In the British Columbia Supreme Court decision, SBF v. DGF, 2022 BCSC 2231, the issue concerned whether the marriage agreement that was entered into by the parties, Mr. and Ms. F, should be upheld to be valid.
Upon separation after eight years of marriage, Ms. F sought spousal support and the division of both property and assets.
If the agreement were to be validated, Ms. F would have been precluded from any support or entitlement to the properties brought into the marriage by Mr. F.
To have the agreement declared invalid, Ms. F argued that she signed it under duress, that she did not fully understand it, and thus its effect would be unfair.
A week before Mr. and Ms. F's wedding ceremony, they entered into a marriage agreement barring Ms. F from any claim to Mr. F's properties that he had bought prior to their marriage. The agreement further stated that neither party would be entitled to spousal support unless they had children together. The couple did not have any children, and Ms. F did not own any of her own properties, but Mr. F did have children from a previous relationship.
The Marriage Agreement
Both parties signed the marriage agreement before the wedding. While negotiations were taking place, Ms. F did receive independent legal advice. Still, she alleged that she signed the agreement under duress because Mr. F stated that he would not marry her otherwise. She claimed duress because the thought of cancelling the wedding was too embarrassing.
The stated goal contained within the agreement was for the parties' assets to be kept separate so that those assets could pass to Mr. F's children.
In determining whether the agreement should be set aside, the Court looked at whether the formation of the agreement was unfair, either procedurally or operationally.
Establishing the Unfairness of the Agreement
Before coming to that assessment, the Court looked at whether the witnesses were credible.
They were hesitant about Ms. F's credibility, whose evidence the Court approached with caution. This was due to several reasons, including that while Ms. F had claimed she did not know the content of the agreement before signing it, the Court found that she knew what was included when negotiations were occurring and had indeed understood the agreement.
She had also told Mr. F that she did not want the "kids' properties" and the Court found that her evidence was clouded by her bitterness and animosity toward Mr. F.
Significant Differences in Income
In arguing that the agreement was unfair, Ms. F focused on Mr. F significantly understating his income in the agreement, her signing the agreement under duress, and her not understanding the terms of the agreement.
With regard to Mr. F's income, the Court found that he had not understated it because there was a difference between the business and personal income he received from his law practice. In fact, the Court determined that Ms. F understated her own income because she did not list her pension as an asset, whereas Mr. F did.
In claiming that she signed the agreement under duress, Ms. F stated that she did so because the destination wedding had been paid for, guests were travelling to the destination soon, and she was vulnerable to Mr. F because he was a lawyer and she "feared him". The Court cited several cases that stated mere emotional difficulty or strain would generally not be sufficient enough to establish duress, and that the elements for duress usually pertained more so to physical threats or physical compulsion.1
The Court furthermore did not accept that Ms. F was blindsided by the agreement, as Mr. F would frequently have conversations with her throughout their relationship that he would want an agreement to protect his assets, and she had witnessed what he had gone through with his previous divorce. Ms. F also did not appear vulnerable because she had independent legal advice and the ability to stand up for herself. The Court found that while Ms. F was likely embarrassed by the thought of cancelling her wedding and was concerned about how much her father had spent on it, those two factors did not amount to duress, and she had freely entered into the agreement.
With respect to the argument that Ms. F did not understand the agreement, the Court did not find that to be the case. The Court stated that there was evidence showing that Ms. F was able to go through the agreement thoroughly and that her notes and statements had shown she understood its terms which were also communicated to her lawyer. Despite the legal advice she received not to sign the agreement because it would be difficult to challenge in the future, Ms. F considered it and signed the agreement. Based on that evidence, the Court found that Ms. F understood the agreement and that the circumstances under which the agreement was signed were fair with regard to the procedures undertaken.
The next concern was whether the agreement was operationally fair. The test was to assess whether the agreement was significantly unfair regarding the division of property and enough to set aside the agreement. The Court noted that Ms. F did not have any property of her own before or during the marriage, but Mr. F did. While they had plans to buy a home together, the Court found that the plans were contingent upon Ms. F obtaining a first-time homeowner's grant and that the plan was not a certainty.
Ms. F further argued that her biweekly $500 payment to Mr. F's bank account showed that their funds were comingled, demonstrating the argument of unfairness. The Court found that the contributions were modest and did not cover household expenses, let alone the mortgage.
The Court further found that she did not contribute toward the betterment of any of the properties in such a way that having no entitlement would result in significant unfairness. The Court, therefore, found that the marriage agreement was indeed valid and Ms. F was not entitled to spousal support or the division of property and assets.
1. Para 57.
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