In a March 2015 decision about the division of family property, Walburger v. Lindsay, Madam Justice Fitzpatrick applies the significantly unfair test to the division of a home in Parksville on Vancouver Island.
Under the Family Law Act, property is divided into family property and excluded property. Family property is divided equally unless the husband or wife proves it would be significantly unfair to do so. Excluded property remains with the original owner unless the other party proves it would be significantly unfair to do so. Increases in value of excluded property are defined as family property.
Even though the words “significantly unfair” are the same, the legal test for significantly unfair in the FLA is different for family property and excluded property.
The significantly unfair test for family property is set out in section 95 (2) and has 9 separate factors including the length of the relationship. There is no contribution factor for property. This is expected because section 81 says that spouses are entitled to family property regardless of use or contribution.
The significantly unfair test for excluded property is set out in section 96 and has only 2 factors, the length of the relationship and, “direct contribution to the preservation, maintenance, improvement, operation or management of excluded property”
In Walburger, Madam Justice Kirkpatrick found that it would be significantly unfair to divide family property, the Lanyon Drive property in Parksville on Vancouver Island for 4 reasons,
- The wife’s lack of contribution to the property,
- The property came from the husband’s mother,
- The husband’s son’s maintenance of the property, and
- The husband’s intention to transfer it to his son.
It must be said that 3 of the 4 reasons given do not appear to agree with the FLA test for significantly unfair in the division of family property. They relate more to the significantly unfair test for excluded property.
First, lack of contribution is excluded by section 81 of the FLA under the family property significant unfairness test; but is a factor for excluded property. Second, the source of the property is not a factor under the family property test; but it does define excluded property with the increase in value being family property. Third, contributions to maintenance are not a factor under the family property test; but direct contributions are under excluded property. Fourth and arguably, only the intention to transfer the property to the son could be considered a factor under the family property significant unfairness test.
It is important to remember that the significant unfairness test for family property is different than the significant unfairness test for excluded property. If the legislature had wanted to make contributions a part of the legal test for significant unfairness for family property, it would have included them as it did for excluded property. We trust that future decisions will clarify this fact.