Interim Distributions in Family Law

If there is one certainty about litigation, it is that it often gets expensive quickly. In the circumstances of family law matters, it can be difficult for separated partners to commence and properly prosecute an action when there is substantial disparity in the parties economic positions. The British Columbia legislature has attempted to remedy this through s. 89 of the Family Law Act which allows a party to apply to the Court for an interim distribution of assets to enable them to pay past and future litigation expenses along with associated costs of litigation including experts such as business valuators. This issue was considered by the Honourable Mr. Justice G.P. Weatherill in the decision of Bartch v. Bartch, 2017 BCSC 210. The for granting an application under s. 89 of the Family Law Act, was described by Justice Weatherill as follows:

 [22]  The test for granting a s. 89 order requires that the respondent show necessity for the distribution and that it would not be prejudicial to the claimant. Mr. Tretiak refers me to Master McDiarmid’s comments in Drinkall v. Drinkall, 2016 BCSC 373, in   particular at paragraph 82 where the learned Master cites Justice Fitch, as he then was, in McKenny v. McKenny, 2015 BCSC 1345, at paragraph 57:

The claimant correctly notes that the order sought by the respondent is                                              extraordinary in nature and must be assessed carefully. The test governing interim                        distribution of family property has two components:

 1)  The applicant must show an advance is required to mount a challenge to the other spouse’s position at trial; and

  2)   The applicant must show that the advance or payment on an interim distribution basis will not jeopardize the other spouse’s position at trial.

 [23]  I agree that this summary accurately sets out the test for granting an order under   s. 89. However, I also agree that the main purpose of a s. 89 order is to level the playing field in the sense of the parties’ access to justice. In I.F. v. R.J.R., 2015 BCSC 793, Madam Justice Ballance stated at paras. 190, 191, and 194:

 [190]    In none of the cases yet decided of which I have been made aware has the  court confronted the thorny question of the impact of a marriage agreement that, if  enforceable, would preclude the applicant spouse from the division of family property.

 [191]  The provision itself does not bar the making of an interim order where there is an existing agreement concerning property division. I can conceive of no principled basis to read such a limitation into s. 89 or to otherwise consider the existence of such an agreement as an absolute bar to relief.

[194]    In cases where the applicant may be precluded from entitlement to the family property based on a pre-existing agreement, the notion of being harmful to the other spouse’s interests could also take the form of the court permitting a distribution so as to enable the funding of an unmeritorious claim. A reasonable way to attenuate that manifestation of harm is to require the applicant to show there is a reasonable prospect of success of impeaching the subject agreement. The claimant in the case at hand has satisfied that hurdle.

[24]  Also in Negus v. Yehia, 2015 BCSC 857, the court stated in relation to s. 89 orders:

 [8]  The words in s. 89, “not be harmful to the interests of a spouse”, have to  be reasonably interpreted in accordance with the Supreme Court of Canada’s instruction on statutory interpretation found in cases such as Bell ExpressVu v. Rex, 2002 SCC 42. The fact that it may be commercially inconvenient or awkward for Mr. Yehia to generate these funds does not mean that it is harmful to his interests within the meaning of the section. I do not see credible evidence to support a finding of harm here, within the meaning of s. 89, as I understand the  section and its purpose.

If you are involved in a Family Law dispute, contact the Kushner Law Group today to schedule a consultation.

 

 

 

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