Balic v. Balic, 2006 BCCA 335

JudgeFinch, C.J.B.C., Ryan and Newbury, JJ.A.
CourtCourt of Appeal (British Columbia)
Case DateMay 26, 2006
JurisdictionBritish Columbia
Citations2006 BCCA 335;(2006), 228 B.C.A.C. 250 (CA)

Balic v. Balic (2006), 228 B.C.A.C. 250 (CA);

    376 W.A.C. 250

MLB headnote and full text

Temp. Cite: [2006] B.C.A.C. TBEd. JL.035

Loredana Gloria Balic (respondent/plaintiff) v. Stjepan Balic also known as Steven Balic (appellant/defendant)

(CA031304; 2006 BCCA 335)

Indexed As: Balic v. Balic

British Columbia Court of Appeal

Finch, C.J.B.C., Ryan and Newbury, JJ.A.

July 11, 2006.

Summary:

The parties divorced after a lengthy traditional marriage. The husband operated the family business through an operating company (Balic Kitchens), which was a subsidiary of a holding company (Balic Woodworking). A family trust owned the common shares of Balic Woodworking and the husband owned substantially all of the preference shares. At issue was the division of the parties' property.

The British Columbia Supreme Court, in a decision reported at [2003] B.C.T.C. Uned. 618; 2003 BCSC 1474, found that the husband's shares in Balic Woodworking were a family asset and it dismissed the husband's claims for judicial reapportionment of those shares in his favour. The court ordered that a receiver be appointed to sell the assets and undertaking of Balic Woodworking in order to permit an equal division of the assets in terms of value. The court also found that a condominium unit purchased by the husband after the separation, and $130,000 which the husband had received in satisfaction of a loan to his brother, were family assets. The court held that the husband had not provided any evidence of what had become of the $130,000 received from his brother, and it ordered him to pay the wife compensation to address his receipt of that asset. The husband appealed.

The British Columbia Court of Appeal held that the trial judge erred in appointing a receiver to sell the assets of Balic Woodworking. The court ordered that the husband be given an opportunity to purchase the number of shares from the wife necessary to effect the equal apportionment contemplated by the trial judge. The court also held that that the condominium unit purchased by the husband was not a family asset and that the trial judge was wrong in saying that no evidence had been provided with respect to what became of the $130,000 loan repayment received by the husband. The evidence established that the $130,000 had been used for family purposes and the court held that the trial judge erred in ordering the husband to compensate the wife for his receipt of that asset.

Family Law - Topic 876

Husband and wife - Marital property - Distribution orders - Family or matrimonial assets - The husband purchased a condominium unit after the parties' separation, but prior to the triggering event - $300,000 which the husband used to buy the condominium and make improvements thereto was borrowed from a family business and the husband executed a promissory note to reflect that indebtedness - When instalments of $12,000 became due each year, the company issued a T4 to the husband for that amount and the amount of the loan was reduced accordingly - The trial judge held that the condominium was acquired with assets from the family business and was a family asset - The British Columbia Court of Appeal held that the funds used to purchase the condominium were not family assets and the condominium was not a family asset - The arrangement by which the husband repaid the amount due to the company each year had the same effect as if the company had paid out a salary to the husband and he then paid down the loan using that money - Instead the necessary book entries were made without the cash actually being paid out and repaid - See paragraphs 16 to 18.

Family Law - Topic 880.36

Husband and wife - Marital property - Distribution orders - Particular property - Active business - The parties divorced after a lengthy traditional marriage - The husband operated the family business through an operating company (Balic Kitchens), which was a subsidiary of a holding company (Balic Woodworking) - A family trust owned the common shares of Balic Woodworking and the husband owned substantially all of the preference shares - The trial judge found that the husband's shares in Balic Woodworking were family assets and dismissed the husband's claims for judicial reapportionment of those shares - The trial judge also ordered that a receiver be appointed to sell the assets and undertaking of Balic Woodworking in order to permit the equal division of the assets in terms of value - The British Columbia Court of Appeal held that the trial judge erred in appointing a receiver to sell the assets of Balic Woodworking - The liquidation order was contrary to the general scheme of both the Family Relations Act and basic company law - In particular, it ignored the fact that at law, a company's assets were not those of its shareholders - The court ordered that the husband be given an opportunity to purchase the number of shares from the wife necessary to effect the equal apportionment contemplated by the trial judge - See paragraphs 19 to 28.

Family Law - Topic 880.36

Husband and wife - Marital property - Distribution orders - Particular property - Active business - The British Columbia Court of Appeal held that a trial judge erred in ordering that a receiver be appointed to sell the assets and undertaking of a family business in order to permit an equal division of the assets between the spouses - The court stated, inter alia, that "if the jurisdiction exists to order the liquidation of a company in order to facilitate the distribution of its assets to divorcing spouses, such an order should be made only in exceptional circumstances, where all the necessary procedural safeguards (including the joinder of the company) are in place, and where the court has complete information as to the consequences of the order sought" - See paragraph 26.

Receivers - Topic 1605.1

Appointment - General principles - Improper appointment - General - [See first Family Law - Topic 880.36 ].

Receivers - Topic 1733

Appointment - By court - Jurisdiction - General - [See second Family Law - Topic 880.36 ].

Cases Noticed:

Newson v. Newson et al. (1993), 25 B.C.A.C. 24; 43 W.A.C. 24; 45 R.F.L.(3d) 115 (C.A.), folld. [para. 21].

Andersson v. Andersson (1992), 15 B.C.A.C. 205; 27 W.A.C. 205; 69 B.C.L.R.(2d) 204; 41 R.F.L.(3d) 241, supplementary reasons at (1995), 11 B.C.L.R.(3d) 366; 17 R.F.L.(4th) 143 (C.A.), consd. [para. 23].

Hole v. Hole (1987), 12 R.F.L.(3d) 165 (B.C.S.C.), refd to. [para. 25].

Forsythe v. Forsythe (1991), 33 R.F.L.(3d) 359 (B.C.S.C.), refd to. [para. 25].

Hodgkinson v. Hodgkinson (2006), 224 B.C.A.C. 224; 370 W.A.C. 224; 2006 BCCA 158, folld. [para. 25].

Bregman v. Bregman (1978), 21 O.R.(2d) 722 (H.C.), affd. (1979), 25 O.R.(2d) 254 (C.A.), refd to. [para. 25].

Penn v. Lord Baltimore (1750), 1 Ves. Sen. 444 (L.C.), refd to. [para. 25].

Grant v. Grant, [1994] B.C.J. No. 2361, refd to. [para. 25].

Rohani v. Rohani, [2003] B.C.T.C. Uned. 646; 2003 BCSC 1438, revd. (2004), 205 B.C.A.C. 178; 337 W.A.C. 178; 2004 BCCA 605, refd to. [para. 25].

Blackett v. Blackett (1989), 40 B.C.L.R.(2d) 99; 22 R.F.L.(3d) 337 (C.A.), refd to. [para. 27].

Counsel:

J.S. Harvey, for the appellant;

H. Wiebach, for the respondent.

This appeal was heard on May 26, 2006, at Vancouver, British Columbia, before Finch, C.J.B.C., Ryan and Newbury, JJ.A., of the British Columbia Court of Appeal. The following judgment of the Court of Appeal was delivered by Newbury, J.A., on July 11, 2006.

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7 practice notes
  • Newton v. Marzban et al., [2008] B.C.T.C. Uned. B15
    • Canada
    • Supreme Court of British Columbia (Canada)
    • 18 Marzo 2008
    ...in a matrimonial action, based on the authorities at that time that are usefully summarized in the later case of Balic v. Balic , 2006 BCCA 335 at paras. 19-26, leave to appeal ref'd (2007) 366 N.R. 400 (Note). However, she would also be advised that the threat of liquidation remained, as M......
  • Miklosko v. Miklosko, [2007] B.C.T.C. Uned. 287
    • Canada
    • Supreme Court of British Columbia (Canada)
    • 19 Abril 2007
    ...such as Devieck v. Devieck (2005), 41 B.C.L.R. (4th) 210 (C.A.), Newson v. Newson (1993), 45 R.F.L (3d) 115 (B.C.C.A.), Balic v. Balic , 2006 BCCA 335 and Hodgkinson v. Hodgkinson , 2006 BCCA 158. In Hodgkinson , Saunders J.A. said at ¶ 23: ...A corporation has a legal personality separate ......
  • Balic v. Balic, 2007 BCCA 530
    • Canada
    • British Columbia Court of Appeal (British Columbia)
    • 26 Mayo 2006
    ...a decision rendered with respect to the division of the parties' assets. The British Columbia Court of Appeal, in a decision reported at 228 B.C.A.C. 250; 376 W.A.C. 250, allowed the appeal. The court's order provided in part "that the appellant be given 90 days from the filing of the ......
  • Valastiak v. Valastiak, (2010) 283 B.C.A.C. 204 (CA)
    • Canada
    • British Columbia Court of Appeal (British Columbia)
    • 8 Diciembre 2009
    ...Bktcy.), refd to. [para. 30]. Winfield v. Lomas, [2008] B.C.T.C. Uned. E68; 2008 BCSC 1636, refd to. [para. 39]. Balic v. Balic (2006), 228 B.C.A.C. 250; 376 W.A.C. 250; 2006 BCCA 335, refd to. [para. Malcolm v. Transtec Holdings Ltd. et al. (2001), 150 B.C.A.C. 20; 245 W.A.C. 20; 2001 BCCA......
  • Request a trial to view additional results
7 cases
  • Newton v. Marzban et al., [2008] B.C.T.C. Uned. B15
    • Canada
    • Supreme Court of British Columbia (Canada)
    • 18 Marzo 2008
    ...in a matrimonial action, based on the authorities at that time that are usefully summarized in the later case of Balic v. Balic , 2006 BCCA 335 at paras. 19-26, leave to appeal ref'd (2007) 366 N.R. 400 (Note). However, she would also be advised that the threat of liquidation remained, as M......
  • Miklosko v. Miklosko, [2007] B.C.T.C. Uned. 287
    • Canada
    • Supreme Court of British Columbia (Canada)
    • 19 Abril 2007
    ...such as Devieck v. Devieck (2005), 41 B.C.L.R. (4th) 210 (C.A.), Newson v. Newson (1993), 45 R.F.L (3d) 115 (B.C.C.A.), Balic v. Balic , 2006 BCCA 335 and Hodgkinson v. Hodgkinson , 2006 BCCA 158. In Hodgkinson , Saunders J.A. said at ¶ 23: ...A corporation has a legal personality separate ......
  • Balic v. Balic, 2007 BCCA 530
    • Canada
    • British Columbia Court of Appeal (British Columbia)
    • 26 Mayo 2006
    ...a decision rendered with respect to the division of the parties' assets. The British Columbia Court of Appeal, in a decision reported at 228 B.C.A.C. 250; 376 W.A.C. 250, allowed the appeal. The court's order provided in part "that the appellant be given 90 days from the filing of the ......
  • Valastiak v. Valastiak, (2010) 283 B.C.A.C. 204 (CA)
    • Canada
    • British Columbia Court of Appeal (British Columbia)
    • 8 Diciembre 2009
    ...Bktcy.), refd to. [para. 30]. Winfield v. Lomas, [2008] B.C.T.C. Uned. E68; 2008 BCSC 1636, refd to. [para. 39]. Balic v. Balic (2006), 228 B.C.A.C. 250; 376 W.A.C. 250; 2006 BCCA 335, refd to. [para. Malcolm v. Transtec Holdings Ltd. et al. (2001), 150 B.C.A.C. 20; 245 W.A.C. 20; 2001 BCCA......
  • Request a trial to view additional results

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