The hot Metro Vancouver real-estate market has led a B.C. Court of Appeal panel to alter the terms of a prenuptial agreement.
In a February 19 ruling, Justices Harvey Groberman, Susan Griffin, and Joyce DeWitt–Van Oosten ordered former federal cabinet minister Herb Dhaliwal to pay an additional $75,000 to his ex-wife, Neelu Kang.
That's because the value of their family home in Richmond grew by $1,050,000 over the course of their eight-year marriage.
As a result, Dhaliwal's lump-sum payment of $450,000—which was part of the prenuptial agreement—was boosted to $525,000.
According to the ruling, the lump-sum payment schedule in the prenuptial agreement did not take into account the rising cost of housing in Metro Vancouver.
"Spousal support will not adequately mitigate the unfairness of the appellant having to bear an increase in real estate prices of more than 100% without sharing in the growth in value of the family home during the period of the marriage and without any adjustment in the lump‑sum payable to her under the agreement," the judges wrote.
Two days before Dhaliwal married Kang in 2008, she signed an agreement intended to keep their assets separate.
It was Dhaliwal's second marriage; his first wife had died of cancer four years earlier. He wanted to ensure that this agreement would protect his children's future should the marriage break down.
Kang, however, maintained in court that she was rushed into signing the agreement as a recent immigrant, not fulling appreciating the extent of Dhaliwal's assets or her rights in Canada.
The agreement did not include a clause offering spousal-support payments.
When Kang tried to overturn the agreement in B.C. Supreme Court, she was awarded an additional $3,000 per month in spousal support for seven years.
She appealed this in the B.C. Court of Appeal.
The recent ruling from B.C.'s highest court concluded that the spousal-support award in B.C. Supreme Court "does not compensate the appelant somewhat for her sacrifices in moving to Canada and leaving behind a successful career in Canada".
"She found that teaching skills learned in India were not readily transferrable to Canada," the B.C. Court of Appeal decision states. "She also suffered some emotional difficulties and was not as confident as she was at the start of the marriage."
Kang was a university professor living in Chandigarh, Punjab, when she met Dhaliwal in 2002 at a chamber of commerce meeting. Later that year, Kang came to UBC as a visiting scholar, researching the women's movement in India.
They began a relationship in 2005 after Kang visited Vancouver with her son for a six-week holiday, according to the ruling.
"In 2006, the appellant obtained another fellowship at UBC for the months of May and June," the B.C. Court of Appeal decision states. "After this, she returned to her position at Panjab University, and the parties began a long‑distance relationship. They began discussing marriage in early 2007."
In 2008, Kang was a visiting associate professor at Simon Fraser University.
She claimed that Dhaliwal never discussed a prenuptial agreement until it was presented to her two days before the marriage.
"She said the appellant picked her up that day, told her he had papers for her to sign, and took her to a lawyer’s office," the B.C. Court of Appeal decision states. "There she spent barely two minutes and signed it. She did not read it, and the lawyer did not discuss or review it with her."
Dhaliwal, on the other hand, maintained that he first raised the idea of a prenuptial agreement three months earlier because his children wanted to protect their future inheritance.
Dhaliwal's lawyer, Harold Epp, reinforced Dhaliwal's story, telling the court that he had lunch with the parties in April 2008 when he provided a draft of the agreement to Kang. Kang's lawyer, Gurjit Tiwana, testified in B.C. Supreme Court that she found a draft marriage agreement in her files dated May 2008.
In addition, Tiwana testified that she and Kang reviewed two copies of the agreement.
"Ms. Tiwana was vigorously cross‑examined by counsel for the appellant, including on her lack of any notes as to her advice to the appellant," the B.C. Court of Appeal ruling states. "She could not recall the specific questions she was asked or specifics of what exactly she said to the appellant in the meeting, although she could recall being asked questions."
Kang on the other hand, denied providing the document to Tiwana in May 2008.
"Faced with the differing versions of events leading up to the agreement, the judge found that the appellant’s evidence was contradicted by the evidence of the respondent, Mr. Epp, and Ms. Tiwana, whose evidence she preferred," the B.C. Court of Appeal ruling states. "She found that the parties reviewed two or three drafts of the agreement before the appellant met with Ms. Tiwana to review the final draft. She found that the appellant had deliberately fabricated her evidence on this issue and preferred the respondent’s evidence wherever there was conflict between the two."
The trial judge was aware that Dhaliwal did not fully disclose his business interests to Kang before she signed the agreement. But that did not lead the B.C. Court of Appeal to increase payments to her beyond what was awarded in connection with the rising value of the family home.
"If one backs out of the judge’s analysis the treatment of spousal support, the judge’s findings mean that the appellant would receive or retain assets worth $698,000 if the agreement was applied as at the time of trial," the B.C. Court of Appeal ruling states.
"As for the respondent, if one backs out the judge’s deduction of capitalized spousal support from the value of the respondent’s assets, the judge found that the net value of his assets after deducting debt was $3,735,073 as at the time of trial. Although the judge mentioned the respondent’s pension income, the judge did not add the capitalized value of the pension to his assets."
Dhaliwal was elected as a Liberal MP in Vancouver South in 1993. Then he was re-elected in 1997 and 2000 in Vancouver South–Burnaby after the riding's boundaries were adjusted.
In 1997, Dhaliwal became the first member of the federal cabinet of Indian ancestry when then prime minister Jean Chrétien appointed him as minister of revenue.
In 1999, Dhaliwal became minister of fisheries and oceans. Then in 2002, he was appointed minister of natural resources and the minister with political responsibility for B.C.
According to DESIBUZZ Canada, Dhaliwal seriously considered seeking the B.C. Liberal leadership in 2017 after Christy Clark stepped down. In the end, he decided not to enter the race, issuing a news release thanking his "many supporters who urged me to toss my hat into the ring".