Division of the Decrease in Excluded Property

In a recent decision, the BC Court of Appeal has ordered the division of the decrease in equity of excluded property between the separating spouses. This decision is interesting as it appears to be a departure from the previous caselaw on the issue.

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Banh v. Chrysler, 2022 BCCA 74 (CanLII)

This is the case where the BC Court of appeal ordered the division of the decrease in equity of excluded property as seen below: 

[66]       I would allow the appeal, set aside the judge’s unequal division of family property and order that the increase and, in the case of the Port Alice Property, decrease in equity in all of the parties’ excluded properties from the date of the parties’ marriage to the date of trial be divided equally.

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In the previous case of Y.L. v G.L, 2020 BCSC 808 (CanLII), the court confirmed the previously established law on the topic as seen below: 

[77]       Section 85(1)(g) of the Family Law Act permits tracing of excluded property that has been disposed of into existing assets. Where property that is alleged to be excluded property has been dissipated, as opposed to disposed of into existing property, then no excluded property claim can be made in relation to it: C.P. v. K.W.A., 2018 BCSC332 at para. 100. If excluded property has decreased in value, the party who has (or had) an interest in that excluded property, is not entitled to seek an allocation of family property to make up the loss in value: Remmem v. Remmem, 2014 BCSC 1552 at para. 29. However, the increase in value during the marriage of any excluded property is family property: Family LawAct, s. 84(2)(g).

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If you would like to discuss your family law case, then feel free to contact me to schedule a consultation.