Our top-rated lawyers routinely represent family law clients in cases involving Setting Aside Marriage Separation Agreements. The new BC Supreme Court case of Y.L v G.L. 2020 BCSC 808 provides an amazing summary of how courts decide Setting Aside Marriage Separation Agreements disputes. Lorne MacLean, QC leads our team of property, support, and child parenting agreements lawyers across BC and Alberta. We have 7 offices in Vancouver, Victoria, Surrey, Richmond, Kelowna. Fort St John/Dawson Creek and Calgary, Alberta.
Vancouver Setting Aside Marriage Separation Agreements – Two-Pronged Approach 1 877 602 9900
Setting Aside Marriage Separation Agreements disputes involve an application of statutory and common law principles regarding the fairness of how a family property agreement was negotiated, the result of the agreement, and how the agreement operated after execution.
[283] In Asselin v. Roy, 2013 BCSC 1681 at paras. 125-127, Mr. Justice Harvey held that s. 93 compels a two-pronged approach to determining whether to set aside the agreement. The first considerations are those set out in s. 93(3) which relate to fairness in the formation of the agreement. If the agreement was fairly reached, the court must then consider the factors in s. 93(5) which relate to the substantive fairness of the effect of the agreement. If the agreement was not fairly reached, the court may decline to set it aside if the terms that the court would substitute are not substantially different than those contained in the agreement. See also Bartch v. Bartch, 2019 BCSC 1643 at para. 146. This two pronged approach is a codification of the approach described by the Supreme Court of Canada in Miglin, a decision that pre-dates the Family Law Act: De Medeiros at para. 85.
[284] A touchstone in the analysis is whether the legislative objectives of the Family Law Act, namely, to encourage resolution of family law disputes through agreements (s. 4(b)) and the certainty, predictability and clarity created by the simplified equal division regime (Jaszczewska at para. 36), are met. The analysis must also respect contractual autonomy while recognizing the unique nature of negotiating agreements for the dissolution of spousal relationship and the inherent vulnerabilities in play as they relate the concept of unconscionability: Miglin at paras. 66, 82.
Family Law Act Section 93 1 877 602 9900
Section 93 of the Family Law Act governs the setting aside of property provisions in setting aside marriage separation agreements cases.
[285] With regard to the s. 93(3) considerations, on review of Miglin; Rick v. Brandsema, 2009 SCC 10; Asselin; Bartch; De Medeiros; B.L.S. v. D.J.S., 2019 BCSC 846; and Bradshaw v. Bradshaw, 2011 BCSC 1103, the following principles emerge:
Holistic Approach
a) the court should consider the s. 93(3) considerations holistically, and not in isolation to each other as the combination of certain factors may lead to setting aside the agreement where each of the factors alone would not, or where the presence of a factor in favour of setting aside the agreement may be ameliorated by the absence of another factor;
b) the fact-specific nature of the inquiry, particularly the relative vulnerabilities of the parties and/or the relative amount of information they have about each other’s financial affairs is such that the cases are not necessarily readily comparable;
Non-Disclosure Matters
c) with regard to failing to disclose significant property, debts or other relevant information:
i. failure to disclose financial information or incomplete disclosure impacts the integrity of the bargain made. The extent and nature of the failure determines whether the court will intervene;
ii. a party’s assertion that he or she did not believe the other party had a claim to the assets and so did not disclose is not an answer if the party has a claim or an arguable claim. Disclosure is mandatory separate from any argument or negotiation around whether there is a legal interest in the property;
iii. failing to disclose any value for property cannot be defended on the basis that there is no misrepresentation because no value is given;
iv. where an asset’s value is uncertain, the party with the duty to make disclosure should disclose the facts that will allow the other party to make a decision as to the value or as to whether further investigation is required;
v. if a party waives the right to financial disclosure in making a separation agreement but does so in the context of having been misled about the existence of assets and/or their value, the waiver may not be informed and therefore not determinative, especially if it is paired with a representation that the facts disclosed are true, accurate and complete;
vi. failure of a party to act in good faith and to act in accordance with an agreement made is not an answer to the other party’s failure to disclose financial information;
vii. failing to disclose includes incomplete financial disclosure such as not providing the values of assets that both parties know to be in existence, not advising of the true income stream of a business, and providing estimates of the values of an RRSP;
viii. failing to ask for greater financial disclosure does not prevent the party who did not receive it from relying on s. 93(3)(a);
ix. where the party complaining of non-disclosure has general knowledge of the other party’s assets and their value, non-disclosure of the exact value may not result in an agreement being set aside where the non-disclosure is not a deliberate attempt to avoid addressing the division of those assets or to deprive the other party of information he or she should have in making the agreement;
x. the non-disclosure must be significant and material;
Taking Advantage of Vulnerabilities Is An Important Consideration
d) with regard to one spouse taking advantage of the other’s vulnerability, including the other’s ignorance, need or distress:
i. the parties’ relative abilities to understand financial matters is relevant to the assessment of whether one party took advantage of the other’s vulnerabilities;
ii. vulnerability of a less powerful party should not be presumed, there must be evidence to support a finding of vulnerability;
iii. whether the party who asserts vulnerability had input into the content of the agreement is relevant to assessing this factor;
iv. legal advice may negate vulnerability but does not necessarily do so and the absence of legal advice does not lead to a presumption that a vulnerability has not been exploited;
v. the parties’ respective bargaining power is relevant to vulnerability and includes whether one of the parties was at an immediate economic disadvantage because the other party controlled the cash or had better access to cash;
vi. physical and/or emotional abuse is relevant;
vii. the timing of emotional or physical abuse in relation to the time at which the agreement was made is relevant in the sense that if a party is living in active fear and makes the agreement to get away from an abuser, that is different than a situation where there was an incident of abuse a significant length of time prior to when the agreement was made, especially if the parties were living in different locations when the agreement was made;
Did Spouse Understand The Agreement?
e) with regard to whether one of the spouses did not understand the nature or consequences of the agreement:
i. whether the party received independent legal advice is relevant, but not determinative;
ii. persons who do not take advantage of the ability to receive legal advice may not be held to unfair agreements despite their own failures especially where the party seeking to enforce it withheld information or the person is vulnerable;
iii. if a party received legal advice but it was affected by incomplete financial disclosure, it may be not fair to hold the party to the agreement;
iv. similarly, failure to read an agreement when there was an opportunity to do so will be taken into account in assessing whether failure to understand the agreement is a basis on which to set it aside;
Unconscionability And Setting Aside Marriage Separation Agreements
f) with regard to other circumstances that would, under the common law, cause all or part of a contract to be voidable:
i. unconscionability can be based on information asymmetry; and
ii. unconscionability does not have to result in the same type of power imbalance that would void a commercial contract but can arise out of any circumstances of oppression, pressure or other vulnerabilities.
BC Setting Aside Marriage Separation Agreements Lawyers Can Help 1 877 602 9900
Whether you are negotiating a marriage or separation agreement and want to ensure it is procedurally and substantively fair or are involved in challenges to an agreement and a Setting Aside Marriage Separation Agreements despite, out 6 times top Vancouver family law firm winning lawyers are ready to assist. Click here to get started or call us toll-free.
