Unequal Division of Family Property in BC (s.95)

Author: SiLaw Group Family Lawyers
Published: Dec 27, 2022
Updated: Feb 28, 2023
Read time: 2 min

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"But I want more than 50/50 of my assets!" These are some of the words that I hear from my clients. Before walking into the doors of my office and sitting across from me they start to share what they have been told by Google, their friends, and a quick read of JP Boyd's Clicklaw Wikibooks (a great resource!) on basic law on everything Family Law in BC.

The starting point is section 81 of the Family Law Act. Subject to an agreement or order that provides otherwise, and except as set out in Part 5 and Part 6, spouses are both entitled to family property and responsible for family debt, "regardless of their respective use or contribution". 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. That last part surprises people. Under the old Family Relations Act, contribution mattered a great deal. The Family Law Act deliberately moved away from that, in favour of a simpler classification exercise.

So the first question is never "who contributed more?" It is "what is family property?" Broadly, family property is what either spouse owns on the date of separation, whoever's name is on it. Excluded property under section 85 stays with that spouse, and the spouse claiming the exclusion carries the burden of proving it applies (s. 85 (2)). The most common examples are property a spouse acquired before the relationship began (s. 85 (1)(a)), inheritances to a spouse (s. 85 (1)(b)), and gifts to a spouse from a third party (s. 85 (1)(b.1)). Section 85 (3) also now provides that the exclusion applies despite any transfer of legal or beneficial ownership of the property from a spouse to the other spouse. But the increase in value of excluded property during the relationship is family property and is shared. A house one spouse owned before the relationship is a common example: the value on the date the relationship began is typically excluded, and the growth since is typically divided. This post was first written in 2022; for what changed afterwards, see our note on the 2023 amendments to BC's Family Law Act.

Only once that classification is done does the possibility of an unequal division arise. That is section 95, a separate provision from the equal-entitlement rule in section 81, and the test is a demanding one: the Supreme Court may order an unequal division of family property or family debt only where an equal division would be significantly unfair. Not merely unfair, but significantly unfair. Courts have been consistent that this is a high bar, and that dissatisfaction with the result is not enough.

In deciding that, section 95(2) sets out the factors the court may consider:

1. The duration of the relationship between the spouses.

2. The terms of any agreement between the spouses, other than an agreement described in section 93(1).

3. A spouse's contribution to the career or career potential of the other spouse.

4. Whether family debt was incurred in the normal course of the relationship between the spouses.

5. If the amount of family debt exceeds the value of family property, the ability of each spouse to pay a share of the family debt.

6. Whether a spouse, after the date of separation, caused a significant decrease or increase in the value of family property or family debt beyond market trends.

7. The fact that a spouse, other than a spouse acting in good faith, substantially reduced the value of family property, or disposed of, transferred or converted property that is or would have been family property, or exchanged property that is or would have been family property into another form, causing the other spouse's interest in the property or family property to be defeated or adversely affected.

8. A tax liability that may be incurred by a spouse as a result of a transfer or sale of property.

9. Any other factor, other than the consideration referred to in section 95(3), that may lead to significant unfairness.

Note what is largely absent from that list: general misconduct during the relationship. BC family law is not fault-based, and an argument built on how badly the other spouse behaved usually raises costs without moving the outcome. The arguments that succeed tend to be concrete and financial: a spouse who dissipated assets after separation, a debt that was never for the family's benefit, a tax consequence falling on one side only.

It is important to note that the division of family property is not always a straightforward process, and can be a source of conflict during separation or divorce. It is advisable to seek the advice of a legal professional to ensure that your interests are protected and that the division of assets is fair and equitable.

Call your local family lawyers in Surrey, British Columbia at (778) 381-9977 or book online on our website at Silaw Group Family Lawyers and Mediators for more information and to get a free consultation about your rights.