am not satisfied that Form 34 contemplates any more than the preliminary criminal record check such as the one obtained by [the father]. Paragraph 12 of that affidavit form provides a section for the applicant to complete where the criminal record check omits some part of a person’s criminal history. It recognizes that the criminal record check may not be complete. The [applicant] is only required to disclose convictions for which there is no pardon. Presumably if a person were convicted of a sexual offence for which they were pardoned, there would be no obligation to disclose it. This defeats the whole apparent intention of protecting children who are members of a vulnerable sector.

"[51] I cannot tell from the evidence before me whether a person can obtain a vulnerable sector search for themselves through any other police agency, but it certainly cannot be obtained from the Vancouver Police Department for personal reasons. It appears this is based on RCMP policy. If applicants cannot obtain a vulnerable sector search, it seems to defeat the whole purpose of having the criminal record check done for a guardianship application. ... 
"[54] I am not satisfied that I have the authority to order [a] secondary fingerprint search absent any legislation empowering me to do so. There is no inherent jurisdiction in this court to make such orders. This goes beyond matters of procedure over which this court does have some inherent jurisdiction. ... 
"[56] The most practical procedure would be for [the father] to attend the detachment where he obtained his initial criminal record check and request a fingerprint search. While I cannot order him to do so, it is more practical than he or any other party trying to determine all of the detachments with which he had any engagements and make applications for disclosure of their records. ... "
In other words, the specific check an applicant for guardianship must obtain for the purposes of the Family Law Act is the particularly intrusive vulnerable sector search. However, an applicant cannot be compelled to request the vulnerable sector search, the form doesn't appear to require it, and policy policy appears to prevent applicants from getting it. Isn't this awkward. Making matters worse, the court's proposed solution — having the applicant attend at a police station to request a special search using fingerprint identification— is something that an applicant cannot be compelled to do.

It appears, then, that a person applying to be appointed as the guardian of a child is only required to provide the sort of brief check you can get by walking into a police station and asking for the check. It would be prudent to ask for the secondary fingerprint search; whether court can force you to do this or not, it will help to demonstrate your good faith in making the application.

Now, the Supreme Court is a court of inherent jurisdiction, which means that it is not limited by what the legislation says it can do when it makes orders. It is also a court of parens patriae jurisdiction, which means that it can make such orders as are necessary for the benefit of a child, usually when there is a gap in any applicable legislation. This may affect the outcome when similar issues arise in that court.

15 September 2013

Varying Entitlements Not Carried Forward in the FLA

I've been thinking more about the issues raised in my last post, "Court Declines to Determine Application of FLA to Unmarried Spouses Separating Before Act," about the transition to the new Family Law Act and was reminded about a really interesting Provincial Court case my friend Michelle Kinney mentioned that deals with a similar problem: what is the court's jurisdiction when it is asked to vary an order made under the Family Relations Act where the right to ask for the order is not carried forward in the Family Law Act?

The Family Relations Act allowed people to ask for a number of different orders that are no longer available under the Family Law Act. The most important of these are probably the right to ask for parental support, support payable by adults to their parents, and a parent's right to ask for child support from the other parent's new spouse while the parent and spouse are together; the case of D.J. and K.J. v. C.K. and T.K. is about child support.

Under the old act and the new, stepparents can be required to pay child support. Most people are pretty comfortable with that idea. However, the issue raised in cases like McFayden v. Faint and K.A.L. v. J.P.R. was whether a stepparent who is in a continuing relationship with a parent can be required to pay child support to the other parent, and the answer, under the old act, was that in certain circumstances they can. (For an explanation of why this was the case, see my post "Stepparent Caught by Hole in Family Relations Act.") The new law corrects this problem by saying, at s. 149(3)(b), that such applications cannot be brought until the stepparent and parent are separated, and as a result the stepparents in McFayden and K.A.L. find themselves in the unusual situation of being stuck paying child support under an order that could not be made under the present law of British Columbia.

This was more or less the case in D.J. v. C.K., where the parties wisely entered into a consent order (an order that everyone agrees the court should make) in 2011 that required the spouse of one of the parents to pay child support to the other parent. (I say "wisely," because this was the law of the land at that time, and it was prudent of everyone to make a deal rather than going through an expensive and time-consuming court hearing.) However, as time passed the stepparent's income must have gone up, and since the child support obligation of all payors, stepparents or not, is based on income, the recipient brought an application to vary (change) the amount of the stepparent's child support payments. Since this application would not be heard until after the Family Law Act was in effect, the stepparent cleverly made an application of his own to prevent the recipient's application from being heard, on the basis that since the order couldn't be made under the new act, it couldn't be varied under the new act.

(Let me pause here to comment about effect of orders made under the old act. Such orders, whether they could be made under the new act or not, continue to operate and are not affected by the repeal of the old act. This is addressed in several parts of the Interpretation Act:
35 (1) If all or part of an enactment is repealed, the repeal does not...
(c) affect a right or obligation acquired, accrued, accruing or incurred under the enactment so repealed, ...
36 (1) If an enactment ... is repealed and another enactment ... is substituted for it, ...
(b) every proceeding commenced under the former enactment must be continued under and in conformity with the new enactment so far as it may be done consistently with the new enactment, 
(c) the procedure established by the new enactment must be followed as far as it can be adapted in the recovery or enforcement of penalties and forfeitures incurred under the former enactment, in the enforcement of rights existing or accruing under the former enactment, and in a proceeding relating to matters that happened before the repeal, ...
37 (1) The repeal of all or part of an enactment, or the repeal of an enactment and the substitution for it of another enactment, or the amendment of an enactment must not be construed to be or to involve either a declaration that the enactment was or was considered by the Legislature or other body or person who enacted it to have been previously in force, or a declaration about the previous state of the law.
In other words, rights acquired under the Family Relations Act aren't cancelled because the old act has been repealed, and proceedings started under the old act must be continued under the new act in accordance with the new act.)

The stepparent's application was heard by Judge Birnie over the course of several days right after the Family Law Act came into effect, in March and April. This was how the judge characterized the stepparent's essential argument:
"[4] The Respondent argues that as of March 18, 2013 when the Family Relations Act was repealed and replaced by the Family Law Act no child support order, including any variation of an existing order, may be made against a step-parent if that person continues to reside with the biological parent. On an application to vary an existing order the Court may only affirm the order or cancel it. A variation is not permitted."
The respondent's argument was of course much more complicated and nuanced than this brief summary suggests; the argument is set out in detail at paragraphs 5 to 15 of this decision and it seems that the respondent's lawyer did a very good job indeed.

Ultimately, however, the respondent did not succeed. The court held that the right to vary an order is intrinsic to the order itself and cannot be separated from it:
"[17] At the heart of the respondent’s argument is the characterization of child support and the variation of child support as two separate rights. This approach fails to acknowledge the reality that the latter flows necessarily from the former. The right to claim maintenance is the essential right. The right to vary [support] in relation to the circumstances of the child or the payor parent, (and on behalf of either of them), is a right which flows from and cannot exist apart from the underlying support claim. ...
"[19] A [support] order is the key that opens the door to support payments. Applications to vary are, in essence, a means to ensure that an appropriate amount of support flows through the door – an amount which is fair to both the payor and the recipient. The right to vary is an essential component of the right to receive or the obligation to pay child support."
Unfortunately, because of s. 35(1)(c) of the Interpretation Act, the respondent could not argue that the original consent order was void as a result of the repeal of the Family Relations Act. The court further held that in absence of an express provision in the act that prohibited the variation of valid orders made under the former act, such orders can be varied where fairness so requires:
"[25] While the Family Relations Act is repealed effective March 18, 2013, the Family Law Act does not state that any rights or vested interests acquired under the Family Relations Act are extinguished. [The provision] that the coming into force of the Family Law Act is not a change in circumstances for the purpose of changing, suspending or terminating existing orders, suggests the contrary. It is an indication of a legislative intent that the new provisions are prospective only and not intended to disrupt existing rights. 
"[26] The fact that as of March 18, 2013 a [stepparent living with a parent] has no obligation to pay child support does not erase an obligation imposed prior to that date and this is so regardless of whether the legislature’s intent was to narrow what they considered to be an over-broad application of child support obligations in relation to step parents. 
"[27] The Family Law Act does not expressly state that a pre-existing order requiring a [stepparent living with a parent] to pay child support may not be varied and can only be understood to do so implicitly if the right to vary a support order is a right separate and distinct from the right to support which underlies it. ... 
"[28] This interpretation of legislative intent avoids the unfairness to both payor and recipient, of a child support order which cannot be varied in accordance with the circumstances of the parties, but can only be affirmed or terminated. It does not undermine the policy implemented by the Family Law Act toward a step parent’s obligation to pay child support. It simply means that the very few [stepparent living with a parent] who were bound by valid maintenance orders prior to March 18, 2013 continue to be bound to pay maintenance in accordance with their ability to earn income and the child’s needs and subject to the other factors which a court may consider in determining a step parent’s obligations."
My thanks to Michelle for bringing this case to my attention.

13 September 2013

Court Declines to Determine Application of FLA to Unmarried Spouses Separating Before Act

The recent Supreme Court case of Bressette v. Henderson involved a couple in an unmarried spousal relationship from 2004 to 2012 and a claim for the division of property. This facts of this case raise two problems that many lawyers have had to grapple with since the Family Law Act came into force on 18 March 2013:
  1. Do the property provisions of the new act apply to unmarried spouses who separated before 18 March 2013?
  2. Can a unmarried spouse who started a claim before 18 March 2013 amend her claim after that date to claim under the new act?
The first question is of critical importance as unmarried couples — spouses or not — were not entitled to an automatic interest in family assets under the old Family Relations Act and could only make claims to property held in just one person's name under the common law of trusts, which was complex and rarely yielded results close to what the couple would have had if they had been married.

Under s. 94 of the Family Law Act, however, spouses may apply for an order dividing property and debt. Section 3 defines "spouse" as including people who have lived in a marriage-like relationship for at least two years and people who used to be spouses. Section 198 says that an unmarried spouse must make a claim within two years of the date of separation. As a result, it would seem that if you meet the definition of spouse at s. 3 and you are within the time limit of s. 198, you may make a claim for the division of property under the new act.

The issue then narrows to this: if a new law gives you a right to make a claim against someone in certain certain circumstances, can you make that claim even though the circumstances occurred before the law came into effect? Think of it like this. Say a brand new law says that you can sue someone for reading your email. If the new law comes into effect in August, can you sue someone for reading your email in July?

Some of the answers lie in the provincial Interpretation Act. Section 4 of that act says that an act must be read as "commencing at the beginning of the day on which it comes into force." Section 3 says that if a new act says that it is meant to apply before it comes into force, then when the act comes into force it is retroactive to the date specified in the act. In other words, an act starts on the day it comes into force and had no earlier effect unless it says it has that effect.

In the case of the law about reading email, the law creates a new cause of action (a reason to sue someone) that didn't exist in July when the misconduct occurred. Unless the new act says that people can sue for instances of email-reading occurring earlier than August, you wouldn't be able to sue the person for reading your email in July.

The subtle difference about the Family Law Act is that the new cause of action it provides (unmarried spouses' right to sue for a share of family property) took effect on 18 March 2013 when the law came into effect, without any retroactive effect, but the definition of "spouse" captured people who were in a qualifying relationship on and after 18 March 2011. Let me put it another way. On 17 March 2013, an unmarried spouse couldn't sue for a share of the family assets, but on 18 March 2013 she could sue for a share of the family property, because that's when the new law came into effect along with its new definition of spouse and its new cause of action. However, the effect of the definition also captures unmarried spouses who were separated on or before 18 March 2013 and as a result, someone who met the definition of spouse on 18 March 2013 gained a new cause of action on that date, and the new act does not actually have a retroactive effect.

The second question is a bit different. If you started a court proceeding prior to 18 March 2013, can you change that claims you're making to include the new cause of action? Frankly, I don't see why not. Some might say "but that law never applied during our relationship," but that doesn't really matter; the government changed the law and if you're going to court that's the law that the court must apply, whether you meant it to or not. Others might say "but that wasn't the law when you started your claim," and that's the better argument. The idea here is that when you start a court proceeding against someone, the claim that you file in court sets out the full claim you are making and crystallizes the legal issues between the claimant and the respondent. However, the rules of the Supreme Court, say that you can change your claim as long as you do it a certain number of days before trial, and the reasons why people usually change their claims is to remove a legal issue or to add a legal issue, and so I'm not sure that this would get you anywhere.

As a result, I can't see why an unmarried spouse who starts a court proceeding before 18 March 2013 couldn't amend his or her claim to claim under the new act. The only restriction I can see is that the person would probably need to qualify as a "spouse" at the time the amendment is made.

By now you're probably asking why I've spent so much time babbling about my views on things when I started off talking about a case. The answer is that these questions were raised in the case:
"[120] The respondent argues that the FLA cannot possibly apply, given that the entire course of the parties' relationship was over before the new regime came into effect. The claimant says that it does apply."
However, the issues was not fully argued and, recognizing the significance of a decision on this point of law, the court commented that
"[131] I am concerned about deciding the issue of the applicability of the FLA in the absence of full legal argument."
and ultimately declined to do so. Her are Her Ladyship's helpful observations in this regard:
"[133] I have concluded that applying the 'significantly unfair' test [to unequally divided family property] in the unique circumstances of this case would lead me to the same conclusions I have reached with respect to the claimant's common‑law claim based on unjust enrichment. In other words, even if the FLA were to apply in this case, it would not change the result that I would reached based on the unjust enrichment cause of action.  
"[134] The unjust enrichment legal cause of action is based on fairness, or equity, and as such is intended to be flexible and to take into account the many varieties of relationships that may exist. An important factor running throughout the authorities in determining whether or not there has been unjust enrichment is the legitimate expectations of the parties. Here, if the FLA was applicable to these parties, it would be 'significantly unfair' to reach a different result than that based on the unjust enrichment remedy, given that the common‑law remedy is based on fairness and the legitimate expectations of the parties. Here the parties never considered or expected that there would be a new statutory regime applicable to the relationship during the course of the relationship. ... 
"[137] The fact is that neither party had the option of changing the relationship or reaching an agreement that would take into account the new statutory regime, the FLA, because their relationship had run its course before the new regime was brought into force. 
"[138] In addition to the above reasons, other factors I would consider under the FLA in reaching the conclusion that equal division of all family property would be significantly unfair would include the same factors I have considered in determining the unjust enrichment claim which I will now address, including: the duration of the relationship; the parties' intentions and expectations during the relationship; and the parties' respective direct and indirect contributions to the acquisition of property during the relationship."
This case is of primary utility, I think, for its concise summary of the law on trust claims to property and overview of the property provisions of the Family Law Act. It may also be useful for the court's conclusions on what constitutes "significant unfairness" under s. 95 of the act, however I would be hesitate to place too much emphasis on this aspect of the decision given the court's position on the application of the act.

My thanks to my former colleague, Thomas Wallwork, for bringing this interesting case to my attention.

08 September 2013

How to Link to the Rules of Court and the Family Law Act on the BC Laws Website

The BC Laws website, run by the provincial Queen's Printer, and the CanLII website, run by the Federation of Law Societies of Canada, are the two best resources for finding British Columbia legislation online. I personally find the CanLII website a bit cluttered and messy to use and print from, although the beta version of the new website improves things a great deal, but CanLII will let you like to point-in-time historic versions of legislation and keeps copies of old statutes, like the Family Relations Act. Although the BC Laws website is somewhat easier to access and print from, it only provides access to current legislation.

Assuming that you're using the BC Laws website, you may bump into a problem because of their decision to post the Family Law Act, the Supreme Court Family Rules and the Provincial Court Family Rules broken up into parts; CanLII has regrettably followed BC Laws' lead. Here's how you can create reliable links to the new act and the rules of court.

Family Law Act

If you cut-and-paste the address for s. 81 of the Family Law Act from the BC Laws website, this is what you'll get:
However, you can get the same result with this much shorter link:
The trick here is to know which part the section you want to link to is found and adjust the link address accordingly. The first part, "www.bclaws.ca/ EPLibraries/ bclaws_new/ document/ID/ freeside/11025_" is stable for all links to the act. The part you adjust is the last bit, "05#section81".

In this example, "05#section81" means part 5, section 81. If you wanted to link to s. 211 on needs of the child assessments, because s. 211 is in part 10 you would link to:
Likewise, to link to s. 15, which you'll find in part 2, the address you would use is:
Supreme Court Family Rules

The same basic idea applies for links to the Supreme Court Family Rules. If you cut-and-paste the address of SCFR 15-2.1(1) on the affidavits required for guardianship applications, this is what you'll get:
Ick. However, you can get the same result with this shorter link:
The first part, "www.bclaws.ca/ EPLibraries/ bclaws_new/ document/ID/ freeside/169_2009_", stays the same for all links to the SCFR. What changes is the last bit, "03#rule15-2.1subrule1". In this example "#rule15-2.1subrule1" means SCFR 15-2.1 and subrule (1) of that rule. Explaining the "03" is a little more complicated. BC Laws has published the SCFR in six bundles:
  1. Parts 1 to 9;
  2. Parts 10 to 14;
  3. Parts 15 to 23;
  4. Appendix A (court forms);
  5. Appendix B (costs awards); and,
  6. Appendix C (fees payable to the court and witnesses).
The "03", you see, comes from SCFR 15-2.1 being in the third bundle. Get it?

To take another example, if you wanted to link to SCFR 4-3 about when a reply to a Notice of Family Claim is due, you would use this link:
The last part, "01#rule4-3", refers to SCFR 4-3 which is found in the first bundle. If you wanted to get fancy and link to SCFR 4-3(2) specifically, you'd add "subrule2" to the end of the address:
Similary, to link to SCFR 11-3 on summary trials, because that rule is in the second bundle you'd link to:
Provincial Court Family Rules 

The Provincial Court Family Rules are simpler because it is published in only two bundles; the complete rules are in the first bundle and the court forms are in the second bundle. The address of the PCFR is:
To link to a specific rule, turn "00" into "01", for the first bundle, and add "#rule" plus the number of the rule you want to link to. For example, to link to PCFR 7 on family case conferences you would use this address:
To link to PCFR 13(3) on the use of affidavits at hearings or trials, you'd use this address:
Wasn't that easy?

04 September 2013

Civil Marriage Act Amended to Allow Non-Residents to Divorce

The federal Civil Marriage Act came into effect in 2005 to give same-sex couples the right to marry throughout Canada by defining marriage as "the lawful union of two persons to the exclusion of all others;" this followed a number of appeal decisions which held that restricting the right to marry to opposite-sex couples was unconstitutionally discriminatory. This was great, of course, however because the Divorce Act defined spouse as "either of a man or a woman who are married to each other," opposite-sex couples could marry but they couldn't divorce.

This oversight was corrected a few months later (the Divorce Act now defines spouse as "either of two persons who are married to each other"), but still left foreign couples marrying in Canada somewhat in the lurch. This problem is what the new amendments correct. Let me explain.

Under s. 3 of the Divorce Act, before a spouse can start a court proceeding for a divorce order, he or she must have been "ordinarily resident" for at least one year in the province in which the proceeding is brought. There are, however, no similar residency requirements to get married, which is why same-sex couples from across the world came flocking to Canada once same-sex marriage had been legalized; see barbara findlay's blog post on the subject and on the new amendments. As a result, non-resident couples marrying here were left in the difficult position of being legally married (for Canadian purposes at least) but unable to get divorced if their home states defined marriage as being the exclusive to opposite-sex couples.

My simplistic take on this issue was that if a non-resident couple's home state didn't recognize same-sex marriage, then they wouldn't be considered to be married in their home state and, as a result, didn't need to get divorced; see my post "The Validity of Same-Sex Marriages" for a more complete explanation. Whether I was right or wrong on the issue — I suppose there's an argument to be made that if your relationship has tanked, you'd probably like to be divorced, even if your marriage is only recognized in a few jurisdictions, perhaps to avoid future legal problems or perhaps to obtain a sense of closure — the federal government has acted.

By Order in Council 2013-889, made under the Civil Marriage of Non-Residents Act, the Civil Marriage Act has been amended as of 14 August 2013 to allow special access to the Canadian courts for non-residents marrying in Canada who need to get divorce and can only get divorced here; see the Canada Gazette notice. Section 7 of the new act provides a means to get a divorce order other than through the Divorce Act and says this:
(1) The court of the province where the marriage was performed may, on application, grant the spouses a divorce if
(a) there has been a breakdown of the marriage as established by the spouses having lived separate and apart for at least one year before the making of the application; 
(b) neither spouse resides in Canada at the time the application is made; and 
(c) each of the spouses is residing — and for at least one year immediately before the application is made, has resided — in a state where a divorce cannot be granted because that state does not recognize the validity of the marriage.
(2) The application may be made by both spouses jointly or by one of the spouses with the other spouse’s consent or, in the absence of that consent, on presentation of an order from the court or a court located in the state where one of the spouses resides that declares that the other spouse
(a) is incapable of making decisions about his or her civil status because of a mental disability; 
(b) is unreasonably withholding consent; or 
(c) cannot be found.
(3) Despite paragraph (2)(c), the other spouse’s consent is required if that spouse is found in connection with the service of the application.
However, there's two things to be aware of.

First, under s. 8, the Divorce Act does not apply to divorces granted under the Civil Marriage Act, which means that a person seeking a divorce under the Civil Marriage Act cannot apply for custody or access to any children, or for child support or spousal support.

Second, under s. 10, the divorce has legal effect throughout Canada, but not necessarily in jurisdictions outside of Canada. The validity of the Canadian divorce will be determined under the law of the couple's home state.