Difference between revisions of "Dividing Property and Debt in Family Law Matters"

Part 5 of the ''Family Law Act'' talks about the division of family property and family debt between spouses. It says what counts as shared 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...

Under the ''Family Law Act'', a person with standing as a "spouse" under s. 3 may apply, within the two-year time limit in s. 198, for a division of property under s. 94(1). Where another court may also make an order for the division of property, the court here must first determine whether it should go ahead under s. 106 and, if so, it must next determine what law it should apply under s. 108. However, where no other court may make an order respecting property, the court here may make orders dividing property and debt under Part 5 of the act without any more complications.

#the court proceeding includes a claim under the ''Divorce Act'' (the reason for this factor is that the ''Divorce Act'' requires a spouse to have lived in the province where he or she makes a claim under the act for at least one year before the court proceeding is started).

Assuming, then, that the court here has decided that it has the authority to make orders for the division of property and debt because one of the s. 106(2) factors is met, and that it hasn't decided to refuse to make orders anyway under s. 106(4), the next thing to figure out is the law that the court should use in deciding how the property and debt should be divided under ss. 107 and 108. That law could be the law of British Columbia — Part 5 of the ''Family Law Act'' — or it could be the law of another place.

#under s. 108(4), if the spouses first together lived in a place that divides property like the ''Family Law Act'' divides property, the law the court must use is the law of the place where the spouses first lived together,

In the right circumstances, the "applicable internal law" could be the ''Family Law Act''!

Section 97 is the key to Part 5 of the ''Family Law Act'' and gives the court its general power to make orders about the division of property and debt. Under this section, the court may:

Under s. 81(a) of the ''Family Law Act'', "spouses are both entitled to family property and responsible for family debt, regardless of their respective use or contribution"; under s. 81(b) each spouse's share of the family property is presumed to be an "undivided half interest" and each spouse is "equally responsible for family debt". Section 97 gives the court the ability to make whatever orders are necessary to divide family property and family debt between spouses.

Under s. 95(1) of the ''Family Law Act'', the court may divide family property or family debt unequally, but only if an equal division would be "significantly unfair". It's hard to say what "significantly unfair" means, because the ''Divorce Act'' doesn't use this phrase and the old ''Family Relations Act'' only talked about things that are just ''unfair'' and things that are ''grossly unfair''. It seems reasonable to assume that under the new ''Family Law Act'', something that is "significantly unfair" is ''more unfair'' than something which is just "unfair" yet is ''less unfair'' than something that is "grossly unfair".

Under s. 96 of the ''Family Law Act'', the court may not make an order dividing excluded property between spouses except in two situations, if there's property outside the province that can't be divided under s. 109, discussed below, or if it would be "significantly unfair" not to divide the excluded property in light of the length of the spouses' relationship of one spouse's contributions to excluded property owned by the other spouse:

Division 6 of Part 5 of the ''Family Law Act'' has a complicated test that the court must apply to determine whether it can and should make orders dividing property and debt between spouses when another court could also make orders about the same people and the same property; this was discussed earlier in this page under the heading "Determining Jurisdiction". If the court decides that it can make orders, it can, in certain circumstances, also make orders about property located outside the province under s 109(2):

The ways that a separation agreement can deal with the division of family property and family debt are virtually unlimited. Under the ''Family Law Act'', each spouse is presumed to keep the property he or she brought into the relationship and share in the property bought during the relationship. Although spouses are presumed to be each half responsible for any debt incurred during the relationship, you can make whatever other arrangements you want, as long as both spouses to those arrangements and they're reasonably fair. In fact, s. 92 says this:

When spouses have an agreement about the division of property and debt, s. 94(2) of the ''Family Law Act'' says that the court cannot make an order about the division of family property, excluded property or family debt, unless the parts of the agreement that deal with property and debt are set aside by a court order. This gives agreements on the division of property and debt a lot more resilience to later court challenges than was provided to agreements under the old ''[[Family Relations Act]]''.

Under s. 93 of the ''Family Law Act'', an agreement about the division of property and debt must be:

Because of the importance the court will usually give to an agreement, it can sometimes be necessary to attack the agreement itself under the law that applies to contacts. An agreement might be found to be invalid for one or more of the following reasons:

The ''Family Law Act'' provides some important rules about agreements dealing with property and debt. First, under s. 94(2), the court cannot make an order dividing property and debt if there is an agreement about property and debt until the agreement is set aside. Second, under s. 93, two tests are set out to help the court decide when an agreement on property and debt should be set.