BC Supreme Court denies creditor's application to join family law case

In a recent decision, the BC Supreme Court denied an application by a credit union to be added as a party in a family law proceeding involving a former couple.

The credit union, a judgment creditor of one party, sought to protect its interest in collecting a debt by gaining full participation rights in the family law case. The credit union argued that its inclusion in the proceedings was necessary to prevent the former couple from putting assets beyond its reach. This concern stemmed from a previous court finding of fraudulent conveyance, where it was determined that the couple had attempted to shield property from creditors. Given this history, the credit union feared a repeat attempt during the family law trial.

However, the former couple opposed the application. They argued that the credit union was a stranger to the family law proceedings and that its inclusion would be unusual and unwarranted. They also contended that adding the credit union as a party would increase the time and expense of the proceedings, complicate the trial, and potentially open the floodgates for other creditors seeking similar participation in family law cases.

The Supreme Court acknowledged the unique circumstances, noting the previous finding of fraudulent conveyance and the significant judicial attention already given to the credit union's concerns. Despite this, the court decided that granting full party status to the credit union was not in the interests of justice. The judge emphasized that allowing creditors to join family law proceedings could complicate and prolong trials, burden the courts, and hinder access to justice.

The court pointed out that safeguards were already in place to protect the credit union's interests. These included previous court orders allowing the credit union to participate in the family law trial to a limited extent, ensuring that the division of the property would be decided on its merits. The court also allowed the credit union to renew its application before the trial judge to seek cross-examination of witnesses solely concerning the property transfer. Additionally, the credit union was granted permission to make opening and closing submissions at the family law trial.

The judge concluded that while the credit union had legitimate concerns, granting it full party status would set a precedent that could complicate family law proceedings with the involvement of unrelated creditors. The decision aimed to balance fair adjudication of family law issues with minimizing additional burdens on the legal process.