Property and Debt in Family Law Matters: Difference between revisions
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Property and Debt in Family Law Matters (view source)
Revision as of 23:19, 20 March 2013
, 20 March 2013→non-spouses
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#responsibility for the remaining $6,000 of her loan. | #responsibility for the remaining $6,000 of her loan. | ||
== | ==Property Division and People Who Aren't Spouses== | ||
People are not spouses within the ''Family Law Act'' definition at s. 4 cannot make a claim for the division of property or debt through that act. When people who aren't spouses own an asset jointly, like a house or a car, they are presumed to each be entitled to half of the value of that property. Where a person claim a share of property owned only by the other person, he or she will have to prove an entitlement to that asset through the principles of the common law. | |||
===Jointly-Owned Assets=== | |||
Where a couple are both on the title of an asset, whether the family home, a car or a bank account, they are each assumed to have an equal interest in the asset. When one party refuses to give the other his or her share of that asset, it is open to that person to start a court proceeding for either: | |||
Where a couple are both on the title of an asset, whether the family home, a car or a bank account, they are each assumed to have an equal interest in the asset. When one party refuses to give the other his or her share of that asset, it is open to that person to | |||
the sale of the asset and the division of the proceeds of the sale; or, | #an order for the sale of the asset and the division of the proceeds of the sale; or, | ||
#an order for payment in compensation for his or her interest in the asset. | |||
Where real property is jointly owned, it is possible to make a claim under the provincial Partition of Property Act. Section 2 of this act says that: | Where real property is jointly owned, it is possible to make a claim under the provincial ''Partition of Property Act''. Section 2 of this act says that: | ||
(1) All joint tenants, tenants in common, coparceners, mortgagees or other creditors who have liens on, and all parties interested in any land may be compelled to partition or sell the land, or a part of it as provided in this Act. | <blockquote><tt>(1) All joint tenants, tenants in common, coparceners, mortgagees or other creditors who have liens on, and all parties interested in any land may be compelled to partition or sell the land, or a part of it as provided in this Act.</tt></blockquote> | ||
(2) Subsection (1) applies whether the estate is legal or equitable or equitable only. | <blockquote><tt>(2) Subsection (1) applies whether the estate is legal or equitable or equitable only. | ||
This act allows a co-owner, including someone with only an equitable interest in the property, potentially including an interest under the law of trusts as discussed below, to apply for an order that the property be sold and the proceeds of the sale divided. | This act allows a co-owner, including someone with only an equitable interest in the property, potentially including an interest under the law of trusts as discussed below, to apply for an order that the property be sold and the proceeds of the sale divided.</tt></blockquote> | ||
===Individually-Owned Assets=== | |||
Where a person believes that he or she should have an interest in property owned only by the other person, a claim against that property can only be made under the common law, specifically the law of equity and the law of trusts. | |||
The essential point of | The essential point of this sort of claim is that the non-owning party has, or should be considered to have, a stake in property owned by the other party. The non-owning party's interest in that property is said to be held ''in trust'' for the non-owning party by the person who owns the property on paper. The non-owning party is the beneficiary of that trust and should be entitled to receive compensation for his or her interest in the property under the trust. | ||
There are three kinds of trust claim that may be made: | There are three kinds of trust claim that may be made: | ||
a constructive trust; | #a constructive trust; | ||
an express trust; and, | #an express trust; and, | ||
a resulting trust | #a resulting trust. | ||
Needless to say, | A ''resulting trust'' happens when the behaviour of the parties will let the court infer the existence of a trust relationship; an ''express trust'' is a trust relationship that people intentionally enter into; and, a ''constructive trust'' is imposed in order to compensate someone for their interest in property when the interest can't be paid out immediately. Resulting and constructive trusts are the most common kind of trusts involved in family law disputes about property. | ||
Needless to say, this area of the law can be complex. If you find yourself in a situation where your only claim to an asset or a share of an asset is through trust law, it is recommended that you hire a lawyer to handle your claim. | |||
====Resulting Trusts==== | |||
A resulting trust can be created in the following circumstances: | A resulting trust can be created in the following circumstances: | ||
one party loans or gives money to the other party to allow | #one party loans or gives money to the other party to allow him or her to buy an asset, and the person buying the asset owns the asset in his or her name alone; or, | ||
one party transfers property to another without payment. | #one party transfers property to another without payment. | ||
In each case, the person who transfers the money or asset to the other party is said to retain an interest | |||
In each case, the person who transfers the money or asset to the other party is said to retain an interest, called a ''beneficial interest'', in the property even though the property is held by the other party in his or her name alone. In court proceeding based on a resulting trust, the person making the claim, the ''Claimant'', is asking for compensation for his or her beneficial interest in the property owned by the ''Respondent'', the person against whom the claim is brought. | |||
====Unjust Enrichment and Constructive Trusts=== | |||
A constructive trust is called ''constructive'' because the Claimant is asking the court to create or impose a trust on the Respondent where there wasn't one before. According to the Supreme Court of Canada's decision in the 1980 case of ''Pettkus v. Becker'', the most important case on constructive trusts, the court will impose a trust on a Respondent where the Claimant has been able to show that the Respondent has been ''unjustly enriched'' as a result of the Claimant's efforts. Unjust enrichment is shown by proving that: | |||
#the Respondent was enriched as a result of the Claimant's contributions; | |||
#the Claimant was correspondingly deprived; and, | |||
#there is no legal reason for the Respondent enrichment. | |||
''Enrichment'' means to have received a benefit or advantage, such as money or the benefit of unpaid labour or other services. ''Deprivation'' means to have lost the value which might have been otherwise received for the benefit or advantage, such as the loss of the money or the wages which might have been paid for labour or services. The deprivation must ''correspond'' to the enrichment, in the sense that the Claimant was deprived of exactly the thing from which the Respondent benefited. If the Claimant can show these things, he or she will have established that the Respondent was ''unjustly enrichment'' his or her contributions, and the court may impose a constructive trust to fix the situation. | |||
(There is one other case from the Supreme Court of Canada which is critical in understanding constructive trusts, a 1993 case called ''Peter v. Beblow''. To get a proper understanding of the law relating to constructive trusts, you should read both ''Pettkus v. Becker'' and ''Peter v. Beblow''.) | |||
Let's use another example to explain things. | |||
<blockquote>Frank moves into a home owned by Lois. Frank's role in the relationship is that of a homemaker while Lois works outside the home and brings home the bacon. Frank also, out of the kindness of his heart, helps Lois with her web design company doing herbooks.</blockquote> | |||
<blockquote>Lois doesn't pay Frank for his labour; perhaps it's understood that Frank is helping out with a common cause, since Lois' company is what provides the family with its income, or perhaps Frank's help is just one of the things he does because he loves Lois. Either way, payment isn't offered and it's not asked for, as is often the case when people are in a relationship.</blockquote> | |||
<blockquote>Frank's labour in the home, cooking, cleaning and tidying, allows Lois to devote her time to the web design company, and saves her from having to hire a housekeeper and a cook, not to mention having to hire an office manager for the company.</blockquote> | |||
<blockquote>Frank, on the other hand, is losing something. Frank could have sold his services as a housekeeper, and launderer and a cook. Frank could certainly have worked as an office manager for some other company. Furthermore, Frank has made a positive contribution to Lois' company and helped it thrive and prosper. | |||
<blockquote>The months pass. Lois' company has grown in value, and the relationship comes to a tragic end when Frank discovers that Lois' trips to visit the internet service provider in Alberta were for both business and pleasure.</blockquote> | |||
In this example, Lois was ''unjustly enriched'' by Frank's labour in the home and his contribution to the web design company, as she didn't have to hire an office administrator or a housekeeper. Frank, on the other hand, lost out on month's worth of wages as an office administrator, and month's worth of wages as a housekeeper. Lois was enriched by exactly the thing Frank was deprived of: his labour, and the financial value and benefit of his labour. | |||
In this example, | |||
Once an unjust enrichment has been found, the court must determine what the appropriate remedy would be to compensate the applicant for his or her interest in the property. The value of the trust will often be determined by the court based on the value of the contribution made by the applicant to the property or the purchase of the property. | Once an unjust enrichment has been found, the court must determine what the appropriate remedy would be to compensate the applicant for his or her interest in the property. The value of the trust will often be determined by the court based on the value of the contribution made by the applicant to the property or the purchase of the property. | ||
In the example above, a concrete value can be attached to | In the example above, a concrete value can be attached to Franks's contributions to the company and to his labour in the home: what would it have cost to hire a housekeeper and a bookkeeper during that period? Or, how much did Lois' company grow in value as a result of Franks's efforts? This is the beginning of fixing a dollar value on Frank's interest in the company and in Lois' house. | ||
Again, trust claims are complex and the case law supporting and opposing such claims is massive. If you are unmarried and wish to claim against your partner's assets, it is highly recommended that you hire a lawyer to advance your claim for you. | Again, trust claims are complex and the case law supporting and opposing such claims is massive. If you are unmarried and wish to claim against your partner's assets, it is highly recommended that you hire a lawyer to advance your claim for you. | ||
==tax shit== | ==tax shit== |