Financial Restraining Order in Family Law Case – Explained by our Vancouver Family Lawyer
You should consider applying for a section 91 restraining order if you are concerned about your ex disposing of family property or if you are concerned that your ex may deal with family asset in a manner that would adversely affect your interests, explains Nassim Nasser, our Vancouver-based family lawyer. You can also obtain financial restraining orders with respect to family business(es). Our skilled divorce and family lawyers routinely apply and obtain financial restraining orders against individuals and businesses. Our Vancouver-based family lawyer points out that applying for a financial restraining order may be paramount with the current circumstances caused by Covid-19 because your spouse may be under significant stress or may need access to funds. You want to make sure that you have access to money when you need it. Contact us to book your initial appointment to see how we can help you to protect and preserve your hard-earned family assets.
What is a section 91 financial restraining order?
Section 91 of the Family Law Act reads as follows:
91 (1) On application by a spouse, the Supreme Court must make an order restraining the other spouse from disposing of any property at issue under this Part or Part 6 [Pension Division] until or unless the other spouse establishes that a claim made under this Part or Part 6 will not be defeated or adversely affected by the disposal of the property. (2) The Supreme Court may make one or more of the following orders: (a)for the possession, delivery, safekeeping and preservation of property; (b)for the purpose of protecting the applicant's interest in property from being defeated or adversely affected, (i) prohibiting the other spouse from disposing of, transferring, converting, or exchanging into another form, property in which the applicant may have an interest, or (ii) vesting all or a portion of property in, or in trust for, the applicant. (3) The Supreme Court may make an order under this section before notice of the application is served on the other spouse, or may order that notice of the application be served on the other spouse. (4) Despite section 215 (2) [changing, suspending or terminating orders generally], the Supreme Court may change, suspend or terminate an order made under this section.
A section 91 financial restraining order is an interim (temporary) order under section 91 of the BC Family Law Act. These types of orders prevent your ex from disposing, converting, transferring, or exchanging any property in which you may have an interests pending trial. For more information on the properties that could be subject to section 91 restraining order, check our property and debt division page to see what constitutes family property and family debt. Only BC Supreme Court has the jurisdiction to order section 91 restraining order. A section 91 financial restraining order is an injunctive relief which is available to those who have standing to apply under the Family Law Act. To have standing under the Family Law Act, you must either be married, divorced, separated, or have lived together with your ex in a marriage-like relationship of at least 2 years. However, if you have a final agreement or a final order in your divorce case then section 91 of the Family Law Act may not be available to you (Fan v. Zhang, 2015 BCSC 311 (CanLII)). If you do not have standing under the Family Law Act for a section 91 financial restraining order, the only other alternative available to you is a general injunction which is made under the inherent jurisdiction of the court or part 12 of the Supreme Court Family Rules.
When should I apply for a financial restraining order?
Nassim Nasser, our Vancouver-based family lawyer, emphasises that under certain circumstances, you should seriously consider applying for a financial restraining order. For example, if your ex:
- controls all the bank accounts and you have no access to the accounts
- has access to substantial amount of funds on a line of credit and you are concerned that he would take out money from the line of credit
- has access to monies in bank accounts and investment accounts
- is transferring assets to non-arm’s length family members to defeat your interests in family properties
- is selling assets such as expensive cars, jewellery, carpets, watches, etc
- controls the family business and is taking money out of the business to support his lavish lifestyle
- has cut you off the family business
- controls all family assets and monies and you have no knowledge about your family’s financial affairs
- is not communicating with you regarding the state of your family’s finances
- may declare bankruptcy
When will a court grant section 91 restraining order?
The wording of the section 91 of the Family Law Act suggests that the financial restraining order is mandatory against your spouse. Thus, on application for a section 91 restraining order, the order should be made until or unless your spouse can demonstrate that your interests would not be adversely defeated. Keep in mind that the section 91 restraining order is only mandatory against your spouse. But, it is not mandatory against other parties to the case (Tidy v. Tidy, 2014 BCSC 1445 (CanLII)). So, for example, to restrain corporate parties in your divorce case you will need to rely on the inherent jurisdiction of the court or Part 12 of the Supreme Court Family Rules. You can apply for a financial restraining order against your spouse on an ex-parte basis (i.e. without notice basis), says Nassim Nasser, our Vancouver-based family lawyer.
Can I get a financial restraining order regarding our family businesses?
Restraining Family Businesses/Corporations
From Tidy, we know that section 91 restraining order is only mandatory against your spouse but not the corporate parties. Thus, if you want to apply to restrain the family business(es) then you must apply for a general injunctive relief under part 12 of the Supreme Court Family Rules. The court in Tidy states:
“As discussed by the Supreme Court of Canada in Aetna Financial Services Ltd. v. Feigelman, 1985 CanLII 55 (SCC),  1 S.C.R. 2, an order for the preservation of property should be made where the property is the very subject matter of the proceeding and where, but for the order, it would be destroyed before the dispute is resolved.
Another way the court has dealt with the concern about assets being dissipated before judgment is the order commonly called a Mareva injunction. One of the leading cases is Sekisui House Kabushiki Kaisha (Sekisui House Co. Ltd.) v. Nagashima (1982), 1982 CanLII 800 (BC CA), 42 B.C.L.R. 1. That case refers to the applicant for a Mareva injunction being required to satisfy these tests:
a) make full and frank disclosure of all material matters;
b) give particulars of the claim, the grounds for it, and the amount;
c) fairly state the points made against the claim by the defendant;
d) show some ground for believing that the defendant has assets in the jurisdiction;
e) show some ground for believing that there is a risk of the assets being removed before judgment is satisfied; and
f) give an undertaking in damages, supported in suitable cases by a bond or security.”
Restraining your ex spouse
Other than obtaining a financial restraining order against the family business, you can also obtain restraining orders against your spouse that would control how he deals with the family business(es). For example, you could obtain orders:
- that require your spouse to consult with you before incurring significant debt under the name of the family business(es);
- that permit your spouse to take limited amount of money from the business for his/her day-to-day living expenses;
- that require your spouse to consult with you before taking any steps that would significantly impact the family business(es), etc.
For example in Gillespie v. Gillespie (1997), 52 B.C.L.R. (3d) 230 (S.C.), on evidence that the husband, who was the sole shareholder of the companies, had made poor investments resulting in losses since separation, the court imposed a restraining order that limited the investments the husband could make, the amount of taxable and non-taxable funds he could draw from the companies, and the personal expenses run through the companies. If you want to apply for a financial restraining order against your spouse that would affect how he/she operates the family business, you must be careful that the order would not negatively impact the value or day-to-day operation of the business. Our Vancouver-based family lawyer, Nassim Nasser, explains that the order must be carefully drafted to avoid common pitfalls. If you are considering obtaining financial restraining orders affecting businesses, Nassim‘s best advice to you are:
- consult with an experienced lawyer first before taking any steps; and
- Act quickly before your ex disposes all family assets or destroys/devalues your family company.
How can I protect our oversees assets?
If you are dealing with foreign/international assets or your spouse is not a resident in BC, you can apply for a Mareva injunction to prevent your spouse from disposing of assets. This injunctive relief helps you protect your interests by preserving the assets in dispute pending trial. Rule 12-2 of Supreme Court Family Rules gives the court the authority to order Mareva injunctions. To successfully obtain a Mareva injunction, you must:
- demonstrate a strong prima facie case against your spouse;
- demonstrate that there is a genuine risk that the assets will disappear either inside or outside the jurisdiction of the court prior to judgment (Aetna Financial Services Ltd. v. Feigelman,  1 SCR 2, 1985 CanLII 55 (SCC); Manousakis v. Manousakis (1979), 10 B.C.L.R. P-21 (S.C.)); and
- give an undertaking in damages (Manousakis).
Can I bring an application for financial restraining even when the court is closed due to Covid-19?
As per Supreme Court directive revised April 16, 2020, the Supreme Court will hear urgent applications. Definition of urgent applications includes restraining orders, preservation orders, and urgent injunction applications. However, you need to follow the correct procedure set out in the directive. The directive includes both an online request procedure and a paper based request procedure. In this blog post, our Vancouver-based Family Lawyer, Nassim Nasser, only explains the online procedure. Here are the setps that you need to take:
- If you want to request an urgent hearing, fill out the online Request for Urgent Hearing Form (Request Form), which is available at: https://www.bccourts.ca/supreme_court/scheduling/Request_for_Urgent_Hearing
- After you submit your form, you will receive an Acknowledgment Email from the court confirming receipt of the Request Form and notifying all parties of the request.
- Reply to the Acknowledgment Email and attach the following documents:
- an unfiled draft of your application setting out the orders that you are seeking; and
- an unfiled draft affidavit which includes the key facts and describes the urgency.
- If your request form is with respect to a matter that had previously been scheduled for hearing, include any filed materials that you previously served on the other party/parties.
- A judge will then review your materials and will determine whether an urgent hearing is required. All parties will be notified via email about the judge’s determination.
If you are concerned about your ex disposing of family assets such that it would adversely affect your interests, contact us to book your consultation with our Vancouver-based family lawyers. We can help.