Contrasting Anderson v. Anderson, 2023 SCC 13 (CanLII), With a Recent Manitoba Decision

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Article2023 | 07 | 06

Contrasting Anderson v. Anderson, 2023 SCC 13 (CanLII), With a Recent Manitoba Decision

red chair and black chair in a white room

Shortly before the release of the Anderson decision, Menzies, J. released his decision in Vanbeselaere v. Vanbeselaere, 2023 MBKB 67. That case dealt with the validity of a pre-marital agreement within the context of Manitoba’s legislation.

In Vanbeselaere the parties began cohabiting in 1994. The husband proposed in 1995, with the wedding planned for July 1997. In the spring of 1997, the husband retained counsel to draft a premarital agreement. The husband brought a copy of the agreement home and left it on the counter.  He told the (then future) wife that without the agreement there would be no marriage.  The parties both signed the agreement two days before the wedding with the wife not retaining counsel herself and instead signing an acknowledgement of her refusal to do so.

The parties remained married for 23 years and had two children.  They both worked on the “family” farm (pre-acquired by the Husband and excluded by virtue of the agreement).  When the wife drew a salary from the farm based on certain tracked hours, she used that salary to pay for groceries and the children’s extracurricular activities. Both parties testified that the payment of wages was an accounting strategy.

For approximately eight years the parties filed income tax returns declaring the farm to be a partnership. The husband’s evidence at trial was that there was no partnership and that this was merely a strategy to reduce taxes. The wife’s evidence was that she did not receive her share of the partnership income.

The premarital agreement itself set out that the husband owned farming assets that were described as substantial. The agreement provided that the wife was not to share in any of those assets, and the property substituted for the original property that was to be included would also be excluded. In addition, appreciation was excluded from accounting, as were any assets derived from those original assets.

In terms of support, the agreement set out that there was to be no spousal support. There was, of course, a standard severability of terms clause indicating that each and any one of the terms of the agreement was severable, and would survive a finding of invalidity of any other term.

Menzies, J. found that the marital agreement was unconscionable, and therefore of no force and effect as between the parties. The Court held that this was not merely a case of the advantage accruing to one party, but rather that there was undue advantage taken by one of the parties.

The court had to find and seemingly did find, that the husband took unfair advantage of the wife by an unconscientious use of his stronger power against her as the weaker party.  To be unconscionable, the inequality of bargaining position between the parties had to have arisen out of ignorance, need or distress leaving the wife, as the weaker party, in the power of the husband.  That is precisely what the court found based on the unique facts of the case.  This then created a presumption of “a type of fraud” which the husband failed to repel as he could not show the bargain was fair, just, and reasonable.

It is important to note that an unwise bargain or one that is one-sided, is not necessarily unconscionable.  Even if entering the contract was folly, people who enter into contracts knowingly and willingly should not be relieved from their bargains. [paragraph 67 quoting Lindsay v. Lindsay, 1989 CanLII 7336 (MB KB)].

The court found that the wife was so vulnerable given her age and station in life at the time of marriage that she was financially desperate and therefore highly vulnerable in the context of a trusting relationship with the husband.  Here the husband was eight years older than the wife, had assets, and a better education than the wife who was eighteen and basically had no net worth.  The court found that at the time of the proposal there was no mention to her of the requirement to sign a marital agreement that was not negotiated but rather was found to have been imposed.

The Take Away

It might be that following the Anderson decision this case might have been considered, or even decided, differently. In the event that the facts were somewhat different, one might imagine the outcome might have been different in a post Anderson world.

If the husband had been clear from the start of the relationship that there was to be no sharing of the property alone, with nothing about support in the property agreement, there might have been a different result.  Had there been disclosure and/or independent legal advice, there might also have been a different answer.

There are many scenarios that one can imagine that might have resulted in a different conclusion.  That of course is often the nature of family law.  There is usually a multitude of unique factors at issue that must be balanced in a constantly evolving legal environment. (For proof of the constantly evolving state of Family Law and Practice in Manitoba, stay tuned for the coming into force of The Family Law Act and other legislation, and the concurrent ending of The Family Maintenance Act and related legislation on July 1, 2023, on the heels of many other changes to the law and the governing Rules).

At the end of the day, it might be that this case simply represents a “bridge too far”.  Too far in terms of the extent to which a farm wife in a long-term marriage was excluded from both support and property relief of any nature and kind whatsoever without independent legal advice or disclosure at a tender age. In a post Anderson legal environment in Manitoba, property agreements may have a greater likelihood of being upheld.  That said, fundamental principles of contract law remain operable.  Accordingly, the presence of independent legal advice and some form of relevant disclosure continue to buttress the sustainability of family agreements.

 


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About the Author
Lawrence Pinsky, K.C.
Lawrence I.Z. Pinsky, K.C.
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