British Columbia Family Law Blog

Lorne MacLean, BC Family Lawyer, publishes Shared custody and BC Spousal Support article in prestigious Lawyers Weekly

Lorne N. MacLean brings a fresh perspective to your family case

BRITISH COLUMBIA FAMILY PROPERTY AND FAMILY ASSETS REAPPORTIONMENT ALERT

The June 2009 British Columbia Court of Appeal decision of GAIN upheld a British Columbia divorce and family law asset reapportionment in favour of a wife who was partially paralyzed as a result of a motor vehicle accident and thus provides the current state of law on family property reapportionment in British Columbia.

 

The parties were married for 29 years and the wife worked as a teacher and the husband was a Parks’ ranger.  In 1981, the wife suffered serious and permanent injuries including partial paralysis as a result of a motor vehicle accident she was involved in.  The assets to be divided at the time of the marriage breakdown total approximately $1.2 million and consisted largely of assets purchased with the wife’s settlement funds from her motor vehicle accident.  While the wife sought 75/25 reapportionment in her favor at trial, she was awarded 65/35 of the assets by the trial judge.

 

The Court of Appeal held:

 

[9]           Ms. Gain sought a reapportionment by which she could realize in excess of $1.0 million.  Mr. Gain maintained that, despite the extent of Ms. Gain’s require­ments and her understandable desire to be as comfortable as possible, it would not be fair to reapportion the family assets to the extent of more than 75% in her favour, which is what would be required to provide what she was seeking.  He sought the opportunity to retain some of the farm, given it was the only work he had known for many years. 

[10]        The judge said the result for which Ms. Gain contended would be unfair.  In undertaking an analysis based on s. 65(1) of the Family Relations Act, R.S.B.C. 1996, c. 128, she found that, while Ms. Gain’s concerns for her future well-being were entirely legitimate, what were advanced as her future costs were unsupported by any compelling medical evidence.  She observed the family of four had lived on an income that was less than what Ms. Gain sought for herself.  She took the view the family had always used the portfolio as its bank account and had invested part of it in acquiring the farm which had provided an idyllic lifestyle while greatly increasing in value.  The life the family chose had required Mr. Gain to give up paid employ­ment and the benefits of future security like a retirement pension, and both parties were now at a stage where they required a significant portion of the family assets to attain and maintain self-sufficiency at a reasonable standard of living.  The judge saw Mr. Gain’s inheritances as enhancing his ability to be self-sufficient, thereby allowing a greater share of the family assets to be used by Ms. Gain for the same purpose.  Since separation, Mr. Gain had encroached on a non-family asset to maintain the value of the parties’ principal asset, the farm, while Ms. Gain had encroached to about the same extent on a family asset to support herself and fund this litigation.  The judge concluded:

[37]  I am satisfied that the appropriate division of family assets is a reapportionment 65 per to Ms. Gain, 35 per cent to Mr. Gain.  This allows each the option of purchasing accommodation while living on the balance of the capital at a reasonably modest standard; the standard they lived by throughout the marriage.  It reflects Ms. Gain's greater need and the fact that the parties have assets worth slightly over $1 million. 

[11]        The 65/35 reapportionment in Ms. Gain’s favour means she receives in the order of $845,000 in value in respect of the family assets and Mr. Gain receives about $455,000.  Mr. Gain of course retains the balance of his inheritance of an additional $240,000.   

 

Taking all these factors into account, the British Columbia Court of Appeal declined to set aside the trial judgment and dismissed the appeal.  The key points to take away from this decision are that a court in a BC family asset reapportionment action must consider all of the factors under section 65 in reaching a decision as to whether fairness dictates a reapportionment of assets in favour of one of the parties instead of the presumptive equal division of assets at the end of a marriage that occurs in 95% of cases.

 

 

It is also important to note that a court cannot in an attempt to bolster one spouse’s economic self-sufficiency, destroy or impair the economic self-sufficiency of the other, and it is only in cases where an equal division of assets is unfair that a court will use their power to reapportion assets to achieve fairness.

 

In the present case, taking into account the wife’s far greater need based on her health issues and the fact that the husband had an inheritance which would assist him in becoming self-sufficient, a 65/35 reapportionment of assets in the wife’s favour was fair.

BC CHILD SUPPORT IMPUTING INCOME ONUS AND THE OBJECTIVE OF PROMOTING ECONOMIC SELF SUFFICIENCY AFTER DIVORCE?

In the recent Canadian child support and spousal support divorce case of Homsi v. Zaya 2009 ONCA 322, the appellate court reviewed the onus when parties allege the actual income of a party does not reflect what they could really earn if they made a reasonable effort to earn income.  The court held the onus is on the person requesting an imputation of a higher income.

 

Whether the trial judge erred in awarding child support on the basis of an imputed income

[27]      Homsi submits that the trial judge imputed income to him without evidentiary foundation.

[28]      I agree.  The approach mandated by this court in Drygala v. Pauli 2002 CanLII 41868 (ON C.A.), (2002), 61 O.R. (3d) 711 requires a consideration of whether the spouse is intentionally unemployed or under-employed, and, if so, what the appropriate income is under the circumstances. The onus is on the person requesting an imputation of income to establish an evidentiary basis for such a finding.  Here, the trial judge cited only historic and unproven evidence in support of imputing an income of $36,000 to Homsi.  In my view, the trial judge’s observation that Homsi was intelligent and had the ability to sell cars (in Quebec when he does not speak French) was not evidence capable of supporting the inference that Homsi was intentionally under-employed and that an annual income of $36,000 was reasonably imputed to him.

 

The Court also dismissed the spousal support claim of the wife given the brief marriage and the priority of child support and looked at the respective incomes of the parties.

 

Whether the trial judge erred in awarding spousal support to Zaya

[33]       Zaya submits that appellate courts should only interfere with a lower court decision awarding support if the trial judge made a material error. The trial judge held that Zaya suffered an economic disadvantage from the marriage because she was not working for 18 months after Anthony was born and would have been employed if the marriage had not broken down.  

[34]      The trial judge provided no reasons in relation to this part of his judgment.  Accordingly, it is open to this court of make its own assessment of whether Zaya is entitled to support, for how long, and in what amount.

[35]         Moge v. Moge, 1992 CanLII 25 (S.C.C.), [1992] 3 S.C.R. 813 (at para. 74) establishes that since there is no automatic entitlement to spousal support, the evidence must be examined.  There was no evidence to support a finding that Zaya had suffered economic disadvantage as a result of the marriage.  The marriage was not long, and there was nothing to suggest that Zaya suffered disadvantage as a result of the marriage. In fact, her employment record during the marriage was stronger than Homsi’s. Moreover, the trial judge ignored Homsi’s limited ability to pay support. The law is clear that priority should be given to support for Anthony.

[36]         I would give effect to this ground of appeal and set aside the spousal support award in its entirety. 

 

This case may well be a bell weather of a return to a more stringent look at the entitlement to spousal support and a better focus on the objective of propmoting economic self sufficiency

 

BC DIVORCE - BITTERNESS: A POSSIBLE NEW MENTAL DISORDER

As an experienced British Columbia family law and BC divorce lawyer I have often felt that the winners after divorce are those people who can move on to a satisfying and fulfilling post-divorce life where they move forward positively and leave the past pain of divorce well behind them. In an article by Sharon KIrkey for the CanWest news service she notes that a new disorder has been proposed for the mental health and book of disorders called DSM-V which is due to be released in the next couple of years. I quote directly from her article:   Post-traumatic embitterment disorder is described as a pathological reaction to a single, negative life event, such as conflict at work, unemployment, divorce, illness or separation. People view the event as unjust, a violation of their basic beliefs and values, and "want the world to see how badly they have been treated," according to published studies.

“People feel wronged, humiliated and that some injustice has been done to them,” says Dr. Michael Linden, the German psychiatrist who named the behaviour after reporting an increase in affected patients in the wake of German reunification.

“The critical part is this lasting and very intensive emotional embitterment, a mixture of depression and helplessness and hopelessness . . . It’s a very nasty emotion.”

People have intrusive thoughts and memories about the event, and get locked into a serious mental state, he says. “These people don’t have the feeling that they must change, but rather have the idea that the world should change or the oppressor should change, so they don’t ask for treatment.”

Ten years of research suggests it affects one to two per cent of the population, but Linden says the incidence rises during times of societal change — including economic upheaval. "We are all vulnerable in those areas which are especially important to us. So, if you really think your job is the centre of your life, that’s where you’re vulnerable."

He says adding severe embitterment to the manual of mental illness could help patients get help and encourage research into the disorder.

But some critics question just how doctors could distinguish between irrational and reasonable bitterness.

Case Analysis - Teja v. Dhanda, 2009 BCCA 198

    The British Columbia family law lawyers at the Vancouver family law firm of MacLean Family Law provide the following update on BC child support and BC  spousal support obligations of a self-employed spouse. We have previously written about how the child support guidelines in British Columbia and BC spousal support advisory guidelines both use the same mechanism to calculate income for the paying spouse. In most cases when the paying spouse is an employee the calculation of income is very easy. However, when the paying spouse is self-employed the calculation of income is more problematic. The guidelines were designed to ensure a fair balancing of ensuring proper spousal and child support is paid in British Columbia and allowing the company to prosper. In recent months two British Columbia cases from RBC Court of Appeal have established that in most cases the pre-tax profits of a corporation will be used in addition to the tax return income of the spouse to controls the Corporation. We summarize the most recent case of a self-employed professional by providing the facts and analysis below.

Parties:

 

APPELLANT: Wife, aged 37, non-practicing lawyer, imputed annual income of $25,000

RESPONDENT: Husband, aged 42, medical professional, imputed annual income of $425,000 at trial (changed to $630,000 on appeal)

CHILDREN: 1 child of the marriage, age 5

 

Case Summary:

 

At trial, court found that husband’s income as determined by s. 16 of the Federal Child Support Guidelines (using line 150 of latest income tax return) was not the fairest method of determining income.

 

Instead, trial judge looked at s. 18, which allows the court to look at corporate pre-tax profits if this produces a fairer determination of income.

 

Using s. 18, court found husband to have annual income of $425,000, which was a portion (but not all) of the husband’s corporate pre-tax profits. Based on this amount, the court ordered the husband to pay child support of ~$3,500 per month and spousal support of $10,500 per month. There was no time limitation on the spousal support order.

 

The wife argued on appeal that the court should have adopted an income of $630,000 for the husband, as that was the total amount of income available to him from his corporation. (100% of corporate pre-tax profits)

 

The Court of Appeal agreed with the wife, and raised the husband’s income to $630,000 for child support purposes. No mention was made of a change to the husband’s income for spousal support.

 

Based on Guidelines amount, result of appeal would change husband’s child support obligation from $3,500 per month to $5,046 per month. No change in spousal support obligation of $10,500 per month based on appeal.

 

Analysis:

 

At trial, the judge found that s. 16 of the Guidelines would not be a fair way of determining the husband’s income. The husband’s most recent tax return did not reflect what income is available to him, as money was deliberately left in his company to obtain a preferential tax rate.

 

The husband admitted that the earnings available to him from his corporation for that year were approximately $630,000. However, the evidence showed that even when the parties were married, the husband never took as much money as was available to him out of the company. There was also no suggestion that he was leaving money in the company after separation in an attempt to reduce his support obligation.

 

The trial judge arrived at an income of $425,000 for the husband, using s. 18 of the Guidelines but taking only a portion of the available income from the husband’s company. In doing so, the judge referred to Kowalewich v. Kowalewich, 2001 BCCA 450, which said at paragraph 44: “A court’s effort to ensure fairness does not require a court to second-guess business decisions nor…to ‘place the largest available shovel in the company store.’” Further, at paragraph 54, Kowalewich says: “The Guidelines allow a court to include all of the pre-tax income of a corporation for the most recent taxation year. They do not require it.”

 

In the appeal of Teja, the wife argued that, while in certain types of corporations such as a manufacturing or sales concern there were valid business reasons for leaving money in a company, those reasons have less validity in a professional corporation such as the husband’s. The Court of Appeal agreed with the wife, stating at paragraphs 12-13:

12     In my opinion, the trial judge misapprehended the court's reasons in Kowalewich, which, unlike the case at bar, was concerned with a corporation for which the corporate income method was the fairer method of determining income for the purposes of calculating child support under s. 18 of the Guidelines. Such corporations include certain types of manufacturing or sales concerns which may need to use corporate income to take advantage of business opportunities, for expansion, to protect against the possibility of business downturns and the like. It was in that context that the court described the factors to be considered to allow the payor to maintain value in the company and permit the company to continue as a viable enterprise and, at the same time, also permit a reasonable amount of income to be available for child support.

13     The Kowalewich factors have, in the circumstances of this case, no application by reason of the personal services nature of Dr. Dhanda's corporation and the absence of evidence regarding any legitimate calls on the corporation's pre-tax corporate income for company purposes. Dr. Dhanda has, through hard work and relative thrift, been able to accumulate significant savings represented by the retained earnings of the company. What he has not demonstrated is that there are legitimate calls on the pre-tax corporate income of his company, other than his desire to build up savings in the company. Through the Guidelines, Parliament has said that children are entitled to support based on the full income available to the payor spouse. The payor's desire to accumulate savings, to the detriment of the child, is not a legitimate factor to consider.

 

The court then used all of the husband’s available pre-tax corporate profits in calculating his income for the purpose of child support. The court noted the difference between the type of corporation in Kowalewich (where the business was a retail operation with several outlets) and in Teja (which the court described as a ‘professional corporation’). This distinction led to a different set of valid reasons for keeping money in the corporation.

 

The fact that the husband in Teja kept money in the company prior to separation due to his desire to accumulate savings was of no consequence, as the Guidelines show Parliament’s intention to entitle children to support based on the full income available to the payor spouse.

 

The court also distinguished Teja from Hausmann v. Klukas, 2009 BCCA 32. In Hausmann, there was found to be a deliberate attempt by the husband to keep income in his company in order to reduce his support obligations. No such suggestion was made in Teja.

 

Finally, the court stated that it would not address the issue of whether it would be unfair to the husband to include income amounts over $150,000 per s. 4 of the Guidelines, as the parties did not argue the applicability of s. 4 at trial.

 

Spousal Support:

 

At trial, the judge set the husband’s spousal support owing at $10,500 per month, based on income imputed to the husband of $425,000. The trial judge said at paragraphs 57-60:

57     Mr. Rose for D.D. [the husband] argues that his income for Guidelines purposes should be set at $350,000 on the basis that he works time and a half all of the time, and he is entitled to a fair compensation for himself for the time he works. R.T. [the wife] is receiving $315,000, and there is no evidence that either she or K. [the child] did without on the support that has been paid.

58     While the argument may seem attractive and novel, I was given no authority that suggests that a payor who works double the time and earns double the money only needs to pay support based on half of his or her earnings. While the Guidelines allow the court to increase the income of underachievers, the Guidelines do not reduce the income of overachievers. However Professors Carol Rogerson and Rollie Thompson, the authors of Spousal Support Advisory Guidelines: A Draft Proposal (Ottawa: Ministry of Justice and Attorney General 2005) at pp. 85-87 proposed that the ceiling be set at $350,000 and thereafter discretion rather than any formula be applied to determine spousal support. D.D. concedes that R.T. is entitled to compensatory support.

59     Mr. Rose also reviewed in detail R.T.'s expenses and reduced them for items such as Pilates, running clinics, and personal interest courses. He also argues there is no need for R.T. to move out of her mother's house and pay rent. In short, he argues that R.T. does not need any more than she currently receives and can live well on less than what she currently receives.

60     The determination of the amount of spousal support is not based solely on need. Under s. 15.2 of the Divorce Act, R.S. 1985, c. 3 (2nd Supp.) it is an amount the court thinks reasonable taking into consideration the condition, means, needs and other circumstances of each spouse.

 

The trial judge refused to “cap” the husband’s income for the purpose of support at $350,000, and the Court of Appeal did not review this decision. However, although the Court of Appeal increased the husband’s income for the purposes of child support from $425,000 to $630,000, they did not state that this also applied to the husband’s income for the purpose of spousal support. (paragraph 15)

 

The Court of Appeal made no mention of s. 11.3 of the Spousal Support Advisory Guidelines, which suggest a “ceiling” of $350,000 for the purpose of calculating spousal support through the SSAG. The SSAG states that this ceiling is not a cap, and does not bar the use of the formulas for incomes above $350,000. Rather, it suggests that the SSAG may have less significance for high incomes due to the complexities arising from calculating support at those levels.

British Columbia Spousal support advisory guidelines: Shared child custody alert

The B.C. family lawyers, MacLean Family Law Group, want the public to be aware of a new 2009 British Columbia spousal support advisory guidelines case which dramatically departs from previous B.C. spousal support and alimony cases.  In the family law and shared custody decision of Mann v. Mann, the British Columbia Court of Appeal applied a brand new spousal support advisory guideline calculation applying a modified “without child” formula instead of a traditional “with child” spousal support formula in situations of shared child custody. Vancouver family lawyer Lorne MacLean is concerned with the impact of this decision on households with income disparity.

 

Mann v. Mann (2009 BCCA 181) is a recent B.C. Court of Appeal decision (available on their website) which dealt with a few issues, notably spousal support. 

 

            The basic facts are these:  Mr. and Mrs. Mann had been married for some time, with two children, by the end of their cohabitation in 1999.  In October 2001, they had an oral agreement on the division of the family home.

 

Many judges have used a formula that equalizes the income in each household, in contrast to this new spousal support formula.  As a practice note, this new spousal support decision is also contrary to the DivorceMate software which automatically defaults to equalizing incomes in both households so there is not a have household v. a have-not household situation. 

 

               In addition, July 2009, Department of Justice (DOJ) Spousal Support Advisory guidelines noted problems with the “without child” formula in short marriages and suggested that “the formula may generate too little support for the low income recipient [in a marriage with a substantial income difference] even to meet her or his basic needs for a transitional period” under the Mann spousal support guidelines formula as opposed to the equalization of incomes in households formula that has been used previously.  The case points out the disparity that  exists in a very short marriage with children whereby over 50 percent of the net income would go to the sole custodial spouse versus a nominal payment to that spouse which would occur if no children were born under the “without child” formula.  In a shared custody situation, if both spouses share custody and direct costs for the child, an argument can be made for the new formula, although previous cases have not gone this route.  Consider also the situation of a short marriage where one spouse brings a child from a previous relationship into the marriage that could result in a very large payment of spousal support after a very short marriage.  In short—consult a lawyer at once if you are facing a marriage breakdown!

 

The Court of Appeal stated that “[t]he Spousal Support Guidelines cannot be applied in the circumstances of this case, without adjustment for the deferred application for spousal support, consideration of the respondent’s significant post-separation income increase, his underpayment for the family assets in 2001, as well as the amounts he actually paid under the parties’ shared custody arrangement.”

 

            In the trial judge’s decision, the concept of compensatory (as opposed to needs based) support was limited to the year immediately following separation.  In the Court’s view, compensatory support should more properly encompass “overlooked the disadvantage to her and the advantage to her husband [because] of the role she played during the marriage.”  It was stated that one can take into account a spouse’s post-separation earnings, which were supported by the advances made during the marriage.

 

Notably, the Court of Appeal approved of a modified “without child” formula, suggests in “The Spousal Support Guidelines: Buyer Beware! Read the Entire Manual and Apply with Care” found in Spousal Support Advisory Guidelines Update 2006 (Vancouver: Continuing Legal Education Society of B.C., 31 March, 2006).  This “without child” formula is in contrast to the “With child formula” which has—as the name suggests—been the normal standard applied when the spouses have children. in shared custody settings, particularly where “a payor spouse is paying the full table amount of child support.”

 

            This formula is best expressed as, “[Respondent’s income (Mr. Mann) - Adjusted child support paid] – [Appellant’s income (Mrs. Mann) + Child support paid + Child tax benefits] = Gross income difference.”  This income difference was then multiplied by 1.5-2% for each year of cohabitation, with a duration of the order to be from 0.5-1 year for each year of cohabitation.

 

To quote from paragraphs 85-88 of the judgment:

[85]  In February 2002, that formula would produce a gross income difference of $41,000 (($93,000 - $20,000) - ($16,000 + $15,000 + $1,000) = $41,000).

 

[86]      The percentage range would be 1.5% to 2% of that difference for each year of cohabitation (15 years) (22.5% to 30% x $41,000 = $9,225 to $12,300).  The duration would be 0.5 to 1 year for each year of cohabitation (7.5 to 15 years).  Thus, appropriate spousal support order would be $769 to $1,025 monthly for 7.5 to 15 years or a lump sum discounted for present value if paid immediately.

[87]      In 2007, the gross income difference would have been $46,500 (($111,500 – $15,000) – ($37,000 + 12,000 + 1,000) = $46,500).  The spousal support range would be virtually the same.  Capitalized, the suggested range of income streams translates to a minimum lump sum payment of about $63,000.  The trial judge’s award was substantially below the lowest end of the appropriate range.  Nevertheless, a payment of $63,000 would be beyond that which could reasonably be required of the respondent in his circumstances.

            In this manner, a lump sum amount awarded by the trial judge had been set aside, and Mr. Mann was directed to pay spousal support of $900 dollars monthly for eight years, as the court took “into account the appellant’s delay in pursuing spousal support, the additional commitments that delay permitted the respondent to make, and the fact that the appellant’s primary contribution was to the advancement of the respondent’s career, as opposed to the acquisition of property, his post-separation income increase, and the child support he paid.”

 

            In addition to the above formula, two important principles which were reiterated throughout the judgement were the ability of courts to look into the totality of circumstances, and the caution that people should pay close attention to any independent legal advice they may receive and act on that advice in a timely manner.

British Columbia Child Support Guidelines and BC Shared Custody under Section 9 of the Child Support Guidelines

In the recent British Columbia Court of Appeal child custody and child support decision concerning a British Columbia family law case in Maultsaid v. Blair 2009 B.C.J. 467, our highest Provincial Court dealt with a situation where the parties had custody and guardianship of 2 children ages 14 and 16.  Up until September 2006, the children had resided primarily with the mother and the father had paid child support.  However, in September of 2006, the Court ordered a change in the primary residence of the two children such that they lived with their father and the mother was granted specified access.  For some reason, no order was made changing the child support obligations.  In June 2007, the father applied for cancellation of his support obligations effective July 2006 and sought support to be paid by the mother effective September 2006 when he got primary residence.

 

The trial judge had terminated the father’s obligation as of September 6, 2006, but applying s. 9 of the Child Support Guidelines, which is a section that allows for a departure from the Guidelines if the parties share care and control of the children and one of the parties has the children more than 40% of the time per calendar year.  The motions judge dismissed the application to reduce the father’s obligation or to cancel the child support arrears although the children were residing primarily with him.

 

An issue in the appeal was the father’s argument that the mother had access less than 40% of the year and there was no basis for applying s. 9 of the Guidelines and as such the mother should pay the full Guideline support based on her income to him has the primary resident parent.

 

The BC Court of Appeal held that the motions judge had erred in concluding that the children’s school time was neutral in the calculation of parents’ access.  Given that the access Order specified the time in which the mother’s access started and ended, the mother had no right to claim access to the children for the period of time that they were in school.  The Court of Appeal also felt there was a mistake by the motions judge to refer to the joint custodial relationship or to the mother’s former status as the primary residential parent.  In adding up the access time and assessing it on a calendar year basis, it was found she did not meet the criteria of having the children with her 40% of the time or more per calendar year and as such, ongoing child support was ordered against the mother commencing December 2007.  In addition, the arrears were cancelled.

 

[19]           This case is yet another example of the difficulties presented by s. 9 of the Guidelines.  Many judges have written of the potential difficulties this section presents for children in the time threshold it establishes, and the difficulties presented to the courts in its application when faced with different methods for making that determination.  I had occasion to address this issue in Berry v. Hart, a case in which the access order did not specify a precise access schedule but rather described access in terms of the father’s work schedule, which varied with times he was at sea.  In Berry v. Hart, one could not say from the order whether, in the terms of s. 9, the father had, or had not, a 40 per cent or more “right of access” and so the question was under the second arm of s. 9 -- “physical custody” where the calculation is even more precarious than when spelled out by a court order in a way that permits determination of the question in relation to “right of access”.  In Berry, the difference in calculation between the parties as to the amount of time the father had physical custody was very close, with even Ms. Hart accepting Mr. Berry was within a hair of 40 per cent.  The range presented by the parties was between 39.37 per cent (Ms. Hart) and 41 per cent (Mr. Berry).  I wrote, concerning time recording as it may be the basis for a submission as to whether the threshold was met in those circumstances:

[9]        One must also ask, considering that this approach may satisfy only the law of unintended consequences, whether the minutiae of such record keeping really determines whether s. 9 of the Guidelines applies.  Rarely can anything be measured with precision.  Even science recognizes that all measurements are subject to a margin of error.

[10]      In my view the issue is a matter of judgment not amenable to simply a time accounting exercise.  I consider that in determining whether the threshold level for application of s. 9 is met the question is whether the paying parent spends such a sizeable percentage of time with a child or children that, on any reasonable view of the evidence and considering the advantage that may accrue to a child in spending the occasional additional day, part day or hour with a parent, one can say reasonably that the 40 percent or more level is achieved.  It follows, in my view, that a court may assess child-parent time as meeting the s. 9 criteria without a tight accounting.  That assessment should be made by considering the broader context of the parenting arrangement.  It perhaps bears mentioning, further, that simply finding that a parental regime comes within s. 9 does not compel an automatic reduction in child support.  That determination must be made considering all of the criteria in ss. (a) to (c) of s. 9.

[20]           With respect I have come to the conclusion the judge in this case erred in principle in holding as she did that the school time was neutral in the calculation of the time the parents have access.  I take it as axiomatic that where an access order spells out the time at which the access starts and ends, and there is no agreement that could be said to alter the terms of the order, the access parent does not have, in the language of s. 9 “a right to access” beyond that time.  That is, it cannot be counted to the benefit of the access parent seeking to reach the 40 per cent level so as to move into the area of the court’s discretion to relieve against payment of all or a portion of the Guidelines amount. 

[21]           Nor, in my view, in considering the application of s. 9 is it correct to refer to the former living arrangements as a circumstance that may affect the application of the section as was done here in paragraph 80 to which I have referred, or the fact of joint guardianship or custody which is not a criteria for the application of s. 9.  The question is quantitative as applied to one of two aspects of the relationship between the child and the parent – access or physical custody.  Although courts have bemoaned the imprecision of the section and expressed concern over the consequences for children of the application of the section in certain circumstances, we are not free to disregard the language enacted by Parliament, or to set as criteria for its application aspects of the parties’ responsibility for the children not found in the Guidelines. 

MacLean Family Law Group expanding!

Maclean Family Law Group expands its Northern office by hiring a new associate and new articling student as well as by opening a position for a summer articling student to better serve Dawson Creek and Fort St. John, BC divorce and family law clients.

BC Family Asset and British Columbia Property Division and Reapportionment in Short to Medium Length Marriages Ending in British Columbia Divorce

As Vancouver family lawyers and Fort St John family law and divorce lawyers, we are often asked what  BC courts do in shorter marriages in British Columbia that end in divorce both with respect to British Columbia spousal support and BC family asset division. We are also frequently asked what kind of BC assets are divided at the end of a marriage?  We advise people that the test is whether the assets were ordinarily used for a family purpose. If you have a specific question concerning BC family property division contact us as the courts have construed a family asset to include a wide variety of family property. Our BC family law lawyers can be reached toll-free throughout the province at 1-877-602-9900.

The recent British Columbia Court of Appeal decision applying the spousal support advisory guidelines and dealing with reapportionment of property in a seven-year marriage provide provides updated guidance in determining what is a short marriage for purposes of reapportionment of BC family assets and how it impacts on an award of entitlement and quantum of spousal support in British Columbia.

In the decision of Wang V. Poon [2008] B.C.J. No 2113 our British Columbia Court of Appeal dealt with a seven-year marriage with husband was 76 years old and his wife was 47 years of age some 30 years his junior. The husband brought the majority of assets into the marriage and his assets were used to purchase various condominiums. The husband's argument that a seven-year marriage was a short marriage for purposes of the Family Relations Act was rejected a number of assets were found to be family assets.

A savings plan in the name of the husband which was used by him to provide for him in his retirement but not an RRSP as we know it in BC, was found not to be a family asset. Had it been in RRSP it would have been a statutorily defined family asset regardless of whether it was used for a family purpose. A variety of British Columbia bank accounts in the husband's name which had been used to support the family were found to be family assets as they had clearly been ordinarily used for a family purpose. The husband had used these accounts to purchase the properties and since the trial judge had erred in concluding the bank accounts were not family assets the issue of whether the condominium purchased with the family asset bank accounts was remitted to the trial judge to make a new determination now that the error regarding the bank accounts being family assets had been corrected.

Of great interest in this case was the level of reapportionment in favour of the husband that was granted based on the Court’s following analysis:

    The trial judge found that it was appropriate to reapportion the home 90/10 in favour of Mr. Poon.  Ms. Wang submits that, in making this order, the trial judge treated the marriage as if it were a short term marriage.  Ms. Wang also submits that the trial judge wrongly emphasized Ms. Wang’s failure to contribute to the home as a significant factor in the reapportionment.

[46]            It is evident from her reasons for judgment that the trial judge was well aware that there is a presumption of an equal division of family assets upon the happening of a triggering event and that the onus is on the person claiming a reapportionment to establish that an equal division of family assets would be unfair.  In  my view, the trial judge’s conclusion that Ms. Wang was entitled to only a 10% interest in the home involved a weighing of the factors under s. 65(1) in which she gave relatively little weight to the length of the marriage (s. 65(1)(a)), and substantially greater weight to the fact that the home was acquired prior to the marriage (s. 65(1)(c)) and that Mr. Poon alone had been responsible for the acquisition, preservation, maintenance, and improvement of the home (s. 65(1)(f)).  She also considered the need for each spouse to become or remain economically independent and self-sufficient under s. 65(1)(e).  She noted that Mr. Poon was then 76 years of age and not in a position to earn income in the future, and that Ms. Wang was considerably younger (47) with the potential to better herself through employment, with the assistance of a share of the home and spousal support. 

[47]            I have reviewed the authorities with respect to reapportionment.  While each case must turn on its own facts, it is fair to say that a 90/10 reapportionment is usually reserved for short marriages where the spouse in whose favour reapportionment is made either brought the asset into the marriage and/or was primarily responsible for its growth, preservation, maintenance and/or improvement during the marriage.  The authorities referred to by the trial judge fall into that category.  Depending on the weight the trial judge gives to each of the factors under s. 65(1), however, the authorities reveal a broad range within which trial judges may exercise their discretion. 

[48]            With some hesitation, I conclude that it would not be appropriate to interfere with the exercise of the trial judge’s discretion in awarding Ms. Wang only 10% of the home.   While I would have given greater weight to the length of the marriage and Ms. Wang’s relative need to become and remain economically self-sufficient, I conclude that, absent an error in law or in principle, which I am unable to find here, the standard of review does not justify this Court in interfering with the result.

On the issue of spousal support our Court of Appeal noted the trial judge made an award below the Spousal Support Advisory Guidelines and increase the wife’s support for two more years as follows:

 In the result, I conclude that the trial judge erred in making an award of spousal support which did not reflect her stated intention of providing more generous support for Ms. Wang than was reflected in the SSAG, with the result that the award did not properly take into account Ms. Wang’s precarious financial circumstances arising from the breakdown of the marriage.  Taking into account the relevant factors under the Divorce Act, S.C. 1985, c. 3 (2^nd Supp.) and the FRA, the fact that Ms. Wang’s capital position will improve as a result of this decision, and the probability that she will be able to increase her hours of work in the future, I would make an order extending spousal support for a further two years at the rate of $600 per month up to and including September 1, 2012.  The effect of this award is to increase the spousal support award by $14,400.  I note that these payments are tax deductible to Mr. Poon and taxable in the hands of Ms. Wang.