Anderson v. Anderson: The Battle Over Domestic Contracts
By: Rhodes Thompson-Chase
In a recent Saskatchewan case that made its way to the Supreme Court of Canada, a couple’s divorce proceedings became contentious when their original agreement was called into question.
The Andersons were married for three years until they decided to part ways in 2015. The couple signed an agreement crafted by Ms. Anderson. The agreement stipulated that each party would retain ownership of their respective property, except for the family home, which they jointly owned.
The Andersons signed the agreement without seeking independent legal advice (ILA), a crucial aspect that would later come under scrutiny. When Ms. Anderson filed for divorce 17 months later, Mr. Anderson contested the agreement, claiming it was signed under duress and without ILA. He argued that the court should divide the family property despite the agreement.
The Family Property Act FPA recognizes two types of domestic contracts related to family property: interspousal contracts and other domestic contracts. Interspousal contracts, as per Section 38 of the FPA, can be enforceable if they meet specific formal requirements, including ILA. However, even if a domestic contract doesn’t meet these requirements, Section 40 allows the court to consider it and assign it a reasonable level of importance. While measures like independent legal advice and financial disclosure help ensure a fair bargaining process, they are not a statutory requirement under s. 40 of the FPA, and their absence alone is not determinative.
Upon reviewing the case, the trial judge found the agreement to be non-binding due to the absence of ILA. Consequently, the judge divided the couple’s assets equally under the FPA, ordering Ms. Anderson to pay Mr. Anderson approximately $90,000.
Ms. Anderson decided to appeal the decision. The Court of Appeal had a different perspective on the matter, basing its ruling on the Miglin decision, which provided a framework for considering agreements under the Divorce Act. The court concluded that the original agreement was indeed binding and should have been considered when dividing the family property. As a result, the Court of Appeal ordered Mr. Anderson to pay Ms. Anderson around $5,000 based on the trial judge’s property valuation.
The case ultimately reached the Supreme Court of Canada. In a unanimous decision, the Supreme Court allowed the appeal, setting aside the Court of Appeal’s ruling, and enforced the original agreement. Justice Karakatsanis, delivering the court’s opinion, emphasized that the absence of ILA did not demonstrate any prejudice. Disagreeing with the Court of Appeal’s interpretation of Miglin, the Supreme Court maintained that domestic contracts should be supported and encouraged by the courts within the boundaries of the law.
This case serves as a reminder of the significance of independent legal advice when signing domestic contracts, but also that the absence of ILA is not determinative. The Supreme Court’s decision upheld the importance of honoring domestic contracts, allowing the original agreement to dictate the division of the family property.