Family Law
#8 - Domestic Contracts
STANDARD
A lawyer who engages in the negotiation, drafting or review of a domestic contract, including a pre-nuptial agreement, a cohabitation agreement and a separation agreement should consider the factors and circumstances against which the documents may be tested if later challenged and subjected to judicial scrutiny.1
Reference Materials
Notes:
1. Miglin v. Miglin, 2003 SCC 24 (CanLII), [2003] 1 S.C.R. 303; Hartshorne v. Hartshorne, 2004 SCC 22 (CanLII), [2004] 1 S.C.R. 550; Rick v Brandsema, 2009 SCC 10 (CanLII), [2009] 1 S.C.R. 295
Related Legislation:
Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.) ss. 11(b), 15.1 (5)(a), 15.1 (8), 15.2 (4)(c), 17 (6.2)(a), and s. 17 (6.5)
Matrimonial Property Act, R.S.N.S. 1989, c. 275, as amended 1995-96, c. 13, ss. 24, 29, and s. 83
Maintenance and Custody Act, R.S.N.S. 1989, c. 160 s. 4(c) and s. 52. (Nova Scotia Child Maintenance Guidelines)
Maintenance Enforcement Act, S.N.S. 1994-95, c. 6.
Testators Family Maintenance Act, RSNS 1989, c. 465 s. 16(2).
Additional Commentary:
Rick v Brandsema, 2009 SCC 10 (CanLII), [2009] 1 S.C.R. 295 - Unconscionable agreement - Full and honest financial disclosure - Mental state
Hartshorne v. Hartshorne, 2004 SCC 22 (CanLII), [2004] 1 S.C.R. 550. - discusses test to override a marriage agreement made pursuant to provincial matrimonial legislation
Miglin v. Miglin, 2003 SCC 24 (CanLII), [2003] 1 S.C.R. 303. - discusses test to override a separation agreement made arising from marriage breakdown.
LeVan v. LeVan, 2008 ONCA 388 (CanLII) – Pre-nuptial contract – ILA obtained – Lack of financial disclosure – Egregious conduct of spouse.
Landry v Landry, 1981 NSCA 1222 (CanLII)– Lawyer exceeded authority to bind client.
MacLean v. MacLean, 2009 NSSC 216 (CanLII) – Inquiry into the validity of the agreement – List of factors the Court must consider.
Rizzo v. Rizzo, 2007 NSSC 358 (CanLII) –Separation Agreement found to be unconscionable.
Pineo v. Pineo, 1981 NSSC 1224 (CanLII)– Authority to bind client.
In Webb v. Birkett, 2011 ABCA 13, the Alberta Court of Appeal held that the defendant solicitor Birkett was negligent in representing the plaintiff Webb in a collaborative family law settlement. The Alberta Court of Appeal held that CFL practitioners must meet the same standard of care required of other family law practitioners including taking appropriate steps to get the financial information needed to properly advise the client. A lawyer must obtain sufficient reliable information to be able to ascertain what the client would likely receive, or be required to pay, for spousal support, child support and matrimonial property division should the matter be resolved at trial, and so advise the client. A lawyer should tell a client who takes the position that he or she wants to settle without having received full information from the other side that they may therefore be accepting less, or paying more, than what would be required according to law, and provide to that client an assessment of the impact f the risk, including estimates of the value of what might be lost, or paid above what was necessary, to the extent possible, on the basis of the information then available. A prudent solicitor would put this advice in writing.
Kerr v. Baranow, 2011 SCC 10, [2011] 1 S.C.R. 269
Kerr and Baranow separated in their late 60s after a 25 year common law relationship. Ms. Kerr claimed spousal support and a share of property in Mr. Baranow’s name. This decision also dealt with the case for Vanasse v. Seguin, one of a twelve-year common-law relationship during which the couple had children. Ms. Kerr brought a claim for unjust enrichment. The court considered and resolved the five main issues as follows:
- The “common intention” approach to resulting trust has no further role to play in the resolution of property claims by common-law couples.
- If not linked to a claimant’s contribution to specific property, the money remedy for a successful unjust enrichment claim should not be based on a “fee for service” approach but on a “co-venturer” approach.
- The mutual conferral of benefits should generally be considered at the defence and remedy stage of the case.
- The legitimate expectation of the parties plays a limited role and has to be considered in relation to whether there is a juristic reason for the enrichment.
- Spousal support should commence on the date of the commencement of the application.
The Court confirmed the law of unjust enrichment did not mandate a presumption of equal sharing nor does the fact of cohabitation alone entitle one spouse to share in the other’s property.
For more information on this case, read Kerr v Baranow and Vanasse v Seguin and Rubin v. Gendemann by Philip M. Epstein QC
FACTORS TO CONSIDER WHEN ADVISING A CLIENT (ADAPTED FROM Miglin (SCC), Hawthorne (SCC), Rick v. Bandsema (SCC) and MacLean (NSSC)):
(1) Do you have a concern about the capacity or mental competence of your client?
(2) Has there been complete disclosure of material information?
(3) Does your client suffer from any particular vulnerability that might reduce or negate the usefulness of that advice?
(4) Does your client appear to understand the provisions of the Agreement and its effect?
(5) Does the Agreement meet the objectives of the legislation with which it deals?
(6) Are the terms of the contract unclear or uncertain? (bear in mind contra proferentem)
(7) Is your client a vulnerable person or under influence or stress that may lead him or her to sign a document against their interest?
(8) Is there any concern regarding fraud, misrepresentation or mistake?
(9) What is your client's understanding of the relationship, what are their intentions and their expectations for the future? What do they say as to their spouse or intended spouse's view on these issues?
(10) Under what circumstances is the contract being negotiated?
(11) What is your client's level of education, literacy level, understanding of financial issues? Is the contract in the client's first language?
Areas which may require expert assistance:
- Tax;
- Pension;
- Medical & Psychological assessments;
- Accounting (including electronic forensics accounting);
- Corporate & Commercial matters
- Property valuations
DOWNLOADS
Related Ethics:
Legal Ethics and Professional Conduct: A Handbook for Lawyers in Nova Scotia, 2nd ed. (Halifax: Nova Scotia Barristers’ Society, 1998), as amended.
Precedents:
Separation Agreement Checklist (Law Society of British Columbia)
Marriage Agreement Checklist (Law Society of British Columbia)
Family Agreement Checklist (Law Society of British Columbia)
Resources:
CLIA (Canadian Lawyers Insurance Association) – provides helpful links and Bulletins related to Family Law issues, including: Issue 34 (January 2003) keep records of work being completed by other professionals.
ARTICLES
CCH Canadian Limited. Canadian Family Law Guide, loose leaf (Don Mills, Ont.: CCH Canadian, 1976).
Christopher, Catherine. The Law of Domestic Conflict in Canada, loose leaf (Toronto: Carswell, 2002). KB 135 C556 2002
Cornish, Julia E / Child support guidelines : what you need to know (March 2006), in Child support guidelines : what you need to know (2006) [KB 139.D4 N935 2006]
Epstein, Philip, How to Arrange a Kinder Marriage Contract, (February 2007) from the Canadian Bar Association
Epstein, Philip M., et al. Separation Agreement Annotated (Toronto: LSUC, 2002). KB 138 E63 2002 + CD-ROM
Finlayson, Alex and Tellier, Nicole "The Meaning of Miglin", paper presented to the 2010 National Family Law Conference of the Federation of Law Societies (Victoria BC)
Freedman, Andrew J; Loomer, Sue C; Alterman, Vivian M; White, Paula G. / Financial principles of family law -- Scarborough, Ont. Carswell, 2001 - KB 139.D4 F853 2001
Johnson, Kim / Support and the separated senior: a case law update (2009)
Ostwald, Krysta H. / The Do’s & Don’ts of Pre-Nuptials (November 10, 2006) in The Lawyers Weekly.
Payne, Julien D; Payne, Marilyn A. / Canadian family law -- 3d ed. -- Toronto : Irwin Law, 2008 - KB 135 P346 2008
Stark, Hugh G; Maclise, Kirstie J. / Domestic contracts -- 2d ed. -- Scarborough, Ont.: Thomson Carswell, 2004 - KB 136 S795 2004
Wolfson, Lorne / Pre-Nups: How to Make’Em and How to Break ‘Em, 26 CFLQ 179.
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Approved by Council on March 25, 2011