Protecting Property

Important Update: The Family Law Act was introduced on 14 November 2011 and contains a number of provisions which are critical to the comments made in this post. See my posts "The Early and Unlamented Deaths of ss. 90 and 120.1: Government takes quick action on parental support and unmarried persons' property agreements" and "Family Law Act Introduced!" for more information.

When a relationship has come to an end, it's usually a good idea to take steps to preserve the assets available for distribution between the parties. I'm not saying that every time a couple splits up one of them will be up to no good, but it usually pays to be cautious and careful. It your ex does decide to try and play games, it can be expensive to undo the damage. In this post, I'll review some of the common and not so common ways that property can be protected. Note that some remedies are only available to married couples, and that most remedies require the commencement of court proceedings.

File an Entry Under the Land (Spouse Protection) Act

A married spouse can apply for an entry against the title of the family home under the Land (Spouse Protection) Act. The entry will stop the property from being sold without the consent of the person who obtained the entry. Here's the fine print:

• The property must be located in BC.
• The parties must not be divorced at the time of the application.
• The entry only applies to property "occupied by the husband and wife as their residence," and which is owned by one or both spouses.
• The application must be made within one year of moving out of the property.

The cool things about entries under the Land (Spouse Protection) Act are that they can be obtained without commencing a law suit and the other spouse is not normally notified about the entry. The bad news is that the act ceases to apply once a couple are divorced, which means that the entry, although still on title, will be ineffective to prevent the transfer of the property.

Register a Certificate of Pending Litigation

Married spouses and unmarried people can apply to register a certificate of pending litigation under the Land Title Act against the title of any real property to which they claim an interest. Once the CPL is registered, the owner will be unable to transfer title of the property or obtain a new mortgage until the CPL is canceled. Here's the fine print:

• The property must be located in BC.
• Litigation must have commenced in the Supreme Court, and the litigation must include a claim about the property proposed to be subject to the CPL.
  
• The person applying for the CPL must be claiming an interest in the property in the litigation.

CPLs are registered with the Land Title and Survey Authority, after being stamped by the court where the litigation was commenced to confirm that the litigation includes a claim about the property the CPL is going to be registered against.

Apply for a s. 67 Restraining Order

A married spouse can apply for an order under s. 67 of the Family Relations Act to restrain the other spouse from selling the family assets or using them as collateral. A restraining order doesn't create an automatic bar to selling the family assets or using them to obtain a loan the way a CPL automatically prevents the transfer of land. Instead, if the person subject to the order breaches the order, he or she can be punished for contempt of court. Here's the fine print:

• The restraining order covers real property and personal property located in BC, as well as personal property located outside the province.
• Litigation must have commenced in the Supreme Court.
  
• You must apply for the order in chambers.

The nice thing about s. 67 orders is that they are all but mandatory on the application of a party. If you need this order, you just have to apply for it and the court will give it to you.

Apply for an Injunction

Married spouses and unmarried people can apply for an injunction under Rule 12-4 of the Supreme Court Family Rules to stop the other party from dealing with assets, and the injunction can theoretically be as narrow or as broad as is required to accomplish the task. Again, the fine print:

• The injunction can cover real property and personal property located in BC, as well as personal property located outside the province.
• Litigation must have commenced in the Supreme Court.
  
• You must apply for the order in chambers and the court may not make the order you want.
  
• You must promise to make good any harm the other party suffers as a result of the injunction.

Married spouses and unmarried people can also apply for the same relief under s. 39 of the Law and Equity Act.

Apply for an Order for the Detention and Preservation of Property

Married spouses and unmarried people can apply for order for the detention and preservation of assets under Rule 12-1 of the Supreme Court Family Rules where there is a real risk that the other party will sell, damage or conceal property. The purpose of this order is to protect the assets from loss or a reduction in value, and can include a term requiring a party to deliver a specific thing to the other party. Here's the fine print:

• The order can cover real property and personal property located in BC.
• Litigation must have commenced in the Supreme Court.
  
• You must apply for the order in chambers and the court may not make the order you want.

Married spouses and unmarried people can also apply for essentially the same relief under s. 39 of the Law and Equity Act.

Japan Finally to Sign Hague Convention

The BBC has reported that, at long last, Japan is going to sign the 1980 Hague Convention on the Civil Aspects of International Child Abduction later this year.

Japan's move is significant, not only because it is the last of the Group of Seven industrialized nations to sign the convention, but because Japanese family law favours single-parent families after separation and thus envisions a distribution of parental rights at odds with the convention's presumption of joint parental significance.

Supreme Court Releases Decision on Retroactive Spousal Support

The Supreme Court of British Columbia has just released an important decision on retroactive spousal support, among other issues, in the case of Crowe v. Crowe. The law in this area has been changing in the last few years, roughly tracking the changes in the law on retroactive child support with a three or four year delay, and this case offers an excellent summary of the current state of things.

In this case, the court examined the recent case law, including two important recent cases of the Supreme Court of Canada, D.B.S. v. S.R.G. and Kerr v. Baranow, in the context of a review of spousal support and reached the following conclusions:

• Whether to order retroactive spousal support is a discretionary decision resting on the particular circumstances of the particular parties before the court.
  
• The factors to be considered on an application for retroactive spousal support are similar to the factors considered on an application for retroactive child support.
• These factors are the needs of the recipient, the conduct of the payor, the reason for the delay in seeking support and any hardship the retroactive award may occasion on the payor spouse.
• However, because spousal support has a different legal basis than child support and there is no presumptive entitlement to spousal support, concerns about notice, delay and misconduct will carry more weight.
• The Spousal Support Advisory Guidelines may be used to determine spousal support on a review application.
  

CRA to Change Sharing of Child Benefits

Effective 1 July 2011, the Canada Revenue Agency will be changing its method for allocating the Canada Child Tax Benefit between separated parents who share their children's time equally or near-equally.

At present, when the CRA learns that separated parents have shared custody it rotates the child-related benefits and credits between the parties, such as the CCTB, the National Child Benefit Supplement, and the Universal Child Care Benefit, on a six-month on/six-month off basis. That's fair where both parents have about the same income, however, since the CCTB and the NCBS are indexed to income, it can be unfair where one parent would parent would get a lot of money out of the benefits and the other would get nothing.

Under the new rule, when when parents have shared custody the CRA will pay to each parent one-half of the benefits that parent would be entitled to receive if that parent were the only person entitled to the benefits. This will end the six month rotation of eligibility and will index the amount paid to only the income of the recipient.

The new rules will apply to:

• the CCTB and, I assume, the NCBS
  
• the UCCB
• the child-portion of the quarterly HST credit
  
• the BC Family Bonus

For more information, see the Child and Family Benefits page of the CRA's website, or call 800-387-1193.

Supreme Court Releases Decision on Foreign Divorces, Foreign Agreements and Effect of Foreign Law

The Supreme Court of British Columbia has just released its judgment in Sangi v. Sangi, a complex but important case which surveys the rules about when the courts of this province will recognize foreign divorces, how the court should evaluate the fairness of separation agreements negotiated under the laws of another country, and how the court should interpret and/or apply the laws of another country, along with a host of other matters such as:

• determining the credibility of a witness
• the drawing of adverse inferences following a party's failure present a witness to give evidence on an issue
• defending against a foreign judgment on the basis of fraud occurring in the foreign jurisdiction
• determining the authenticity of the records of a foreign court
• measuring whether a foreign agreement is unconscionable or unfair against domestic values and standards
  

This decision is very well written and provides an eloquent statement of the law in this area, and I would do it a disservice if I tried to summarize it further. Suffice it to say that if you have a legal problem in these areas, this decision is well worth your time to read.