Can A Couple Orally Agree Not to Divide Their Property? Will a Court Respect that Agreement?

GeorgiaLeeLang059Today’s decision of Mr. Justice Kelleher of the British Columbia Supreme Court  provides an answer to the two questions posed above.

If a couple decide to live together, have no children, and confirm with one another that everything each of them owns or will own will always remain separate if the couple separate, will a court interfere?  In the case of Doell v. Prentice 2018 BCSC 1115 the Court said “yes” it will.

This common law couple lived together for 23 years on property purchased with Mr. Prentice’s savings. He was a highly skilled bricklayer and stone mason, while Ms. Doell, who had a university degree, worked in menial positions taking care of dogs and horses. Her annual income was less than a full-time minimum wage job.

Many witnesses testified they were aware of the couple’s financial arrangements which were apparently openly discussed with their friends and relatives. Ms. Doell reputedly said that if their relationship ended she would leave with her belongings but nothing of her husband’s. However, after she left the home she shared with Mr. Prentice she changed her mind and brought a court action seeking an equal division of property and spousal support. Mr. Prentice argued that she should receive no property and no spousal support despite her status as a common law spouse under the law.

The judge reviewed the evidence finding they never shared property, had no joint accounts or joint credit cards; she paid for her expenses and he paid for his. When they ate at a restaurant they each paid their way. Mr. Prentice bought several other properties and fixed them up. When he sold a property he did not share the sale proceeds with  his wife.  Ms. Doell was of the view that she would not work on the properties as they were not hers and she would get nothing back for her services.

Later, during the relationship, Ms. Doell purchased a property in joint tenancy with her mother and made it clear that it was not intended to be shared with Mr. Prentice. At that point she moved her dog care business to her new property. Unfortunately, Ms Doell fell off her horse and had a concussion which caused migraine headaches. Still later several of her animals unexpectedly died which caused her upset and depression. She changed her will deleting any gift to Mr. Prentice.  By this time the relationship was clearly coming to an end.

The Court was satisfied that the parties entered into an oral contract to keep their property separate. As for spousal support, there was no definitive evidence that Ms. Doell had agreed to give up that claim.

The Court reviewed s. 95(2)  of the Family Law Act to determine if it would be “significantly unfair” not to deviate from the oral agreement:

(2)        For the purposes of subsection (1), the Supreme Court may consider one or more of the following:

(a)        the duration of the relationship between the spouses;

(b)        the terms of any agreement between the spouses, other than an agreement described in section 93 (1) [setting aside agreements respecting property division];

(c)        a spouse’s contribution to the career or career potential of the other spouse;

(d)        whether family debt was incurred in the normal course of the relationship between the spouses;

(e)        if the amount of family debt exceeds the value of family property, the ability of each spouse to pay a share of the family debt;

(f)         whether a spouse, after the date of separation, caused a significant decrease or increase in the value of family property or family debt beyond market trends;

(g)        the fact that a spouse, other than a spouse acting in good faith,

(i)  substantially reduced the value of family property, or

(ii) disposed of, transferred or converted property that is or would have been family property, or exchanged property that is or would have been family property into another form, causing the other spouse’s interest in the property or family property to be defeated or adversely affected;

(h)        a tax liability that may be incurred by a spouse as a result of a transfer or sale of property or as a result of an order;

(i)         any other factor, other than the consideration referred to in subsection (3), that may lead to significant unfairness.

After reviewing similar cases, the Court ordered that the property of the parties would be divided 80/20 in favour of Mr. Prentice, however, he would pay indefinite spousal support of $850 per month.

Would it have made a difference if this couple had written down their agreement? Probably not. After 23 years together it is unlikely that an agreement not to share assets, where one party has an abundance and the other, very little, would be upheld by a court in British Columbia.

Lawdiva aka Georgialee Lang

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Will Wife’s Shoe Collection Determine Court’s Jurisdiction?

GeorgiaLeeLang057We often hear politicians speak of our “global community” to describe the people or nations of the world being closely connected by modern telecommunications and being socially, economically, and politically interdependent.

One area where the phenomena of global connectedness is ever more apparent is  in the area of family law. Only a few decades ago cases in family court typically involved a divorcing couple who lived in the same city or town and they usually remained there after their divorce was finalized.

Now it is commonplace for family law cases to involve several jurisdictions. The scenarios are varied. It may occur where a couple own real estate outside of their country of residence, or one of them wishes to move away with the children to another country. Child abduction is on the increase world-wide as couples separate and engage in high conflict litigation, sometimes marked by one parent’s non-consensual departure from the home country.

Couples that have  domestic situations involving multiple jurisdictions now also analyze where the law is most favourable to them and seek to bring their court cases to that jurisdiction. It’s called forum-shopping.

Great Britain is seen as a very friendly jurisdiction for women in large property cases and there have been many recent cases where one party sought to persuade a British court to take authority over their case, while the other stridently resisted. In middle eastern countries where sharia law governs, women have few legal rights and even with the limited rights they have, they often find themselves waiting years to obtain justice, if it ever arrives. If another jurisdiction is available they will go there.

There is no doubt that family law has become more complex as a result of the global community that is now our world. In a recent case in New York City, Swiss businessman, Maurice Alain Amon and his wife, Tracey Hejailan, had homes in Manhattan and in Monte Carlo. Mr. Amon argued the Monte Carlo court was the proper jurisdiction to hear their case. Not surprisingly, Mr. Amon had received advice that the family law system in Monaco did not include a division of property based on the fact of marriage. In Monaco ownership of property is conclusive. In other words, if you own it, you keep it.

In support of his argument that the couple’s primary residence was in Monaco, Mr. Amon submitted evidence of the size of his wife’s shoe collection, along with her walk-in closet in Monte Carlo, suggesting that where she stored most of her extensive shoe collection and designer fashions is where they lived.

Mr. Amon was no doubt motivated to make his jurisdictional argument when he learned his wife was going after his valuable art collection on the walls of their New York home, property she would have no interest in under Monacan law.

Somehow I think it’s going to take more than Jimmy Choo’s and Manolo Blahnik’s for Mr. Amon to succeed.

 

Lawdiva aka Georgialee Lang

 

 

 

Guest Post: How to Find Your Perfect Divorce Lawyer

Let’s face it, most of us who commit ourselves into the bond of marriage are reluctant to think about it one day crumbling into a messy divorce, but the truth is, with today’s increasing divorce numbers, the reality is downright dismal ( in the US around 50% of all first marriages end in divorce, about 67% for second marriages and the numbers quickly rise with the number of additional marriages).

So what does this mean in terms of finding an attorney if you are among that fifty percent wanting to dissolve you marriage? Plenty!

Here are a few tips to heed if you find yourself needing someone to help you wade through the murky and unfamiliar waters of divorce.

• Before you file: Really consider the ramifications of filing for divorce. Have you exhausted every avenue before taking the steps for your divorce? Counseling and separation can be important steps to take before you make the final move.

Be very careful about moving about before the divorce, this could potentially be used against you, especially in the case of determining custody for minor children. Run a credit check for yourself, if possible get your finances in the best shape that you can. Divorce is extremely expensive and no matter the verdict, both parties will lose when it comes to finances.

Are you the non-breadwinner? You will need to take care of your personal finances as well as your healthcare, housing, cars and personal effects. A good attorney will inform you of what you should do long before you sign anything. Above all, if you can avoid divorce, then do so. Except in the cases of abuse or criminal behaviors on the part of your spouse, you should give your marriage every effort. Divorce should always be a last resort.

• Arbitration and Mediation versus litigation: The dissolution of a marriage cannot be on the same footing as breaking a business contract, though similar as seen through the eyes of the law, no one can put a price on the cost of someone’s betrayal or the lives of children of divorced parents who will forever grieve the loss of a family unit.

But there are ways to lessen the emotional trauma often association with divorce. If at all possible going through mediation services versus outright litigation will help not only with the overall costs, but will help families make choices over issues that can become quickly contentious if presided over by a non-family member or law enforcement.

Talk with your attorney; chances are if they have experience with family law and especially mediation expertise, this would make a better fit than someone hell-bent on taking on your spouse for every nickel and dime. Consider arbitration as an alternative to a lengthy, drawn-out court battle.

• Your attorney’s personal history: Find out about your attorney. Are they married? Or have they also been through a divorce, child custody battles with their own children or were they able to use their legal acumen to help minimize the trauma inflicted on all parties involved.

Sit down and talk with them about your personal feelings in regards to your spouse’s role, your custody concerns and your future. Do they really seem to be listening, adding thoughtful comments to your concerns or do you feel even more ambivalent after you leave their office?

Other than the death of a family member, going through a divorce is right there when it comes to life-altering experiences and more than ever, you will need someone who you feel confident in, someone who will stand up and defend you and fight for all rights.

A good family law lawyer will explain your rights and what you can expect with a divorce, they will not try to sugarcoat the truth about how difficult the situations will be, they will in all likelihood try to talk you out of a divorce, but if you are both in agreement about pursuing a divorce, they will be with you every step of the way.

GUEST AUTHOR NOAH KOVACS has over ten years experience in the legal field. He has since retired early and enjoys blogging about small business law, at Noah Kovacs and everything in between. He recently purchased his first cabin and spends his free time remodeling its kitchen for his family. Twitter: @NoahKovacs.

Divorce and Double-Dipping

A common complaint from ex-spouses who are obliged to pay spousal support is that all too often, the supported spouse gets a double-dip, and I don’t mean an ice cream cone.

Double-dipping occurs when a payor spouse pays support based on his employment income, but also pays support on his investment, rental or capital gains income arising from assets that were divided between the spouses, or for which the supported spouse received compensation through the receipt of cash or the retention of the family home.

Let me give you an example. If a husband retains a rental property valued at $100,000 and an investment portfolio worth $200,000 and in return the wife receives the former matrimonial home with a basement suite, valued at $300,000, it seems unfair for her husband to include these additional income sources as income for the purpose of paying spousal support. Yes, he may earn income on his share of the family property, but the wife also has that option.

As well, consider that the wife’s home has a basement suite she declines to rent and therefore eliminates an additional source of income for herself.

On top of all that, keep in mind that for Canadians, the matrimonial home is a tax-free asset, while the husband’s rental property will attract capital gains tax as will the investment portfolio.

Do our courts care? Nope. But lawmakers in California are addressing this issue. Bill SB 481 has been tabled in California’s Senate with the goal of passing legislation that would give judges the discretion to consider the sources of income utilized for a support calculation to prevent unfair, blatant double-dipping.

Another common example of this practice is where a business is valued by capitalizing the business’ income stream and the wife is compensated for her interest, while the husband is ordered to pay support on that same income stream.

The treatment of this issue by North American courts is divergent to say the least. In Mississippi the courts have declared double-dipping a “glaring inequity” while in other jurisdictions there is passive tolerance with no apparent will to resolve the unfairness that can occur.

Of course, cynics will say that because double-dipping most frequently prejudices husbands, not wives, it will be a long time until our courts get around to fixing the problem.

California is on the right track with their double-dipping bill. Perhaps it will catch on in other jurisdictions. Let’s hope so. Fair means fair for everyone.

Lawdiva aka Georgialee Lang