Smith v. MacLean, 2021 BCPC 141

Citation: Smith v. MacLean 2021 BCPC 141 Date: 20210507 File No: 1926737 Registry: North Vancouver IN THE PROVINCIAL COURT OF BRITISH COLUMBIA Small Claims BETWEEN: FREDRICK EDWARD SMITH CLAIMANT AND: LESLIE KAREN MACLEAN DEFENDANT REASONS FOR JUDGMENT OF THE HONOURABLE JUDGE P. JANZEN Counsel for the Claimant: R. Tyo Counsel for the Defendant: K. Thauli Place of Hearing: North Vancouver , B.C. Date of Hearing: April 13, 2021 Date of Judgment: May 7, 2021 [ 1 ] Leslie Karen MacLean is the Defendant in a claim brought by Fredrick Edward Smith.

She has challenged the jurisdiction of the Provincial Court of British Columbia Small Claims Division to hear a claim for breach of a cohabitation agreement made between the parties on May 14, 2018. [ 2 ] Mr. Smith’s claim is based exclusively on the breach of a term of that agreement that provides:

“If the Parties should separate, Leslie shall pay Fred the sum of $1,200 for every month of the Parties’ cohabitation, commencing May 14, 2016.” [ 3 ] Ms. MacLean argues that this is a family law matter involving, in particular,

Part 5 of the Family Law Act and, as such, should be brought before and heard by the Supreme Court of British Columbia. [ 4 ] The parties lived together from May 14, 2016, until June 30, 2019. On May 14, 2018, they entered into a cohabitation agreement (the “Agreement”). Both parties expressly acknowledged that they had received independent legal advice when they entered into the Agreement. [ 5 ] Ms. MacLean has 3 children and an annuity income of $154,000 per year. She owned two houses in North Vancouver. She resided in one of them with Mr. Smith. The other was rented out.

Both had mortgages against them but her interest in them was worth well over $1m. Mr. Smith did not own any real property. He has a pension from Coast Mountain Bus Co. Both were 64 years old at the time they entered into the Agreement. [ 6 ] The

Preamble provided that the Agreement was entered into to determine division of property and spousal support should the relationship come to an end. They expressly wished “to confirm that each of them relies on this Agreement to be enforced according to its terms”, had considered the provisions of the Family Law Act and the Wills, Estates and Succession Act and each was prepared to abide by the terms of the Agreement because being able to rely on it outweighed any risk of it operating unfairly in the future, amongst other things. [ 7 ] I quote sections 1-4 of Paragraph K of the

Preamble in their entirety: 1. The parties are aware that the law provides for judicial intervention in some circumstances if this Agreement is found to be unfair now or in the future. 2. The Parties wish to confirm that: (

a) each of them relies on the Agreement to be enforced according to its terms; (

b) each of them has considered the provisions of the Family Law Act and the Wills, Estates and Succession Act ; (

c) neither of them would have entered into this Agreement had it been anticipated that the other would ever apply to vary the Agreement; and (

d) neither of them may choose not to pursue economic opportunities because of their relationship but each Party recognizes that certain sacrifices will be made within, and because of , the relationship, and the consequences of those choices will not be used to avoid the terms of this Agreement. 3. The Parties acknowledge that each of them is prepared to abide by the terms of this Agreement because each recognizes that (

a) the importance to each of them of being able to rely on the Agreement far outweighs the risk that it may operate unfairly at some future date; and (

b) the impossibility of returning the Parties to the positions they occupied before they entered into this Agreement would make any variation, however fair, viewed solely in the changed circumstances, unfair on the whole because all dealings with their property during the course of their relationship will have been based on the binding nature of this Agreement. 4. The Parties wish to confirm that (

a) Leslie has children from a previous relationship; (

b) both of them intend to leave their respective estates to their respective heirs according to the terms of their wills; and (

c) each of them is relying on the other not to make any claim based on being a spouse or common law partner (

i) If their relationship ends and they cease to be companions, (ii) On the death of either of them; except as specified in this Agreement . (my emphasis) [ 8 ] Paragraph 5 of the Agreement provided that, regardless of circumstances, neither would bring a claim of spousal support against the other and gave up any claim to spousal support. [ 9 ] In the Agreement both parties acknowledged and agreed that they had no claim against the property or pension of the other and no claim against the estate of the other. [ 10 ] Paragraph 18 provided that while continuing to live in her residence, Mr. Smith agreed to pay Ms.

MacLean a monthly payment of $1,200 “as a contribution to the cost of his accommodation and living expenses”. [ 11 ] Paragraph 20 provided that “if the Parties should separate, Leslie shall pay Fred the sum of $1,200 for every month of the Parties’ cohabitation, commencing May 14, 2016.” [ 12 ] Paragraphs 24 and 25 provided express mutual releases. Paragraph 24 stated:

“Fred releases Leslie from any claims Fred may have or may acquire in the future against Leslie’s separate property other than anyclaims arising under this Agreement or to enforce the provisions of this Agreement.” (my emphasis) [13] Paragraph 27 stated: “Except as otherwise provided in this Agreement, each Party shall give up all claims at law, in equity, or by statute against the otherrelating to support or a division of property, including, without limiting the generality of the foregoing, all claims under the Family LawAct, and the Wills, Estates and Succession Act, with respect to: (

a) support; (

b) property; (

c) succession rights; and (

d) any other matter arising from their relationship.” [14] Paragraph 28 stated: “Each of the parties waive the application to their relationship and to this Agreement of Parts 5 and 6 of the Family Law Act or ofsimilar legislation in any other jurisdiction where they may reside.” (my emphasis) [15] Paragraph 29 stated: “Neither Party will make any claim under any enactment now in force or to come into force in the future against any property, real orpersonal, that the other may now own, or in the future may own.” [16] In paragraph 39 the parties acknowledged, amongst other things, that he or she: (

a) has had independent legal advice (

b) has read the Agreement carefully (

c) was fully aware of the effect, purpose and intent of this Agreement (

e) was signing voluntarily without any undue influence or coercion by the other or by anyone else (

i) believed that the Agreement would not result in circumstances that were unconscionable or unfair to the other party and (

j) understands that the provisions of this Agreement, if considered by the Supreme Court to be substantially unfair due to the non-disclosure of material fact, may be reviewed and varied by the Court despite the mutual agreement of the Parties that this Agreement isfinal and binding. [17] I interpret paragraph 39(

j) to mean that the parties intended any review and variance of this Agreement to be strictly confined tounfairness arising from non-disclosure. Non-disclosure has not been pleaded or alleged in any way in this case. [18] The agreement is 15 pages long. Both parties gave up any and all claims to any type of property claim and to spousal support.Both expressly waived the application of Parts 5 and 6 of the Family Law Act to this Agreement.

Part 5 deals with property division andPart 6 deals with pension division. [19] Ms. MacLean argued that the claim arises in the context of an agreement entered into by the parties at the second anniversary oftheir cohabitation. The subject matter of the Agreement includes spousal support and property owned by the respective parties. [20] The Defendant wishes to rely on s. 93 of the Family Law Act in order to defend the claim made against her. [21]

Section 93 provides that a spouse may apply to the Supreme Court to set aside or replace a provision in “a written agreementrespecting division of property and debt” but only if satisfied that a spouse failed to disclose significant property or debts, a spouse tookimproper advantage of the other spouse’s vulnerability, including the other spouse’s ignorance, need or distress, the spouse did notunderstand the nature or consequences of the agreement, or other circumstances that would cause all or part of a contract to be voidableunder the common law. [22] The Defendant relies upon the decision of Ball v.

Carpentier 2014 BCPC 319 , 2014 BCPC 0319. In that case, theagreement between a married couple was called a separation agreement. It was intended to be a complete, effective and final settlementof the issues of their respective rights in and to the assets and property of each other and to any assets and property held by them jointly.At issue was a provision dealing with the transfer of a condominium owned by both of them to one of them and one of their children.

Thecontract expressly provided that the “Supreme Court of British Columbia shall have exclusive jurisdiction over this Agreement”. [23] The Provincial Court decided that the Supreme Court had jurisdiction over the dispute based on the language of the contract andthat the Provincial Court did not have the jurisdiction to enforce the claim. The Provincial Court wrote that if it was wrong to rely on theexpress language of the agreement, the Supreme Court had exclusive jurisdiction to make orders under

part 5 of the Family Law Act thatdeal with property division including the jurisdiction to set aside or replace a provision in an agreement between spouses respectingproperty division. [24] As a result, the Provincial Court dismissed the claim as it had no jurisdiction to hear the claim or to transfer it to the SupremeCourt.

[ 25 ] In my view this is a very different kind of case. Property division is not the issue in this claim. The Claimant only seeks to enforce an express provision of the Agreement that is unrelated to the division of property. Nor has the Defendant applied to the Supreme Court to set aside or vary a part of this Agreement that deals with the division of property, as contemplated by

section 93. [ 26 ] The Agreement expressly provided that neither party would bring any kind of claim under the Family Law Act or the Wills, Estates and Succession Act . More specifically, paragraph 28 stated that “each of the parties waives the application to their relationship and to this Agreement of Parts 5 and 6 of the Family Law Act or of similar legislation in any other jurisdiction where they may reside.”

Section 93 is contained within

Part 5 of the Family Law Act . [ 27 ] The purpose of this Agreement was to contract out all of the provisions of the Family Law Act and the Wills, Estates and Succession Act . The parties wished to ensure that the provisions of those Acts would never apply to them as the result of their decision to continue to cohabit beyond two years. [ 28 ] In essence, the Agreement they entered into was a mutual release of any and all claims that could arise out of their continued cohabitation, including under legislation. [ 29 ] The Agreement expressly provided that Mr. Smith was to pay the Defendant Ms.

MacLean $1,200 per month to offset the cost of his accommodation and living expenses for as long as the parties continued to cohabit. Ms. MacLean agreed that, upon separation, she would reimburse Mr. Smith by the amount that he had paid to her during the cohabitation. [ 30 ] In insisting upon her right to raise a defence under s. 93 in the Supreme Court, Ms. MacLean is also reneging on her express agreement to waive the application of

Part 5 of the Family Law Act to the Agreement and to their relationship. [ 31 ] I note that the Agreement expressly contemplated one exception to the comprehensive mutual release of all claims, including under

part 5 of the FLA . That is when, and only when, a party has failed to disclose all of their assets. That has not been pleaded or alleged in any way in this case. [ 32 ] The Agreement was carefully drafted with very specific and very comprehensive terms that expressed the clear intention of the parties to not become embroiled in claims under the Family Law Act or the Wills, Estates and Succession Act, including applications to set aside the Agreement based on the grounds set out in

section 93. Instead, upon separation any claim had to be based exclusively upon the breach of an express provision of the Agreement. That is precisely the claim that Mr. Smith has brought in this small claims action. [ 33 ] The Agreement is a contract that provided a mutual release of any and all claims that might arise upon the parties no longer cohabiting, including for spousal support and property division under parts 5 and 6 of the FLA . The Agreement expressly provided additional consideration for entering into the contract to Mr.

Smith, as the less wealthy of the parties, in the form of reimbursement of money he had paid to Ms. MacLean for accommodation and living expenses, upon their separation. Mr. Smith alleges that Ms. MacLean has failed or refused to pay the amount that she agreed to pay under their contract. [ 34 ] It is a claim for breach of contract that falls squarely within the jurisdiction of this Court and Mr. Smith is entitled to have his claim resolved in a “just, speedy, inexpensive and simple manner” under s. 2(1) of the Small Claims Act . [ 35 ] Ms.

MacLean’s application to dismiss the Claim on the basis that the Supreme Court of British Columbia has exclusive jurisdiction over it is dismissed. ___________________________ The Honourable Judge P. Janzen Provincial Court of British Columbia