When the new Family Law Act was enacted on March 18, 2013 the most significant change that it made to the existing law at the time was that if you owned property before the relationship or if you inherited or were given property during the relationship you would get the property back if you separated.
Under the old Family Relations Act if you wanted to get this type of property back on separation you had to seek reapportionment of the family property in your favour and argue that for some reason it was unfair to have to divide this property with your spouse on separation. Succeeding with a reapportionment argument however was extremely difficult. It usually meant going through a trial and the courts would only allow it in exceptional circumstances.
Finally the law was clear. Under the Family Law Act if you had money at the beginning of your relationship or if you inherited it or were given it by a third party you could keep it. Or so we thought.
The problem that has arisen is that often a spouse who has money at the beginning of a relationship will “gift” that property to his or her spouse during the relationship by placing it in joint tenancy. For example, if you use the money to buy a house for your family and you put your spouse’s name on the title as a joint tenant you have gifted at least one half of the money to your spouse.
The B.C. Supreme Court in a recent decision which was made on April 16, 2015, V.J.F. v. S.K.W., 2015 BCSC 593 says that if property that was excluded property is placed in joint names, that exclusion is lost.
The Family Law Act does however state that if it is “significantly unfair” to share excluded property the court can make an order that it not be shared. There are no judicial decisions yet to tell us what “significantly unfair” means.
The end result of this is that we are really back where we started before the Family Law Act was enacted and arguably it is now even harder to retain property that you owned prior to the relationship if it is placed in joint names with your spouse. Under the Family Relations Act you had to argue that it was “unfair” to share the property but now under the Family Law Act you have to argue that it is “significantly unfair.”