Feb 27, 2020

How to Lose Your "Exclusion": BCCA

Namdarpour v. Vahman, 2019 BCCA 153 (CanLII)

The Court in Namdarpour v. Vahman 2019 BCCA 153 considered a husband’s appeal from a trial judge’s order that personal injury settlement funds were not excluded property.

The parties had a 15-year marriage with no children. They jointly operated retail kiosks at two BC ferry terminals, property found to be joint family property. During the marriage, both husband and wife received settlements for injuries suffered in a car accident. The wife’s settlement funds were deposited into the parties’ joint account and used to purchase the first kiosk. The husband received $52, 000 for non-pecuniary losses, depositing the funds into a joint account and later withdrew $90,000 to put a down payment on a real property that was joint family property. He argued that the wife’s funds were spent on “consumables” and could not be connected to any property, while his could be traced to property and should be characterized as excluded property.

The trial judge concluded that the presumption of advancement applied, which defeated his claim for excluded property. Alternatively, the court held that the deposit of the funds to the parties’ joint account was a gift from husband to wife.

The Court reviewed the law on the presumption of advancement, starting with the contrary decisions of Remmem v. Remmem 2014 BCSC 1552 and Wells v. Campbell 2015 BCSC 3, which culminated in VJF v. SKW 2016 BCCA 186, where the Court held that the presumption of advancement continued to operate in concert with the provisions of the Family Law Act.

While confirming the continuing relevance of the equitable principle, the Court cautioned against overemphasizing the role of evidentiary presumptions because of the context in which they were birthed, including the “anachronistic notions of economic dependence in contrast to contemporary circumstances.”

The Court also examined earlier Court of Appeal decisions and Pecore v. Pecore 2007 1 SCR 795, summarizing the current state of the law:

a) Evidentiary presumptions only operate where the trial judge is unable to reach a conclusion about the transferor’s actual intention at the time of transfer;

b) A conclusion about intention is only to be determined after consideration of all the circumstances of the case;

c) Those circumstances include both direct evidence and circumstantial evidence;

d) Those circumstances include evidence that arose subsequent to a transfer if relevant to the transferor’s intent at the time of transfer, although such evidence will be reviewed critically.

The Court dismissed the husband’s appeal, but not before noting that the trial judge reversed the order in which he considered the matter, by applying the presumption of advancement before considering evidence of the intention to make a gift. In that respect, the trial judge’s resort to the evidentiary presumption was therefore unnecessary.

Finally, the Court held that merely depositing funds into a joint account in any given case is not alone persuasive evidence of donative intent but coupled with a pattern of activity in the joint account by both parties, such a conclusion may be appropriate.