Source: https://elawtalk.com/dividing-a-business-when-going-through-divorce-in-bc/
Timestamp: 2019-04-22 12:19:41+00:00

Document:
When a couple owns a business, property division can be difficult. However, BC Courts have dealt with it extensively - here are the basic regarding businesses and divorce.
Louise and Don have been married for 18 years. For the first 7 of those years Louise worked at a Whitespot while Don went to medical school. Don now works at the University of Victoria medical health center walk-in clinic. Their marriage has broken down and Louise is arguing that Don’s medical degree is a family asset and she is entitled to a half-interest as per section 56 of the Family Relations Act. However, there is no specific provision in the FRA that allows Louise to do this. Under sections 58 and 59 of the FRA business assets are considered family assets they are owned by one spouse and not used primarily for business to the exclusion of the other spouse.
It is important to note that there is a difference between a medical practice and a medical degree. Where a spouse owns a professional practice, or shares in the partnership or professional management company, this property may be divided and valued like any other business. However, professional qualifications, like Don’s medical degree, are not tangible assets that a value can be placed on. Courts have generally held that these are not property within the meaning of ss. 58 and 59 and as such, Louise has no claim against Don’s training.
As the BC Court of Appeal reasoned in Samson v. Samson, the earnings from employment cannot be treated as property and are more properly classified as income. The trend in family law has been to deal with contributions made by spouses towards higher education and professional degrees through spousal support rather than the division of property. Therefore, it would make more sense for Louise to bring evidence of her endeavors to assist Don with his career in a spousal support action.
Can licences ever be considered family assets?
There are some circumstances where a licence may be considered a family asset. For example in Seymour a commercial fishing licence was considered a family asset that was divisible as property. The BC Superior Court maintained that it generated income for a family that was distinct from other intangibles such as a university degree or professional qualification. The court determined the fishing licence had no personal quality, and could be used by anyone. It was distinguished from a medical licence which was only valuable in the hands of the person who it was awarded to. Where the value of a licence can be transferred, it may be considered a family asset.
Similarly, a milk quota was also to be a family asset. It was ordinarily used for a family purpose and had potential for marketability and profit, which meant that it could be valued.
What about contributions to a family business?
Suppose instead of being a medical doctor, Don was a used car salesman and owned his own business. Louise attended the office every now then and while she was there she would greet the customers. She also liked graphic design and would often make signs for the windows of the showroom advertising sales. Now that the couple has divorced, Louise is seeking to establish that Don’s business was a family asset.
Therefore it is reasonable to assume that Louise’s participation in Don’s business through her graphic design and customer service would be considered a contribution. The business would be considered a family asset, of which Louise would be entitled to half through the Family Relations Act.
 Family Relations Act, RSBC 1996, c 128, s. 56.
 Coulthard v. Coulthard (1984), 38 R.F.L. (2d) 78 (B.C.S.C.).
 Laxton v. Laxton (1981) 26 B.C.L.R. 57 (S.C.), Rev’d in part (1982) 41 B.C.L.R. 194 (C.A.).
 Wilson v. Wilson (1982) 27 R.F.L. (2d) 424 (B.C.S.C.).
 Samson v. Samson (1996) 26 R.F.L. (4th) 333 (B.C.C.A.).
 Moge v. Moge (1992) 43 R.F.L. (3d) 345 (SCC); De Beeld v. De Beeld (1999) B.C.C.A. 515.
 Seymour (1992) 71 B.C.L.R. 218 (S.C.).
 Verschurr (1992) 72 B.C.L.R. (2d) 397 (C.A.).
 Family Relations Act , ss. 58-59.
 O’Bryan v. O’Bryan (1996) B.C.J. No. 1125 (S.C.).
 Piercy v. Piercy (1991) 31 R.F.L. (3d) 187 (B.C.S.C.).
 O’Keefe v. O’Keefe (2002) B.C.J. No. 485 (S.C.).
DISCLAIMER: Please note that this website does NOT provide legal, business or financial advice. This website is purely informational. If you have a legal or financial matter, please consult the appropriate professional (lawyer, accountant, etc.).
What Happens When a Will Is Damaged or Lost?
When Can BC Courts Deny a Wills Variation Act Claim?

References: v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v.