Couples can make all kinds of promises to each other, but as a recent decision from the British Columbia Supreme Court points out, doing so won’t necessarily prevent the courts from overriding the couple’s agreement.
A history of separate finances
The couple met in in Powell River, British Columbia in 1992 and began living together a short time later. At the time, the woman in the relationship (“the claimant”) was employed as a dog groomer and also worked in a veterinarian’s office and the local hospital. The man (“the respondent”) was employed doing industrial work in the pulp industry, doing repairs in plants and operations out of town.
The claimant testified they agreed from the outset of their relationship to keep their finances separate. They also agreed to not marry unless they changed their minds about not wanting to have children. The respondent, meanwhile, testified that while he agreed to buy and maintain ownership of the home they lived in, day to day household expenses would be shared, and that if the couple ever decided to separate, they would each take what they owned and leave, and there would be no lawyers involved should that happen. The claimant testified there was no agreement beyond the separation of finances, and she had not agreed to walk away with what each person owned in the event of a separation.
Throughout their relationship the couple kept their finances completely separate, not sharing bank accounts or credit cards. Each of them bought and maintained their own vehicles, and would even pay individually for their meals when they enjoyed a night out.
The couple’s home was purchased by the respondent, and he did the majority of the considerable repairs to it, though the claimant did help in some of the renovations. In 1995 the respondent purchased the property adjacent to their home, again paying for it with his own money. The new property contained a mobile home that the respondent rented out, though the claimant testified her and her mother did a deep clean of it after it was purchased. Both the claimant and the respondent purchased additional properties over the years. She bought a house for her mother to live in, and he sold his original home to buy a new one that the couple lived in together. He also sold the property with the mobile home, making $12,400 in doing so.
The relationship begins to fall apart
In 2011 the claimant fell off a horse and suffered a concussion that lead to migraine headaches. This affected both her relationship with the respondent as well as her ability to earn money. In addition, one of her horses and her cat died shortly thereafter. Both parties testified that she was saddened by the losses, and their relationship was further impacted by her sadness.
The claimant moved out of the house in September 2015, four months after removing the respondent as the beneficiary of her will.
The claimant’s mother testified that she had conversations with the respondent over the years where he said the claimant would “get nothing” if they ever split up. She said she told that despite those wishes, the law would say otherwise. Some of the parties’ friends testified that they knew of the couple’s arrangement, and that the claimant would correct people when someone referred to the respondent’s property as hers.
The court’s analysis
Despite the differences in the couple’s testimony, the court concluded had entered into an oral contract to keep their property separate. However, court determined their agreement did not extend beyond the division of property, and there was no evidence the claimant had agreed to give up her right to spousal support.
However, even though the court was satisfied the couple had entered into an oral agreement to keep their property separate, the court determined that their agreement was outside of the law as stated in the province’s Family Law Act (the “FLA”), which states that such an agreement must be in writing, and be signed and witnessed. Without such a contract, the court divide property equally, unless an equal division is “significantly unfair.” Section 95(2) of the FLA outlines the factors governing whether an equal distribution would be unfair. They are:
(a) the duration of the relationship between the spouses;
(b) the terms of any agreement between the spouses, other than an agreement described in section 93 (1) [setting aside agreements respecting property division];
(c) a spouse’s contribution to the career or career potential of the other spouse;
(d) whether family debt was incurred in the normal course of the relationship between the spouses;
(e) if the amount of family debt exceeds the value of family property, the ability of each spouse to pay a share of the family debt;
(f) whether a spouse, after the date of separation, caused a significant decrease or increase in the value of family property or family debt beyond market trends;
(g) the fact that a spouse, other than a spouse acting in good faith,
(i) substantially reduced the value of family property, or
(ii) disposed of, transferred or converted property that is or would have been family property, or exchanged property that is or would have been family property into another form, causing the other spouse’s interest in the property or family property to be defeated or adversely affected;
(h) a tax liability that may be incurred by a spouse as a result of a transfer or sale of property or as a result of an order;
(i) any other factor, other than the consideration referred to in subsection (3), that may lead to significant unfairness.
The claimant sought an equal division of assets, while the respondent wanted to avoid any division at all. The court agreed with neither party. After considering the factors outlined in the FLA, the court divided the property on an 80/20 basis in favour of the respondent and fixed spousal support indefinitely at $850 per month.
At Borden Family Law, we have been helping clients with family law needs for over 17 years. In this time we’ve had the opportunity to work on cases covering the spectrum of family law, including spousal support. Our experienced and knowledgeable team can provide you with the legal support you need when going through a divorce or separation. Please call us at 905-597-6090 or reach us online to talk today. Please remember to ask about our bundled services and flat fees.