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What is the impact of the new Family Law Act on a Separation Agreement under the Family Relations Act?

Kevin Heinrichs

Written by: Kevin Heinrichs (View All Posts • View Bio) Published: June 15, 2012

Categorized: Agreements, Child Support, Custody and Access, Legislation Analysis, Spousal Support.

In February of 2006, the Ministry of Attorney General began a review the Family Relations Act (“FRA”) with an aim to modernize family law in British Columbia. After years of consultation and review, the Family Law Act (“FLA”) was passed by the Legislative Assembly of British Columbia on November 23, 2011, and received royal assent the following day.

While the legislation officially passed, the FLA has not yet come into force. The government has estimated that the FLA will come into force sometime in 2013. When it comes into force, the FLA will replace the FRA as the provincial law in British Columbia that applies to family claims.  As of today’s date, and with only small exceptions, the FRA and the federal Divorce Act (Canada) (hereafter referred to as the “Divorce Act”) govern family law matters in British Columbia.

While it is anticipated that the FLA will bring positive changes to family law in British Columbia, it begs the question “how will the courts interpret separation agreements created under the FRA when the new FLA comes into force?” In this post I will explore the answer to this question and provide a rough summary of the potential impacts that the FLA will have on FRA separation agreements.

This post is not intended to be a legal document, but rather an educational overview of this topic. The information contained herein is derived from the British Columbia Government website. If you are looking to hire a lawyer, contact Henderson Heinrichs for legal advice.

 

Once the FLA comes into force, will there be any immediate impact on my separation agreement?

The simple answer to this question is no, as long as there are no on-going disputes surrounding your separation agreement.  The mere introduction of the FLA will not on its own impact your separation agreement. In other words, the coming into force of the FLA is not in itself a “change in circumstances for the purposes of changing, suspending or terminating an order”. Thus, there is no requirement to re-draft the separation agreement with the introduction of the FLA.  Any settlement that was reached between parties continues to be legally valid and any duties, responsibilities, or rights set out in that separation agreement will continue to be binding on both parties.

 

What if in the future there is an issue or dispute that arises regarding my separation agreement made under the FRA?

The answer to this question depends on the particular subject matter that is in dispute within the separation agreement. Below I will outline a summary of how the FLA will be applied to the major areas typically outlined in a separation agreement. However, as a matter of contract law, parties are at liberty to include a choice-of-law clause in agreements that determines whether the FRA will govern the separation agreement on a forward-going basis.  There is no absolute guarantee that a judge will apply this choice-of-law provision in the future, but this clause will definitely have weight in court when a judge is determining what piece of legislation should govern a future dispute.

 

If parties have not included an explicit clause in their separation agreement to indicate that the contracting parties wish to have the FRA govern future disputes, the Interpretation Act (British Columbia) contains a default rule that all new family law proceedings will be brought under the FLA after it comes into effect.  However, this default rule is subject to exceptions. Part 13 of the FLA contains transitional provisions that outline the exceptions to this rule and is outlined below.

 

PARENTING ARRANGEMENTS WITH CHILDREN

 

What are parenting arrangements and how does the FLA deal with custody and access?

Under the FLA “parenting arrangements” refers to the allocations of “parental responsibilities” and “parenting time” that a guardian can have with a child. One of the noticeable differences between the FRA and FLA will be a change of the language and terms typically used to explain legal concepts in family law. For example, the act disposes of the terms “custody” and “access” traditionally used under the FRA. Instead, the FLA refers to terms such as “parental responsibilities”, “parenting time” and “contact”. In addition, under the new statutory scheme, the “best interests of the child” will be the only consideration for reviewing guardianship, parenting arrangements or contact with a child.

 

If I was granted custody in my separation agreement under the FRA, will I lose my rights under the new FLA scheme?

No, Section 251 of the new FLA indicates that if a prior agreement under the FRA provided a party custody or guardianship of a child, then that party will be considered a guardian of the child under the new legislation. Guardians under the FLA have “parental responsibilities” in respect of the child, which basically grants the party decision-making authority over the child. Someone who is not a guardian of a child will be considered to have “contact” with a child.

 

CHILD SUPPORT

 

Will my child support obligations change with the implementation of the FLA?

Like most questions to family law, the answer to this question depends on the particular fact scenario before the court. However, for the most part, child support obligations would remain the same under the FLA. As a general rule, if you have a legal obligation to support a child, the introduction of the FLA will not change this obligation. However, as an exception to this rule, a child under the age of the majority may no longer be entitled to child support if they have withdrawn from the care of their parents.

 

PROPERTY

 

Perhaps the most significant difference between the FRA and the FLA is the division of property. In order to adequately understand how the FLA will deal with property provisions in a separation agreement drafted under the FRA regime, it is useful to first understand the major difference between how property is treated under both statutory schemes.

 

How is property treated under the old FRA?

Generally speaking, the FRA presumes that married parties presumptively share any property on a 50/50 equal basis.  However, if either party disagrees the court then begins a two stage process of identifying the property subject to division, and then determining whether that property has an “ordinary use for a family purpose” as outlined under the FRA.  This investigation is a case-by-case analysis based on the unique circumstances of each fact scenario.  In addition, the FRA grants the court jurisdiction to reapportion property to one party or the other should the court deem it appropriate.  Therefore, things like your assets acquired prior to the marriage, inheritances, and your unequal contributions to the matrimonial home down payment may be taken into consideration in awarding property in a manner other than 50/50.

 

How is property treated under the new FLA?

In contrast, the FLA moves to an excluded property model that involves less judicial discretion, particularly at the initial stage of identifying which assets are subject to division.  Under the FLA, “family property” is property primarily composed of the assets acquired by either spouse during the course of their relationship. Family property is presumptively shared equally between spouses. The court may divide excluded property or reapportion family property, but only where it would be significantly unfair not to do so. In addition, the FLA clarifies what constitutes “excluded property,” which includes assets acquired by a spouse before the relationship, gifts and inheritances received by a spouse, certain kinds of court awards and certain kinds of insurance payments. Thus, except for the increase in value of excluded property during the relationship, excluded property presumptively remains the property of the spouse who acquired it.  In addition, family debts that are incurred during the relationship, or incurred to maintain family property after separation, are presumptive shared equally between spouses.

 

How will the courts interpret an FRA property provision under the new FLA?

The government has indicated that the FRA continues to apply to property agreements or orders made before the FLA comes into force. This is explicitly set-out in section 252 of the FLA under the “Transitional Provisions”. Thus, property division disputes that have been resolved under the FRA may not be re-opened on the basis that new property division rules have been introduced.

 

Where a property division proceeding is started under the FRA, it will be determined under the FRA, unless the parties expressly contract to be governed under the FLA. If parties chose to be governed under the FLA, there would likely be major discrepancies between the outcomes of the original property agreement under the FRA and a judicial interpretation of the agreement under the FLA.  It seems likely that any party with an advantage under the FRA will be unlikely to agree to reassessment under the FLA, and we consequently do not foresee many such reviews.

 

PENSION BENEFITS

 

What is the difference between pension divisions under the FRA and FLA?

Unlike property, the pension regimes under the FRA and FLA are relatively similar. The FLA has only attempted to clarify issues surrounding the law of pension division. For this reason, separation agreements that deal with pension division decided under the FRA are expected to be dealt with under the FLA. Section 13 of the FLA indicates that unless an order or agreement provides otherwise, undivided pension benefits will be divided according to the rules under the FLA. However, as mentioned previously, the interpretation of a pension agreement under the FRA or FLA would not result in a significant difference due to the similarities.

 

SPOUSAL SUPPORT

 

What are the differences for Spousal Support under the FRA and FLA?

Similar to pensions, the spousal support provisions under the FRA and FLA have only minor differences. For example, under the FLA the test for entitlement, quantum and duration now mirrors the Divorce Act. In addition, the FLA does not reference the Spousal Support Advisory Guidelines (hereafter referred to as SSAG), which means that the SSAG continue to be guidelines for judges and are not mandatory. They will likely continue, however, to be highly influential on judges’ decisions. As practiced under the FRA, the SSAG will continue to be applied on a case-by-case basis.

 

Another difference between the acts in the area of spousal support is that the FLA will allow a court to use an unequal division of property to compensate for situations where spousal support is insufficient to meet the spousal support objectives. In contrast, the FRA was silent on how property division should interact with spousal support. 

 

Further, the FLA includes new provisions (namely, Section 164, 168 and 169 of) that provide ways in which spousal support orders or agreements may be changed; and explicitly permits the periodic review of spousal support.

 

The Legislative Assembly has posted the new Family Law Act on its website available for public use. The new act can be accessed here.

Angie Riaño


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