Vancouver Oral Family Agreements lawyers know that family law agreements whether written or oral have a significant impact in family disputes that come before the courts. In today’s blog, senior Vancouver family lawyer David Joyce explains how an oral contract between a husband and wife was held to govern the division of substantial excluded property.
There is a famous saying: “oral agreements aren’t worth the paper they’re written on,” so many are surprised when they discover that Vancouver oral family agreements between spouses regarding property division are enforceable in British Columbia. Even “excluded property” such as an inherited family farm can be divided according to the terms of an oral agreement despite the beneficiary denying at trial that any agreement existed. Our senior and experienced family agreement lawyers are pleased to assist you.
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Our Court of Appeal recently affirmed the principles of British Columbia’s “excluded property” regime in Pisarski v. Piesik, 2019 BCCA 129, noting that “family property” is generally divided in half between spouses, whereas “excluded property” generally remains the property of the spouse who received it.
However, in M.F.W. v. M.A.H., 2019 BCSC 588, our Supreme Court clarified that even where the property would otherwise meet the legal test for “excluded property,” spouses may enter into Vancouver oral family agreements to treat it as “family property” making it subject to equal distribution under the Family Law Act.
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The Supreme Court upheld the agreement even though it was never written down, nothing of value was given in exchange for getting half the property, and the recipient of the property denied any oral agreement ever existed. The court looked at the surrounding circumstances and decided it was more likely than not that the spouses had an oral agreement to equally share the inherited farm which had been in the beneficiary’s family since 1928:
190 The fact that an oral agreement is not in writing or not witnessed is not a bar to its validity under the FLA. There is no requirement under s. 92 that the agreement be in writing or that it be witnessed. Oral agreements respecting division of property are enforceable if properly proven on the evidence: Asselin v. Roy, 2013 BCSC 1681at para. 132.
191 The decision in P.N.K. v. C.L., 2013 BCSC 1856 further addresses how oral agreements are contemplated in the FLA:
[86] Interestingly s. 92 makes no reference to such an agreement being in writing. Indeed, the FLA has a specific provision dealing with written agreements respecting the division of property: s. 93 provides that the court may only set aside or replace such agreements in certain circumstances. Section 95(2)(b) then requires that a court considering the unequal division of family property or debt consider “the terms of any agreement between the spouses, other than an agreement described in section 93” [emphasis added]. It is clear that the legislature intended s. 92 to permit oral agreements between spouses.
192 I agree that oral agreements are clearly permissible under s. 92. I further heed Justice N. Brown’s caution in Mottershead, v. Ladouceur, 2014 BCSC 604 that the lack of a written agreement makes the words and actions of the parties more important, and mandates greater scrutiny of the credibility of witnesses:
[101] When parties do not reduce an alleged agreement to writing, the court must consider the parties’ words and actions to see if they establish an intention to be bound. The credibility of witnesses will be particularly important; different versions of events increasing the difficulty of finding out if the parties made an enforceable bargain: Le Soleil Hotel & Suites Ltd. v. Soleil Management Inc., 2009 BCSC 1303 at para 328 [Le Soleil].
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For those looking to avoid unexpected results regarding property division, it is advisable to consider the benefits of a written agreement. Proving Vancouver oral family agreements in litigation is costly as it requires “greater scrutiny of the credibility of witnesses” requiring more court time and making results unpredictable.
David Joyce advises that if you currently have an oral agreement, crystallizing it into a written agreement can save a significant amount of time, money, and stress if the agreement ever becomes the subject of litigation. Written family agreements can also insulate you against surprise allegations of an “oral agreement” in the event of a breakdown in the relationship.
