On March 27, 2023, the Honourable Niki Sharma, Attorney General for British Columbia, proposed significant changes to the Family Law Act with Bill 17, the Family Law Amendment Act, 2023.
One important change concerns some rules of evidence a judge can consider when determining who owns what in a family dispute.
If Bill 17 is passed, the Family Law Act will contain a new section 81.1 which will read as follows:
81.1 (1) The rule of law applying a presumption of advancement must not be applied in questions respecting the ownership of property as between spouses.
(2) The rule of law applying a presumption of resulting trust must not be applied in questions respecting the ownership of property as between spouses.
The presumption of advancement and the presumption of resulting trust are what’s called evidentiary presumptions. They are tools a judge can use if there’s not enough hard evidence to figure out who owns what property.
The presumption of advancement has been used in family law to say that where one spouse transfers property to another, the law will presume the spouse who made the transfer intended to gift the property to the receiving spouse, unless there’s enough evidence to establish something else. This has been particularly relevant where a spouse, for example, uses an inheritance to pay off the mortgage. When the parties separate, could the inheriting spouse claim the inheritance was theirs? Or did they intend to “gift” the inheritance to the family?
The Family Law Act came into effect ten years ago and, ever since, judges have disagreed over whether the Family Law Act overruled the presumption of advancement. Both the Supreme Court and Court of Appeal have commented on this, but there’s been no clear, unified approach. The Legislature is now stepping in to answer the question once and for all. Bill 17 makes it clear: the presumption of advancement is no more.
The presumption of resulting trust works similarly but in different circumstances. It presumes that where, for example, an adult parent transfers property to an adult child for free, the child will hold the property in trust for the parent. The proposed amendments clarify that the presumption of resulting trust has no role play when it comes to who, as between the spouses, owns what property.
Anytime you transfer property—be it a house, a vehicle, or adding someone to a bank account—you should be aware of the legal ramifications of the transfer. Our Family Law team is ready and able to answer any questions you may have.