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MARITAL PROPERTY - Equalization or division - Exempt acquisitions and deductions

Monday, February 25, 2019 @ 10:42 AM  

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Appeal by the husband from a spousal support award and compensation payment. In 2014, the parties separated after approximately 40 years of marriage. At the time of separation, they lived off the income from investments managed by the husband. In 2015, a letter agreement purported to divide assets. Among other things, a residential property the husband acquired from his mother through a joint tenancy right of survivorship was to be transferred to the wife. Litigation ensued after the parties only partially performed their duties under the agreement. The trial judge ordered the husband to pay $828,829 as an equalization payment, and $2,650 per month in spousal support for 10 years, based on his income of $219,017 and the wife's income of $89,391. The husband appealed.

HELD: Appeal allowed. Although the trial judge did not err in dividing property equally, the judge erred in analyzing whether the disputed residential property was excluded property as a gift or inheritance, in failing to properly consider and apply the tax implications of property division, and in ordering ongoing spousal support. The trial judge failed to analyze whether the registration of the husband as a joint tenant to the disputed property constituted a gift of the right of survivorship to him solely or was a gift to both the husband and the wife, as both had contributed to the purchase price. The trial judge also failed to properly consider whether the transfer of the property under the letter agreement extinguished the husband's excluded property claim, as this was not a case in which the presumption of advancement between spouses applied. In addition, the trial judge failed to justify the abandonment of the parties' efforts and submissions to take tax consequences into account. A new trial was ordered. Given that the parties' income was derived from assets that were the subject of division, the award of ongoing spousal support following trial constituted double-dipping. Support for the period between separation and the new trial remained extant.

Baryla v. Baryla, [2019] B.C.J. No. 48, British Columbia Court of Appeal, E.A. Bennett, J.E.D. Savage and Butler JJ.A., January 18, 2019. Digest No. TLD-February252019003