Deference to Arbitrator Falls When Best Interests of Child Are Overlooked

GeorgiaLeeLang009In Canada, courts are becoming increasingly deferential to arbitrators as a result of opinions from the Supreme Court of Canada, namely, Teal Cedar Products Ltd. v. British Columbia, 2017 SCC 32, and the rapid growth of arbitration, as our court system continues to flounder under the weight of increased traffic and the related costs.

While family law arbitration has been practiced for many decades in Ontario, it is still in its infancy in British Columbia, after being introduced in 2013.

British Columbia’s leading case is McMillan v. McMillan 2016 BCCA 441 where the court established the following principles:

1. an arbitrator’s findings of fact are not open to review;
2. questions of law are questions about what the correct legal test is;
3. questions of mixed fact and law permit a review on the standard of reasonableness, nor correctness;
4. deference to the family law arbitrator calls for “respectful attention” to the reasons offered, or which could have been offered; and
5. the overriding test of reasonableness is whether the decision falls within a range of possible acceptable outcomes which are defensible in respect of the facts and the law.

These legal maxims were at play in the British Columbia Supreme Court’s consideration of an appeal from a family law arbitration award in Forrest v. Forrest 2019 BCSC 1323.

The uncontested facts presented to the arbitrator included the following:

1. Ms. Forrest, age 42 was self-employed as an interior designer and television personality. Her husband was a self-employed Project Manager with one client, BC Hydro.

2. The parties cohabited for 14 years, living initially in Ontario, then in BC and then back again in Ontario. Each of them had two adult children from previous relationships and together had three more children, a boy age 17 and twin girls, age 10. The parents both participated in parenting their seven children.

3. They separated in November 2013 in Ontario, where Ms. Forrest remained with the three biological children while Mr. Forrest moved to British Columbia, although he visited his children often and maintained a rental property nearby his children for a time. In August 2016 Ms. Forrest and the children moved to BC in order to attempt a reconciliation, which ultimately failed.

4. The parties together worked out a parenting schedule from the date of separation until early 2018 when Ms. Forrest announced that she wished to move back to Ontario for employment purposes.

Prior to the 4-day arbitration the parties agreed their 17-year-old son would remain with Mr. Forrest on Vancouver Island. The arbitrator ruled that the twin girls would also remain with their father. Ms. Forrest appealed the arbitrator’s award on the following grounds:

1) That the arbitrator misapprehended and misapplied the best interests of the child test pursuant to s. 37 of the Family Law Act (“FLA”).

2) That the arbitrator made a status quo preference error contrary to sections 37(2)(e), 40(4), and s. 46(2) of the FLA.

3) That the arbitrator failed to conduct a blended analysis by deciding location separately from parenting arrangements contrary to the requirement of section 45 of the FLA.

4) That the arbitrator misapprehended and misapplied the relocation test pursuant to s. 46 of the FLA.

Mr. Justice McIntosh reviewed the findings of fact made by the arbitrator and identified a number of key findings, including:

a) Ms. Forrest “wishes to move in order to pursue her career. She wishes to be as successful as possible, both in order to achieve financial independence and for personal satisfaction. I take no issue with this. I also accept that her opportunities for success in her line of work are in Toronto and not here in Victoria”.

The Court noted that Duggan v. White 2019 BCCA 200, provided ample support for Ms. Forrest’s relocation to Toronto in order to achieve financial independence and career satisfaction, “without that in any way being held against her in the relocation analysis at the heart of this case.”

2. “I find that the emotional health and well-being of the twins would best be served if they could be with their mother. I accept Dr. Colby’s opinion that they would experience emotional harm and would require therapy in order to adjust to their mother’s absence should she move to Toronto without them.”

Judge McIntosh observed that the arbitrator unequivocally accepted Dr. Colby’s opinion that the twins would be best served by being with their mother and she included a counselling provision for the girls to assist them to adjust to living such a distance from their mother. He also remarked that the evidence revealed that the arbitrator’s December 10, 2018 decision was not released until January 20, 2019, wherein the arbitrator “took the unusual step of offering Ms. Forrest three years’ of additional spousal support and increased parenting time if she remained in the Saanich area”, albeit the arbitrator was aware that Ms. Forrest was moving to Toronto.

3. “The twins want to be with their mother. Dr. Colby finds the twins to have a “chronological and gender affinity with their mother” which he finds to be “age appropriate”. I also find that this affinity is present. However, I find that it [is] not simply due to their age and their gender. I find that Amanda has in the past been the primary parent in their lives, taking care of the details of their life, and as such it feels safer and more comfortable for the girls to be with their mother going forward.”

4. “I find that Amanda has been the primary caretake for the twins…I find that Amanda has been more present for the twins….Amanda has taken the leadership role…I find that the history of care of the twins to be a persuasive factor to move the twins to Toronto”…I find Amanda to be a good parent…I do not accept Dr. Colby’s conclusion that the is trying to undermine Stephen’s relationship with the twins….I also believe Dr. Colby got it wrong when he believed that Stephen was an equally involved parent….I find that Amanda’s parenting plan is a better one than Stephen’s”.

Because of these findings, one is stymied as to how the arbitrator came to her final decision that the twins would not relocate with their mother. Mr. Justice McIntosh determined that the facts found by the arbitrator indicated a “clear breach of section 37 (3)” regarding the best interests of the child.

The critical error of law made by the arbitrator was her conflation of the parties’ 17-year-old son’s evidence that he wanted to remain with his father and did not want to be separated from his twin sisters. The problem was that the arbitrator failed to consider only the best interests of the twins. She negated their best interests and allowed their brother’s desires to trump what was best for them. The arbitrator also relied on the twin’s relationship with extended family in Victoria to favour their Victoria residence.

Judge McIntosh considered whether he ought to remit the case back to the arbitrator or amend the arbitration award to reflect the twins’ move to be with their mother, and chose the latter, pursuant to section 31 (4) of the Arbitration Act.

An interesting case that ultimately resulted in four days of court, after a 4-day arbitration.

Lawdiva aka Georgialee Lang

Appeal Court Upholds Reversal of Custody Due to Alienation

B9316548187Z-1.1_20150314202542_000_GFTA6A1QO.1-0The Alberta Court of Appeal recently upheld a chambers judge’s decision to reverse custody of two children, ages 13 and 10, where their custodial parent refused to comply with parenting orders and related counselling orders. B (RM) v. B (DT) 2020 ABCA 11 (CanLII)

The father and mother separated in 2011 and enjoyed shared parenting for six years. In November 2017 the father brought an application to have physical custody of his 11 year-old daughter after obtaining a Views of the Child report. The author of the report expressed concern that the child’s viewpoint and language were atypical of a girl her age.

In January 2018 the girl began living full-time with her father and refused to see her mother. Later in January 2018 the court ordered that the parties return to a shared parenting regime and attend counselling. Six months later the case management judge ordered the girl to have week/on week/off parenting with each parent; that her brother reside with his mother; that mother and daughter attend counselling; and that the orders be enforced with police assistance as required.

Two months later a further order provided that mother would parent her son, the daughter would live with her father and each child would spend weekends with the other parent. Another counselling order was made requiring both parents to attend. The counselling commenced three months later but was abandoned by February 2019 due to a lack of participation by the father. The same month the son left his mother’s home, despite the court order, and returned to live with his father. The Court observed that the father did nothing to facilitate his son’s return to the mother’s home.

A month later the Court ordered an expedited three-day hearing and ordered counselling for the children and separate counsellors for each of the parents. In April of 2019 the Court ordered the mother to have parenting time every second weekend with her daughter, and shared parenting of their son. The court order contained this provision:

“this gives [the father] an opportunity to demonstrate to the court at the June hearing that he is willing and able to facilitate parenting time to [the mother]

if the [father] can demonstrate to this court that he will abide by this Order, the risk his parenting time in June 2019 will be suspended is decreased.”

Despite these orders the mother had no contact with her children.

The expedited hearing occurred in August 2019 over four days. The court heard from three experts who had been involved with the family. The Court determined that each parent had engaged in alienating behaviour and made derogative statements about the other parent.

However, the judge found that the father’s behaviour had instigated the family problems and that if it continued, the children would suffer continued harm. As well, because the previous orders of shared parenting were unsuccessful, the remaining options were to do nothing and leave the children with their alienating father, or direct a custody reversal by placing the children with the rejected parent.

The judge’s conclusion was that the mother would have primary parenting and sole custody of both children, with the father having no contact with the children. The father was also found to be in contempt of five previous orders commencing in January 2018.

The father’s grounds of appeal, which included challenging certain factual findings; asserting that the chambers judge misapplied the best interests test; and seeking to introduce fresh evidence, were rejected, but most notable was his utter failure to offer a viable solution. What he wanted was the return of the children…a complete non-starter.

What this case illustrates is the Court’s apparent inability to provide timely solutions to egregious situations…the alienation in this case began in 2017 and it took until January 2020 to craft a solution that would end the father’s reign of control and obstruction.

We need to do better than this.

Lawdiva aka Georgialee Lang

Appeal Court Refuses to Order Release of Unedited Reasons

Olga Routkovskaia and Michael Gibson represented themselves in a 14-day trial before Provincial Court Judge Steinberg. In a decision handed down on September 7, 2018 the judge made orders for joint guardianship of their 12-year-old child, parenting time for Mr. Gibson to include every second weekend from Thursday to Monday, regular telephone time, and an equal division of holiday parenting time. He also ordered a review of his orders in April 2019.

Ms. Routkovsaia appealed the order to the British Columbia Supreme Court alleging that the trial judge wrongly applied the best interests test and incorrectly assessed family violence. Her appeal was heard by Mr. Justice Ball who after reviewing the transcript of Judge Steinberg’s Reasons, dismissed it, on the basis that it was an interim order, not subject to appeal. Ball J. also said:

“The recorder had difficulty recording reasons because there were often two persons speaking. What is clear from the transcript is that there was a conversation between Ms. Routkovskaia and Judge Steinberg. Judge Steinberg is a very experienced member of the court, he would not have tolerated the kind of consistent interruptions which took place here while he was giving reasons. It is difficult enough to give reasons without being repeatedly interrupted with references to bits of evidence and statements to the effect that “I disagree with this, and I disagree with that”. This is simply a conversation intending to lead to a further hearing which occurred and not a final order.”

Ms. Routkovskaia appealed Justice Ball’s decision to the BC Court of Appeal submitting that he erred in law by finding that the trial order was an interim order. She also alleged a reasonable apprehension of bias and requested the appeal court to order the release of Justice Ball’s unedited Reasons. Ms. Routkovskaia maintained that the edited Reasons failed to reflect evidence of bias and that she needed the unedited transcript to prove her allegations. She deposed that after listening to the audio recording of the Reasons she noted differences between what the judge said in court and what he later released as his Reasons.

Madam Justice Garson, sitting in Court of Appeal chambers, advised Ms. Routkovskaia that according to the Court Record Access Policy she had the right to receive a transcript of the audio recording and that she should first contact the Registry to obtain the transcript. With Garson J’s order in hand she approached the Registry who advised her that they could only release the judge-approved transcript and that she required a court order for the unedited version. She then sought a review of Madam Justice Garson’s order by a panel of the Court of Appeal.

The appellate panel held there was no prohibition against trial judges editing their Reasons. Judges can do so, whether or not they advise litigants that they reserve the right to do so, although notice is preferable. Trial judges cannot edit or change their Reasons “in an attempt to defeat an appeal” but where words are misspoken or require clarification, edits and changes are permissible. The onus is on an applicant to establish that it is in the interests of justice for an unedited transcript to be released. See Alers-Hankey v. Solomon et al 2000 BCCA 196.

The Court found that Ms. Routkovskaia had failed to meet the onus upon her. Routkovskaia v. Gibson 2020 BCCA 8

Garth Drabinsky Denudes Himself of Property: Fraudulent Conveyance Found

GeorgiaLeeLang100Garth Drabinsky, late of Livent and Millhaven Prison, suffered another loss in court this month, in a fraudulent conveyance action brought against him by his former lawyer. In September 2015 Mr. Drabinsky and his wife owned a Toronto home as joint tenants valued at $2.6 million. He transferred the home into his wife’s name for consideration of $2.00 at a time when he was making payments to lawyer Philip Anisman as part of a settlement agreement previously negotiated. Mr. Anisman had represented Mr. Drabinsky in a matter before the Ontario Securities Commission.

The fee settlement provided that Mr. Drabinsky would pay the Mr. Anisman a total of $50,863.00, spread over a 6-month period. Mr. Drabinsky provided the lawyer with 19 post-dated cheques in the amount of $2,677.00 each, dated the 15th of each month from January 15, 2015 to July 15, 2016. The cheques were drawn on the account of Flagship Entertainment Limited, a company controlled by Mr. Drabinsky. Mr. Anisman was able to cash the first two cheques but the later cheques were dishonoured.

After months of haggling over payments and arrears, Mr. Anisman obtained a consent judgment against Mr. Drabinsky for approximately $60,000, which he failed to pay.

At an examination in aid of execution in 2019 Mr. Anisman became aware that Mr. Drabinsky no longer owned the home. He then brought an action against Drabinsky and his wife to reverse the transfer of the home.

The issues before the court were:

1) Was the transfer intended to defeat, hinder, delay, or defraud Drabinsky’s creditors and;
2) Was the action barred by the Limitation Act?

At the hearing Mr. Drabinsky argued that it was the financial institution holding the mortgage on the property that insisted the home be transferred to his wife, as she was the mortgagor, while Drabinsky and his brother were guarantors. However, testimony from a bank officer rebutted this suggestion.

Mr. Drabinsky argued that a two-year limitation period applied to bar the action, but the court applied the ten-year limitation period in the Real Property Limitations Act.

The court also found that prior to the examination in aid of execution there was nothing to prompt the Plaintiff to search the title of the property, as Mr. Drabinsky consistently lead Mr. Anisman to believe that he would be receiving payment imminently, and even provided him with replacement cheques when the previous ones became stale-dated. The court stated:

“Mr. Drabinsky was more than just another debtor; he was a rather renowned debtor who was very much in the public eye. It did not occur to the Plaintiff (or, presumably, to any other creditors) that Mr. Drabinsky would be denuding himself of substantial assets such as the Property. As the Plaintiff submits, there is only a duty to investigate when there is something that leads one to investigate: Fennell v Deol, 2015 ONSC 4835, para 8.”

However, discoverability was not an issue as Mr. Anisman’s claim was brought well before the expiration of the ten-year time period.

The court recited the “badges of fraud” relative to a fraudulent conveyance action, finding that many of them were present:

a) the donor continued in possession and continued to use the property as his own;
b) the transaction was secret;
c) the transfer was made in the fact of threatened legal action;
d) the transfer documents contained false statement as to consideration;
e) the consideration was grossly inadequate;
f) there was unusual haste in making the transfer;
g) some benefit is retained under the settlement by the settlor;
h) a close relationship exists between the parties to the conveyance.

The court granted judgment in favour of the Mr. Anisman with an order that the transfer of title to the property from Mr. Drabinsky and his wife as joint tenants to her alone, was void as against the creditors of Mr. Drabinsky.

Mr. Drabinsky’s civil fraud adds yet another layer to his previous criminal convictions and disbarment. Anisman v. Drabinsky, 2020 ONSC 1197

Lawdiva aka Georgialee Lang

Appeal Court Says No Bias, But Allows Appeal

It will inevitably come up in your law practice. You finish a hearing, get the Reasons, experience the disappointment, and then, while formulating the grounds of appeal, consider an appeal based on a reasonable apprehension of bias. Was the judge sneering, did he sternly caution counsel, did your client feel he or she was misunderstood and unfairly criticized? A constellation of “second guessing” of what occurred at the hearing might lead counsel to seriously consider this ground of appeal.

But I urge you to take this step very carefully. In my 30 year trial career only once did I make this argument before a chambers judge who promptly dismissed my application. At that time I researched the law extensively and remarkably found that in 99% of cases, the alleged “offending” judge declined to recuse him or herself and the matter proceeded. Whether the argument is more successful at the appellate level is doubtful.

In Willms v. Willms 2020 BCCA 51 the Court of Appeal considered an allegation of bias and the appellant’s complaints about the chambers judge, which included the following:

1. Counsel was “harshly” reprimanded by the chambers judge when he submitted that “the respondent had intentionally deposed statements that were deceiving the court”. The judge responded saying: “Don’t call somebody a fraud based on this kind of material. And don’t suggest they’re deceiving the court. It’s a very serious allegation – – could end somebody in jail. … And a conclusion like that based on assumptions is on very, very thin ice indeed. Don’t do it again.”

The Court of Appeal noted that the affidavit said to be deceptive had not been tested, was not the subject of cross-examination, and the respondent’s evidence was not contradicted. After that exchange, counsel changed his approach calling the respondent’s evidence “inconsistent”. The Court of Appeal indicated that the transcript showed the judge’s respectful attention to the balance of counsel’s submissions.

2. Later there was an exchange between counsel and the judge following completed submissions on the respondent’s application to increase spousal support. It was then that appellant’s counsel began argument regarding his application to reduce spousal support. The judge remarked that all the necessary submissions had already been made on the topic of spousal support. Counsel advised the court that he was also seeking to terminate spousal support. The judge asked him where that could be found in the pleadings and a discussion ensued regarding the “fuzzy” reference to it in the material. Nonetheless, the court stated it would take the submissions into account.

3. Counsel also argued that he was repeatedly interrupted by the judge, that the judge dismissed his arguments without proper consideration, and failed to hear all of his submissions, which taken collectively, was evidence of bias.

The appeal court dismissed Mr. Willms appeal on this ground, finding there was nothing in the exchanges that gave rise to a reasonable apprehension of bias if viewed by an impartial observer cognizant of the matters that preceded the dialogue between counsel and the judge, and accepting at face value the judge’s assurance he would take counsel’s submissions into account. Further, the appeal court said that the appellant’s concerns that certain issues were not addressed by the judge could not be blamed on him, as counsel failed to make submissions on those points.

However, Mr. Willms did persuade the appeal court to address a miscalculation in the amount of spousal support and varied the retroactive award from August 2016 to March 2018, the date his former spouse brought her application for an increase in support.

Lawdiva aka Georgialee Lang

Why Bother? Hopeless Appeal Dismissed

I sometimes wonder why a litigant would bother to challenge a case that they will so obviously lose…even more curious is when they lose, but carry on, by appealing…Kraemer v. Kraemer is such a case, 2020 ONCA 91.

Larry and Stacey Kramer married in 2001, but ended their marriage in 2015. In the spirit of familial harmony, they agreed that Stacey’s parents, Gus and Jan, would invest $216,000 into the home the Kraemer’s owned to renovate the property and build a “granny suite”. Gus and Jan resided together in the suite commencing in 2007 until Jan died in 2013. Gus remained living there.

After Gus and Jan moved in, they wisely retained a lawyer to document the arrangements and all parties signed a License Agreement, which confirmed that Larry and Stacey owned the home and that in consideration of a loan of $165,000 from Stacey’s parents to Larry and Stacey, Gus and Jan would reside in the granny suite. As security for the loan the parties agreed to an unregistered mortgage, which could be registered with 14 days notice.

After Stacey’s marriage collapsed, Gus tried unsuccessfully to register the mortgage, followed quickly by the commencement of several lawsuits.

Larry argued that the monies advanced were a gift and not a loan. Stacey
and her father Gus relied on the license agreement and mortgage to defend that claim. The Chambers judge, not surprisingly, agreed with Stacey and Gus and dismissed Larry’s action.

But Larry was not done, he brought an appeal citing three grounds:
1. He said that the License Agreement was not a “license” but a lease. This was summarily dismissed by the appeal panel.

2. Remaining with the rental theme, Larry argued that because it was really a lease, it was an invalid lease as it had no rental payment provision.

3. Finally, he said that if it was a license the amount of the mortgage should be reduced to take into account a “discount” for the time Gus occupied the suite. He sought a reduction of $67,000.

Pointing out that the agreement contained no such discount provision, Larry’s appeal was dismissed with an order that he pay costs of $21,000.

Only one question remains: How embarrassed was Larry Kraemer’s lawyer, Patrick Kraemer, to advance such futile arguments on appeal? Only a relative would suffer through that humiliation.

Lawdiva aka Georgialee Lang

Nine-day Trial a “Crushing Weight” with No Gain, Says Judge

GeorgiaLeeLang025
In a recent costs decision from the Ontario Superior Court of Justice, Mr. Justice Pedlar decried the “crushing weight” of a 9-day trial accompanied by a huge risk of costs and the unfathomable stress on the parties. Calver v. Calver 2019 ONSC 7317.

The Calver’s were married for four years of a relationship lasting eight years. The judge noted that Ms. Calver chose the multiple remedies she sought, leading to a case that was “over-litigated”. Mr. Calver’s counsel remarked that the trial should have been completed within a day and a half and the judge agreed.

Her claims included unjust enrichment, constructive trust, proprietary estoppel, loss of future income, and compensation for emotional and physical damages related to her role in pursuing in vitro fertilization treatments over a period of seven years.

The facts relevant to the division of property were basically admitted. There was no dispute between them with regards to a joint venture or Ms. Calvert’s contributions to the joint venture. Ms. Calver sought a compensation payment of $450,000 and presented an offer to settle before the trial of $300,000. Her husband made a pre-trial offer of $9,000. The judge remarked that neither offer was reasonable given the outcome of the trial.

The majority of the relief claimed by Ms. Calver was dismissed and she was awarded the sum of $83,000, approximately 18% of her total claim.

In assessing an appropriate costs award, Judge Pedlar ordered Mr. Calver to pay his wife costs related to her success in being awarded 18% of her claim, amounting to costs of $13,560. He awarded Mr. Calver costs for his success in defending all other claims in the amount of $94,000 and set off what he was to pay his wife, leaving her to pay him $81,000 by forfeiting all of her judgment except the sum of $2,588.

In closing, the court commiserated that a 9-day trial cost the parties an enormous amount of money for virtually no gain.

Lawdiva aka Georgialee Lang

Filing a Lien on Your Spouse’s Home is Easy to Do in British Columbia

home real estate
Photo by Binyamin Mellish on Pexels.com

Are you worried that your spouse may sell or mortgage the home you live in with him or her, without your consent? What if you want to file a lien on a property you live in with your spouse? Do you have to start a lawsuit or is there an easier way?

The good new is, there is an easier way. You can file an “entry”, which acts as a lien against a home you reside in, without notifying the owner spouse and without starting a court action. This lien or entry, as it is called, is filed under British Columbia’s Land (Spouse Protection) Act.

To be eligible to file an entry you must:

1. Be a legal spouse or common law spouse, defined as having lived in a marriage-like relationship with the owning spouse for a continuous two-year period or more;

2. The entry can only be filed on a home that you have resided in with your spouse;

3. The entry must be filed within one year of your residence in the home;

4. The home must be owned only by your spouse, if you are on title you cannot use this lien;

5. If you are divorced you cannot use this lien.

6. If you are separated and have resolved ownership of the family home, you cannot use this lien

While this entry is on title the owning spouse cannot take any of the following actions:

They cannot:
(a) transfer, agree to sell, assign an agreement for sale, or lease or execute any other instrument intended to convey or transfer any interest in land;

(b) mortgage or encumber the land with the payment of money;

(c) devise or dispose of the land by your will; and

(d) mortgage by deposit of duplicate indefeasible title or indefeasible title, or other mortgage not requiring the execution of any document.

However, a lien under this legislation does not give the lien holder any priority over other filings against the land. To obtain priority, a person must commence a court action against the land and file a certificate of pending litigation pursuant to the Land Title Act.

If an owning spouse wishes to sell the property that spouse must obtain the consent of his or her spouse. Typically, if a spouse with an entry on title refuses to agree to a sale, a court order will be required. The usual remedy is that the sale is approved by the court with the net sale proceeds held in trust, pending the resolution of the spouse’s claim against the property under the Family Law Act.

Lawdiva aka Georgialee Lang

Borrowing on Family Property to Acquire New Property Will be Traced by the Court

With the introduction of “excluded property” into British Columbia’s family property law, cases continue to be released providing guidance to lawyers and separating couples alike.

The Appeal Court in KPB v. KE 2019 BCCA 152 considered whether the husband’s use of a line of credit secured by the parties’ family home, and used by him to purchase real property in his name after the date of separation, brought the after-acquired property into the category of family property or whether it was excluded property.

The parties were married for 12 years and had two children. They jointly purchased the family home for $255,000 with a $70,000 loan from the appellant wife’s father. The parties agreed that the trial judge incorrectly held that the loan was excluded property and consented to an order that the loan was a family debt pursuant to the Family Law Act.

The parties had a joint line of credit, that had a $0 balance. It was secured by a collateral mortgage against the family home. The home had a trial date value of $480,000. Just prior to the separation, the husband withdrew $25,000 from the credit line, and later an additional $95,000 to purchase a home in his name. Still later, he unilaterally withdrew a further $73,000, making total withdrawals of approximately $194,000.

When the husband brought his action for divorce and corollary relief, he failed to disclose this new home and the line of credit debt.

During the marriage the husband received an inheritance which he used to purchase RRSP’s and mutual funds which were agreed to be excluded property.
The trial judge equally divided the family property with the exception of the home the husband purchased at the time of separation. His rationale was that since the line of credit debt was the husband’s sole responsibility, the home was excluded property.

The appeal panel acceded to the wife’s argument that the trial judge erred in concluding that the husband’s after-acquired real property was excluded property. The Court held that if the trial judge had first determined what assets were family property and thereafter, what debt was family debt, he may not have fallen into error.

The Court said:

“After determining that the $193,792 was not family debt, the judge then reasoned that whatever was acquired by the husband with those monies was not family property. Had the correct approach been followed, in my opinion the result would have been different.”

The Court observed that the husband’s new home and the family home were interconnected assets because the husband, in effect, borrowed $120,000 from the equity of the family home to make his purchase.

The Court held that the wife’s interest in the husband’s home equated to that portion of the home that was purchased using the family home equity, which based on the home’s value of $490,000, less encumbrances, amounted to a compensation payment to the wife of $88,000.

Lawdiva aka Georgialee Lang

Trial Judge Misunderstands Evidence: Appeal Court Intervenes

In Baryla v. Baryla 2019 BCCA 22, the Court considered whether the trial judge had erred by failing to find that a half-interest in a home owned by the husband was excluded property, as the respondent husband had received the half-interest from his mother upon her death as a joint survivor of the joint tenancy property.

The parties ended their 40-year marriage in 2014 by signing a Letter of Intent Agreement dividing their assets equally between them. The Agreement provided that Mr. Baryla would transfer the subject home to his wife, and he did so. However, not all of the terms of the Agreement were implemented, as the wife brought a family law action seeking spousal support and an equal division of property.

The trial judge determined that the respondent wife had made a financial contribution to the home, which caused the appellate court to examine whether the gift of the right of survivorship was made to the husband and his wife, or just the husband, noting that this analysis was not done by the trial judge.

The appeal panel also pondered whether the husband’s transfer of the property to his wife pursuant to the Agreement extinguished his excluded property claim.

The appellant husband alleged that the trial judge had misapprehended the evidence by erroneously finding that the parties had contributed approximately $170,000 to the purchase of the home, while the true facts were that the sum of $170,000 came from the sale of his mother’s former home.

The trial judge relied on VJF v. SKW 2016 BCCA 186 to find that the husband’s voluntary transfer of the property to his wife eliminated his excluded property claim.

The Court of Appeal disagreed saying that the presumption of advancement had no application because the parties were separated at the time of the transfer and the transfer was not a gift but a fulfillment of a contract.

The husband also challenged the trial judge’s alternative holding that it would be significantly unfair not to divide the property equally because the purchase price of the home came primarily from the parties, relying again on the misunderstanding of the relevant evidence.

The appeal panel acknowledged that they could not consider this argument until the parties’ actual contributions to the purchase price was ascertained.

The Appeal Court allowed the appeal and ordered a new trial.

Lawdiva aka Georgialee Lang