The division of family property after a separation or divorce is technically complex. Under British Columbia’s Family Law Act (FLA), spouses are entitled to an equal division of all family property. However, the nature, history and value of a couple’s assets may lead to complications and disputes.
In an interesting recent decision of the Supreme Court of British Columbia, a wife claimed she was entitled to a half share of various fishing assets as part of her divorce.
What is the division of family property?
Under Part 5 of the Family Law Act, the general rule is that spouses are both entitled to family property and responsible for family debt, regardless of their respective contributions. On separation, each spouse has a right to an undivided half interest in all family property and is equally responsible for family debt.
“Family property” includes any asset owned by either spouse on the date of separation, apart from those that are expressly excluded by the Family Law Act, such as property acquired by a spouse before the relationship between spouses began, inheritances to one spouse, or gifts to a spouse from a third party.
Are there any exceptions to equal entitlement?
There are various exceptions set out in the Family Law Act. For example, spouses may make agreements respecting the division of property and debt. These could, for example, divide family property unequally or exclude items from family property that would otherwise be included.
The Supreme Court may also order an unequal division of family property or debt if it would be significantly unfair to have an equal division.
Wife returns to Vietnam after multiple drug trafficking convictions in Canada
In Mong v. Giang, the parties married in Vietnam in 1976. In 1984, the husband fled to Canada. His wife and children joined him five years later.
The couple acquired a salmon-fishing boat in 1996. They had very different stories as to how the funds were raised for the purchase. Around this time, the wife became involved in illegal drug trafficking, leading to a series of criminal convictions and increasingly lengthy prison sentences. The husband claimed the couple separated in 1997, while the wife placed the date of separation in 2003.
Possibly facing deportation, the wife agreed to return to Vietnam voluntarily. She claimed that she returned with only $300, initially residing in her family’s village and then later going into business with a friend investing in real estate.
Wife requests share of salmon-fishing boat for return to Vietnam
The husband and one of the daughters testified that around the time she returned to Vietnam, she asked that the boat be sold so that she could take her share to Vietnam. He says that he reached an agreement to purchase her share for $70,000, which was based on a valuation of $320,000 and accounted for the deduction of various expenses. He said that this money was used to purchase an investment property in Vietnam.
Wife later seeks divorce and half share of fishing assets upon their sale
In 2005, the boat was rebuilt and expanded to allow for an increased catch of shrimp and crab. The husband and daughter said that the daughter provided the funding for these works, in exchange for 50% ownership. She later purchased her father’s remaining half interest. In 2015, the daughter entered into an agreement to sell the boat for $1.1 million.
In 2015, the wife learned of the sale and commenced an action, seeking half of the funds received for the crab-fishing boat and associated licence, along with a half share of the profits earned on crab sales between 2005 and 2014 and the lease payments the purchaser made for the use of the boat prior to completion.
Court considers whether oral agreement for property division can be binding
The Supreme Court of British Columbia explained that the Family Law Act does not require an agreement regarding the division of property to be in writing. However, great caution must be exercised in evaluating whether or not the parties intended to be bound by an agreement when the agreement was never reduced to writing.
The test is whether a reasonable person would find that the parties had reached an agreement. For an agreement to be binding, the parties must reach an agreement on all of the essential terms.
Court decides wife sold her interest to the husband; daughter receives proceeds of sale
The Court found both the husband and wife to be generally unreliable witnesses, which made it difficult to determine what had occurred. Justice Milman concluded that the husband and daughter’s account was “probably closer to the truth”. For example, the wife did not provide a plausible explanation as to how she was able to finance the acquisition of the investment property in Vietnam.
Justice Milman decided that the wife sold the fishing assets to her husband for $70,000. As a result, her application for equal division was dismissed because she had agreed to sell her spousal interest. Her daughter, who later bought the property from her father, was therefore entitled to the proceeds of the sale.
Contact Meridian Law Group in Vancouver for Legal Advice on Family Property Division
Meridian Law Group understands the complexities of property division following a separation or divorce and advocates for clients’ rights and interests in all legal forums, including mediation, arbitration, and trial. The firm’s skilled family and divorce lawyers develop creative, practical legal solutions to resolve property disputes and ease clients’ concerns.
Located in Nelson Square in downtown Vancouver, the firm proudly serves clients in Vancouver and throughout British Columbia, including West Vancouver, North Vancouver, Coquitlam, Penticton, Kelowna, Richmond, New Westminster, Burnaby, Surrey, Langley, and White Rock. To arrange a confidential consultation for your family law matter, please call 604-687-2277 or reach out online.