In Voitchovsky v. Gibson, 2022 BCCA 428 the appellant, Ms. Voitchovsky, sought an equal division of family property and spousal support from the respondent, Mr. Gibson, after their 30-year long-term relationship ended. The parties had both been previously married and had accumulated their own property and financial assets. When they began their relationship, the parties agreed that they did not intend to remarry and that they would keep their property and financial assets separate. The parties stayed in a committed relationship and acted in accordance with their oral agreement for the next 30 years.
Findings of the Trial Judge
The trial judge found that the parties had made an oral agreement, pursuant to s. 92 of the Family Law Act (FLA), to keep their property and financial assets separate during their relationship, and that this agreement was “patently obvious” in their undertakings. The trial judge stated that this determination was based on testimony, as well as on the extrinsic and objective evidence of how the parties managed their financial affairs during the relationship, which included:
- keeping separate bank accounts;
- sharing expenses 50/50;
- both working and supporting themselves; and
- holding their house as tenants in common.
The judge also found, pursuant to s. 95 of the FLA, that it would be significantly unfair to order an equal division of all property held by both parties given the oral agreement and their legitimate expectations throughout the relationship that they would not share their financial assets.
The judge ruled that only two assets were to be considered family property subject to equal division under the FLA: the family residence and a van. In addition, the judge ordered the respondent to pay the appellant spousal support.
Appeal and Standard of Review
The appellant, Ms. Voitchovsky appealed the decision, arguing that the trial judge had erred in finding:
- the existence of an oral agreement; and
- that it would be significantly unfair to divide the family property equally.
The standard of review for such cases is highly deferential, meaning that an appellate court may only intervene if there is a material error, a serious misapprehension of the evidence, or an error in law. This deference applies to all family law matters, including property division. Further, orders under s. 95 of the FLA are subject to a deferential standard of review because they involve a significant amount of discretion.
The Oral Agreement
The case at hand involved a disagreement over whether the parties had an oral agreement to keep their property separate, and whether this constituted an agreement under s. 92 of the FLA.
The appellant argued that the trial judge should not have given weight to a “vague oral agreement” and that a written agreement in similar circumstances would have been set aside due to lack of disclosure and failure to obtain legal advice. The respondent argued that the trial judge did not err in finding that the parties had an oral agreement under s. 92 of the FLA.
Section 92 of the FLA provides that spouses may make agreements respecting the division of property and debt. The provision provides a non-exhaustive list of possibilities for how spouses may agree to the division. There is no requirement that an oral agreement must be documented in writing for it to have continued effect throughout a relationship.
The BC Court of Appeal agreed with the trial judge’s finding that there was no dispute about the existence of an oral agreement to keep the parties’ financial assets and property separate and not to share them. The trial judge based their determination on the testimony of both parties and on the evidence of how the parties managed their financial affairs during their 30-year relationship. The BC Court of Appeal stated that the parties’ conduct clearly indicated to the outside world they intended to abide by the agreement of “what’s mine is mine, what’s yours is yours”.
The Unequal Division of Family Property
Under the FLA, each spouse is entitled to a presumptive equal division of family property upon separation, unless there is an agreement or order providing otherwise.
Section 95 of the FLA allows for an unequal division of family property if an equal division would be significantly unfair, taking into consideration factors such as:
- the duration of the relationship;
- any agreements between the spouses;
- contributions made to the other spouse’s career; and
- any significant decreases or increases in the value of family property after separation.
In this case, the BC Court of Appeal emphasized that the significant unfairness threshold required to depart from an equal division of property is high. Even so, the BC Court of Appeal agreed with the trial judge’s findings that it would have been significantly unfair to divide the parties’ property equally given their oral agreement. The trial judge had found the parties had a mutual desire to maintain financial autonomy and independence from each other, as demonstrated by their separate investment advisors, bank accounts, and respect for each other’s privacy. The fact that the parties contributed to household expenses did not negate their oral agreement.
Concluding their review, the BC Court of Appeal found no basis to interfere with the decision of the trial judge, and dismissed the appeal.
Of Note: Consideration of the Family Relations Act in a 30-Year Relationship
At trial, the judge considered that the parties had spent the majority of their relationship under the Family Relations Act (FRA) which, at the time, did not apply to the property interests of unmarried couples. Instead, unmarried couples relied on the doctrine of unjust enrichment to establish a property interest. The trial judge noted that although the FLA was the applicable legislation at the time of trial, it was important to consider the law of unjust enrichment as it would have applied prior to the FLA and at the outset of the parties’ relationship.