When Can a BC Court Divide Property Unequally as Significantly Unfair?

You may feel that splitting everything fifty-fifty after separation would not be fair to you. Perhaps the relationship was short, or your spouse ran up debts, or property disappeared. British Columbia law starts from equal sharing, but it does leave room for exceptions.

This article explains the starting rule, the test for "significantly unfair" in section 95 of the Family Law Act, and the factors a court weighs. It is general information, not advice on your situation.

This article covers the law of British Columbia.

The starting point is equal sharing

Unless an agreement or order says otherwise, spouses are equally entitled to family property and equally responsible for family debt. On separation each spouse holds an undivided half interest in family property.

Family property is generally everything the spouses own separately or together on the date of separation, and it does not matter whose name it is in. Excluded property, such as an inheritance or property owned before the relationship, is treated differently, although its increase in value is generally shared.

Ownership is fixed as at separation, but value is generally measured at the date of the dividing agreement or the court hearing, not the separation date, unless an agreement or order says otherwise. Spouses are not treated as separated if they reconcile within one year and live together for at least 90 days in total, and spouses can be separated while still living in the same residence.

The rules on property division apply to spouses, meaning people who are married or who have lived in a marriage-like relationship for at least 2 years. Having a child together does not make a couple spouses for property and pension division without that 2-year period.

What the significant unfairness test says

Under section 95(1), the court may order an unequal division of family property or family debt if an equal division would be significantly unfair. The word "significantly" matters. The government says courts will not order an unequal division in most cases.

A court only divides property on a spouse's application, and it does so after property and debt have been identified and valued. If you have a written, witnessed agreement, a court cannot override it unless it is first set aside under section 93.

To give effect to a division, the court can declare ownership, order a transfer, order compensation, order a sale, order security, or order debt indemnities. This is how a buyout or a sale of the family home is ordered.

The factors a court weighs

Section 95(2) lists what the court may consider:

• The length of the relationship.
• The terms of any agreement, other than one dealt with under section 93(1).
• A spouse's contribution to the other spouse's career or career potential.
• Whether debt was incurred in the normal course of the relationship.
• If debt exceeds the value of property, each spouse's ability to pay a share.
• A change in value after separation, beyond market trends, that a spouse caused.
• A spouse substantially reducing property value, or disposing of, transferring or converting property other than in good faith.
• Tax liability from a transfer, sale or order.
• Any other factor that causes significant unfairness.

Debt and conduct with property

Family debt is generally obligations incurred from the start of the relationship to separation, and after separation only if incurred to maintain family property. Where debt is more than the property, the court can weigh each spouse's ability to pay a share and whether the debt arose in the normal course of the relationship.

A debt in one spouse's name can still be family debt and shared. However, a division between spouses does not bind a lender, and a debt in one spouse's name remains owed to the creditor by that spouse.

Honest disclosure matters. A court can draw an adverse inference if someone gives incomplete, false or misleading information. It can also divide unequally where a spouse substantially reduced property value or dealt with property other than in good faith.

What to do next

• Gather records of what each of you owned and owed at separation.
• Collect evidence for any factor you rely on, such as statements showing transfers.
• Check for any written agreement and when it was signed.
• Note the time limit: a claim to divide property generally must start within 2 years of the divorce judgment for married spouses, or of separation for marriage-like relationships.
• Speak with a lawyer before assuming an unequal split is realistic.

The time limit is suspended while the spouses are in family dispute resolution with a professional or a prescribed process.

If you are worried that property may be disposed of while your claim is underway, the court must, on a spouse's application, make an order restraining the other spouse from disposing of the disputed property unless that spouse shows the claim will not be defeated or adversely affected. In Supreme Court, a spouse claiming property division files a financial statement in Form F8. How all of this applies depends on your situation, so it is worth confirming with a lawyer.

Frequently asked questions