Does The Family Law Act Apply To Family Law Agreements Entered Into Prior To March 18, 2013?

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In Bingham v. Bingham, 2020 BCSC 1020, the parties entered into a cohabitation agreement in 2006, married in 2007 and separated in 2018.
Canada Family and Matrimonial
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In Bingham v. Bingham, 2020 BCSC 1020, the parties entered into a cohabitation agreement in 2006, married in 2007 and separated in 2018. The main issue with respect to property division for the Court was whether the applicable statutory provisions are those in Part 5 of the Family Law Act, S.B.C. 2011, c. 25 (the "FLA"), or those in the corresponding part of the predecessor legislation, the Family Relations Act, R.S.B.C. 1996, c. 128 (the "FRA").

The Claimant sought reapportionment of the family assets set out in the cohabitation agreement, pursuant to the FRA. The Respondent sought an order that the cohabitation agreement be varied or replaced with orders under the FLA.

The distinction holds potential significance for the parties, as the division of property varies under the two statutes.

Under the FRA, when a couple separates, each spouse is entitled to a one-half interest in all family assets. A "family asset" is most commonly property owned by one or both spouses that is ordinarily used for a family purpose. It also can include business assets that a spouse has directly or indirectly contributed to or an asset that is controlled by a spouse but not technically owned by that spouse. Where a standard division of family property would result in an "unfair" division of property given the length of the marriage or other relevant factors, the Court will often make an exception and reapportion the property in favour of the appropriate spouse.

Under the FLA, the Courts do not decide whether a certain piece of property was "ordinarily used for a family purpose". Rather, any property owned by one or both spouses will be considered to be family property, subject to equal division between the spouses. Where an equal division would be significantly unfair given the length of the relationship, whether a spouse substantially reduced the value of family property, and a number of other factors, the Court may order an unequal division. There will, however, be a number of classes of property that will be excluded from division.

The FLA introduced the concept of "excluded property" to family law in British Columbia. Section 85 of the FLA lists categories of property that are "excluded property" as follows:

  • (a) property acquired by a spouse before the relationship between the spouses began;
  • (b) inheritances to a spouse;
  • (b.1) gifts to a spouse from a third party;
  • (c) a settlement or an award of damages to a spouse as compensation for injury or loss, unless the settlement or award represents compensation for
    • (i) loss to both spouses, or
    • (ii) lost income of a spouse;
  • (d) money paid or payable under an insurance policy, other than a policy respecting property, except any portion that represents compensation for
    • (i) loss to both spouses, or
    • (ii) lost income of a spouse;
  • (e) property referred to in any of paragraphs (a) to (d) that is held in trust for the benefit of a spouse;
  • (f) a spouse's beneficial interest in property held in a discretionary trust
    • (i) to which the spouse did not contribute, and
    • (ii) that is settled by a person other than the spouse;
  • (g) property derived from property or the disposition of property referred to in any of paragraphs (a) to (f).

Section 252 of the FLA, a transitional provision, which was brought into force on May 18, 2013 by B.C. Reg. 131/2012, reads as follows:

  • 252 (1) This section applies despite the repeal of the former Act [the FRA] and the enactment of Part 5 [Property Division] of this Act.
  • (2) Unless the spouses agree otherwise,
    • (a) a proceeding to enforce, set aside or replace an agreement respecting property division made before the coming into force of this section, or
    • (b) a proceeding respecting property division started under the former Act must be started or continued, as applicable, under the former Act as if the former Act had not been repealed.

The judge considered the wording of section 252 to be unambiguous. It states that a proceeding to enforce, set aside, or replace an agreement respecting property division made before the FLA came into force is to be started under the FRA unless the parties agree otherwise. Therefore, the Court found s. 252 applicable and divided the couple's property under the provisions of the FRA.

The Court refused to consider extrinsic evidence of legislative intent since the meaning was unambiguous.

On appeal, in Bingham v. Bingham, 2023 BCCA 69, the Appellant argued that s. 252 applies only to agreements made at a time when spouses are either preparing to separate or are already separated.

The Court of Appeal was not persuaded that there is any ambiguity in s. 252(2)(b) or that there is any reason to interpret it in a way that is not consistent with its plain meaning.

The Court of Appeal held: the Appellant's interpretation of "agreement" as limited to separation agreements is inconsistent with the obvious intention of the statute to allow for other types of binding family law agreements. "I disagree with his contention that the interpretation of the word "agreement", in its ordinary sense is incompatible with its use in the specified statutory provisions."

The Court of Appeal further held that the purpose of s. 252(2)(a) was to ensure that property division conformed with the expectations of parties who entered into agreements under the FRA.

About Mackrell International – Canada - Lindsay Kenney LLP is a full service business law firm with offices in Vancouver and Langley, BC and a member of Mackrell International. Mackrell International – Canada is comprised of four independent law firms in Alberta, British Columbia, Ontario and Quebec. Each firm is regionally based and well-connected in our communities, an advantage shared with our clients. With close relations amongst our Canadian member firms, we are committed to working with clients who have legal needs in multiple jurisdictions within Canada.

This article is intended to be an overview and is for informational purposes only.

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