Foreign property: obligation to disclose, admissibility of evidence, and valuation

December 29, 2022

Effective property settlement after the breakdown of a marriage, or a marriage-like union is so crucial for many clients in order to move forward with their lives. They gain financial stability as well as emotional/financial closure.

The Matrimonial Property Act and the Family Property Act are the legislations in Alberta which govern the division of property upon the breakdown of a marriage or adult interdependent partnership. The Family Property Act came into effect on January 1, 2020, and replaced the Matrimonial Property Act. However, according to the transitional provisions in the Family Property Act (specifically section 39), the Matrimonial Property Act still applies to married partners who began living separate and apart immediately before January 1, 2020, or if a divorce judgment was granted, marriage was declared null or void, declaration of irreconcilability, or a judicial separation judgement was obtained before January 1, 2020.

The Family Property Act enables the Court to distribute property owned by the spouses or adult interdependent partners (section 7). More specifically, section 9 of the Family Property Act says if spouses or adult interdependent partners own property in Alberta and some elsewhere, the Court may distribute property in Alberta in a way that gives effect to all the property, regardless of where it is situated. The specific wording of this section suggests that this type of distribution when it comes to property in other jurisdictions is at the discretion of the court given the circumstances.

How do Courts treat foreign property owned by either spouse during property settlements? Simply put, Courts cannot divide or otherwise distribute assets in foreign jurisdictions. BUT recent jurisprudence from the Court of Appeal in Alberta reminds us that courts can take their value into account, and divide assets here in Alberta using the values of foreign property in a “set-off” mode (if acquired during the marriage). Alpugan v Baykan, 2014 ABCA 152 (CanLII), <https://canlii.ca/t/g6q9t>. This case suggests that it is not impossible to get real property appraisals from countries like Turkey or India. If the opposing party does not agree, then simply seek directions from the Court as to how to attribute value and/or obtain an appraisal.

Can Courts in Alberta make an order to disclose foreign property? If your spouse did not disclose foreign property that they solely, or jointly own in another jurisdiction, then you may be entitled to bring an Application for a disclosure order in Family Docket Court. In Chikonyora v Chikonyora (2013 ABCA 320), the Alberta Court of Appeal confirmed that a Justice in a lower court has authority to make an order in personam to compel the disclosure of foreign income and property. An Order in personam basically means an Order against a person. In this case, the highest court in Alberta confirmed that the Matrimonial Property Act mandates parties to disclose ALL particulars of ALL their property whether in Alberta or in another jurisdiction.

Remember that an application for a family property order cannot be made made in Morning Chambers; rather, a full trial may need to be scheduled in the Court of Queen’s Bench, specially where the matters are highly contentious and there is no prospect of settlement.

If you are seeking disclosure, or assistance with property settlement, contact Udani Perera at udani@pereralegal.ca for a consultation.

Disclaimer: This blog post does not constitute individualized legal advice. We highly recommend that you contact us for an individualized assessment of your case.