Several of our recent posts have involved the new case law that has been coming out under the Family Law Act. The Family Law Act came into force in March 2013 and has significantly altered how property division functions in British Columbia. In particular, the new Act allows for some property to be treated as “excluded property” and not subject to division. We have been following cases that outline in greater detail what this means in certain circumstances.
In the case of Remmem v. Remmem, 2014 BCSC 1552 Mr. Justice Butler decided that if a spouse takes their excluded property and puts it in the joint name of their spouse, that action did not cancel the exclusion. We welcomed that decision as a well-reasoned and clear answer to one of the questions we had about how the Family Law Act would operate.
It now appears that we were too quick to cheer that result. In a recent decision, Wells v. Campbell, 2015 BCSC 3, Mr. Justice Masuhara determined that a spouse did lose his exclusion because he had made his excluded property joint with his spouse. This decision is the opposite of what was said in Remmem, so where we thought we had an answer, we now once again have an open question.
Leaving aside which Judge is legally correct (in our opinion, Mr. Justice Butler), from a practical standpoint the approach in Remmem is just more logical than the approach in Wells. Very few people go through life structuring their finances to be in a superior position if they end up getting divorced. There are many reasons to want your spouse to be a joint tenant on your property, and it does not make sense to effectively punish those who make that decision while they are still together with their spouse by reducing the property they get in the event of a divorce. In any event, there is a lesson here about the inherent uncertainty of litigation – even when the only case that exists says X, a Judge may just decide Y anyway.
Author: Joseph K. Broadhurst