Foreign Property and Family Law in Canada
With greater ease of movement across borders, it is not uncommon for people to own property in different countries at the time of their separation or divorce. This often creates a problem because the law in Canada requires that family property be divided equally, but Canadian courts have no jurisdiction over land situated in a foreign country. The failure to take account of foreign property often results to an unequal division of family property.
In order to address this problem, Canadian courts have ordered that the owner of foreign assets must sell the foreign property and that the proceeds of sale be used to honour their obligations for equal division of property in Canada.
One of the first cases where the courts made such an order involved a couple who got married in Portugal and then relocated to Ontario. The couple had assets in Canada and assets in Portugal, but the property in Portugal was only in the husband’s name. The court ordered the husband to either sell the property in Portugal, or to pay the wife her share of the property.
Another way Canadian courts have addressed the potential for an unfair division of property is by including the value of foreign assets in calculating equalization of family property, and then granting one spouse a greater share of the Canadian assets to take account of their share of the foreign assets to which they are not a named owner. This solution can only work however where there are sufficient assets in Canada to equalize the value of foreign assets.
Although Canadian courts have developed some methods to ensure compliance with equalization of family property under Canadian law, there is always the risk that the owner of foreign property will not comply with a court order to sell or pay the other spouse’s equal share, leaving the other spouse with no means to collect. A Canadian court can find a spouse in contempt of court for failing to follow a court order, but contempt orders are not always effective, especially if the spouse is no longer living in Canada.