Fantastic Elder Law Conference Coming to Vancouver in November: Save the Date!

The Continuing Legal Education Society of British Columbia, Canada's leading providing of continuing professional training for lawyers, and the Canadian Centre for Elder Law are hosting the Canadian Elder Law Conference on 12 and 13 November in 2015. The conference is open to anyone with an interest in the legal and other issues affecting Canada's elders, but will be of most interest to lawyers, financial planners and mental health professionals.

The conference is extremely timely, given Statistics Canada's recent report showing that there are now more Canadians who are older than 65 than those who are under 15. In fact, the baby boomers, the oldest of whom turned 65 in 2011, make up a greater share of the population than any other age group.

The boomers are also the first generation for whom divorce carried only a marginal stigma, as a result of the introduction of the original Divorce Act in 1968. But not only are more older persons divorced or separated than ever before, more are forming new married or unmarried spousal relationships. This poses special challenges for the legal and mental health professionals involved in family breakdown, as we can expect, in the very near future, to be helping more clients with significant physical and mental illnesses, more living on fixed incomes and in poverty, and more requiring institutional or assisted home care. Cases involving persons of retirement age often raise special concerns and competing generational interests about the distribution of income and assets following separation; concerns can also arise about the tension between the interests of employed persons wishing to retire and dependent persons unable to survive without spousal support. Dealing with later-in-life separation also demands a special sensitivity to the needs of women, who have lower incomes than men in general, and are disproportionately affected by separation and divorce.

I've written about the economic consequences of separation and divorce later in life, the federal benefits available to older Canadians and the interplay of spousal support and retirement in a paper for the National Judicial Institute, which you can download (PDF) from the website of the Canadian Research Institute for Law and the Family.

This conference is a must for anyone practicing family law or involved in family breakdown from a financial or therapeutic perspective. The full details, including the agenda, are available on CLEBC's website and CCEL's website, but here's the stuff you need to know.

Place: Pan Pacific Hotel, Vancouver BC 

Date: 12 and 13 November 2015, 9:00 am to 4:30pm both days 

CPD Credits: 12.5 hours, including 2 hours on ethics 

Pricing: Early bird registration of $1,005 ($585 for students) ends 15 October 2015. The registration fee thereafter is $1,110 ($585 students), or $990 if you want to attend by webinar.

Keynote speakers include:

• Barb MacLean, Chair of the British Columbia Council to Reduce Elder Abuse
• Isobel Mackenzie, British Columbia's Seniors Advocate
• Dr. Andrew Wister, Chair of the National Seniors Council

Panelists presenting at the conference include myself and: 

• Hon. Marion Allan, Clark Wilson
• Barbara Buchanan, Law Society of British Columbia
• Deidre Herbert, McLellan Herbert
• Anna Laing, Fasken Martineau
• Andrew MacKay, Alexander, Holburn, Beaudin and Lang
• Catherine Romanko, British Columbia Public Guardian and Trustee
• Kimberly Whaley, Whaley Estate Litigation
• Geoffrey White, Geoffrey W. White Law Corporation

The topics to be addressed include:

• Advance health care planning
• Whether a national power of attorney registry would help reduce elder financial abuse
• Update on guardianship law in British Columbia
• Reporting and responding to suspected elder abuse
• Physician assisted suicide and health care decision-making
• Later-in-life separation and divorce
• Dementia and client competency
• Class action litigation in elder and estate law

Save these dates and head on over to CLEBC's website to register now. Space is limited.

Dividing Property Under the FLA: Where We're At

The Family Law Act has been law in British Columbia for just over two years now, and we're starting to accumulate a good number of court decisions interpreting the parts of the act dealing with the division of property and debt. Since I've just spoken about these cases for the Trial Lawyers' Association of British Columbia and the Continuing Legal Education Society, I thought I'd provide a short summary of where we've gotten to.

The first case dealing with property under the new act was Asselin v Roy, a 2013 decision of Mr. Justice Harvey. This was a helpful case, as the judge had to address property that was brought into the parties' relationship, property bought during the relationship with inheritances, property bought during the relationship using the property brought into the relationship, and property bought during the relationship using property brought into the relationship plus new money earned during the relationship. This is important because:

1. property brought into the relationship is supposed to be excluded from the property the spouses  share after separation;
2. inheritances received during the relationship are supposed to be excluded from shared property; 
3. spouses are presumed to share in property bought during the relationship; and,
4. spouses are also supposed to share in the increase in value of excluded property during their relationship.

The judge decided that the equity in property brought into the relationship (the sale value minus the amount of any mortgages that had to be paid off from the sale proceeds) is what is excluded from sharing, and that all increases in value above the equity when the relationship started is to be shared. If that property is sold and the proceeds used to buy a new property, the person who bought the first property into the relationship is entitled to get the equity in the first property out of the new property. Inheritances are excluded from sharing between spouses, and a spouse who puts money from an inheritance into buying a property is entitled to get that money out of the property. However, the judge also decided that if a property excluded from sharing goes down in value during the relationship, the spouse who owns the property isn't entitled to get a credit for the decrease from shared property.

Perhaps most importantly, the judge also decided that the new act is intended to:

"[105] ... create more certainty for litigants in the division of their assets. The broad discretion formerly available under the [old legislation] has been replaced with a more formulaic approach to both the identification and division of family property ..."

Oh, would that the new act was indeed more certain.

The next important case was Remmem v Remmem, a 2014 decision of Mr. Justice Butler that I've written about elsewhere. Like in Asselin, the judge had to deal with property that was brought into the relationship and went down in value, property that brought into the relationship and sold and used to buy new properties, and property bought during the relationship with money earned during the relationship, as well as one spouse's excluded property that is put into the names of both spouses.

Justice Butler reached the same conclusion about property going down in value as Justice Harvey: if property excluded from sharing goes down in value, the spouse who owns the excluded property has to eat the loss and cannot make up the lost value from shared property. Good. This approach is consistent with what the Family Law Act appears to want the court to do, and it's good to have two decisions making the same decision on the issue.

On the excluded property that was transferred into both spouses' names, the judge decided that the transfer didn't affect the amount of the exclusion that the spouse who formerly owned the property would be entitled to. This was a really important point because of a principle of the old common law called the "presumption of advancement" that normally would have characterized the transfer as a gift between spouses essentially erasing the exclusion that the former owner would have been entitled to.

The common law, the rules made by judges when there is no legislation that requires a specific result, is full of odd quirks that aren't part of legislated laws and are sometimes counterintuitive, like the presumption of advancement, the presumption of gift and the presumption of resulting trust. The main problem with these presumptions is that they're not only not part of the legislated law, the legislated law doesn't even refer to them! As a result, both the rules of the common law and the rules of the legislation might apply to a problem, but someone who doesn't know about the common law would have no idea just reading the legislation that there is a whole other collection of uncodified laws that also needs to be considered. This, I humbly suggest, is a real problem from an access to justice perspective.

In the case of the presumption of advancement, Justice Butler observed that the presumption only applies to married spouses, and applying the presumption would:

1. create a differential treatment of married and unmarried spouses contrary to what the act intends, and the presumption is at odds with the overall scheme of the act;
2. defeat the owning spouse of the excluded equity he or she would normally be entitled to; and,
3. rob the act of the simplicity and certainty of it's plan for the division of property.

Accordingly, the judge decided that the plan for the division of property set out in the act was a "complete code" such that the presumption of advancement, and presumably the other presumptions of the common law, no longer applied to the division of property between spouses.

This conclusion is really appealing to me, and I think that Justice Butler's reasoning is fully in line with the overall design of the Family Law Act. It really would be helpful for everyone, lawyers and spouses alike, if the act were a complete code. Avoiding those old common law principles would lend a great deal of certainty to the division of property between spouses; fewer spouses would have unreasonable expectations as to what they are and aren't entitled to; lawyers would be able to more accurately predict the outcome for their clients and more cases would settle out of court as a result; and, people without lawyers wouldn't have to go spelunking until the bowels of the common law just in case theres some dusty old rule there that applies to them that the legislation doesn't even mention.

However, this was not the conclusion reached by the Chief Justice in Cabezas v Maxim. In this case, the spouses lived in a property that was purchased with help from one spouse's parents, who also contributed to the mortgage from time to time. According to the case law, when the parents of a married person give the person money to buy the family home, without an agreement in place, the court is required to presume that the money was a gift to the person receiving it which, through the presumption of advancement, also becomes a gift to the person's spouse. The Family Law Act, of course, says that gifts received by a spouse during the relationship are the property of the spouse and are excluded from sharing with the other spouse.

The Chief nonetheless applied the presumption of advancement, holding that:

"[68] ... This presumption of advancement is limited in scope, and does not apply to all gifts or inheritances received by a spouse from his or her parents. Generally, such gifts are excluded property under s. 85(1)(b) of the Act ... However, where a parent chooses to provide funds to a child for the purchase or maintenance of the family residence ... those funds are presumed to be a gift to both the child and his or her spouse. Absent evidence rebutting this presumption, the funds ... are family property under s. 84 of the Act."

The presumption of gift was applied by Mr Justice Masuhara in Wells v Campbell, in the context of a property brought into the relationship by one spouse and later transferred into the names of both spouses. The judge said that:

"[32] I find that [the claimant] at the time he transferred the [property] into joint tenancy he did so as a gift to [the respondent]. ... The transfer of an interest in the [property] was a perfected inter vivos gift and the gift cannot be revoked. I do not read the Act as altering the law of inter vivos gifts. Accordingly I cannot see how [the respondent] can be denied the entirety of her interest in the property ..."

Commenting on Remmem, Justice Masuhara said that:

"[38] ... I am not persuaded that [the problems identified by Justice Butler] lead to the conclusion that the Act displaces or extinguishes the presumption of advancement, or the effect of an inter vivos gift resulting in a joint tenancy. There is no explicit extinguishment in the Act [of these presumptions], as has been done in other jurisdictions ..."

Mr. Justice Walker reached the same decision as the Chief and Justice Masuhara more recently, in the 2015 case of V.J.F. v S.K.W. Justice Walker addressed the issues raised by Justice Butler, applied the reasoning of Justice Masuhara, and further observed that the Family Law Act seems to preserve the rules of the old common law:

"[63] ... in s. 104(2), the FLA provides that common law and equitable rights are retained. That section provides:

104(2) The rights under [the part of the act dealing with the division of property] are in addition to and not in substitution for rights under equity or any other law.

"[64] In looking through the reasons for judgment, I cannot find where s. 104(2) was raised before Justice Butler in Remmem. ... 

"[67] ... I am of the option that it cannot be said that the FLA does not contain any provision that permits for the presumption of advancement."

With much regret, I do believe that Justice Walker is correct, much though I wish this were not the case. With the greatest respect for the drafters of the Family Law Act, in my view it would be better for British Columbian families if s. 104(2) were repealed; leaving the act open to the vagaries and uncertainty of the common law does a disservice to all.

The other issue that's been working its way through the courts is what "significant unfairness" means. This is important as the act says that:

1. shared family property should be divided equally between spouses unless an equal division would be "significantly unfair;" and,
2. a spouse's excluded property should not be divided between spouses unless it would be "significantly unfair" not to do so.

There's only one other law in BC that uses this phrase, and I'm afraid it's the Strata Property Act, which uses the term in the context of the actions taken by a strata property council against a strata property owner, which I don't think is really analogous to the relationship between spouses under the Family Law Act.

In L.G. v R.G., a 2013 case of Mr. Justice Brown, the court referred to a thesaurus for the idea that "significant" means something that is "important, of consequence, of moment, weighty, material, impressive, serious, vital, critical." Looking at some of the Strata Property Act cases, the court noted that "significant" has been held to mean something that is "burdensome, harsh, wrongful, lacking in probity or fair dealing," and that:

"[70] ... the use of the word 'significant' before 'unfairness' indicates to the Court that it should not interfere with the actions of a strata council unless the actions result in something more than mere prejudice or trifling unfairness."

With respect, I don't think that the threshold intended by the Family Law Act is something as modest as unfairness that is "more than mere prejudice or trifling unfairness." It seems to me that the act means to raise a much higher burden to unequal divisions of family property, or the division of excluded property, than this.

In Remmem, Justice Butler took an approach closer to the dictionary definitions and held that "significant unfairness" means something that is "weighty, meaningful, or compelling," and that:

"[44] ... the legislature has raised the bar for a finding of unfairness to justify and unequal distribution. It is necessary to find that the unfairness is compelling or meaningful having regard to the factors set out in s. 95(2) ..."

The court also helpfully provided a three-part test to decide when the equal division of shared family property might be significantly unfair:

1. determine the family property to be divided, excluding any property qualifying as excluded property;
2. equally divide the family property; and,
3. determine whether the equal division is significantly unfair, taking into account the overall result of the equal division including the excluded property each spouse is keeping.

This approach was followed by Madam Justice Fitzpatrick, in the 2015 case of Walburger v Lindsay.

To summarize the general trend of the case law to date, then, when property is brought into a relationship, the equity in the property on the date the relationship begins is the excluded property of the spouse who owns it. However, when that property decreases in value during the relationship, the decreases value is the excluded property and the owning spouse can't look to the shared family property to make up the loss. The family property to be shared by the spouses is the property brought with new money during the relationship plus any increase in the value of excluded property occurring during the relationship. Family property also includes the value of new property bought with the proceeds of sale of excluded property, less the amount of the excluded property that was contributed to the purchase of the new property.

In general, gifts from third parties and inheritances that are received by a spouse during the relationship are excluded property, except when one of the common law presumptions applies to make the gift or inheritance the property of both spouses. Likewise, a spouse who transfers excluded property into the names of both spouses may also be considered to have lost his or her excluded interest in the property.

And this, more or less, is where we're at.

Multiple Misfortunes: Legal Challenges for Those in Polyamorous Relationships

I was recently contacted by an individual with an especially interesting legal problem resulting from the particular circumstances of the polyamorous relationship he was involved in that would most certainly not have arisen had he been in a same- or opposite-sex binary relationship. This naturally led me to reflect on the other legal problems people in polyamorous relationships might experience, and these are the subject of this post.

First off, I should say that as far as vanilla family law is concerned, polyamorous relationships are accommodated quite nicely in British Columbia's Family Law Act. I've written about that at length in my post "Polyamory and the Family Law Act: Surprisingly Happy Bedfellows." In a nutshell, people in these relationships would seem to have all of the same rights as anyone who is in an unmarried spousal relationship, as the definition of "spouse" doesn't preclude the possibility of having multiple spousal relationships simultaneously, including with two members of the family who are married to each other. These rights include the right to ask for spousal support, the right to ask for child support and the right to a share of the family property, and can even include rights about the guardianship of non-biological children in certain circumstances. Really neat stuff, and likely unanticipated by the drafters of the legislation.

Things are not necessarily so comfortable for those in polyamorous relationships in other areas of law and life. By and large these problems arise from definitions of "spouse" or "common-law partner," the misleading term used by the federal government to describe unmarried spouses, and assumptions that when it comes to "spouses" and "parents," there are but two of them. The following are a list of potential problems that might arise. Note that whether these are actually problems will depend on the law applicable in your province or territory, and often on the policies and practices of specific organizations.

Marriage

You can't. Well, to be precise, only two of you can marry; any further marriages to persons within the relationship who are married will be void.

There's a bunch of reasons for this. First, I expect that the Marriage Acts of most province says that marriages are between two persons; British Columbia's does. Second, the federal Civil Marriage Act defines marriage as the "lawful union of two persons to the exclusion of all others." Third, the federal Criminal Code makes bigamy a crime. Bummer.

Since members of a polyamorous family cannot marry, or at least cannot all be married, family members other than those who are married to each other will not be eligible for any benefits and entitlements that are reserved for people who are legally married to one another. This may not be a huge problem, as many benefits and entitlements are available to unmarried spouses as well as the married variety, however in most provinces, the right to share in the family property is limited to married spouses. Unmarried spouses can only share in family property the way that married spouses do in Manitoba and British Columbia.

On the up side, if you can't marry, you don't need to get divorced.

Insurance Plans and Benefits

Most private insurance plans limit their coverage to employees, their spouses and their children, and expect that employees will have only one spouse. The same may hold true for provincial public health plans with respect to the family rates they offer. However, it's worth checking whether an additional dependent adult can qualify for coverage under the basic family rate.

Survivor's benefits paid by the Canada Pension Plan and Old Age Security are payable to the spouse or common-law partner — singular — of the deceased person.

Although private pensions plans and retirement savings vehicles like RRSPs only allow for one spousal beneficiary in the event of the owner's death, most plans allow other persons to designate additional beneficiaries. This is meant for children, but can usually be extended to anyone. It will be important to check with your private pension plan administrator to see whether multiple beneficiaries are permitted.

Children

Most provincial Adoption Acts limit adoptions to one or two persons; British Columbia's does. It would also be a bad idea for a non-biological parent to adopt the child of another member of the relationship, as one of the effects of adoption is to strip the biological parent of his or her status as a parent, and of all rights and obligations a parent has with respect to a child.

Parentage is likewise limited to two persons, except in provinces, like British Columbia, that allow a child to have up more than two legal parents where the child is born as a result of assisted reproduction processes. In BC, the Family Law Act allows a child to have up to five parents: one or two intended parents, a donor of ova, a donor of sperm and a surrogate mother.

However, in some provinces it may be possible for non-biological, non-adoptive parents to become a legal guardian of the child, usually by making an application to court. In this way a child could have more than two legal guardians who would all be entitled to make the decisions a parent could make.

Immigration

I'm not going to discuss the federal government's offensive views on "barbaric" — that's the word used in the legislation and press releases — cultural practices; there's actually another, more common problem.

A citizen may sponsor his or her spouse or common-law partner to enter Canada and become a Canadian citizen. The problem here is the federal government's vigilance toward fraudulent marriages. Although people in a polyamorous relationship would likely view themselves as being in a committed, long-term relationship, Citizenship and Immigration does not recognize polyamorous relationships as being spousal or common-law in nature and would view such applications with much scepticism.

(Let me pause here and anticipate certain comments to this post. Yes, I think it is abusive and exploitive to force girls and women into marriage, especially in the case of children. However, I don't think it's for us to judge and label the cultural practices of a community as barbaric. That smacks of arrogance and cultural imperialism; after all, some might say that the federal government's treatment of indigenous peoples is barbaric. Glass houses, yes?)

Entitlements Based on Household Income

People in polyamorous relationships will need to be wary of benefits assessments and legal tests that are based on household income, as the income in question may very well be the income of all cohabiting persons. The benefits that spring to mind in this regard include the Old Age Security Guaranteed Income Supplement, entitlement to welfare benefits and entitlement to legal aid coverage. I'm sure there are others. The legal test I'm thinking of is the test for relief from the fixed child support amounts set out in the Child Support Guidelines on the ground of undue hardship; that test looks at the parents' household standards of living before deciding whether the amount that would normally be paid is too much or too little. Again, I'm sure there are other that I haven't thought of.

Sharing Property

More than two people can be legal owners of most things, including bank accounts, cars, houses and companies. That's not really the problem for polyamorous families. The problem has to do with how the laws about family breakdown divide family property.

Canada Pension Plan credits are often but not always equalized when married or unmarried spouses divorce or separate. The Canada Pension Plan legislation says that these credits can be equalized on the application of "either" spouse or common-law partner, and talks about the entitlements of "the two persons," which implies that CPP credits can only be equalized between two spouses.

As I mentioned earlier, most provinces exclude people who aren't married from their rules about property division. However, in the provinces that give unmarried spouses the same property rights as married spouses, the legislation tends to talk about equal half interests. The British Columbia Family Law Act says that "both spouses" are entitled to family property and that "on separation, each spouse has a right to an undivided half interest in all family property." Now, this doesn't mean that unmarried spouses in polyamorous relationships can't share the family property, but it does mean that it pays to be the first one out. I expect that the first to leave would get half the family property, with the next to leave getting half of the remaining half, and so on.

Anything Else?

I'm sure that there are things I'm overlooking, and I'd really be interested in your input, especially if you are or have been in a polyamorous relationship and have had experienced legal problems as a result of the nature of your relationship.

Supreme Court Releases Important Decision on Jurisdiction in Property Cases Under the FLA

Over the winter break, Madam Justice Donegan of the British Columbia Supreme Court handed down her judgment in Cockerham v Hanc, an  important decision discussing some of the more difficult parts of the new Family Law Act on when the court should take jurisdiction in disputes about property division and spousal support. "Jurisdiction" has a number of meanings. For the purposes of this post, I mean jurisdiction in the sense of the court's authority to hear a particular case when the same case could potentially also be heard by a different court. Courts don't like to be stepping on each other's toes — with good reason! — and whether to take jurisdiction when jurisdiction is challenged is among the more important and more difficult decisions the court has to make.

Cockerham involved an unmarried couple who began to live together in Ontario in 2007 and separated in early 2014, following which Cockerham, who was unemployed, moved to British Columbia while Hanc stayed in Ontario where his job was. Cockerham started court proceedings in British Columbia a few months later, following a contact from Hanc's lawyer in Ontario. In her claim, Cockerham asked for:

• an equal division of the family property, including a house and a condominium in Ontario;
• an interest in Hanc's other property;
• an equal apportionment of responsibility for her student loans, amounting to some $200,000; and,
• spousal support.

Hanc replied to Cockerham's claim with a Jurisdictional Response, a court form under the Supreme Court Family Rules which is filed when a party to a lawsuit, usually a respondent, believes that the court should not or cannot take jurisdiction in the case. Hanc subsequently applied for an order under SCFR 18-2 that Cockerham's case be dismissed or suspended, "on the grounds that this court does not have jurisdiction or that the court ought to decline to exercise its jurisdiction," and it is this application which gave Madam Justice Donegan reason to consider some of the more complicated parts of the Family Law Act.

The reasons for Hanc's application are probably obvious from the short facts I've given. Here, however, is the court's concise synopsis:

"[26] Mr. Hanc submits that the appropriate forum for these issues to be decided is Ontario. The parties resided in Ontario until their separation, when Ms. Cockerham moved to Kamloops. Mr. Hanc has no ties to British Columbia and owns no property here. He is not, and has never been, a resident of British Columbia. He has no connection to this province. With respect to Ms. Cockerham’s claim for spousal support, Mr. Hanc submits that it must be claimed pursuant to the provisions of the [Interjurisdictional Support Orders Act]. The [Family Law Act], he submits, does not empower a British Columbia court to make an original order for support against a non-resident.

"[27] With respect to the claim for division of family property and debt, Mr. Hanc asserts that there is no real and substantial connection between British Columbia and the facts on which the proceeding against him is based. As such, he submits that this court lacks territorial jurisdiction under either the provisions of the Court Jurisdiction and Proceedings Transfer Act ... or the FLA. In the alternative, if the court determines that it does have jurisdiction in respect of this claim, Mr. Hanc submits that this court ought to decline jurisdiction in favour of Ontario."

Fair enough. Now the Court Jurisdiction and Proceedings Transfer Act, which deals with the court's authority to hear a case, has been around since 2003. We've had enough court decisions on the act to understand it fairly well. The Family Law Act, on the other hand is fairly new and the parts of the act that deal with property located outside the province, and the ability of British Columbia courts to make orders about that property, are ridiculously complex, which is what makes this decision so important. If you want to read them in their entirety for yourself — which you should — look for Division 6 of Part 5. It's harder to read than the federal Income Tax Act, and just as likely to keep you awake at night.

Determining Whether to Take Jurisdiction under Part 5 of the Family Law Act

Here is the step-by-step analysis taken by Justice Donegan with respect to the property portion of Cockerham's claim.

1. The burden of proving that the court has the jurisdiction to hear a case is on the person who claims that the court has jurisdiction. (Para. 31) 

2. The first place to look is normally the Court Jurisdiction and Proceedings Transfer Act, unless there is legislation that applies to the case which specifically addresses the jurisdiction issue. (Para. 32) 

3. The Family Law Act specifically addresses the jurisdiction issue at Division 6 of Part 5. (Para. 33)  

4. The test for the court to decide whether it should make orders under Part 5, the part of the act dealing with property and debt, is set out in s. 106. (Para. 42) Here's what s. 106 says:

(1) This section applies if an order respecting property division, respecting the same spouses, may be made in more than one jurisdiction. 

(2) Despite any other provision of this Part, the Supreme Court has authority to make an order under this Part only if one of the following conditions is met: 

(a) a spouse has started another proceeding in the Supreme Court, to which a proceeding under this Part is a counterclaim; 

(b) both spouses submit, either in an agreement or during the proceeding, to the Supreme Court's jurisdiction under this Part; 

(c) either spouse is habitually resident in British Columbia at the time a proceeding under this Part is started; 

(d) there is a real and substantial connection between British Columbia and the facts on which the proceeding under this Part is based.

   (3) For the purposes of subsection (2) (d), a real and substantial connection is presumed to exist if one or more of the following apply:

(a) property that is the subject of the proceeding is located in British Columbia; 

(b) the most recent common habitual residence of the spouses was in British Columbia; 

(c) a notice of family claim with respect to the spouses has been issued under the Divorce Act (Canada) in British Columbia.

   (4) Despite subsection (2), a court may decline to make an order under this Part if the court, having regard to the interests of the spouses and the ends of justice, considers that it is more appropriate for jurisdiction to be exercised outside British Columbia. 

(5) In determining whether to decline jurisdiction under subsection (4), the court must consider all of the following: 

(a) [Repealed. 2014-9-15(b)]. 

(b) the relative convenience and expense for the spouses and their witnesses; 

(c) if section 108 [choice of law rules] applies, the law to be applied to issues in the proceeding; 

(d) the desirability of avoiding multiple proceedings or conflicting decisions in different courts or tribunals; 

(e) the extent to which an order respecting property or debt

(i) made in another jurisdiction would be enforceable in British Columbia, and 

(ii) made in British Columbia would be enforceable in another jurisdiction;

    (f) the fair and efficient working of the Canadian legal system as a whole; 

(g) any other circumstances the court considers relevant.

   (6) A determination of authority under subsection (2) or of whether to decline jurisdiction under subsection (4) is to be made solely by reference to this section.

Bit of a mouthful, isn't it? 

5. However, under s-s. (1), s. 106 only applies if an order about property division between the same people can be made in more than one jurisdiction. (Para. 46) 

6. If s. 106 applies, the court must then decide whether one or more of the conditions in s-s. (2) are met, giving it the authority to make orders under Part 5. (Para. 49) 

7. Even if the court has jurisdiction under s. 106(2), under s-s. (4) it must then decide whether it should exercise that jurisdiction or "it is more appropriate for jurisdiction to be exercised outside British Columbia," considering the factors set out in s-s. (5). (Paras. 57 and 59)

Application to the Case

Following this reasoning, the judge held that Cockerham had the burden of establishing that the British Columbia court could take jurisdiction over property mostly located in Ontario. She held that the Family Law Act has specific provisions addressing jurisdiction over that property and that the Family Law Act applied rather than the Court Jurisdiction and Proceedings Transfer Act.

She then turned to s. 106 and concluded that the section applied to the case before her as orders between Cockerham and Hanc about the family property could be made in both Ontario, where the parties had lived during the whole of their relationship and where the bulk of their property was located, and in British Columbia, where Cockerham lived now and where the proceeds of an RRSP account and some jewelry were located.

The judge then decided that Cockerham was "habitually resident within British Columbia," under s. 106(2)(c), which would allow the court to take jurisdiction and make orders about the Ontario property under Part 5.

Habitual Residence

I'm going to pause here to dwell on "habitual residence" and "ordinary residence" for a moment. These terms are used in the Court Jurisdiction and Proceedings Transfer Act, pop up in the case law about jurisdiction all the time, and can be confusing. Here's Justice Donegal's handy summary of the case law, cites omitted as usual:

"[51] What is meant by habitual residence? 'Habitual' and 'ordinary' residence are two expressions that have been used interchangeably ... 

"[52] In [S.R.L. v. K.J.T.] Madam Justice Fenlon summarized the principles governing the determination of ordinary residence at para. 30 as follows:

I now turn to the principles governing the determination of ordinary residence.

a) Preponderance of time spent at a residence is not determinative; 

b) A person may be ordinarily resident without being actually resident; 

c) It is where a person regularly, normally or customarily lives his or her customary mode of life as opposed to a special, occasional, or casual residence; 

d) It is where a person intends to make a home for an indefinite period; an intention to reside there permanently is not required."

Accordingly, Her Ladyship concluded that:

"[53] On the basis of these authorities, I am satisfied that at the time of filing her claim, Ms. Cockerham was habitually resident in British Columbia. 

"[54] In March of 2014, Ms. Cockerham left the home she had previously shared with Mr. Hanc in Ontario. With nowhere to go, she moved to [city], British Columbia and into the home of her mother and step-father, residents of [city] for several years. Having spent time here in the past with family and friends, it was a place familiar to her, a place where she now receives financial and emotional support. 

"[55] Ms. Cockerham's evidence is clear that she is not a visitor or tourist here — this is her home. Her activities following her arrival here all support the conclusion that British Columbia is where she now normally and customarily resides. She obtained a British Columbia driver's licence. She secured a family doctor, who is currently treating her for a medical condition. She has applied for a multitude of jobs in [city] in fields related to her degree. She has significant and meaningful family ties here. That Ms. Cockerham may be accepted to a residency program next year that may see her away from [city] temporarily does not affect a finding that she was, and remains, habitually resident in British Columbia pursuant to s. 106(2)(c) of the FLA."

However, although the judge held that she could take jurisdiction under s. 106(2)(c), she declined to exercise that jurisdiction in favour of the courts of Ontario under s. 106(4):

"[61] Other than the engagement ring that Ms. Cockerham kept and a small RRSP that she has now cashed and spent, the property and debts at issue are all located and based in Ontario. Mr. Hanc's real and other property is all located in Ontario. Ms. Cockerham's claims, as they have been pled, relate substantially to that real property, but also include claims to Mr. Hanc's RRSPs, pensions, chattels, insurance, savings, business interests, options, shares, and club memberships. Neither party owns any real property in British Columbia. 

"[62] If this matter were to proceed in British Columbia, the inconvenience and expense to the parties would be very high, particularly to Mr. Hanc. The parties lived their lives together in Ontario. Civilian witnesses that may be required would largely be from Ontario. Mr. Hanc's financial information is all in Ontario. Expert witnesses from Ontario would be required in relation to appraisals of the real property and possibly his other assets. The significant family debt that is claimed is based upon a contract signed by the parties in Ontario. Bank representatives involved in the contract and/or in keeping of the records may be required to testify. To hear this matter, with nearly all Ontario witnesses, would be very inconvenient and expensive to many people, significantly Mr. Hanc. 

"[63] Further, s. 108 of the FLA applies to this case and leads to the inevitable conclusion that the applicable internal law that would apply to Ms. Cockerham's claims under Part 5 of the FLA is the law of Ontario."

Of course this means that we need to talk about s. 108 as well.

Applicable Law

Section 108 is another difficult part of Division 6. In a nutshell, when the court takes jurisdiction under s. 106, s. 108 is used to figure out the law that should be used to divide the property, which might be the rules about the division of family property set out in the rest of Part 5 or might be the laws of the jurisdiction in which the parties had their "last common habitual residence" — the last place they lived together. Here's s. 108, which is just as difficult to read as s. 106:

(1) In this section, "regime of community of property" means a system of law, including a regime of partnership of acquests, in which property owned or acquired and debt owing or acquired during the relationship between the spouses 

(a) are deemed to be owned or owing by both spouses, and 

(b) are divided, on separation of the spouses, as if both spouses equally owned the property or owed the debt,

but does not include a regime of separate property or a system of law under which a spouse's interest is deferred until or after the occurrence of an event that signifies the end of the relationship between the spouses. 

(2) If the Supreme Court takes jurisdiction under this Division, the Supreme Court must act in accordance with the rules set out in this section. 

(3) Subject to subsection (4), if spouses make an agreement respecting the division of property or debt, the substantive rights of the spouses in a proceeding under this Part are determined by the agreement. 

(4) The enforcement of an agreement under subsection (3) is subject to any restriction that the proper law of the relationship places on the ability of spouses to determine the division of property or debt by agreement. 

(5) Subject to subsection (3), if the spouses' first common habitual residence during the relationship between the spouses was in a jurisdiction in which a regime of community of property applies, property owned or acquired and debt owing or acquired during the relationship between the spouses that is property or debt to which the regime of community of property applies must be divided at the end of the relationship between the spouses according to that regime of community of property. 

(6) If neither subsection (3) nor (5) applies, the substantive rights of spouses in a proceeding under this Part must be determined according to the proper law of the relationship.

In other words, if the parties have an agreement about property, their property should be divided according to their agreement. If the parties used to live in a place that had rules like the old Family Relations Act, where all property used for a family purpose was divided, whether bought before or during the relationship, those are the rules that should be used. If neither of these situations apply, you then have to figure out the "proper law of the relationship," according to the test set out in s. 107:

The proper law of the relationship between the spouses for the purposes of section 108 is 

(a) the internal law of the jurisdiction in which the spouses had their most recent common habitual residence, 

(b) if the jurisdiction under paragraph (a) is outside Canada and is not the jurisdiction most closely associated with the relationship between the spouses, the internal law of the jurisdiction that is most closely associated with the relationship between the spouses, or 

(c) if the spouses did not have a common habitual residence, the internal law of the jurisdiction in which the spouse making an application for an order under this Part was most recently habitually resident.

The judge's conclusions under s. 108 merely confirm her decision to decline to act made under s. 106(4):

"[64] Section 108(2) mandates that if the court takes jurisdiction under Division 6 of Part 5, it must act in accordance with s. 108. As there is no agreement between the parties regarding the applicable internal law, only subsections (5) and (6) are relevant. ... 

"[65] The parties' first common habitual residence was in Ontario. It was their only residence together where they lived and participated in everyday family life. If Ontario has a 'regime of community property', the applicable internal law is that of Ontario. If Ontario does not have a 'regime of community property', the applicable internal law is determined by s. 107 of the FLA. Also known as the 'proper law' of the spousal relationship, this too would be Ontario law because Ontario is the jurisdiction where the parties had their most recent common habitual residence. 

"[66] As I have concluded the law of Ontario would apply to Ms. Cockerham's claims under Part 5, additional inconvenience and expense would be required if this matter proceeded in British Columbia. As Mr. Hanc points out, an expert in Ontario family law would be required to offer opinion evidence on the law of property and debt division."

I should mention that at this point in her reasons, the judge analyses Cockerham's claim under the Court Jurisdiction and Proceedings Transfer Act, reaching an identical conclusion. Her analysis of this act will be helpful for anyone looking into whether there is a "real and substantial connection" — another cryptic phrase bedevilling the case law on jurisdiction! — between British Columbia and the facts of a particular case. 

Determining Whether to Take Jurisdiction under Part 7 of the Family Law Act

As for Cockerham's claim for spousal support — spousal support and child support are covered in Part 7 of the act — the court rejected this as well, on the basis that the Interjurisdictional Support Orders Act, a law which has been passed by each province and territory, provided the appropriate mechanism for a resident of British Columbia to obtain a support order against someone living in another province.

Following the Court of Appeal's decision on the Interjurisdictional Support Orders Act and the Family Relations Act in a 2006 case called Nurani v Virani, Justice Donegan held that:

"[92] Neither the [Supreme Court Family Rules] nor the FLA alters the [Interjurisdictional Support Orders Act] scheme or renders it now inapplicable. Express statutory language would be required for such a result. No such language exists. Although Ms. Cockerham argues that the ISOA mechanisms are inconsistent with the object of the Family Rules, describing them as slow and cumbersome, one can also see how its scheme is consistent with the object as well. A process whereby no court appearance in British Columbia or another jurisdiction is required in order to obtain a support order could be seen as promoting a just and inexpensive determination of the issue. 

"[93] In any event, in the absence of express statutory language rendering the ISOA inapplicable in light of the FLA, [the Court of Appeal's decisions in Nurani] remain binding authority on this court. Mr. Hanc is not a resident of British Columbia, nor has he ever been. He has no connections to British Columbia whatsoever. In these circumstances, this court has no jurisdiction to make an original order for support against him pursuant to the FLA. ... Ms. Cockerham has the mechanisms of the ISOA available to her should she so chose."

Summary

I am grateful to Justice Donegan for her clear analysis of Division 6. It is a very difficult part of the act and her decision in Cockerham is, I believe, the first treatment of the division by the court. Here is a short summary of the steps required to analyze a claim involving property located outside British Columbia.

1. The burden of proving that the court has the jurisdiction to hear a case lies on the person who claims that the court has jurisdiction.

2. Claims about the interests of spouses in property located outside of British Columbia brought under the Family Law Act should be analyzed under that act rather than the Court Jurisdiction and Proceedings Transfer Act.

3. Determine if s. 106 of the Family Law Act applies by examining whether an order about property division between the same people can be made in more than one jurisdiction. 

4. If s. 106 applies, determine whether one or more of the conditions in s-s. (2) are met to give the court authority to make orders under Part 5 of the Family Law Act. 

5. If the court has jurisdiction under s. 106(2), determine whether the court should exercise that jurisdiction or leave the matter to a court in another jurisdiction under s. 106(4), considering the factors set out in s. 106(5). 

6. If the court decides to act, determine the law to apply under ss. 107 and 108. Note that the applicable law may be a factor in determining whether to decline to act under s. 106(4).

My thanks to my colleague Mary Fus, a lawyer with a thriving family law practice in Kamloops, for bringing this important case to my attention.

Important Legislation About Matrimonial Property on Reserves Coming Into Effect

The Family Homes on Reserves and Matrimonial Interests or Rights Act, a fairly new piece of federal legislation, allows First Nations to make rules about homes on First Nations lands and attempts to address a problem that's festered for almost 150 years. Sections 91 and 92 of the Constitution Act, 1867 divides the powers involved in running a country between the federal and provincial governments and, among other things, gives the federal government exclusive authority over "Indians, and Lands reserved for the Indians" and the provincial governments exclusive authority over "Property and Civil Rights in the Province," thereby allowing the provinces to make all the rules they wish about family law and the division of property between spouses but making those rules ineffective on First Nations lands.

The Family Homes on Reserves Act became law on 16 June 2013, with the first bits coming into force on 16 December 2013 and a huge swack, the remainder of the act, coming into force on 16 December 2014. The act applies only to the First Nations that are "bands" as defined by the Indian Act.

Although the act doesn't affect the underlying title to First Nations lands, which continues to be held by the Queen in most of Canada, it does allow First Nations governments to establish laws about how family homes on reserve lands will be used and occupied when a relationship between married or unmarried spouses has broken down. Here's what s. 4 of the act says:

The purpose of this Act is to provide for the enactment of First Nation laws and the establishment of provisional rules and procedures that apply during a conjugal relationship, when that relationship breaks down or on the death of a spouse or common-law partner, respecting the use, occupation and possession of family homes on First Nation reserves and the division of the value of any interests or rights held by spouses or common-law partners in or to structures and lands on those reserves.

(I don't know why federal legislation must be written in such clunky, hard-to-parse language, but there it is.) For First Nations that are listed in the schedule to the First Nations Land Management Act and have the right to manage their lands under a self-government agreement with Canada, the act also provides a lengthy set of provisional rules that apply when the laws the act entitles them to make are not in effect.

Here are the important parts of the act. Sections 1 to 11 and 53 came into force in 2013, sections 12 to 52 come into force tomorrow.

• Sections 7, 8 and 9: First Nations governments can make laws about the use, occupation and possession of family homes located on reserve lands during and after the breakdown of a "conjugal relationship." The laws must be put to a plebiscite, are approved with the support of a majority of the members of the First Nation.
• Section 12: The provisional rules about the use, occupation and possession of family homes set out in sections 13 to 52 apply to First Nations with rights of self-government and are listed in the First Nations Land Management Act and do not have laws about family homes that are in effect.
• Section 13: Each spouse or partner may occupy the family home during their relationship, whether the person is a First Nation member or a status Indian or not. However, the 
• Section 15: A spouse or partner with an interest in or right to the family home, must not sell it or use it as collateral for a lone without the consent of the other person.
• Sections 16 and 17: A spouse or partner can apply for a temporary exclusive occupancy order, including an order for the removal of a person's belongs from the home and an order that a person not go near the home, without notice to the other person if family violence has occurred and order should be made right away. If the judge making the order is a provincially-appointed judge, the judge must send the order and all supporting materials to a judge with the power to make orders under the Divorce Act for a review of the order.
• Section 18: Either spouse or parter can apply to change an exclusive occupancy order.
• Sections 20 and 21: A spouse or partner can apply for a permanent exclusive occupancy order, and the judge hearing the application must consider, among other things, the best interests of the children living in the home, any agreement between the parties, the collective interests of the First Nations members in their reserve lands, the length of time that the person has lived on the reserve and the availability of other accommodation, family violence. The order can include a term requiring the person with exclusive occupancy to keep the home in good condition or requiring either party to pay for the costs of the home. The order can be made to survive the death of the spouse or partner with the interest in or right to the family home.
• Section 23: Exclusive occupancy orders do not change who holds an interest in or right to the family home.
• Sections 28 and 29: When a conjugal relationship breaks down, each party is entitled to an amount equal to one-half of the value of the family home, plus extra rights to the other person's interests in property located on First Nations lands that change depending on whether the party is a member of the First Nation. A court order a different sharing of property interests depending on factors like the length of the relationship, the terms of an agreement between the parties and the debts incurred by each party. 
• Section 30: Applications must be made within 3 years of the date the parties ceased to cohabit. 
• Sections 30 and 31:The court can order that an amount payable under ss. 28 or 29 be paid as a lump-sum, be paid in instalments, be set-off by another amount or be satisfied by the transfer of a property interest or right. The court's ability to transfer property interests or rights is subject to a number of factors relating to the the status of the First Nation, the applicant's status as a member of the First Nation and the circumstances of the parties' relationship.
• Sections 34 to 40: These sections establish rules about estates and the rights of person upon the death of their spouses and partners.
• Section 43: A court with jurisdiction under the Divorce Act has jurisdiction to deal with applications under the Family Homes on Reserves Act.
• Section 48: The court may determine whether a person has a right in a home or land situated on First Nations lands on the application of a spouse or partner, a survivor, an executor of a will, or the counsel of the First Nation on whose lands the home or land is located.

Remember that the provisional rules do not apply to all First Nations, and that both the provisional rules and the First Nations laws on family homes apply in place of the matrimonial property provisions of any provincial legislation.

Polyamory and the Family Law Act: Surprisingly Happy Bedfellows

In summer of 2013, the Canadian Polyamory Advocacy Association asked me if I could speak to a convention they were hosting on the subject of polyamory and British Columbia's new Family Law Act. Of course I said yes.

The Family Law Act is the province's general law about family and family breakdown. In the old days, this area of the law used to be called the law of husband and wife or the law of domestic relations. "Domestic relations" isn't such a bad term, because the range of legal issues and interested parties the law addresses isn't just about husbands and wives. The Family Law Act applies to:

• people who are, or used to be, married spouses;
• people who are, or used to be, unmarried spouses, which usually means that the couple lived together for at least two years in a "marriage-like" relationship;
• people who are parents of a child together;
• people who are family members when family violence is or may be a problem; 
• people parents ask to become guardians of their children; and, 
• anyone, such as a grandparent, who has an interest in caring for or spending time with a child.

Besides, we're well past the age of Leave it to Beaver, where all couples were straight, married and had two children. Family law just isn't as it used to be.

Anyhow, as I was preparing my presentation, I was struck by how very well the Family Law Act fit with the circumstances and legal interests of people involved in polyamorous or polyfidelitous relationships. Far from the moralizing finger wag of the federal Civil Marriage Act, the new provincial law practically throws the door open to non-binary spousal relationships! To be fair, I expect that this result was unanticipated, but it is nonetheless welcome and astonishingly progressive.

Who is a "spouse"

Not too long ago, the only kind of legal "spouse" there was, was a married spouse. That's still the case under the federal Divorce Act, which defines spouse as "either of two persons who are married to each other."

In 1972, the provincial Family Relations Act, which was brand new at that point, gave unmarried couples who'd lived together for at least two years the right to claim spousal support from each other, and in 1978, the law was changed to define "spouse" as including married spouses and people who had lived together for at least two years in a marriage-like relationship.

We sometimes used to call unmarried couples in long-term relationships "common-law spouses," but this term was horribly misleading as many people in such relationships believed themselves to actually be married and in need of a divorce when they split up. The term actually actually refers to a common law rule from the middle ages that allowed to people to express their commitment to each other before friends and family and be validly married to each other without the necessity of a priest's incantations and wand-waving.

Under the Family Law Act now, spouse includes married spouses as well as:

• someone who "has lived with another person in a marriage-like relationship" and "has done so for a continuous period of at least two years;"
• someone who "has lived with another person in a marriage-like relationship" for less than two years and "has had a child with the other person;" and,
• people who used to be spouses.

What being a "spouse" gets you

During the spousal relationship, someone who is a spouse is obliged to provide the other spouse with the "necessaries of life" under the Criminal Code. The old common law rule is a bit more specific and requires husbands to provide their wives with adequate food, clothing and shelter, although he had a fair bit to say about what standard "adequate" meant.

After the spousal relationship ends, married spouses can use the Divorce Act to ask for spousal support, and for custody and child support for step-children as well as the couple's own children.

Under the Family Law Act, married spouses and unmarried spouses can ask for orders about spousal support, child support, parenting arrangements and contact, and married spouses and unmarried spouses who have been together for at least two years can also ask for orders about family property and family debt.

Other laws give spouses other rights, such as the family rate for the Medical Services Plan, the right to the Old Age Security spousal allowance or to share in each other's Canada Pension Plan credits. The key question you have to ask for all of these laws, including the Divorce Act and the Family Law Act, is this: "do I qualify as a spouse under this particular law?"

Spousal relationships

Under the federal Divorce Act and Civil Marriage Act, only two people can be legally married to each other. In fact, the Criminal Code makes it an offence for someone who is married to "go through a form of marriage with another person." Each person is a "spouse" of the other person:

A and B are each in a married spousal relationship with the other. Because of the legislation, it is not possible for A or B to be also in a married spousal relationship with anyone else.

Under the Family Law Act, and the old Family Relations Act, someone could qualify as an unmarried spouse while still being a married spouse. Most of this time, this happened when a married person had separated, started a new relationship, and lived with the new person for long enough to qualify as an unmarried spouse without being divorced from the first spouse. A number of my clients were quite unhappy to find themselves in this position. Here's how the spousal relationships work in a case like this:

A is in a married spousal relationship with B, but also in an unmarried spousal relationship with C.

Now you might think that the Family Law Act definition of an unmarried spouse as someone who "has lived with another person in a marriage-like relationship" would restrict unmarried spousal relationships to only one other person. In fact, I think it does. However, nothing in the act says that you can only be in one spousal relationship at a time!

Assuming that A, B and C have all lived together for at least two years in marriage-like relationships, A is in an unmarried spousal relationship with B and in a separate unmarried spousal relationship with C. B is in a spousal relationship with A and in another spousal relationship C. C is likewise in a spousal relationship with A and in a spousal relationship with B.

In fact, things could be yet more complicated, as long as each relationship meets the criteria of (a) living tother (b) for at least two years in a (c) marriage-like relationship. Here's a diagram of the spousal relationships among four people in a polyamorous relationship:

In this case, A is in three simultaneous relationships, one with B, another with C and yet another with D.

Lest anyone get too hung up on what "marriage-like" means, that's been addressed by the British Columbia Court of Appeal in a 1998 case called Takacs v Gallo as describing the couple's relationship with and commitment to each other, including whether the couple does chores for each other, sleeps together, shares financial obligations, goes to social functions together and so on.

Children

Under the Family Law Act, parents who live together are presumed to both be guardians of their children. This extends to people who are parents and had a child using a means of assisted reproduction. In fact, as a result of ss. 20, 29 and 30, a child could have up to five parents, all of whom are the child's guardians:

• up to two people who intended to have the child;
• a donor of sperm;
• a donor of ovum; and,
• a surrogate mother.

If a member of a polyamorous relationship happens not to qualify as the guardian of a child, the person can apply for a court order making them a guardian under s. 51.

Being a guardian is important, as only guardians have parental responsibilities, which means the right to make parenting decisions about all of the important aspects of a child's life, from choice of school to choice of health care, as well as having day-to-day care and control of a child.

Child support

Under s. 146 of the Family Law Act, the people who may have to pay child support include parents, guardians with parental responsibilities and stepparents. A parent, as we've discussed, includes biological parents as well as parents through assisted reproduction. A guardian includes people who aren't parents. Stepparent means people who qualify as the spouse of a parent and lived with the parent and the parent's child.

As a result, anyone in a cohabiting polyamorous relationship who qualifies as the spouse of someone in the relationship will be a stepparent of the person's children and be obliged to pay child support. Someone who is the parent of a child of a person in a polyamorous relationship will have to pay child support as you'd expect.

Spousal support

Under s. 160, if a spouse is entitled to receive spousal support, the other spouse has a duty to pay it. In a polyamorous relationship, this means that a dependant spouse might be entitled to collect spousal support from each other person with whom the dependant spouse is in a spousal relationship.

Family property and family debt

This is where the Family Law Act gets tricky.

Under s. 80, "spouses are both entitled to family property and responsible for family debt," and on separation "each spouse" gets "an undivided half interest in all family property ... and is equally responsible for family debt." "Both" means that there are two spouses in a spousal relationship, which is reinforced by the idea that each is entitled to "half" of the property and debt. I don't think that this section necessarily deprives any of the spouses in a polyamorous relationship of a property right, but it does mean that it's best if the relationships collapses all at once rather than one spouse at a time.

If the relationship collapses all at once, each spouse is entitled to half of the family property accumulating with each other spouse. A gets half of the property with B and half of the property with C. B gets half of the property with A and half of the property with C, and C gets half of the property with A, and half of the property with B. Once it all shakes out, everyone has an equal interest in all of the family property, and a three-way split it is.

On the other hand, say the spousal relationship between A and B craps out while the spousal relationship between A and C and B and C survives. A and B each take half of the family property, and C gets nothing until C's relationship with A or B terminates; when C's relationship with A terminates, C gets only half of A's half share! Instead of getting 50% of the total property, C gets 25% of the property. In other words, if you're in a polyamorous relationship and things are going sour, it's best to be the one who gets out first.

Cohabitation agreements

Interesting stuff, isn't this? Anyhow, what it all boils down to is that, apart from some awkwardness in relation to dividing property, people in polyamorous spousal relationships seem to be subject to pretty much the same legal rights and responsibilities as people in binary spousal relationships.

Because the law applies to people polyamorous relationships almost as it does to people in binary relationships, and because people in polyamorous relationships generally tend to enter them in a fully conscious manner, knowing what it is they're getting into, it makes sense that the people involved would also plan for the breakdown of their relationship. This will not only allow everyone to make make arrangements about:

• having children, and the parentage of children if assisted reproduction is going to be used;
• child care responsibilities during the relationship;
• contribution to household expenses and household chores;
• management of household finances, including joint accounts;
• purchasing new assets, and how those assets will be owned; and,
• new partners entering the relationship and existing partners exiting,

it'll help everyone figure out how those problems about the sharing of family property and family debt I just mentioned will be handled. A cohabitation agreement will help everyone manage the relationship and navigate the tricky thicket of legal issues that will arise when one or more partners leave.

As it happens, I know a number of talented lawyers who have prepared cohabitation agreements for people involved in polyamorous relationships, namely barbara findlay, Agnes Huang, Samantha Simpson and Zara Suleman, and I know a few others who are good lawyers as well and would be up to the challenge. Feel free to contact me for a referral.

Spouses' Half-Interest in Family Property May Not Expire: A comment on the FLA's only triggering event

A recent question on a listserv for family law lawyers, and another from a colleague involved in a collaborative process practice group, have raised some interesting issues for me about the effect of separation as a triggering event under the new Family Law Act. I swear, the new act is like a matroyshka doll; just when you think you've got it figured out, you discover another layer of meaning underneath.

Triggering Events

A "triggering event" is a hard thing to explain; in a nutshell, when a triggering event happens each spouse is deemed to receive a one-half interest, as a tenant in common, in all family property.

Let me unpack that a bit. Family property is the pool of assets that accumulate during a couple's relationship, minus certain kinds of assets, such as assets brought into the relationship and gifts and inheritances received during the relationship, that are excluded from the pool of family assets. A one-half interest means having a legal interest in the asset, even though a spouse may not be a registered owner of the asset. A tenancy in common is a way that two or more people can both own something. Someone who is a tenant in common owns a specific share of an asset and can sell his or her share, or use it as collateral for a loan, without needing the permission of the other co-owners.

During a relationship, spouses manage and own their assets as they wish. Some couples own everything together as joint tenants (a joint tenancy is another way that two or more people can own something, and in this kind of co-ownership each owner owns the whole asset and can't dispose of his or her share without the consent of the other owners), others each own their own property, and others arrange for a particular spouse to own all of the assets to protect the property from creditors and lawsuits. However, the Family Law Act says that each spouse is entitled to a half interest in the family property, just like the old Family Relations Act said that each spouse is entitled to a half interest in the family assets.

The importance of a triggering event is that when the event happens, each spouse is deemed to receive his or her half interest in the family property, regardless of whether the property is owned by both of them or by one of them alone. Among other things this means that:

• a spouse who isn't a registered owner of family property gains a legal half interest in that property;
• if a spouse goes bankrupt after separation, the other spouse still owns his or her share of the family property, including his or her share of any assets that are registered in only the name of the bankrupt spouse;
• if the spouses own an asset together as joint tenants, the joint tenancy is severed and they now own the asset together as tenants in common; and,
• if a spouse dies after separation, only half of the family property goes to the dead spouse's estate.

Triggering Events under the Family Relations Act

The implications of the arrangements under the Family Law Act are best understood in comparison to the old Family Relations Act. Under the old law, there were four possible triggering events: the court making a divorce order or annulling a marriage; the spouses executing a separation agreement; or, the court making a declaration that the spouses were unable to reconcile and save their marriage, called a s. 57 declaration.

The thing about all of these triggering events is that you had to do something to get one. Getting a divorce, an annulment or a s. 57 declaration all required you to start a lawsuit, serve your ex and go to court. Getting a separation agreement required you to actually sit down and sign a piece of paper with your ex. Since triggering events weren't automatic, there were cases in which a party failed to get a s. 57 declaration, the most common triggering event, only to see his or her share in the family property disappear into the hands of a creditor or trustee in bankruptcy. Whoops.

The Triggering Event under the Family Law Act

There is now only one triggering event available, the separation of the spouses. The following is s. 81 of the Family Law Act; s-s. (a) sets out the general rule that each spouse is entitled to half of the family property, and s-s. (b) provides the triggering event:

Subject to an agreement or order that provides otherwise and except as set out in this Part and Part 6, 

(a) spouses are both entitled to family property and responsible for family debt, regardless of their respective use or contribution, and 

(b) on separation, each spouse has a right to an undivided half interest in all family property as a tenant in common, and is equally responsible for family debt.

Of course, separation is something spouses do when they're breaking up; it doesn't require making an agreement or going to court, it is automatic. I expect that separation is also something most spouses do without realizing that a triggering event has just occurred.

The Time Limit on Property Claims

There are some other really important differences between the Family Law Act and the Family Relations Act.

The old act used the definition of "spouse" at s. 1 to set limits on when you could bring a property claim, saying that spouse "means a person ... who applies for an order under this Act within 2 years of the making of an order for dissolution of the person's marriage." Once two years had passed from the date you got divorced or had your marriage annulled, you ceased to be a "spouse" and once that happened:

• you stopped being a "spouse" entitled to an interest in the family assets under s. 56; and,
• you stopped being a "spouse" entitled to apply for a share of the family assets under s. 66.

Under s. 3(2) of the Family Law Act, however, once you're a spouse, you're always a spouse. The time limit for making a property claim instead appears at s. 198:

(2) A spouse may start a proceeding for an order under Part 5 to divide property or family debt ... no later than 2 years after,

(a) in the case of spouses who were married, the date

(i) a judgment granting a divorce of the spouses is made, or 

(ii) an order is made declaring the marriage of the spouses to be a nullity, or

(b) in the case of spouses who were living in a marriage-like relationship, the date the spouses separated.

The passage of the two-year time limit doesn't mean that you've ceased to be a spouse, it means that you're out of time to apply for certain orders under the act.

Why Spouses' Half Interest in Family Property May Not Expire

Let me summarize where we've gotten to.

1. Under the Family Law Act, if you are a spouse you're entitled to an equal share in the family property under s. 81(a).
2. Once you separate, you gain a one-half interest in all of the family property as a tenant in common under s. 81(b), regardless of how the family property was owned before you separated, and regardless of whether you meant to get (or give) a half interest in the family property.
3. Under s. 198(2), you have two years from the date of separation (unmarried spouses) or divorce (married spouses) to make your claim for an order for your share of the family property, assuming you can't make an agreement about how the family property will be divided.
4. However, under s. 3(2), once you've qualified as a spouse under the act you are always a spouse for the purposes of the act, regardless of how much time has passed.

So here's the nifty thing. Since a spouse is always a spouse and it's spouses who are entitled to a half interest in the family property, although the passage of the two-year time limit under s. 198(2) may strip a spouse of the right to apply for a share of the family property under the Family Law Act, it won't strip a spouse of his or her one-half tenant in common interest in the family property.

That's huge.

Among other things, this means that other legislation, like the Land Title Act or the Partition of Property Act, and certain principles of the common law, such as the remedies in trust for unjust enrichment, might be used to realize a spouse's interest in family property even after the spouse has lost the ability to apply under the Family Law Act. I note that s. 104 of the act expressly allows for the application of other rules and laws:

(2) The rights under this Part are in addition to and not in substitution for rights under equity or any other law.

Furthermore, the time limits that will apply are the time limits particular to that legislation and to those remedies, not the time limit set out at s. 198(2). Frankly, I don't know whether a tenant in common interest can expire without an agreement or order to that effect, and such an interest might survive to be exercised years down the road or could conceivably form a part of a spouse's estate.

I also wonder whether or not a spouse who is the sole owner of family property could be considered to hold half of the value of that asset in trust for the benefit of the other spouse once the spouses have separated. There are remedies for the wasting of family property — intentionally decreasing its value — after separation set out in s. 95(2)(f), but I expect we'll see case law on this issue develop soon enough as trustees have a fiduciary obligation (a duty) to manage trust property for the benefit of the trust beneficiary.

And now I'll conclude the list I just started.

5. Even though you can't apply for your share of the family property under the Family Law Act once the time limit at s. 198(2) has passed, under s. 104(2) you may be able to apply for orders about your share of the family property under other legislation and common law principles.
6. The time limits that will apply to claims under other laws and legal principles are not the time limits set by the Family Law Act, and I'm not certain that, without an order or agreement, there are any time limits to potential claims respecting tenancies in common.

Interestingly, these conclusions are just as important for owning spouses as they are for non-owning spouses. Non-owning spouses get the comfort of knowing that their one-half interest in the family property may not expire even though the limit set out in s. 198(2) has passed. Owning spouses, on the other hand, are warned that they can't let their guard down just because the two-year limit has passed; until we get some case law to clarify the situation, unresolved tenancy in common interests may survive separation and divorce for years if not decades.

Supreme Court Releases Important Judgement: First Decision on Tracing, the Presumption of Advancement and the Valuation of Excluded Property

Last Friday, Mr. Justice Butler of the Supreme Court of British Columbia released his decision in Remmem v Remmem, a case which I suspect is probably the first case addressing how property brought into a relationship is to be handled under the new Family Law Act.

As frequent readers of this blog will know, the Family Law Act imposes a new plan for the division of property between separated spouses that is wholly different from the old Family Relations Act, and, if anything, is more along the lines of how property is divided under Alberta's Matrimonial Property Act and Saskatchewan's Family Property Act. This is how it works in a nutshell:

• under s. 81, both spouses are entitled to an equal interest in the family property;
• family property is defined in s. 84 as all property owned by either spouse on the day the spouses separate, including real property, corporate interests, bank accounts, pensions, retirement savings and so on;
• the court can divide family property unequally under s. 95, but only if an equal division would be "significantly unfair," having regard to a list of factors set out at s. 95(2);
• under s. 87, the value of family property — and only family property — is its fair market value, determined either at the date of trial or the date of settlement;
• under s. 85, certain property, such as property brought by a spouse into the relationship and property received by a spouse as a gift or inheritance, is excluded from the pool of family property; 
• under s. 96, excluded property remains the property of the spouse who owns it; however,
• under s. 84, any increase in the value of excluded property during the relationship is shareable family property.

Although a short summary like this probably makes things look pretty straightforward, there are a whole bunch of questions that the legislation leaves unanswered. Here's a sampling.

1. What does "significantly unfair" mean? We have a whole lot of law on what "unfair" means, because that was the test under the old Family Relations Act to decide whether an unequal division was appropriate, but since the only other legislation in British Columbia to use "significantly unfair" as a legal test is the Strata Property Act, we don't yet know what the phrase means in a family law context. 

2. What do you do if you sell excluded property that you brought into the relationship during the relationship? Do you get a credit for that property against the pool of family property?  

3. What if you sold excluded property, like a car, to buy something that is family property, like another car? Is the new car your excluded property? Do you get a credit for the value of your old car? What happens if, when you separate, the value of the new car is less than what your old car was worth? Do you get the new car plus a credit against the family property? 

4. What happens if you still have your excluded property but it's gone down in value? Do you get the value of the excluded property at the date when you brought it into the relationship or the value of the property surviving at the date of separation?

Remmem goes some way toward answering difficult questions like these. The facts of the case are a bit complicated because the relationship was a long one and involved a mix of property brought into the relationship, property acquired during the relationship and property sold during the relationship. When the parties' relationship began, the husband owned a commercial fishing boat, a number of commercial fishing licences and a house which later became the family home. During the relationship, he sold some of the licences and acquired others, and incorporated a company through which he ran his fishing business. The company and the new licences were put into his name and the wife's name. The husband also sold the house he brought into the relationship to buy a new house; the new house was also registered in his name and the wife's name. Using the income from their fishing business, the parties bought other properties during their relationship and accumulated savings in the form of RRSP and TFSA accounts.

The major issues for the purposes of this discussion concerned the husband's fishing boat — should he be credited with the full value of the boat on the date that the parties' relationship started or the value when it ended? — and the house that the husband sold to buy the new house — should the husband be credited with the full value of the house he brought into the relationship even though he essentially gifted half of that value to the wife when he bought the new house? The status of the licences that the husband brought into the relationship and later sold was not an issue as the wife agreed he should receive a sizeable credit for their value.

Value of the Boat

This is how Mr. Justice Butler described the issue and the husband's position:

"[27] This issue concerns the proper approach to the exclusion of property which has depreciated since one spouse brought it into the relationship. [The husband] argues when interpreted liberally, the provisions of Part 5 of the [Family Law Act] allow the court to give credit to a spouse for the full value of depreciating property in certain circumstances. Specifically, he says where personal property which depreciates has been used by the family for business purposes, the court should exercise its discretion to exclude the full original value when dividing family property. ..."

Justice Butler's tidily succinct analysis of the statutory provisions, however led him to a contrary conclusion to that urged upon him by the husband (important bits in bold, as usual):

"[40] ... Section 85 [of the Family Law Act] excludes from the definition of family property, any property acquired by a spouse before a relationship began. Accordingly, any such property is not family property and the other spouse has no right to an undivided half interest in that property as a tenant in common. If that property increases in value then the increase would be family property pursuant to s. 84(2)(g). However, if it does not, pursuant to s. 96, the court has no discretion to order a division of that property. ... 

"[42] In British Columbia, the legislation provides that the property acquired by a spouse before the relationship began is excluded, not the value of the property. As a result, when property depreciates, no part of the depreciated property is subject to division. The court has no discretion during the first stage of its analysis (i.e. when determining the property is subject to division) to include the original value of depreciated property in the division exercise. In the present case, this means the [boat] is not and never was family property, and the ... value of the vessel in [when the relationship began] cannot be brought into the equation to apply against other family property. 

"[43] It is only at the very end of the exercise that equitable considerations come into play pursuant to s. 95. After determining the full extent of the family property, the court must go through the notional exercise of dividing that property equally. The court must consider if equal division would be 'significantly unfair'. If it would, then it is possible to order an unequal division."

To this point, then, the court has concluded that if property is excluded it is off the table for division as family property. Moreover, what is excluded is the property itself, not the value of the property, and as a consequence the owner of excluded property cannot look to the shareable family property to make up any depreciation in the value of excluded property. This follows the reasoning of Mr. Justice Harvey in Asselin v Roy, a 2013 case that was the first to deal substantively with the division of property under the Family Law Act:

"[222] In my view, s. 85 doesn’t provide for a tracing of otherwise excluded funds beyond the asset which was acquired through the disposition of her inheritance. Just as the claimant is entitled to no consideration for monies expended by her from the inheritance on matters such as travel or other disposables, if there is no equity or insufficient equity in [a property purchased with the inheritance] to repay her original investment [in the property], she cannot look to other family property to make up the difference."

Mr. Justice Butler then moved on to consider whether the husband might be entitled recoup the depreciated value of the boat through an unequal division of the family property, giving us a welcome opinion on the meaning of "significantly unfair" (cites omitted):

"[44] The [Family Law Act] provisions granting the court a discretion to order other than an equal division are very different from the provisions in the previous legislative scheme. Pursuant to s. 65(1) of the Family Relations Act, courts had a discretion to divide family property in unequal shares if the court found that the division of property (pursuant to agreement or the provisions of the FRA) would be unfair having regard to the factors set out in that section. The first and obvious difference between the discretion given under the FRA and the discretion given in Part 5 of the FLA is that in order to exercise the discretion, it is no longer sufficient to find that a division of property is merely 'unfair'. There must be a finding that the division of property pursuant to the statutory scheme is 'significantly' unfair. The Concise Oxford English Dictionary defines 'significant' as 'extensive or important enough to merit attention'. Significantly is understood to mean more than a regular impact — something weighty, meaningful, or compelling. In other words, the legislature has raised the bar for a finding of unfairness to justify an unequal distribution. It is necessary to find that the unfairness is compelling or meaningful having regard to the factors set out in s. 95(2). 

"[45] Of the factors set out in s. 95(2), the ones which have some importance to the assessment of unfairness here are (a) and (c): the duration of the relationship and the contribution of [the wife] to the career or career potential of [the husband]. The other factors are not relevant because there is no agreement between the parties, no family debt of significance, and neither party caused a significant reduction or increase in the value of family property or debt. 

"[46] The [parties'] 22-year relationship is a significant factor. The parties worked very much in partnership both to raise their children and to improve their financial situation. This factor strongly favours an equal division of family property. The fact that [the wife] supported and facilitated [the husband's] fishing career to the exclusion of her own career is not as significant. While this factor might suggest that family property should be divided unequally in her favour, it can be taken into account by an order for spousal support. 

"[47] In order to determine if it would be significantly unfair to divide the family property equally, the court must notionally divide the family property, taking into account the exclusions, in accordance with the provisions of the FLA. When that is done in this case, the parties will divide equally, family property with a value slightly in excess of $1.8 million. This figure does not include the RRSPs (of approximately $45,000) and CPP credits which will also be divided equally. Under the scheme of the FLA, [the husband] will receive credit for the excluded properties that he brought into the relationship, including the [licences that were sold] and the [house]. Under the scheme of the FLA, [the husband] will receive credits of $217,500 by way of the excluded properties: $100,000 for the [licences]; $52,500 for the [boat]; and $65,000 for the [house]. ... The fact that he receives a credit or benefit of only $52,500 for the [present value of the boat], rather than of $100,000 [value at the beginning of the relationship] is of little significance to the overall property division. There is nothing unfair, let alone significantly unfair about such a division and there is no basis for concluding this division of family property would result in a meaningful or compelling unfairness."

What's worth noting in this analysis is firstly the definition of "significantly unfair" as more than mere unfairness, but as weighty, meaningful or compelling unfairness, and secondly the judge's clear statement that the test for an unequal division of property under the new act is different and more onerous than the test under the old act. 

Further, the judge also laid out a convenient three-stage test to be applied where claims for an unequal distribution of family property are made.

1. Determine the family property to be divided, excluding any property qualifying as excluded property.
2. Undertake a notional equal division of the family property.
3. Assess for significant unfairness in light of the global result that an equal division of family property would have as well as any credits received in respect of excluded property.

Although the court could have stopped after reaching its first conclusion, that the owner of excluded property cannot look to the shareable family property to make up any depreciation in value, applying this test to the unequal division argument left the court to weigh the $47,500 loss in value the boat had suffered since the beginning of the relationship against the excluded property the husband was keeping plus his share of a total pot of family property amounting to some $1,800,000. Given the judge's definition of significant unfairness, his refusal to order an unequal division of family property is perhaps not unreasonable.

The House

Here is the court's summary of the question raised by the husband's decision to register the new house, bought with the proceeds of the sale of the house he brought into the relationship, in his name and the wife's name:

"[48] This issue considers whether the transfer of excluded property into joint property reduces the value of the exclusion for the spouse that brought the property into the relationship. ..."

Under the Family Relations Act, this would not have been an issue at all: the assets that were shared were the assets that were "ordinarily used for a family purpose" during the relationship, and the nature of their ownership was irrelevant. Under the new act, however,

•  the husband would have been entitled to treat the value of the old house as exempt from division; yet, 
• under the presumption of advancement, a common law presumption that only applies to married spouses, he was deemed to have given half the value of the new house to the wife as a result of putting her on title; and,
• the wife is entitled to treat gifts to her as excluded property under s. 85. 

(Section 85 has since been amended to correct this last problem by excluding only gifts from third parties.) Considering these problems, the court held that:

"[48] ... I have concluded that the purchase of property in joint names using the proceeds of excluded property does not reduce the value of the exclusion. The property provisions of the FLA are intended to be a complete code so that there is no need to examine the intention of the parties at the time of a transfer of excluded property to joint tenancy. To come to the opposite conclusion would bring uncertainty and a level of inequality into a property division structure that was intended to treat married and unmarried spouses equally and to provide for a greater level of certainty. ...

"[52] When I consider these difficulties, I conclude that the tracing provisions in the FLA, at least when applied to the circumstances in this case, are to be applied without considering or applying the presumption of advancement between married spouses. In other words, none of the excluded property – the fair market value of the [old house when the relationship began] – was gifted to [the wife] when the [new house] was placed in joint names. [The husband] remains entitled to the full value of the exclusion of $65,000.

This is a very important conclusion as it confirms that the property division scheme of the Family Law Act prevails over the common law presumption of advancement, thereby avoiding the significant problems that would arise were this not the case:

"[51] ... First, the apparent simplicity and certainty of the property division scheme would be lost. Exclusion would depend not only on whether property was owned prior to the commencement of the relationship or brought in by way of inheritance in the course of the relationship, but on other circumstances. The new scheme is easier to apply if subsequent transactions only have to be examined to see if property is derived from the excluded property. If the court also has to look at subsequent transactions to determine if property was gifted, it would have to consider the parties’ intentions in transactions which may have taken place many years before trial. This would be a difficult exercise which would require considerably more court time. Further, the amount of the exclusion would be different for married and unmarried spouses, a result that does not appear to have been intended by the legislation. The amount of the exclusion might also be different for married spouses in similar situations, depending on the conclusions arrived at as to application of the presumption of advancement."

This pragmatic approach is entirely in keeping with government's statement objectives of simplifying, and making more intuitive, the rules for dividing property. 

To put these conclusions into a nutshell, the court found that:

1. The property division provisions of the Family Law Act are a complete code which excludes the application of the presumption of advancement.
2. Family property purchased with excluded property is subject to an exclusion equal to the value of the excluded property at the commencement of the relationship.

The Legislation of Other Provinces

Finally, much has been made of the applicability of the legislation of other provinces to the interpretation of the Family Law Act. I am partly responsible for this; it was a reasonable inference to make given the similarity of the provisions of the new legislation in British Columbia to the existing legislation in Alberta and Saskatchewan, and I have encouraged people to look elsewhere when interpreting the new act.

Following this approach, counsel for both parties made arguments at trial based on the law of other provinces. However, Mr. Justice Butler found that the Alberta legislation contains "significant differences" from the Family Law Act by exempting the value of property from division rather than the property itself and in the generous latitude it allows for the unequal division of property. The legislation of Saskatchewan likewise takes a different approach to exempted property, the discretion available to the court to order unequal distributions of property and the discretion given to determine the fairness of an exemption. As a result, the court did not consider either the extraprovincial legislation or the case law interpreting that legislation:

"[40] As I have already indicated, the language in the FLA requires a different approach from that taken in either Alberta or Saskatchewan. ..."

When asking the court to adopt interpretations of the Family Law Act based on the legislation of other provinces, counsel should take care to ensure the similarity of the legislation with exactitude. I have previously written about the distinction between the treatment of the federal Divorce Act on matters relating to the care of children under Alberta's Family Law Act and that of the British Columbia legislation.