IN THE SUPREME COURT OF BRITISH COLUMBIA

Citation:

Cao v. Chen,

 

2018 BCSC 831

Date: 20180503

Docket: E100233

Registry: Vancouver

Between:

Weihong Cao

also known as Wei Hong Cao

Claimant

And

Yongchang Chen also known as Yong Chang Chen

and Chao Chen

Respondents

Before: The Honourable Madam Justice Forth

Oral Reasons for Judgment

In Chambers

Counsel for the Claimant:

J.E. Shragge

Counsel for the Respondent Yongchang Chen:

G.K. Thomas

Counsel for the Respondent Chao Chen:

B.H.Y. Blake

K.J. Learn

Place and Date of Hearing:

Vancouver, B.C.

May 3, 2018

Place and Date of Judgment:

Vancouver, B.C.

May 3, 2018


 

Introduction

[1]             These reasons address two applications that have been made in this proceeding. The first application filed by the claimant, Weihong Cao, on March 29, 2018 for payment of support arrears was heard on April 6, 2018. The claimant seeks orders directing the respondent Yongchang Chen to:

a)    Pay into court or his lawyer’s trust account:

                           i.          $96,000 as security for 16 months of arrears owing under the interim order of Master Muir dated May 12, 2016 (the “Support Order”), and

                          ii.          $72,000 as security for 12 months of payments falling due under the Support Order from May 1, 2018 to April 1, 2019; or

b)    Provide the claimant with 12 post-dated cheques for the payments falling due under the Support Order from May 1, 2018 to April 1, 2019.

[2]             The claimant also seeks special costs, and an order that the respondent Yongchang Chen pay the claimant a fine of $2,500 or such amount as the Court deems fits.

[3]             The Support Order pronounced by Master Muir on May 12, 2016, by consent, provided that:

2. The Respondent, Yongchang Chen, aka Yong Chang Chen, will pay to the Claimant the sum of $6,000.00 Canadian dollars per month for support commencing June 1, 2016 and on the first of every month thereafter until further order or written agreement of the parties.

3. The noted $6,000.00 support payment is without prejudice to either party’s argument with respect to the quantum of support and is without prejudice as to the characterization of support.

[4]             The second application filed by the claimant on April 16, 2018 for an interim advance was heard on April 26, 2018. The claimant seeks the following orders:

a)    declaration pursuant to s. 57 of the Family Relations Act, R.S.B.C. 1996, c. 128 [FRA] that there is no reasonable prospect of reconciliation, effective as of January 21, 2013, nunc pro tunc;

b)    a property located at 721 Southborough Drive, West Vancouver, BC (the “Property”) be forthwith listed and sold;

c)     the claimant have sole conduct of the sale of the Property;

d)    the net proceeds of the sale of the Property be paid to Jeremy Shragge Law Corporation in trust;

e)    the net proceeds be held in an interest bearing trust account until further order of this Court, save and except that counsel for the claimant shall retain $125,000 of the net proceeds as a retainer for legal representation, which amount shall be without prejudice to the respective claims of the parties, and shall be subject to a final accounting between the parties upon the determination of the outstanding issues in this litigation; and

f)      costs.

[5]             The respondent Chao Chen took no position on the two applications. In the remainder of these reasons, the reference to “respondent” will be to Yongchang Chen.

Arrears Application

Parties’ Positions

The claimant

[6]             The claimant submits that aside from the first six months following the Support Order (i.e. June to November 2016), the respondent has failed to comply with the Support Order. The claimant submits that as of the date of filing the application, the respondent is in arrears for 15 months, or $90,000.

[7]             The claimant concedes that the respondent has made additional ex gratia payments to her from time to time, but submits that these payments are for the benefit of the parties’ three children, do not occur with any regularity, and are not proper substitutes for the payments required by the Support Order. The claimant submits that her counsel has attempted to have the Family Maintenance Enforcement Program enforce the Support Order, but it has not done so for reasons that are unclear.

[8]             The claimant requests that I exercise my discretion pursuant to s. 230(2) of the Family Law Act, S.B.C. 2011, c. 25 [FLA], and order the claimant pay the arrears amount, the security, and the fine.

The respondent

[9]             The respondent denies the claimant’s assertions. He submits that he has paid the claimant more than what is required by the Support Order. He submits that in 2017 he paid a total of $86,000 to the claimant, and that in January and February of 2018 he paid a total of $48,723 to the claimant. He also submits that in 2017 he paid $21,975 to their daughter, and in 2018 he has paid $2,000 to their daughter. He concedes that the payments made to the daughter cannot be characterized as support payments pursuant to the Support Order.

Issue 1 – Support

Legal principles

[10]         The parties have not provided case authorities upon which to analyze the key issue in dispute – whether the respondent is in arrears for support. However, there is disagreement about what constitutes a support payment under the Support Order.

[11]         The claimant requests that I exercise my discretion pursuant to s. 230(2)(a) of the FLA to ensure the respondent’s compliance with the Support Order. The Support Order is clear that payments of $6,000 are to be made to the claimant herself. The claimant submits that to properly comply with the Support Order, the payments must be in the exact sum of $6,000, on the first day of each month. The claimant submits that a payee spouse, especially in a high-conflict matrimonial dispute, is entitled to predictability and certainty, and it is not open to the payor spouse to comply with a specific order merely as he sees fit.

[12]         As the Support Order “is without prejudice as to the characterization of support”, I will not speculate on the intended use of the payments or their intended purpose in satisfying either spousal maintenance or child support obligations. However, I quote Justice L’Heureux-Dubé in Moge v. Moge, [1992] 3 S.C.R. 813 at 871, for the proposition that, at least in the context of spousal maintenance, “support orders remain essentially a function of the evidence led in each particular case.”

The evidence

[13]         The submitted evidence supports that the respondent sent the claimant cheques or drafts with the following dates and amounts from November 2016 to date:

1.

November 2016

(post-dated cheque)

$6,000

2.

November 24, 2016

$20,000

3.

January 26, 2017

$10,000

4.

February 20, 2017

$16,000

5.

April 18, 2017

$20,000

6.

April 29, 2017

$20,000

7.

November 29, 2017

$20,000

8.

January 8, 2018

$5,000

9.

February 23, 2018

$5,000

10.

March 6, 2018

$10,000

11.

March 26, 2018

(claimant alleges this one was never received)

$10,000

12.

March 28, 2018

$10,000

 

 

 

 

TOTAL:

$152,000

[14]         The claimant submits that several of these payments do not satisfy the obligations of the Support Order. She deposes that:

·       The cheque dated November 24, 2016 for $20,000 was to pay for a holiday, in which she took their three children to Florida and then on a Caribbean cruise.

·       The cheque dated January 26, 2017 was unsigned, and the claimant has “no memory or record of receiving this cheque, which appears never to have been cashed”.

·       The cheque dated February 20, 2017 for $16,000 was given to her for the express purpose of purchasing airlines tickets for her and their three children to return to China for a short holiday in March of 2017, and she used the funds to buy the tickets.

·       The cheque dated April 18, 2017 for $20,000 bounced. It was given to the claimant to repay her for purchasing “highly prized” caterpillar fungus for the respondent while she was in China. The draft dated April 29, 2017 for $20,000 was then given to her in place of the April 18, 2017 cheque.

·       The draft dated November 29, 2017 for $20,000 was given to her for the express purpose of purchasing airline tickets for her and their three children to return to China for a short holiday during the Christmas break, and she used the funds to buy the tickets.

·       The cheque dated January 8, 2018 for $5,000 was given to her to pay for supplemental math and English classes for their younger children, and she used the funds to pay for the tutoring.

·       The cheque dated February 23, 2018 for $5,000 was given to her to pay for math and English classes for their younger children, and the funds were used for that purpose.

·       The cheque dated March 6, 2018 for $10,000 bounced.

·       The cheque dated March 26, 2018 for $10,000 was never received.

·       The cheque dated March 28, 2018 for $10,000 was received, but she does not know whether it has cleared. This amount was to pay for the children’s skiing lessons and associated expenses at Cypress Mountain.

[15]         I note that the respondent has also submitted evidence regarding payments made to one of the parties’ daughters. As these payments were not made to the claimant herself, they are not relevant to this issue.

[16]         The respondent has also provided evidence supporting that he paid for the claimant’s car insurance in the amount of $8,723 on February 27, 2018. Although the cheque appears to reference a license plate number “PW606C”, which is consistent with an owner’s certificate of insurance in the name of Cao Wei Hong, I am not persuaded that this amount is in the nature of support pursuant to the Support Order. The amount was not paid to the claimant and there is insufficient evidence to find that it was intended to satisfy the Support Order.

Analysis of the disputed payments

[17]         With respect to the payments totalling $56,000, which were allegedly spent on the holiday, the cruise, and the airline tickets, there are several issues. First, the claimant has provided no additional evidence beyond her deposed statement to support that these funds were used, in fact, to purchase airline tickets or the southern holiday. It would have been a simple exercise to submit a receipt or proof of payment. The absence of any supporting documentation is of a concern. It is not known how much money was used for tickets and holidays.

[18]         Second, the claimant has provided no specifics as to the communications between her and the respondent with respect to these payments other than that the payments were “to pay for a holiday” and were for the “express purpose of purchasing airline tickets”. I do not suggest that a payor spouse can never provide a cash payment that is exclusive of support obligations; however, in this case I am unable to find that these payments were “ex gratia”, or some kind of gift, without substantiating evidence. Furthermore, I note that a number of the cheques reference “Support Payment” in the bottom left corner.

[19]         Lastly, even if these amounts were put towards airline tickets or a holiday, I am not convinced that this would necessarily disqualify them from satisfying the Support Order obligations. As mentioned previously, I am unable to speculate on the characterization of the Support Order payments. I note that, typically, amounts paid for spousal maintenance and child support could include certain travel expenses, which are justified through the objectives of child support (see Federal Child Support Guidelines), the objectives of spousal support (see Family Law Act, s. 161 or Divorce Act, s. 15.2(6)), the payor’s moral obligations, and the statutory schemes in place.

[20]         Overall, I am of the view that the payments totalling $56,000 are to be credited towards the respondent’s Support Order obligations.

[21]         With respect to the cheque dated January 26, 2017 for $10,000, the respondent’s evidence, a screen shot of his bank statement, supports that this cheque was in fact received and cashed by the claimant, despite that it was unsigned. As a result, this amount is to be credited to the respondent’s support obligations.

[22]         With respect to the amount totalling $20,000 for the caterpillar fungus reimbursement, I accept that the initial cheque bounced; the respondent has not forcefully contested this. The claimant has deposed that the amount was linked to the purchase of caterpillar fungus. I am going to accept the evidence of the claimant since there was no issue taken at the hearing by counsel for the respondent that this was not accurate. If it turns out that this evidence is not correct and the funds were not for the reimbursement for caterpillar fungus then in the final accounting credit should be given to the respondent for this as part of the support payment.

[23]         As a result, the $20,000 bank draft dated April 29, 2017 is not credited towards the respondent’s support obligations.

[24]         With respect to the cheques dated January 8 and February 23, 2018, there is a lack of evidence on the educational expenses, and in light of fact that the cheque dated January 8, 2018 states “Support Payment” in the bottom left corner, I find that these amounts shall be credited towards the respondent’s support obligations.

[25]         With respect to the cheque dated March 6, 2018 for $10,000, the claimant’s evidence does support that the cheque bounced. Exhibit A of the claimant’s affidavit sworn April 3, 2018 is a printout from her personal bank statement in which the cheque has been returned for insufficient funds. As a result, this amount is not credited towards the respondent’s Support Order obligations.

[26]         With respect to the last two payments of $10,000, I accept that the claimant did not receive the cheque dated March 26, 2018. I also accept that at the time of this application, it was unknown whether the March 28, 2018 payment went through. As a result, neither of these amounts are credited towards the respondent’s support obligations.

[27]         If it turns out that the March 28, 2018 payment did go through, it will be credited to the respondent’s support obligations.

Summary

[28]         Between November 1, 2016 and April 1, 2018, the respondent has incurred support obligations for 18 months, at $6,000 a month, which totals $108,000. From the $152,000 in cheques or drafts the respondent alleges were sent to the claimant, the following should be removed:

a.

April 18, 2017 –

cheque which bounced

$20,000

b.

April 29, 2017 –

cheque for the caterpillar fungus repayment

$20,000

c.

March 6, 2018

cheque which bounced

$10,000

d.

March 26, 2018

cheque which was never received

$10,000

e.

March 28, 2018 –

cheque which has not cleared

$10,000

 

 

 

 

TOTAL:

$70,000

[29]         Over the same period, the respondent has made payments to the claimant in the amount of $82,000 ($152,000 minus $70,000). As a result, the respondent is currently in arrears for $26,000 if the March 28, 2018 cheque has not cleared ($108,000 minus $82,000). If it does clear, then the amount of arrears is $16,000.

[30]         I order that the respondent immediately pay the claimant the amount of $26,000 if the March 28, 2018 cheque has not cleared. If it has cleared then the amount of $16,000 should be paid.

[31]         In addition, to avoid future applications of a similar nature, and to prevent the wasting of valuable judicial time and resources, I order that the respondent provide the claimant 12 post-dated cheques in the amount of $6,000 each for payments falling due from May 1, 2018 to April 1, 2019, pursuant to the Support Order.

Issue 2 – Costs and Fine

[32]         The claimant seeks an award of special costs and a fine of $2,500 for the respondent’s failure to comply with the Support Order.

[33]         Special costs are intended to punish reprehensible conduct in the course of litigation. Reprehensible conduct includes scandalous or outrageous conduct as well as milder forms of misconduct deserving of reproof or rebuke: Smithies Holdings Inc. v. RCV Holdings Ltd., 2017 BCCA 177 at paras. 132-134.

[34]         The conduct at issue in this case is the respondent’s non-compliance with the Support Order, specifically: (1) the respondent’s failure to make exact payments of $6,000 every month; and (2) the respondent’s current state of arrears.

[35]         With respect to the respondent’s failure to make payments of exactly $6,000 on the first of each month, I note that based on my earlier findings, during the period between November 1, 2016 and May 31, 2017, the respondent made payments to the claimant totalling $52,000. This equates to an overpayment of $10,000 for that period.

[36]         During the six months that followed (from June 1, 2017 to November 30, 2017), the respondent made one payment totalling $20,000, which equates to an underpayment of $16,000 for that period. However, taking into account the $10,000 overpayment, the respondent had a negative balance of $6,000 as of November 30, 2017. In the five months since the end of November, the respondent has made payments totalling $10,000 or $20,000, if the March 28, 2018 cheque clears.

[37]         In my view, this is not the type of scandalous or outrageous conduct that is contemplated by the law on special costs. That is not to say the respondent’s recent falling into arrears is condonable; however, I note that for the first year of the Support Order, the claimant had the benefit of an overpayment as a result of various sums transferred to her. I have not been directed to any evidence in this application that indicates that the claimant objected to this practice.

[38]         As a result, I deny the award of special costs, but order costs against the respondent. I do so since the respondent is primarily responsible for his failure to specifically comply with the Support Order. If the respondent had provided cheques in the amount of $6,000 at the beginning of each month to the claimant, which is what the Support Order required, then it would have been clear whether the Support Order was being complied with. He failed to do so.

[39]         For similar reasons, I decline to exercise my discretion to order a fine against the respondent. I do not see his conduct as one meriting a fine in all of the circumstances.

[40]         I also deny the respondent’s request for special costs relating to what he characterizes as “unfound allegations” against him.

Interim Advance Application

Parties’ Positions

The claimant

[41]         The claimant seeks an order for sale of the Property, which she maintains is a family asset, on the basis she is in severe financial difficulty and needs funds to retain counsel to defend the two-week trial set to commence on June 11, 2018 respecting recognition of the Chinese judgment: see reasons indexed at 2017 BCSC 1851 for further details respecting this issue.

[42]         She claims that it is clear that the Property is a family asset and as such she is presumptively entitled to one-half of it pursuant to s. 58(3)(d) of the FRA. She asserts that the respondent has not adduced any evidence to displace this presumption.

[43]         The claimant seeks the interim distribution to “level the playing field” since there is an enormous disparity in the financial resources that she has in comparison to the two respondents. She requires counsel to represent her at the June trial since the issues are complex and involve the application of Chinese and private international law. She cannot adequately represent herself in that she does not speak English and she would be facing three experienced counsel acting on behalf of the respondents.

[44]         The claimant asserts that there will be no prejudice to the respondent since the Property was purchased as an investment property and will eventually have to be sold, and, as such, both parties will benefit from the monetization of the asset.

The respondent

[45]         The respondent disagrees that the Property will be found to be a family asset on the basis that the funds used to purchase the Property came from a company in China that the Chinese judgment decided was not a family asset. The argument presented is that if the source of the funds to purchase the Property is not a family asset then the Property is an excluded asset.

[46]         Furthermore, the respondent asserts that the claimant is precluded from making a claim against the Property since she failed to make an application for property division within two years from the divorce order made by the Chinese courts and as a result her claim for property division is statute barred. He argues that as a result of the Chinese divorce order, she is no longer a spouse as defined in s. 1(1) of the FRA and therefore has no standing.

[47]         The respondent submits that the claimant’s evidence and her finances as disclosed in her financial statement sworn September 14, 2017 do not support that she is in severe financial difficulty and cannot afford to pay a retainer to a lawyer.

[48]         Finally, he submits that the discretion to order an interim distribution for the purpose of payment of legal fees was rarely made under s. 66 of the FRA. There should be no reference to the more “generous” judicial treatment of interim advances pursuant to s. 89 of the Family Law Act, S.B.C. 2011, c. 25 [FLA].

The issues

[49]         The issues that arise are:

a)    Is the Property a family asset?

b)    Is the claimant prohibited from making a claim for property division due to the expiry of some limitation period?

c)     Does the claimant meet the test for an interim distribution under the FRA?

d)    If so, is it necessary or expedient to order the sale of the Property pursuant to Rule 15-8 of the Supreme Court Family Rules?

e)    If so, should a s. 57 declaration be made and as at what date?

f)      How should the sale of the Property be conducted?

a)    Is the property a family asset?

[50]         The parties were married on January 25, 1994 in China; they separated in September 2009. The Property was purchased on January 8, 2009, when the parties were still married.

[51]         The claimant’s evidence is that after the marriage, the respondent started a company called Zhong Sheng Guo Dian in China (the “Company”) that owns and operates three coal mines in China. The Company has been very successful.

[52]         She deposes that in or about 2006 she and the respondent decided to immigrate to Canada and the family started living on a regular basis in Canada in February 2008.

[53]         Upon their arrival in Canada, the respondent commenced actively investing in real estate. The first property purchased was the Property at issue in this application.

[54]         There is no direct evidence on this application supporting how the Property purchase was funded. In her affidavit dated January 20, 2010, the claimant deposed that the respondent had approximately $3,700,000 deposited at a TD Bank in Richmond in the respondent’s name, and that these funds were derived from the respondent’s interest in the Company.

[55]         The Property was registered in the name of the respondent.

[56]         In the pleadings, the respondent claimed for the reapportionment of this Property in his favour.

Legal principles

[57]         The FRA is the applicable legislation to this property division. Section 252 of the FLA is the transition provision dealing with proceedings respecting property division. Unless spouses otherwise agree, and these parties have not, proceedings respecting property division that started under the FRA must be continued under that Act.

[58]         The key part of the FRA to this analysis is Part 5, headed “Matrimonial Property”, and the key provisions are s. 56, which sets out when a spouse is entitled to a half interest in a family asset, and ss. 58 and 59, which define “family asset”.

[59]         Section 58 of the FRA defines a family asset as:

Family asset defined

58 (1)  Subject to section 59, this section defines family asset for the purposes of this Act.

(2)  Property owned by one or both spouses and ordinarily used by a spouse or a minor child of either spouse for a family purpose is a family asset.

(3)  Without restricting subsection (2), the definition of family asset includes the following:

(a) if a corporation or trust owns property that would be a family asset if owned by a spouse,

(i)  a share in the corporation, or

(ii)  an interest in the trust

owned by the spouse;

(b) if property would be a family asset if owned by a spouse, property

(i)  over which the spouse has, either alone or with another person, a power of appointment exercisable in favour of himself or herself, or

(ii)  disposed of by the spouse but over which the spouse has, either alone or with another person a power to revoke the disposition or a power to use or dispose of the property;

(c) money of a spouse in an account with a savings institution if that account is ordinarily used for a family purpose;

(d) a right of a spouse under an annuity or a pension, home ownership or retirement savings plan;

(e) a right, share or an interest of a spouse in a venture to which money or money’s worth was, directly or indirectly, contributed by or on behalf of the other spouse.

(4)  The definition of family asset applies to marriages entered into and property acquired before or after March 31, 1979.

[60]         Under s. 56 of the FRA, each spouse is entitled to a presumptive one-half undivided interest in each family asset as a tenant in common upon the happening of one of the events set forth in s. 56(1), commonly known as a “triggering event”:

(a) a separation agreement,

(b) a declaratory judgment under section 57,

(c) an order for dissolution of marriage or judicial separation, or

(d) an order declaring the marriage null and void.

[61]         In this case, there has been no s. 57 declaration. Furthermore, no separation agreement has been submitted to this Court. The only potential triggering event is the Chinese divorce that was granted on January 21, 2013.

[62]         An asset set out in s. 58(3)(d) is deemed to be a “family asset” without proof of ordinary use or family purpose: see Yang v. Zhang, 2017 BCSC 524 at para. 50; K.J.L. v. M.S.L., 2005 BCSC 34 at para. 25.

[63]         Pursuant to s. 60 of the FRA, “[t]he onus is on the spouse opposing a claim under section 56 to prove that the property in question is not ordinarily used for a family purpose.”

Discussion

[64]         The claimant takes the position that since the Property was purchased and owned prior to the separation of the parties, it is presumptively a family asset pursuant to s. 58(3)(d) of the FRA and the onus is on the respondent to present evidence to displace this presumption, which he has not.

[65]         The respondent takes the position that the funds that were used to purchase the Property came from funds of the Company. The Company was found not to be a family asset in the Chinese judgment, and, as such, the Property is not a family asset.

[66]         There are two concerns with the respondent’s position in this application: firstly, the Chinese judgment has not been recognized by this Court, it remains a “live” issue; and secondly, even if the monies came from a Company that ultimately turned out not to be a family asset, that does not necessarily render the Property purchased in BC an excluded asset.

[67]         The respondent has not provided support for the proposition that money coming from a business cannot end up as a “family asset”. To the contrary, the wording of s. 58 of FRA puts limited importance on the original source, and instead emphasizes the asset’s use. For example, s. 58(3)(c) provides that:

58  (3)  Without restricting subsection (2), the definition of family asset includes the following:

(c) money of a spouse in an account with a savings institution if that account is ordinarily used for a family purpose;

[Emphasis added.]

[68]         Furthermore, I note that s. 59 of the FRA addresses “excluded business assets” but does not provide any condition for the tracing of funds that are eventually used to purchase assets:

Excluded business assets

59  (1)  If property is owned by one spouse to the exclusion of the other and is used primarily for business purposes and if the spouse who does not own the property made no direct or indirect contribution to the acquisition of the property by the other spouse or to the operation of the business, the property is not a family asset.

[69]         In light of the above provisions, the submitted evidence, and the onus of proof on the respondent, I am prepared to hold that the Property is a family asset for the purposes of this application.

b)    Is the claimant prohibited from making a claim for property division due to the expiry of a limitation period?

[70]         The respondent takes the position that since the parties were divorced in China on January 21, 2013, and the claimant did not bring an application for property division within two years of that date, she is prohibited from making any claim for property division in this proceeding.

[71]         The respondent relies upon the definition of spouse in s. 1(1) of the FRA which provides:

“spouse” means a person who

(a) is married to another person,

(b) except under Parts 5 and 6, lived with another person in a marriage-like relationship for a period of at least 2 years if the application under this Act is made within one year after they ceased to live together and, for the purposes of this Act, the marriage-like relationship may be between persons of the same gender,

(c) applies for an order under this Act within 2 years of the making of an order

(i)  for dissolution of the person’s marriage,

(ii)  for judicial separation, or

(iii)  declaring the person’s marriage to be null and void, or

(d) is a former spouse for the purpose of proceedings to enforce or vary an order.

[72]         The respondent’s interpretation of this section is that the claimant had to make an application for an order for division of the property in BC within two years from the date of the dissolution of the marriage, being January 21, 2013.

[73]         The respondent further relies on the fact that no s. 57 declaration has been made in this proceeding and as such the only triggering event was the Chinese divorce on January 21, 2013.

[74]         The claimant did apply for division of property in the writ of summons and statement of claim filed on January 22, 2010.

[75]         The respondent relies on the Court of Appeal’s decision in Suckau v. Suckau, 2002 BCCA 300 [Suckau], to support his proposition. The facts in Suckau are markedly different than those currently before me. In that case, the respondent had moved back to Germany from Canada in January 1990. While in Germany, she commenced divorce proceedings, and on February 27, 1995, a German court made an order divorcing the parties. The respondent commenced the BC proceeding on May 13, 1998, more than three years after the divorce order was made. The Court of Appeal noted that the trial judge did not address any limitation periods in his judgment.

[76]         The Court of Appeal then referenced the decision in Tatlock v. Tatlock, [1994] B.C.J. No. 403 (C.A.) [Tatlock], in which the court held that because the Quebec Superior Court had ordered a judicial separation more than two years before the commencement of the BC action, the plaintiff was out of time, as she no longer met the definition of a spouse.

[77]         The respondent also refers to the Court of Appeal’s decision in Halliday v. Halliday, 2015 BCCA 82 [Halliday] in support of his proposition. In that case, there was a separation agreement entered into on July 23, 2009 that included issues respecting property division and spousal support. In August 2009, the parties commenced divorce proceedings by way of a joint family law case. On March 7, 2011, a final order for divorce was issued in that proceeding. No claims were made in the divorce proceeding concerning property division or spousal support. On January 6, 2014, the wife commenced proceedings and sought an order replacing parts of the separation agreement for spousal support.

[78]         In Halliday, the Court of Appeal noted at para. 34:

[34]      The FRA and FLA contain provisions that effectively limit when claims for division of property or applications for spousal support can be brought. While the FRA did not have a specific limitation provision, a limitation period was read into the legislation by way of the definition of “spouse”. Only a “spouse” could seek spousal support or challenge a property division. By definition, a person ceased to be a “spouse” 2 years after a divorce was pronounced, becoming instead a “former spouse”. In the result, there was no jurisdiction to hear applications for spousal support or division of assets under the FRA if proceedings were brought more than two years after the parties were divorced: see Suckau v. Suckau, 2002 BCCA 300, Tatlock v. Tatlock (1994), 88 B.C.L.R. (2d) 197 (C.A.). The FRA contained no provisions pursuant to which the time to bring an action could be extended.

[Emphasis added]

[79]         The clear distinguishing factor to all of the cases cited by the respondent is that the claimant, in this case, brought a proceeding while she was still married to the respondent seeking property division. She was a spouse at that time as provided for in s. 1(1)(a) of the FRA. By virtue of her bringing this proceeding and making the claim for property division she is not required to bring an application for an order to preserve her rights to make a property division claim.

[80]         The claimant’s rights to a claim in property division are clearly preserved by the original writ of summons and statement of claim, which was filed when the parties were still married, and which has yet to be resolved. This distinguishes the case at hand from the decisions in Suckua and Tatlock, in which initiating proceedings were commenced more than two years after a triggering event. It also distinguishes the case at hand from the decisions in Halliday and Ren v. Emerson, 2018 BCSC 221, in which parties sought to vary final separation agreements more than two years beyond the triggering event. Lastly, Brehm v. Moore, 1996 CanLII 2273 (B.C.S.C.) and Lovricic v. Lovricic, 1983 CanLII 377 (B.C.C.A.) [Lovricic] are distinguished on the basis that those cases involved unmarried partners and thus engaged different paragraphs in the definition of “spouse”.

[81]         To quote the Court of Appeal in Lovricic at para. 11, the purpose of the limitations “is to have a time limit. When that time has expired, people can say with some certainty what their rights and obligations are.” As the issues pled in the original writ of summons and statement of claim have yet to be determined in the case at hand, this statement is of limited relevance.

[82]         As a result, I find no merit in the limitation argument that the respondent makes.

c)    Does the claimant meet the test for an interim distribution under the FRA?

[83]         The parties do agree that the applicable section of the FRA is s. 66(1) which reads:

Determination of ownership, possession or division

66  (1) In proceedings under this Part or Part 6 or on application, the Supreme Court may determine any matter respecting the ownership, right of possession or division of property under this Part, including the vesting of property under section 65, or under Part 6 and may make orders that are necessary, reasonable or ancillary to give effect to the determination.

[84]         The parties agree that the court has the jurisdiction to make the order and that the test as set out in Jiwa v. Jiwa, [1992] B.C.J. No. 3024 at para. 8 (S.C.) is a twofold one that asks:

a)    Is the advance required to mount a challenge to the other spouse’s position at trial?

b)    Will an advance or a payment of an interim distribution jeopardize the other spouse’s position at the trial?

[85]         The parties disagree on whether the Court should apply the restricted case law that existed prior to the enactment of s. 89 of the FLA or a more liberal approach. I note that in Halliday, at paras. 42-43, the Court of Appeal stated that:

[42]      The effect of s. 252(1) of the FLA is to allow parties that would otherwise have been subject to the FLA property regime at the time they filed their claim to proceed under the old FRA regime despite it having been repealed. In essence, s. 252(1) preserves the FRA regime as it concerns property division for any separation agreements that were finalized before the FRA was repealed, unless the parties elect to proceed under the FLA.

[43]      There is no evidence that the parties agreed that the dispute be governed by the FLA rather than the FRA. Accordingly, an application such as that brought by the Wife to set aside or replace a separation agreement made before the FLA came into force and dealing with property division must be resolved under the FRA. Procedurally, this means that s. 198 of the FLA, the section upon which the Husband relies, could not be used as a means of dismissing the Wife’s proceeding to set aside the property provisions of the Separation Agreement.

[Emphasis added.]

[86]         The cases decided prior to the enactment of s. 89 of the FLA provided that courts should be “very cautious”, see para. 15 of Prystay v. Prystay, 2006 BCSC 495, and granting an interim advance was an “extraordinary order and one that must be weighed carefully and approached with reticence”, see para. 43 of Van den Dungen v. Van den Dungen, 2013 BCSC 1273.

[87]         Specifically there was a reluctance to order an interim distribution of assets for the purposes of funding past or projected legal expenses as noted in Ansari v. Ansari, 2000 BCSC 634 at para. 28:

[28]      As the interim distribution of assets sought relates primarily to past and projected legal expenses in the matrimonial litigation, entitlement falls to be determined, in my view, within s. 66 and with regard to the limitations expressed in the earlier decisions. The weight of authority is against ordering an interim distribution of assets to meet past and, in particular, future legal expenses except to fund unusual disbursements relating specifically to the valuation of assets. I decline to order an interim distribution in favour of either party.

[88]         Since the enactment of s. 89 of the FLA, which specifically addresses interim distributions to fund family law proceedings, the courts have commented on the need to “level the litigation playing field” and to assist “economically disadvantaged spouses to access justice in matrimonial cases”: see I.F. v. R.J.R., 2015 BCSC 793 at para. 192; J.W.L.P. v. A.J.P., 2017 BCSC 1898 at paras. 120-122.

[89]         Regardless of the approach taken, the question that needs to be answered is whether the advance is required to mount a challenge at trial. There has to be evidence to support the applicant’s position that such an advance is required.

[90]         It is this aspect of the claimant’s application that concerns me for the following reasons:

a.     The claimant’s financial statement supports that as of September 14, 2017, she has the following assets:

                           i.          a property in China worth approximately $745,000 which is unencumbered. There was no evidence on why the claimant could not borrow against that asset;

                          ii.          a unencumbered motor vehicle with an estimated value of $180,000;

                        iii.          financial assets in the amount of approximately $142,000.

b.     The claimant claims in her financial statement to have expenses of approximately $50,000 a month and approximately $600,000 a year, yet her income is $10,000 in commissions for assisting a friend sell water systems to clients in China and the $6,000 monthly pursuant to the Support Order;

c.     She deposes that she is in “severe financial difficulty” and is forced to borrow from friends to support herself and the three children, but no particulars of any borrowing or documents in support have been provided;

d.     She was represented in the Chinese proceedings by lawyers and in this action she was previously represented by two law firms. There are no particulars provided of any debt owed to any of the prior lawyers she has retained.

[91]         I am not convinced that the extraordinary remedy of forcing the sale of the Property is warranted on the evidence that was produced in this application.

[92]         I will address the second prong of the test since I am not convinced the claimant has met that prong as well. The claimant is in essence seeking a “forced” sale of the Property. The Property has a tenant. There is no evidence that the Property is ready to be sold in that it has been appropriately cleaned up and is ready to be shown so that the best price is obtained. The respondent’s position is that there will be tax consequences on the sale of the Property. It may well be that as the matter proceeds the respondent may wish to keep the Property as an investment property and not be forced to sell it.

[93]         The respondent disagrees with the claimant’s submissions that the Property would have to eventually be sold. The respondent deposes that in 2015, he settled this action with the claimant and he purchased a property, 6650 Wiltshire, Vancouver, and paid the claimant 1 million RMB in accordance with this alleged settlement. It is not clear if the respondent intends to pursue this allegation since it is not currently reflected in the pleadings.

[94]         If the settlement of the action defence is pursued and if it is successful, then the Property will remain belonging to the respondent. If it is sold by way of a court order prior to the trial on the merits, the respondent will be prejudiced and harmed since he will be deprived of an asset which he does not wish to dispose of.

[95]         I need not deal with the remaining issues listed at para. 49 of these reasons since the test for an interim distribution has not been met on the evidence before me.

Summary

[96]         A summary of the orders granted is as follows:

a)    The respondent will immediately pay the claimant the arrears of $26,000. This amount may be adjusted downwards to $16,000 if the cheque dated March 28, 2018 has cleared.

b)    The respondent will provide the claimant with 12 post-dated cheques in the amount of $6,000 each for payments falling due from May 1, 2018 to April 1, 2019, pursuant to the Support Order.

c)     The post-dated cheques will be provided to the claimant on or before May 18, 2018;

d)    The claimant’s application for the sale of 721 Southborough Drive, West Vancouver, BC is dismissed.

e)    Costs to the claimant for her application filed March 29, 2017.

f)      Costs to the respondent, Yongchang Chen, for the application of the claimant filed April 16, 2018.

g)    The respondent, Chao Chen, is not entitled to any costs for attending these applications.

“The Honourable Madam Justice Forth”