Nov 11, 2019

Appeal Court Adjusts Division of Property to Account for Gifts Between Spouses

Venables v. Venables, 2019 BCCA 281 (CanLII)

In Venables v. Venables 2019 BCCA 281 the appeal court considered a case where a husband transferred a home he acquired before the commencement of his marriage into joint tenancy with his wife, and also placed inherited funds in joint names. At trial the court determined that the home and inherited funds were gifted to the wife and therefore, could not be characterized as excluded property. However, the court utilized section 95 of the Family Law Act and declared an equal division of the property to be “significantly unfair” resulting in a division of property that closely mirrored a division that shared the growth of the assets during the marriage, akin to a division recognizing excluded property.

The facts disclosed an eight-year relationship where the husband had a home valued at $203,000 and cash of $93,000 when the parties began to cohabit. He had no debts. His wife had personal chattels and a car with a loan attached. During the marriage he received an inheritance of $164,000 and placed $90,000 in joint names. At the time of trial, the husband was 56 years old and the wife, age 60. The family home had increased in value by $27,000 during the marriage.

In the final tally, the trial held that the husband’s interest in RRSP’s, savings, and investments, totaling $93,000, was excluded property and that the total value of family property was $473,000.

The judge’s section 95 analysis included the following finding:

“If the family property were divided equally, as a result of their eight years together, Mr. Venables would largely be in the same financial position as when the parties began living together while Ms. Venables would be in a substantially better position.”

The Court noted that if an equal division was ordered Mr. Venables would have increased his property over the eight-year marriage by only $33,000, despite his contributions and inheritance.

The trial judge awarded Ms. Venables $134,989 of the family property while Mr. Venables was awarded the remaining value of $337,702, plus his excluded property. Ms. Venables also received lump sum spousal support of $25,000 and the parties shared pension credits earned by each of them during the marriage equally.

Ms. Venables appealed the judge’s order regarding the unequal division of property citing procedural unfairness as section 95 was not plead nor argued at trial. The appeal panel did not accede to this argument noting that pleadings in family law cases consists of a template with check boxes and schedules. The Court also observed that while the pleadings were “confusing” it should have been apparent to the parties at trial that while they both checked the same boxes; their submissions did not parallel each other. The Court also found that each party plead “such further and other relief as the Court may deem meet and just” and “such further and other relief as may be available pursuant to the Family Law Act”, which was sufficient to raise a section 95 analysis.

The wife also argued that her theory that “once a gift, always a gift” prevented the trial judge from reapportioning the family property in favour of the husband. After reviewing the legislative history of the concepts of excluded property and section 95, the appeal panel considered whether the fact that the Family Law Act did not expressly state what would happen if excluded property became family property because one spouse gifted the property to the other, barred a reapportionment based on significant unfairness.

The appeal court rejected this argument finding that the silence of the Family Law Acton this issue did not mean that the legislators intended that a gift of excluded property to a spouse precluded the application of section 95, holding that no language in the Family Law Act compelled that result.

The trial judge’s order was upheld, and the appeal dismissed