Foreign Assets and Tracing

Why is foreign assets and tracing an important issue?

This issue of foreign assets and tracing is important in an international divorce because very frequently a spouse may try to hide or dissipate income or assets in a foreign country, assuming that their schemes will never be discovered or, even if they are, there is nothing the BC court can do. In scenarios like this, it’s critical for you to act quickly to prevent, stop and/or to remedy the situation.

Taking these proactive steps will not only maximize the figures of your child support, spousal support and property division, but will also help other aspects of your case by demonstrating the other party’s dishonesty.

My spouse and I have substantial foreign assets in other countries. Can we deal with them all in one lawsuit in Canada?

Generally speaking, yes, but there are circumstances where it would be more beneficial to litigate elsewhere. For example, in cases where you and your spouse have real properties and income-generating companies in China, but less property in Canada, you should first inquire about what the result would be if you litigate in China. If the answer is more favourable than in Canada, or if the result is very close but it will be more convenient for you to litigate in China, it’s probably a good idea to do so.

If your spouse has already sued in BC, you should immediately raise a jurisdictional challenge, where you essentially ask the BC court to reject your case in favour of a more proper jurisdiction.

If you have already participated in this litigation by the time you raised a jurisdictional challenge, or if you missed the deadline in doing so, then you will forever lose the right, which means you will be in a disadvantaged position throughout the lawsuit. For this reason, it’s absolutely critical that you consult with lawyers with expertise in these issues early in your case.

I fear my spouse is hiding or disposing of foreign assets in other countries. What can I do?

You have a number of options. The first and easiest one is applying for a financial restraining order (an order that prohibits your spouse from dissipating foreign assets, regardless which country he is in). If this does not stop him/her, you can seek an imputation of income and/or assets, which will force your spouse to either compensate you based on the imputed income or foreign assets, or produce copious documents to demonstrate that the imputations are incorrect. You can also apply for securities to ensure that there are sufficient funds to pay you at the end of the proceeding.

How do I obtain the best result on the division of our assets?

Because of the extreme complexity of these issues and the values at stake, you need to consult lawyers who are experienced and aggressive in such issues from the very beginning of your case. You will need to work closely with your counsel, follow his/her instructions carefully, and proactively produce documents and obtain evidence. The higher the property and income involved in your case, the higher the stakes, and the more you need for legal representation.