Misconduct and Lack of Contribution are not Grounds for Reapportionment of Property

In He v. Guo 2022 BCCA 355 the court considered whether a false immigration complaint levelled by Mr. He against his wife of 3 ½ years was a proper consideration for a 100% reapportionment of property owned by Ms. Guo in her favour. 

The facts revealed that after an online connection, the parties began living together in November 2014 and separated in early 2018. Ms. Guo was in Canada on a visitor’s visa with her 10-year-old son who had a student visa. She purchased a home in August 2014 where the parties resided. 

During the marriage Mr. He agreed to support her and her son’s applications for permanent residency status by giving a financial undertaking. Permanent residency was granted in December 2017. But apparently angered by their separation he filed a document with Immigration Canada titled “Immigration Marriage Fraud Report” in April of 2018 asserting that the marriage was a fraud. He also alleged that Ms. Guo had “beat him, threatened a witness and was dating some men for money”. 

The trial judge rejected Mr. He’s allegations which should have been the end of it, but the judge invoked section 95 of the Family Law Act which provides for an unequal division of property based on “significant unfairness” and found that it would be significantly unfair to condone Mr. He’s “malicious act of filing a baseless Immigration Marriage Fraud Report”. This together with the trial judge’s findings that Mr. He contributed very little to the family property led him to reapportion the property entirely to Ms. Guo. 

The factors for reapportionment in section 95 are as follows:

  • The duration of the relationship;
  • The terms of any agreement;
  • A spouse’s contribution to the other spouse’s career or career potential;
  • Whether a spouse caused a significant increase or decrease in the value of family property;
  • The fact that a spouse substantially reduced the value of family property or disposed of or converted family property causing the other spouse’s interest to be defeated or adversely affected. 
  • Any other factor that may lead to significant unfairness; 
  • The extent to which the financial means and earning capacity of a spouse has been effected by the responsibilities and other circumstances of the spousal relationship in relation to the objectives of spousal support. 

Earlier appeal cases confirm that the “threshold for departing from equal division of property is high”. VJF v. SKW 2016 BCCA 186 and Khan v. Gilbert 2019 BCCA 80. 

The issue of using section 95 to compensate for misconduct was considered in Singh v. Singh 2020 BCCA 21 where a bad faith bankruptcy was filed to avoid paying the claimant’s costs in respect of a property. This behavior was  not characterized as “family violence”, unlike the finding in He v. Guo. However, in Singh Madam Justice Garson said:

…I must consider whether the factors the judge relied on are properly the subject of a s. 95 (2). In my view, they are. The economic characteristics of a spousal relationship would clearly…permit consideration of the costs of bankruptcy and a party’s motivation for entering bankruptcy…and the consequent impact on the value of the asset…”

The court in He v. Guo held there was nothing in section 95 that indicates that family violence should be awarded special consideration absent impact on the “economic characteristics of a spousal relationship.” Ms. Guo testified that she was emotionally shaken by her husband’s conduct but led no evidence that his report to Immigration caused any negative financial consequences or otherwise hindered her self-sufficiency. The court stated:

“In these circumstances, reliance on the malicious filing of a baseless report to reapportion property amounts to an award akin to damages for misconduct or, at the further extreme, punitive damages for misconduct. Neither, in my view, is contemplated by the applicable provisions, and is contrary to the determined attempt to eradicate general enquiries on the relative conduct of parties as a feature of family litigation, absent conduct relevant to the particular relief claimed in the proceeding.” 

With respect to Mr. He’s limited financial contribution to property as a reason to reapportion the property entirely to Ms. Guo, the court held that to find that a spouse of modest income loses the presumptive equal sharing by reason only of having made a small financial contribution is contrary to the Family Law Act and an error in law. 

The appeal court set aside the trial decision and granted Mr. He a 20% interest in the family property. 

**This article was first published by The Lawyer’s Daily, a publication of LexisNexis Canada.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s