Our hard working Associate James Cudmore says that good BC family lawyers like the divorce lawyers at our Vancouver family law firm all want to make sure that you receive legal advice before entering into any sort of BC marriage contract before during your relationship or on its breakdown. Don’t be foolish meet with a lawyer at a minimum for an initial; consultation. Huge changes are coming into effect in BC this year.
Paying your lawyer a modest fee for an initial consultation may gain you several hundred of thousands of dollars, save you the same amount and/or obtain benefits for you and your children with an incalculable value. You will know your rights and not be acting out of fear or by acting as the “hero” only to regret in later and find out you are stuck with your foolish deal.
A recent case from the BC Court of Appeal shows that even inelegant and informal contracts can be binding and enforceable. In Hoban Construction Ltd. v. Alexander 2012 BCCA 75, the Court held that a contract for the purchase of shares of a company was binding, as the parties intended it to be binding and treated it as such. The contract, described by the trial judge as a “one-page document on a sheet of lined paper”, with “portions of the document that I cannot decipher”, and signed in a gravel pit, may not have been what many people envision when thinking of a deal involving $3 Million. However, the party seeking not to uphold the deal wound up being ordered to pay over $900,000.
While this case is not in the BC family law realm, it should serve as a caution to those contemplating a separation from their spouse and hoping to “keep the lawyers out of it”. Settling a case quickly and amicably is to be encouraged, but if you don’t have an idea of your rights and what you may be giving up, then there is the very real risk that you could wind up with a bad deal that you’re stuck with.
The law as it currently stands regarding the formal requirements for a “marriage agreement”, which can mean a contract drafted before or during a relationship and after separation, is governed by section 61 of the Family Relations Act. The formal requirements are not many: the agreement is in writing, signed by both spouses, and witnessed by one or more persons.
That being said, a separation agreement can be binding even if it is not in writing. If the Court concludes on the facts that the parties have agreed, even orally, on the distribution of their assets, that may be upheld. One example of many can be found in Desrosiers v. Desrosiers 2006 BCSC 258.
With the coming into force of the new Family Law Act at some point next year, “domestic agreements” will be given even more weight than before.
Setting aside agreements respecting property division
93 (1) This section applies if spouses have a written agreement respecting division of property and debt, with the signature of each spouse witnessed by at least one other person.
(2) For the purposes of subsection (1), the same person may witness each signature.
(3) On application by a spouse, the Supreme Court may set aside or replace with an order made under this Part all or part of an agreement described in subsection (1) only if satisfied that one or more of the following circumstances existed when the parties entered into the agreement:
(a) a spouse failed to disclose significant property or debts, or other information relevant to the negotiation of the agreement;
(b) a spouse took improper advantage of the other spouse’s vulnerability, including the other spouse’s ignorance, need or distress;
(c) a spouse did not understand the nature or consequences of the agreement;
(d) other circumstances that would, under the common law, cause all or part of a contract to be voidable.
(4) The Supreme Court may decline to act under subsection (3) if, on consideration of all of the evidence, the Supreme Court would not replace the agreement with an order that is substantially different from the terms set out in the agreement.
(5) Despite subsection (3), the Supreme Court may set aside or replace with an order made under this Part all or part of an agreement if satisfied that none of the circumstances described in that subsection existed when the parties entered into the agreement but that the agreement is significantly unfair on consideration of the following:
(a) the length of time that has passed since the agreement was made;
(b) the intention of the spouses, in making the agreement, to achieve certainty;
(c) the degree to which the spouses relied on the terms of the agreement.
(6) Despite subsection (1), the Supreme Court may apply this section to an unwitnessed written agreement if the court is satisfied it would be appropriate to do so in all of the circumstances.
