How Do the Courts Deal with Secret Families in Family Law Matters in BC?

When a marriage ends and one spouse discovers that the other has maintained a “secret family,” the emotional impact can be enormous—but in family law, the focus is on the financial consequences. British Columbia courts do not punish moral wrongdoing. Instead, they look at whether a spouse’s conduct has caused an unfair financial impact on the division of family property. The case of Poon v. Yuen, 2024 BCCA 374, provides a clear example of how the courts handle such situations under the Family Law Act.

What Happened in Poon v. Yuen?

Ms. Poon and Mr. Yuen were married for 50 years and had no children together. At the time of trial, both were in their eighties. The family property had a total value of about $6.9 million, including real estate in Vancouver, Hong Kong, and China, as well as personal items and several bank accounts. The husband sought an equal division of the family property, while the wife argued that an equal split would be “significantly unfair.”

The trial judge agreed with the wife and ordered an unequal division of family property, awarding her 60 percent and the husband 40 percent. The court found that for more than 15 years, the husband had been diverting substantial funds to another woman with whom he had a child. During the marriage, he had paid her nearly $961,400, and after separation, he withdrew more than a million dollars from a joint account and transferred it elsewhere. The judge determined that these actions significantly reduced the value of the family property and therefore harmed the wife’s financial interests. As part of the remedy, the wife was also awarded 50 percent of the value of the unfair transfers.

What Legal Principles Guided the Decision?

Under the Family Law Act, section 95(2) allows the court to order an unequal division if equal division would be significantly unfair. The law sets a high bar for significant unfairness—it must be something “objectively unjust, unreasonable, or unfair in some important or substantial sense,” as the Court of Appeal previously explained in Jaszczewska v. Kostanski, 2016 BCCA 286.

The purpose of this high threshold is to ensure predictability and fairness in family law matters. Unequal division is a discretionary exercise based on the judge’s assessment of all the relevant circumstances. It is not a mathematical calculation, but rather an discretionary process aimed at achieving fairness.

In Poon v. Yuen, it was found in the Court of Appeal that the trial judge correctly applied these principles. The husband’s conduct—specifically his diversion of funds to support a secret family—was directly connected to a substantial reduction in the value of the family property. The unequal division was therefore justified under section 95(2)(g) of the Family Law Act.

What Did the Court of Appeal Decide?

On appeal, the wife did not challenge the finding that an unequal division was appropriate. Instead, she argued that the trial judge’s method of calculating the division resulted in her receiving less than she should have. She proposed two alternative calculation methods: the “Compensatory Award Method,” which would have treated her claim like a compensation claim for lost assets, and the “Total Asset Pool Method,” which would have recalculated the division differently.

The Court of Appeal dismissed her appeal. It held that there is no single correct method for calculating an unequal division of family property. What matters is that the trial judge applied the correct legal principles and exercised their discretion reasonably. The Court found no error that would justify intervening in the decision.

Was Unjust Enrichment Relevant?

The wife also argued that the trial judge’s decision amounted to unjust enrichment in favour of the husband. Unjust enrichment is an equitable doctrine used to fill gaps when no statutory remedy exists. However, the court found that there was no such gap here because the Family Law Act already provided a legal framework to address unfairness through unequal division. The doctrine of unjust enrichment was therefore inapplicable in this case.

What Does This Case Tell Us About Secret Families in Family Law in BC?

Poon v. Yuen demonstrates that BC courts focus on the financial impact of a secret family, not the moral implications. If a spouse diverts family funds to maintain another household or support another partner or child, that conduct may justify an unequal division of property under section 95(2). However, the court’s goal is not to punish the spouse for the deception, but to ensure that the innocent spouse is not left at a financial disadvantage as a result of the other’s actions.

The decision also reinforces that judges have significant discretion when deciding how to structure an unequal division. There is no fixed formula or single “right” way to calculate it, as long as the outcome is consistent with the principles of fairness set out in the legislation.

FAQ

Does having a secret family automatically lead to unequal division of property?
No. The court must find that the conduct caused significant financial unfairness, such as a reduction in the value of family property or increased family debt.

Can a spouse claim unjust enrichment if the other had a secret family?
Not necessarily. The Family Law Act provides a statutory remedy for unfairness, so unjust enrichment may not apply.

Does the court consider moral wrongdoing?
Not directly. Family law in BC currently focuses on financial fairness, not compensation. The key question is whether the conduct affected the value of family property.

What is the takeaway from Poon v. Yuen?
When a spouse secretly uses family assets to support another relationship, the court may find that equal division would be significantly unfair. Unequal division can restore fairness, but how it is calculated depends on the judge’s discretion and the specific facts of the case.

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