Dividing Property and Debt in Family Law Matters

If spouses are able to agree on how their property and debts will be divided, they can make a separation agreement setting out the terms of their agreement. However, if they can't agree the court can make an order dividing their property and debt for them.

This page talks about how property and debt is divided by the court through court orders and by spouses through separation agreements, when excluded property can be shared between spouses, when family property can be divided unequally and when the court can make orders about property located outside British Columbia.

Introduction

Whether you're able to settle how property and debt are going to be shared by agreement or if you're going to need a court order, it's important to understand how the Family Law Act works. If you're going to start a court proceeding, the court will be required to divide property using the rules set out in the act; if you're going to be able to settle your property issues, the act will be used to measure the fairness of your agreement if either of you ever try to get out of the agreement in the future.

The Plan of the Family Law Act

Part 5 of the Family Law Act talks about the division of family property and family debt between spouses. It says what counts as family property and family debt, and which property is excluded from family property. It talks about when family property and family debt can be divided unequally and the circumstances in which excluded property may be divided between spouses. Part 6 talks about how pensions, which Part 5 says are family property, get divided between spouses. This is how Part 5 works...

• Section 97(2)(a): This section says that the court can make declarations concerning the possession and ownership of property and to make orders as may be necessary to give effect to such declarations.
• Section 106: This section says when the courts of British Columbia have the authority to divide property and debt if there is another court which also make orders dividing property and debt.
• Section 81: This section states the basic principle that when spouses separate, each takes a one-half interest in family property as a tenant in common and each becomes responsible for one-half of the family debt.
• Sections 84 and 85: These sections tell you how to figure out which property is family property and which property is excluded property.
• Section 94(1): This section gives the court the authority of the court to make orders for the division of property and debt.
• Sections 95 and 95: These sections say when the court should divide excluded property between spouses and when it should divide family property unequally.
• Section 109(1): This section allows the court to make orders for the ownership and division of property outside of British Columbia.

Interestingly, there isn't a section that out and out says "the court should make orders dividing family property and family debt equally"; you have to infer this from s. 81, which says that each spouse should have half of the family property and family debt, and from s. 94, which says that the court can make orders dividing family property and family debt.

Putting the Plan into Action

1. Determine whether the client is a “spouse” within the meaning of s. 3 of the Family Law Act.

Do not proceed if the client is not a spouse; examine whether the circumstances support an unjust enrichment claim.

2. Verify that the client’s claim in respect of property or debt is not out of time under s. 198(2).

Do not proceed if the claim is out of time.

3. Determine whether any other court may make an order respecting the division of property, pursuant to s. 106(1).

If no other possible court, proceed under Part 5 Division 4.

4. Determine whether the British Columbia make take jurisdiction under s. 106(2) and that it is not appropriate for another court to take jurisdiction under s. 106(4). Do not proceed if the court cannot take jurisdiction or declines jurisdiction.

5. Determine the applicable law under s. 108(4) and (5).

If the applicable law is the law of British Columbia, proceed under Part 5 Division 4. If the applicable law is other the law of British Columbia proceed under s. 97(2)(a) applying the foreign law.

Further Reading in this Chapter

• bulleted list of other pages in this chapter, linked

Page Resources and Links

Legislation

• bulleted list of linked legislation referred to in page

Family Law Act, Divorce Act, Constutution Act 1867 at least

Links

• bulleted list of linked external websites referred to in page