The existence of property located outside of British Columbia presents a number of unique problems for issues of property division that are not engaged when all of the parties’ assets are located in British Columbia. These problems are present, though different, both with property located in other Canadian provinces and with property located in other countries.
Property located in other Jurisdictions
The first problem revolves around what the BC courts can actually order. The BC courts are limited in their jurisdiction and cannot make orders about property located in other jurisdictions. They cannot make orders (called “in rem” orders) regarding the disposal or transfer of “real property” (which for practical purposes means real estate) located in other jurisdictions. However, they do have the authority to make orders (called “in personam” orders) against a person directing them to transfer property. The practical implication is that while BC courts can’t actually order the transferring of ownership of property located somewhere else, they can order the owner of that property to transfer it. This is usually sufficient, but in the event that the person ordered to transfer the property is not living in BC, it can be difficult or even impossible to enforce the judgment. When there is a foreign property and any concern that one of the spouses may live elsewhere, it is prudent for the party living in BC to try to obtain their full share of property division from assets located in BC.
When it is not possible to obtain a full settlement of a claim out of assets located in BC, it is important to carefully examine the enforceability of any orders made in BC in the jurisdiction where the assets are located. This is generally not an issue as between Canadian provinces. BC has explicit sections in the Family Law Act for recognizing foreign orders (which includes other provinces), as well as the Court Jurisdiction and Proceedings Transfer Act. Canadian provinces generally have similar legislation to ensure family orders made in other provinces can be enforced. However, when it comes to other jurisdictions, how they decide if they will recognize a BC law is a function of their own laws. If there is a question of foreign enforcement, it is a good idea to have your local lawyer work with a lawyer in the jurisdiction where you are trying to get the order enforced to ensure all local laws are met.
Discovery of Foreign Property
Another problem regarding foreign property is that it can be more difficult to ascertain what assets exist and what they are worth. BC courts have less tools available to track down hidden assets that are located in other jurisdictions than hidden local assets. Particularly where a spouse is involved in having offshore accounts for such proposes as reducing their taxes, the other spouse will be doing themselves a big favour by staying alert and aware as much as possible as to their spouse’s accounts.
Foreign Property and Choice of Forum/Law
Another issue that can arise is questions of choice of forum and choice of law. The choice of forum is the question of whether or not BC is the correct place to be making property division decisions at all. Even when BC has jurisdiction a spouse can argue that another location should decide property division. The factors the court looks at are lengthy, but they include the location of assets, as well as the enforceability of BC orders in the other jurisdiction as well as the enforceability of the other jurisdictions orders in BC. Because property division can be vastly different between different countries, the choice of forum can be a significant factor to the end result of property division in some cases.
The second question is one of choice of law. There are some circumstances, typically involving marriage agreements, where the BC courts will apply the law of a different jurisdiction. In these cases, lawyers from the other jurisdiction have to testify as to the law in that jurisdiction, and the BC courts then apply the law of that jurisdiction to some or all of the proceeding. While these types of cases are rare, they can occur and remain an issue for which experienced counsel must prepare.
While these are not an exhaustive list of the issues arising around the foreign property, they are some of the most common considerations that Family Counsel need to be prepared to address.
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