Anderson v Anderson, 2021 SKCA 117

Court of Appeal for Saskatchewan Docket: CACV3383 Citation: Anderson v Anderson , 2021 SKCA 117 Date: 2021-09-01 Between: Diana Anderson Appellant (Applicant) And James Allan Anderson Respondent (Respondent) Before: Ottenbreit, Caldwell and Schwann JJ.A. Disposition: Appeal allowed Written reasons by: The Honourable Madam Justice Schwann In concurrence: The Honourable Mr. Justice Ottenbreit The Honourable Mr. Justice Caldwell On appeal from: 2019 SKQB 35 , Regina Appeal heard: November 19, 2020 Counsel: Ian McKay, Q.C., for the Appellant David Couture for the Respondent Schwann J.A. I.

INTRODUCTION [ 1 ] The Family Property Act , SS 1997, c F-6.3 [ FPA ], creates a presumption of equal distribution of family property, subject to the parties’ right to contract out of the FPA by way of an interspousal agreement, provided certain formalities are observed.

In situations where an interspousal agreement does not satisfy the formalities prescribed by the FPA , family property is divided in accordance with the FPA regime, subject to the court’s discretion to assign the agreement whatever weight it considers reasonable. [ 2 ] This appeal concerns the weight given to an interspousal agreement following a short, three-year marriage, where the parties did not receive independent legal advice prior to its execution. The trial judge concluded the agreement should have nominal weight, which in the end result turned out to greatly disadvantage one party to it, Diana Anderson.

She appeals from that decision. [ 3 ] For the reasons that follow, I conclude the trial judge erred in both fact and law in relation to the agreement and that his decision must, therefore, be set aside. I would direct the division of the parties’ family property such that, in the end result, James Allan Anderson will pay $4,914.95 to Ms. Anderson to equalize the division of family property. II. BACKGROUND [ 4 ] The Andersons were married in May of 2012.

This was not the first marriage for either party and both came into the union with considerable assets, including houses, vehicles, items of personal property, RRSPs, savings and pensions. [ 5 ] The parties initially resided at Ms. Anderson’s home but, in early 2013, they jointly purchased a house in White City for $430,000 [the family home]. Each contributed $25,000 towards the down payment, with the balance covered by mortgage financing. The parties agreed to evenly share the cost of the monthly mortgage payment as well as taxes and utilities. [ 6 ] Over Ms. Anderson’s strong objection, Mr.

Anderson invested in Globe-Elite Electrical Contractors Ltd. [Globe-Elite], with which he was employed at that time. Ms. Anderson considered the investment to be improvident and declined to invest her own money in it. Although her decision caused considerable discord in their marriage, Mr. Anderson was undeterred. He borrowed $152,000 from his sister, for whom he had acted as trustee over her financial affairs. Mr. Anderson used the borrowed funds to pay off an existing loan that was secured by his Regina home.

He then refinanced that home and applied $225,000 of those funds to become a shareholder of Globe Electric

(1987) Ltd [Globe 1987] through a holding corporation, 101227335 Saskatchewan Ltd. Globe 1987 owned 50% of the shares in Globe-Elite. [ 7 ] The parties separated on May 11, 2015. Ms. Anderson remained in the family home and Mr. Anderson continued to pay his share of the monthly mortgage and taxes until June of 2017. [ 8 ] Roughly one month after the parties separated, Ms. Anderson invited Mr. Anderson to a reconciliation meeting with mutual friends, who also happened to be elders from the church they both attended. As the meeting drew to a close, Ms. Anderson presented Mr.

Anderson with a separation agreement she had drawn up [2015 Agreement]. Ms. Anderson asked Mr. Anderson to review it. They both signed it in the presence of the two witnesses. The agreement provided as follows: Separation Agreement between J. Allan Anderson and Diana Anderson dated: July 19, 2015. Married on May 19, 2012 and ceased living as husband and wife on May 11, 2015.

The couple has no children together. It is agreed by both parties (J. Allan Anderson and Diana Anderson) that: 1. All assets/property/income/savings/investments/pets and any other of the like accrued prior to the marriage will remain solely with that individual. The other individual forfeits all rights and claims in whole and/or in part to the above. 2. With the exception of the mortgage on 5 Rosewood Bay and the $1800.00, J.

Allan Anderson still owes Diana Anderson for the remainder of the cost of the PVC fence, all individual debts incurred prior to and during the marriage will remain the responsibility of that individual. 3. All income, pension, investments, benefits and any other of the like earned/accumulated prior and during the marriage will remain solely with that individual; the other individual forfeits all rights and claims in whole and/or in part to the above. 4.

Each party forfeits any claims or rights to any and all property, assets, income, investments, pension, benefits, pets, debts and any other of the like incurred by the individual after date of separation on May 11, 2015. 5. With the exception of 5 Rosewood Bay and the $1800.00, J. Allan Anderson still owes Diana Anderson for the remainder of the cost of the PVC fence, any and all property/business/assets/debts and/or of the like will remain with the individual who purchased/amassed it (e.g.

Diana Anderson will forfeit all rights and claims to Globe Electric and associated company(ies) and there [ sic ] assets, inventory and any of the like). 6. The resolve of 5 Rosewood Bay will be determined at a later date. It is agreed by both parties that a Real Estate evaluation will be performed. The household goods/appliances/furniture, and of the like mutually purchased (with the exception of goods/appliances/furniture/tools purchased/owned by each individual prior to the marriage) during ownership of 5 Rosewood Bay will remain with the property, if buyout is mutually agreed upon by either party.

If sale of the above noted property is mutually agreed to by the parties, the household goods/appliances/furniture/tools mutually purchased during the marriage will be itemized and agreed to either buyout or division of goods. If no agreement between parties can be reached, the parties will seek mediation. 7. It is the intent of Diana Anderson to sign over the 2000 Toyota Tundra truck to Al Anderson on a date yet to be determined. [ 9 ] Neither party received independent legal advice prior to signing the 2015 Agreement. [ 10 ] Shortly thereafter, Ms.

Anderson instructed her legal counsel to prepare a formal interspousal agreement that she hoped would “make things more legal”. Mr. Anderson refused to sign that agreement or engage in any discussions with her in relation to the agreement or how they would deal with the family home. Several months later, Ms. Anderson’s legal counsel sought financial disclosure from Mr. Anderson in relation to his business interests. [ 11 ] On December 10, 2015, Ms. Anderson filed a petition under

Part 15 of The Queen’s Bench Rules seeking divorce and costs, but not property division. The “Proceedings and Agreements”

section of her petition stated as follows: “An Agreement in writing signed by the Respondent and I which dealt with all of our property as well as spousal support”. Ms. Anderson went on to describe it as “[a]n Agreement in writing dated July 19th, 2015”. [ 12 ] Mr. Anderson filed an answer and counter-petition to Ms. Anderson’s petition a year and half later on May 5, 2017. Unlike Ms. Anderson, his pleadings included a claim for a division of their family property.

He, too, had acknowledged the 2015 Agreement, under the heading “Proceedings and Agreements”, but stated that it was “[s]igned with no legal advice and under duress”. [ 13 ] The matter proceeded to trial in 2018, with judgment rendered on January 30, 2019: Anderson v Anderson , 2019 SKQB 35 [ Trial Decision ]. III. THE TRIAL DECISION [ 14 ] The primary issues at trial were the legal effect of the 2015 Agreement, occupation rent and valuation of the family property. Selection of the valuation date was complicated by the fact that Ms.

Anderson had only petitioned for divorce and costs and, relying on the binding effect of the 2015 Agreement, had not sought a division of the family property. The trial judge undertook an extensive valuation exercise in relation to each of their assets and made findings of value for three possible dates: December of 2015 (being the date of Ms. Anderson’s petition), May of 2017 (being the date of Mr.

Anderson’s counter-petition) and June of 2018 (being the date of adjudication). [ 15 ] The trial judge began his analysis with the 2015 Agreement, summarizing it in this way: [87] The essence of the agreement was that each of the parties was to keep the property that they owned and which was registered to them and leave the other’s property to the other, excepting the Tundra truck, which was registered to [Ms. Anderson] at the time. This truck was to be placed back into [Mr. Anderson’s] name.

All other assets were to be kept by their then recognized owner. [ 16 ] He found as fact that the 2015 Agreement did not qualify as an interspousal contract within the meaning of s. 38 of the FPA , but recognized that s. 40 allowed him to take it into consideration. In doing so, he began his analysis by framing the inquiry as a question as to “whether the agreement was, at the time it was executed, fair and reasonable” (at para 90).

After reviewing the evidence, the trial judge concluded as follows: [108] The agreement at issue here is not within the category of agreements recognized in Tether [2008 SKCA 126] or Iverson [2009 SKQB 246]. The absence of legal representation of either party before, or at the time, it was executed is most troubling. It is important to ensure that requirement is not easily overlooked. The involvement of counsel is what provides most people with the best chance to

ascertain what their rights truly are regarding family property. Agreeing to a significant disposition when emotions are still raw absent a clear understanding of what the law provides raises the requirement for additional vigilance. This glaring absence alone is sufficient to make the agreement unenforceable. [ 17 ] The trial judge buttressed his conclusion by pointing to three additional factors: (

a) the agreement was unenforceable because “other matters were as yet unconcluded”, notably the family home (at para 109), (

b) the parties had little understanding of the value of their assets and liabilities, which he found to be fundamental to such an agreement, and (

c) Ms. Anderson had subsequently pursued a formal s. 38 agreement and the disclosure of information relating to Mr. Anderson’s business interests. Those factors caused the trial judge to conclude that the 2015 Agreement was “more akin to an agreement to agree than a contract” (at para 114) and that there was no consensus ad idem “so as to make it enforceable according to its terms” (at para 115).

That said, the trial judge said he would take it into account in the final determination of the equitable division of their family property. [ 18 ] When the trial judge turned to address the issues of valuation and the appropriate valuation date, he concluded that most of the parties’ assets and debts should be valued as of the date of Mr. Anderson’s counter-petition (May 5, 2017), being “the first date an application as set out in the FPA was made” (at para 261).

With regard to the parties’ respective pensions, investments and the family home, however, he determined they should be valued as of the date of adjudication. An adjudication date value for the family home was used to account for Mr. Anderson’s continued payment of one-half of the monthly mortgage costs after separation. [ 19 ] The trial judge also valued Mr. Anderson’s corporate interests as of the date of adjudication because “the changes occasioned there are due to the market forces that affected them” (at para 253). He noted Mr.

Anderson’s business had lost value in the years following separation, summarizing the situation as follows: [266] What appears to have changed from December 2015 to May 2017 then again to June 2018 is, most significantly, the value of the business interests held by [Mr. Anderson]. The change from December 2015 to May 2017 saw the loss of the $160,000.00 in retained earnings. By June 2018 a positive value of $15,412.00 via [101227335 Saskatchewan Ltd.’s] assets and the shareholder’s loan which has a present value of $85,000.00 provides the adjudication date value of [Mr.

Anderson’s] total financial interest in the three corporations. [ 20 ] Next, the trial judge found the homes that each party had acquired prior to marriage were exempt under s. 23 of the FPA . [ 21 ] The trial judge went on to make findings of fact with respect the exempt status of the parties’ respective vehicles, bank accounts, securities, RRSPs, and pensions. However, he found the 2012 Grey Wolf recreational trailer, which Ms. Anderson had purchased just prior to the marriage, was family property valued at $21,000. [ 22 ] Mr. Anderson had borrowed roughly $152,000 from his sister.

The trial judge determined this loan did not amount to dissipation and that it was a family debt incurred to purchase shares in Globe-Elite while the couple were married. [ 23 ] Even though the trial judge did not find the terms of the 2015 Agreement binding on the parties, he exercised his discretion under s. 21(2) (

c) and s. 21(3) (

q) of the FPA to reduce the overall equalization payment to Mr. Anderson by $8,000. He said as follows: [278] In these circumstances I use my discretion to reduce the distribution to [Mr. Anderson] by $8,000.00. The execution of the agreement without seeking legal advice and without effectively communicating with [Ms. Anderson] about it in any way caused additional expense and consternation for [Ms. Anderson]. Silence was not the best course for [Mr. Anderson] to take, particularly when coupled with a new valuation date becoming central to the matter later on.

In all the circumstances, an $8,000.00 reduction in [Mr. Anderson’s] entitlement is another fact or circumstance and relevant to a fair and equitable disposition within the meaning of s. 21(2) (

c) and 21(3) (

q) of the FPA . [ 24 ] The final consideration was the overall fairness of the proposed division given the parties’ circumstances as a whole. Stepping back, and taking a high level view of things, led the trial judge to reach this conclusion: [280] In consideration of all the circumstances here, including: the assets brought into the marriage by each party; the agreement executed by the parties in July 2015; [Mr. Anderson’s] continued payment of the mortgage on the family home; the drop in value of [Mr.

Anderson’s] corporate business holdings from the time of the initial petition due to no fault of his own; the various assets each was left with at the end of the relationship; the date of the execution of the agreement in July 2015 and the value of the parties’ property at the date of the initial petition; the date of the counter-petition raising family property issues; and the date of adjudication, I find that a further payment to [Mr.

Anderson] of $62,646.98 (this being the sum of the $70,646.98 equalization of non-taxable assets less the $8,000 equitable factor regarding the July 2015 agreement), and either an RRSP rollover of $37,089.69 or a further cash payment of an additional $27,817.27 to [Mr. Anderson] as the person entitled, balances all the various factors at play regarding family property. It is a conclusion in this matter that is fitting and properly divides that which is properly divided.

As recognized by the Court of Appeal in Riley v Riley , 2011 SKCA 5 , 366 Sask R 110, fairness overall, after having considered each of the issues raised in turn, is an important feature of a family property division decision of this sort. IV. ISSUES [ 25 ] Ms. Anderson raises the following six grounds of appeal from the Trial Decision : A. Did the Trial Judge err by concluding that the agreement entered into between the part[ies] was not a valid agreement under The Family Property Act ? B.

Did the Trial Judge err by failing to grant an exemption with respect to certain property acquired by the Appellant prior to the marriage and which … continued to be owned by the Appellant subsequent to marriage? C. Did the Trial Judge err by failing to give adequate consideration to the financial loss suffered by the Appellant as a result of the counter-claim being filed some two years after the petition?

D. Did the Trial Judge err in determining the value of the assets in the final award? E. Did the Trial Judge err in determining the value of the debts resulting in a miscalculation of the amount owing by the Appellant tothe Respondent? F. Did the Trial Judge err by awarding costs to the Respondent? V. STANDARD OF REVIEW [26] The applicable standards of review with respect to property division decisions was addressed in Riley v Riley, 2011 SKCA 5,366 Sask R 110, in this way: [5] When an appellate court reviews a decision of a trial court, three standards of review are usually engaged: (

i) the standard of reviewconcerning questions of law, i.e., did the trial judge decide all questions of law correctly (see: Housen v. Nikolaisen, 2002 SCC 33 atpara. 8, [2002] 2 S.C.R. 235); (ii) the standard of review as to factual findings, i.e., did the trial judge make any palpable and overridingerror with respect to a material finding of fact (see: Lensen v. Lensen, (SCC), [1987] 2 S.C.R. 672 at p. 683 and Housen atpara. 10); and (iii) the standard of review with respect to discretionary matters, i.e., did the trial judge consider all relevant matters (see:Friends of the Oldman River Society v.

Canada (Minister of Transport), (SCC), [1992] 1 S.C.R. 3 at 76–77 and thecases referred to therein). [27] Some of the arguments raised by Ms. Anderson on appeal concern the valuation of assets and a determination of whatconstitutes a fair and equitable division of family property.

Issues of that sort attract a deferential standard of review, which means that“[a]n appeal court should only interfere if the trial judge has abused his or her discretion by erring in principle, disregarding a materialmatter of fact, or failing to act judicially, or if the result is so plainly wrong as to amount to an injustice” (Ackerman v Ackerman, 2014SKCA 137 at para 23, [2015] 6 WWR 626). Also see Tyacke v Tyacke, 2021 SKCA 80 at para 15. VI. ANALYSIS A. The validity of the 2015 Agreement [28] The principal issue on appeal concerns how the trial judge dealt with the 2015 Agreement.

I find it useful to begin my analysisof this issue with an overview of the legislation and the jurisprudence in relation to interspousal agreements under the FPA. 1. Interspousal agreements under the FPA [29] Interspousal agreements are addressed under

Part VII of the FPA. Family property that is dealt with by an interspousal contractwithin the meaning of s. 38 is exempt from distribution under the FPA, provided the contract satisfies the technical requirements set out inthat

section and is not “unconscionable or grossly unfair” pursuant to s. 24: Soiseth v Hill, 2021 SKQB 109 at para 62. That is, to bypassthe statutory regime governing the division of family property, the agreement must be one that satisfies the following criteria: Interspousal contracts 38(1) The terms of an interspousal contract mentioned in subsection (4) are, subject to

section 24, binding between spouses, whether ornot there is valuable consideration for the contract, where the spouses have entered into an interspousal contract: (

a) that deals with the possession, status, ownership, disposition or distribution of family property, including future family property; (

b) that is in writing and signed by each spouse in the presence of a witness; and (

c) in which each spouse has acknowledged, in writing, apart from the other spouse, that he or she: (

i) is aware of the nature and the effect of the contract; (ii) is aware of the possible future claims to property he or she may have pursuant to this Act; and (iii) intends to give up those claims to the extent necessary to give effect to the contract.

(2) A spouse shall make the acknowledgment mentioned in subsection (1) before a lawyer other than the lawyer: (

a) acting in the matter for the other spouse; or (

b) before whom the acknowledgment is made by the other spouse. [30] Where the agreement fails to meet the criteria prescribed by s. 38, a court may still take it into consideration and assign it theweight that the court considers reasonable.

Section 40 speaks to this issue: Agreements between spouses 40 The court may, in any proceeding pursuant to this Act, take into consideration any agreement, verbal or otherwise, between spousesthat is not an interspousal contract and may give that agreement whatever weight it considers reasonable.

[ 31 ] Sections 4 and 7 of the FPA contain provisions of similar effect with regard to the possession of a family home or household goods: Right to possession 4 Where one spouse has a right of possession with respect to a family home or household goods, both spouses are, as between themselves, equally entitled to the right of possession, subject to the following: … (

e) any interspousal contract or, where the court thinks fit, any other written agreement between the spouses. … Powers of court 7 In exercising its powers pursuant to this Part, the court shall have regard to: … (

e) any interspousal contract or, where the court thinks fit, any other written agreement between the spouses … . [ 32 ]

Section 40 was first introduced into family property legislation in Saskatchewan under The Matrimonial Property Act , SS 1979, c M-6.1 [ MPA ] (repealed and replaced by the FPA in 1998). Since then, the provision has carried forward unaltered. The Honourable Roy Romanow, Attorney General at the time of the bill’s second reading, discussed the general principles governing agreements between spouses in this way (Saskatchewan, Legislative Assembly, Debates and Proceedings (Hansard) 19th Leg, 1st Sess (19 April 1979) at 1821 (Mr. Romanow)): Contracting out?

Yes, the spouses may contract out of the scheme by an agreement in writing acknowledged by each of them before separate lawyers. They may do so prior to or during their marriage. This contract may deal with ownership, division and possession of property during marriage and upon termination. If the spouses enter into a valid and binding interspousal contract, all property dealt with in that contract is exempt from the provisions of this act.

Any other written agreement may be taken into consideration in the courts but does not carry with it the presumption that the property covered by it is exempt . (Emphasis added) [ 33 ] Finally, and as will be discussed below, the purpose of the FPA , which is enshrined in s. 20 , is relevant to the operation of s. 40 .

It provides as follows: Purpose 20 The purpose of this Act, and in particular of this Part, is to recognize that child care, household management and financial provision are the joint and mutual responsibilities of spouses, and that inherent in the spousal relationship there is joint contribution, whether financial or otherwise, by the spouses to the assumption of these responsibilities that entitles each spouse to an equal distribution of the family property, subject to the exceptions, exemptions and equitable considerations mentioned in this Act.

Section 40 jurisprudence [ 34 ] While s. 40 or its predecessor provision have been applied by Court of Queen’s Bench judges on numerous occasions, it has received limited analysis at the appellate level, apart from a passing reference in Propp v Propp , 2014 SKCA 5 , 433 Sask R 42. As such, I find it useful to begin with a broad overview of the judicial treatment given to it by the Court of Queen’s Bench. a.

Judgments where no agreement was found to exist [ 35 ] Several decisions from the Court of Queen’s Bench establish that the threshold to the application of s. 40 is, of course, the existence of a contract or an agreement: see, for instance, Tanner v Jones , 2010 SKQB 150 at para 43 , 354 Sask R 251, rev’d in part, 2012 SKCA 68 (but not on this point); Miller v Miller , 2008 SKQB 318 at para 126 , 65 RFL (6th) 198; and Scheibel v Craft , 2010 SKQB 439 at para 89 , 364 Sask R 245. b.

Judgments placing no or little weight on a s. 40 agreement [ 36 ] In circumstances where the court has found the parties to have reached an agreement, there have been decisions where little or no weight has been given to it.

In Aboo v Mota , 2010 SKQB 368 , the husband did not dispute signing an agreement, but his description of the circumstances under which he had signed it gave rise to questions as to “whether the document represented a meeting of the minds arrived at by willing parties in circumstances where there is no undue influence or other circumstances indicating a flawed negotiation process” (at para 34).

Without oral evidence in chief or the cross-examination of witnesses, McIntyre J. concluded that the agreement could not be given any weight. [ 37 ] In Thurlow v Shedden , 2009 SKQB 35 , 330 Sask R 243, the petitioner admitted that in the early days of the parties’ relationship she had declared no interest in the family home and that the subject of an interspousal agreement had been raised. However, the discussions had not proceeded any further and the petitioner had then made the mortgage payments on the house for some years.

Accordingly, Koch J. found that “[t]he material changes in the circumstances over the ensuing years” made it inappropriate for the agreement to be given any weight (at para 19).

[38] At issue in Pearson v Pearson, 2002 SKQB 17, 214 Sask R 181, varied (17 December 2002) Regina, Doc 477 (Sask CA) (butnot on this point), leave to appeal to SCC refused, [2003] 1 SCR xv, and Iradi v Iradi, 2002 SKQB 64, 216 Sask R 34, was whether acommon law cohabitation agreement, which did not state that it was in contemplation of marriage, was still relevant after the marriage ofthe parties.

In both cases, the Court found the agreement to have no application. [39] In Gardiner v Gardiner (1987), (SK KB), 54 Sask R 246 (QB), Walker J. found the agreement at issue wasnot a s. 38 interspousal contract as neither party had received independent legal advice. He then assessed the agreement within the contextof s. 40 in terms of several factors: (

a) the husband’s lack of knowledge of the financial position of the parties at the time of theagreement, (

b) the lack of evidence that the parties had calculated their financial positions prior to the execution of the agreement, (

c) theevidence that the husband entered the agreement to give the wife greater security and to prevent her carrying out her threat of divorcinghim, and (

d) the wife’s evidence about her husband’s reasons for entering into the agreement. On these bases, Walker J. concluded theagreement should not be given “great weight” (at para 16). c. Judgments enforcing or assigning weight to a s. 40 agreement [40] Although agreements that fall short of the s. 38 requirements are prima facie not enforceable, courts have on multiple occasionsgiven effect to such agreements.

This point was underscored by Popescul J. (as he then was) in Iverson v Iverson, 2009 SKQB 246, [2010]3 WWR 511 [Iverson], where he stated as follows: “non-compliance with the formalities of s. [38] of the Act does not bar the court fromfinding that an agreement between parties constitutes a final and binding settlement” (at para 49). [41] Similarly, in Elash v Elash, 2015 SKQB 392 at para 25, 71 RFL (7th) 97 [Elash], Zarzeczny J. found that a text exchangebetween the divorcing couple in advance of the scheduled start of their trial constituted a binding agreement between them.

In reachingthis conclusion, Zarzeczny J. drew from the following passage in Tether v Tether, 2008 SKCA 126, 314 Sask R 121, rev’d in part, 2008SKCA 126 (but not on this point) [Tether]: [62] In

summary, there can be three distinct lines of inquiry. Firstly, was there a “meeting of the minds”, or consensus ad idem, that wasmanifest to the reasonable observer. Secondly, was there consensus on all the essential terms of the agreement, for if a material term is notresolved, and is left vague and imprecise, without the tools to refine it, the agreement is illusory and the parties are simply asking thecourt to make an agreement for them. Thirdly, did the parties make their agreement conditional upon, and subject to, execution of a formaldocument.

Using this formula as the basis for his analysis, Zarzeczny J. found that the texts demonstrated a clear “meeting of the minds” evident to areasonable observer (Elash at para 26). [42] A disputed agreement made by a separating couple was found to be enforceable under s. 40 in Crook v Harper, 2009 SKQB 84[Crook].

Justice Currie used the framework developed by Klebuc J. (as he then was) in McHugh v McHugh, (Sask QB),to find that the terms of the agreement were not unreasonable, there did not appear to be any imbalance in negotiating power and thepremise of the agreement was that the parties were to share equally in family property. [43] Justice Ryan-Froslie (as she then was) held that the agreement in Montour v Pope-Baker, 2007 SKQB 97, 295 Sask R 211[Montour], was enforceable, stating that “[w]ritten agreements between spouses should be respected unless there is something in theagreement or the circumstances surrounding it which makes it unconscionable” (at para 18).

The agreement in that case lacked thenecessary formalities required by s. 38, but there was no indication either party had considered the terms unfair or inequitable or that theparties did not understand the terms or effect of the contract. [44] The focus of the court’s s. 40 analysis in Dmyterko v Dmyterko (1986), (SK KB), 54 Sask R 23 (QB)[Dmyterko], was the parties’ lack of vulnerability and their awareness of the nature and effect of the agreement.

As both parties were“mature and experienced adults well able to look after their own interests” and the husband was “fully aware of the nature of the effect oftheir agreement” that his wife would purchase his entire share of his business (at para 10), the husband’s claim for a division of familyproperty was dismissed. [45] In Ethier v Ethier, (SK KB), [1987] 4 WWR 641 (Sask UFC) [Ethier], the parties had separatedand hired lawyers to construct an agreement.

Although an agreement had been reached involving them keeping their respective homes andan equalization payment being made by the husband to the wife, the husband then refused to sign it as he realized that, should the potashmine nearby close, his home would be worth far less. Justice Dickson found the agreement should nonetheless be enforced as it was as. 38 interspousal contract apart from the husband’s signature: [6] I have come to the conclusion that the agreement should be enforced. In all respects, save the signature of the husband, it is aninterspousal agreement as defined by s. 38 of the Act.

It deals with ownership and distribution of matrimonial property. It was committedto writing and the written form satisfies all the requirements of s. 38. Each party was advised by independent counsel. The spirit of the Acthas been observed; only the form is wanting and that because of the husband’s decision to repudiate.

If the court is to encourage parties tosettle their own disputes and hire lawyers to assist them, then the court should not refuse to enforce agreements that are achieved by thatexpensive and arduous process. [46] In Kuzma v Kuzma (1983), (SK KB), 24 Sask R 183 (QB), Kindred J. held that two written documents hadevidentiary value, regardless of the lack of signatures on one document and the absence of the respondent’s signature on the other. Thecircumstances supported a finding that the parties had come to a verbal consensus and the respondent’s argument was undermined by hisunreliable testimony.

Accordingly, it was “clear from the evidence that the parties concluded a binding verbal agreement followed by twodocuments in writing” (at para 28). Moreover, he said, the verbal agreement on the division of property was “fair and equitable under theprovisions of the [FPA]” (at para 23). [47] A different scenario was present in Anderson v Lambert, (Sask QB). Both parties accepted that theseparation agreement, which was not an interspousal contract under s. 38, should govern the distribution of property. However, the parties’interpretation of it diverged. Justice Zarzeczny held that the wife’s

interpretation was the correct one and enforced it.

[48] In Beaudry v Beaudry (1980), (SK KB), 9 Sask R 38 (QB) [Beaudry], the parties had concluded a separationagreement 14 years previously, in which the wife released the husband from any further claims or demands. The wife had legalrepresentation at the time and the agreements were explained to her. The wife, however, later filed a claim to half of the $55,000 herformer husband had made subsequently, including from allegedly selling a second house the couple owned jointly.

The Court took theagreement into account under s. 40 and refused to order any division of the assets the husband had made since the separation. [49] The parties in Klettke v Klettke, 2002 SKQB 54, 215 Sask R 317, had agreed at the time of their marriage to keep their assetsseparate and not to make a claim on the assets of the other. They also agreed to leave their entire estates to their respective children; bothchanged their wills to this effect. Justice Malone found that this was an appropriate situation to apply s. 40 and that the verbal agreementshould be considered binding.

Consequently, the petitioner was only entitled to half of the assets acquired during the marriage. [50] In Huber v Huber, 2003 SKQB 329, 236 Sask R 87, the husband had declared bankruptcy. The trustee in bankruptcy reachedan agreement with the wife regarding the family home. Justice Dawson held that the wife, who had paid out the arrears on the mortgageand the costs of transfer, and who had assumed the obligations under the new mortgage, should be able to rely on the agreement unders. 40.

Another case in which the court order closely reflected the terms of a non-s. 38 separation agreement is Bilusack v Bilusack, 2012 SKQB128, 395 Sask R 129 [Bilusack]. Justice Sandomirsky noted that “[a]t best, [the agreement] evidences a willingness of [the parties] todivide their family property and debt and thereby make peace within the family. Their son and daughter had acted as facilitators on thatdate, very early in the separation” (at para 58).

He then stated as follows: “The court may give the draft agreement such weight as it deemsreasonable, but only if the weight of evidence supports the conclusion that the spouses had a meeting of the minds – a consensus ad idem.Does the draft agreement accord with s. 20 of The Family Property Act which creates the presumption of an equal distribution?” (atpara 60). Both factors, Sandomirsky J. concluded, were present in the circumstances he was considering: [61] The draft agreement reflects a meeting of the minds in 2007. The agreement was not executed nor adhered to.

In the ensuing four andthree-quarter years, the behaviour of Estelle and Richard in regards to possession and treatment of family property bears a closeresemblance to the distributive regime originally contemplated. The draft agreement provides a starting point and [a] historical contextwhich, over time, actualized or manifest into fact. In many ways, given the behaviour of Estelle and Richard relative to the family propertyand spheres of de facto ownership of the property and liabilities, they adhered to most of the agreement.

The final division of the family property order accordingly “closely accord[ed] with the parties’ handwritten draft agreement prepared inconsultation with their daughter” (at para 132). [51] Admittedly, it is difficult to draw any firm principles from this line of jurisprudence given the unique factual circumstancespresented by each case other than to observe that, generally speaking, a consistent analytical approach has not evolved or been employedby the Court of Queen’s Bench.

That said, at a minimum, there must first be an agreement or consensus ad idem between the parties, withthe onus resting on the party asserting an agreement to satisfy the court of that assertion on a balance of probabilities (Iverson and Elash).Beyond that, certain common themes emerge from this body of case law: (

a) reference to, and application of, principles of contract law (Elash and Bilusack); (

b) consideration of the agreement in terms of the s. 38 requirements (Ethier, Dmyterko and Beaudry); and (

c) analysis of whether the agreement is fair, equitable and accords with the general presumption of equal distribution under theFLA (Bilusack and Crook). In very broad terms, fairness and equitability seem to be the overarching principles. d.

Judgments with more extensive treatment of s. 40 [52] Two recent Queen’s Bench decisions – C.M. v S.K., 2017 SKQB 289 [C.M.], and Banilevic v Cairney, 2020 SKQB 25[Banilevic] – adopted and applied a more principled approach to the exercise of judicial discretion under s. 40 by invoking the analyticalframework established in Miglin v Miglin, 2003 SCC 24, [2003] 1 SCR 303 [Miglin]. In Miglin, the Supreme Court embraced a two-staged approach to the review of interspousal agreements under the Divorce Act, RSC 1985, c 3 (2d Supp), in the context of spousalsupport.

At the first stage of Miglin, a court must examine the specific “circumstances surrounding the negotiation and execution of theagreement …” (at para 92). The second stage calls for an assessment of the substance of the agreement to see if it is “in substantialcompliance with the general objectives of the Act at its time of creation …” (at para 87). [53] In Rick v Brandsema, 2009 SCC 10, [2009] 1 SCR 295 [Brandsema], the Supreme Court extended the Miglin approach toproperty division disputes.

C.M. followed suit by applying the Miglin framework for property division purposes: “A determination of thevalidity of a prenuptial, cohabitation or interspousal agreement starts with the legal principles as set out by the Supreme Court in Miglin…” (at para 99). [54] In Banilevic, Megaw J. adopted the approach taken by Wilson, J. in C.M. with respect to the overall framework for review ofnon-interspousal contracts, summarizing in these terms: [140] This procedure for examining non-interspousal contracts provides an appropriate framework when reviewing the agreement in thisaction.

Step one will then require a consideration of the circumstances under which the agreement was completed. Step two will involve areview of the substance of the agreement. [141] The review of the substance is to determine whether the agreement is fair and reasonable in the circumstances. This requirementwas observed by Brown J. in Anderson v. Anderson, 2019 SKQB 35 [Anderson]: [90] The initial question here is whether the agreement was, at the time it was executed, fair and reasonable.

[142] When reviewing the substance of the agreement, the court must consider the agreement in general to determine if it was fair andreasonable at the time it was signed. The issue of fairness and reasonableness is driven by a consideration of all of the available evidence,and not merely by what was actually divided: although, that will certainly be part of the consideration. [143] Interspousal contracts and other agreements are accorded different treatment by the Act, and therefore the courts.

While individualsare allowed to make their own bargains and to make improvident deals, generally parties will be expected to abide by their interspousalagreements. In the case of a s. 38 agreement, the court must determine if the contract is unconscionable or grossly unfair. … [144] The test pursuant to s. 40, for these other agreements, is as previously outlined. This is so because there has been no professionaladvice received. It therefore compels the court to consider the entirety of the circumstances between the parties.

The unique circumstancesof a family law agreement dictates this special consideration. [145] In the result, when determining the effect of an agreement pursuant to s. 40, I must consider the following factors: 1. Was either party vulnerable or exploited; 2. Was either party incapable of understanding the effect of entering into such an agreement; 3. Did the parties have counsel available to either assist, or provide guidance; 4. Did the agreement consider all of the family property available; 5. Was the agreement fair and reasonable in the circumstances. 3.

The analytical framework on a go-forward basis [55] Judicial

interpretation of domestic agreements involves the balancing of potentially competing principles. Courts routinelyencourage settlement between the parties, including disputes that involve family property or spousal support. Importantly, courts do notlightly interfere where the parties have attempted to resolve their differences by mutual agreement: see Miglin; Hartshorne v Hartshorne,2004 SCC 22 at para 9, [2004] 1 SCR 550; and Kawchuk v Kovacs, 2016 ABCA 210 at para 38, 79 RFL (7th) 276, leave to appeal to AltaCA refused, 2016 ABCA 210.

Agreement on important issues serves “the compelling policy goals of certainty, autonomy and finality”(Miglin at para 57); as such, parties should be able to determine “what constitutes for them, in the circumstances of their marriage,mutually acceptable equitable sharing” (at para 73).

I find the opening comments of the Ontario Court of Appeal in Van Delst vHronowsky, 2020 ONCA 329, 447 DLR (4th) 702 [Van Delst], in this regard to be particularly apt: [1] Certainty in the resolution of financial issues flowing from the dissolution of family relationships has been a policy imperativeunderlying much of the recent reform of family law in Canada. Child support, spousal support, and the division of family property have allbeen clarified through legislative and regulatory reform.

While certainty should be tempered by limited judicial discretion to ensurefairness, certainty facilitates two essential policy objectives of family law: the encouragement of settlement and the avoidance of costlylitigation to resolve financial issues. (Emphasis added) The Court in Van Delst makes an important point that I wholeheartedly endorse. See also Dembo v Hannas, 2020 ONCA 564 at para 17. [56] By the same token, courts have not been oblivious to the contexts in which domestic agreements are negotiated.

The SupremeCourt recognized this in Miglin when it observed that such agreements are forged in a “unique environment … [A] time of intensepersonal and emotional turmoil, in which one or both of the parties may be particularly vulnerable” (at para 74). Domestic agreements aredistinctively “vulnerable to a risk of inequitable sharing at the time of negotiation and in the future” (at para 73). In a similar vein, inBrandsema, the Supreme Court described how “negotiations following the disintegration of a spousal relationship take place in a uniquelydifficult context” (at para 1).

Justice Abella, speaking for the Court, cautioned judges to be alive to how the negotiation context mighthave shaped the resulting agreement: “The reality of this singularly emotional negotiating environment means that special care must betaken to ensure that, to the extent possible, the assets of the former relationship are distributed through negotiations that are free frominformational and psychological exploitation” (at para 1). [57] The distinct nature of the negotiating climate in family property matters is reflected in s. 38 of the FPA, which provides a set ofcriteria to establish a final and binding interspousal contract.

As discussed above, agreements that fall short of these criteria are notnecessarily unenforceable, nor are they irrelevant under the FPA. Supreme Court jurisprudence suggests that, when faced with spousalagreements that fail to meet the formalities of s. 38, Saskatchewan courts must strive to recognize the parties’ contractual autonomy,always having regard for the context in which the negotiations took place as well as the objects and purposes of the FPA.

As noted inKelly v Kelly (2004), (ON CA), 242 DLR (4th) 677 (Ont CA), “the court must assess whether there is any reason todiscount the agreement because of the circumstances under which it was negotiated and executed” (at para 19). [58] Having regard to the case law and the Supreme Court jurisprudence in this area generally, the approach a court should takewhen dealing with an interspousal agreement under s. 40 of the FPA should involve the following sequential steps: (

a) Step one – a court must ask itself whether there is an agreement in the contractual sense of consensus ad idem. If the existenceof an agreement is itself in question, the party seeking to enforce its terms must prima facie establish its existence. Where the existence ofthe agreement is challenged, a court should be particularly attentive to the lines of inquiry outlined in Tether (at para 62): (

i) Was there a meeting of the minds that would be “manifest to the reasonable observer”? (ii) Did the parties achieve consensus on the “essential terms of the agreement”? (iii) Was the agreement intended to be “conditional upon, and subject to”, some other condition being met?

(

b) Step two – if an agreement is prima facie established, the onus shifts to the party asserting it to be invalid, unenforceable or that it should be given little weight. If challenged, a court must look to the circumstances surrounding negotiation and execution to determine whether there is any reason to discount the agreement. While the list of factors used to assess these matters is not closed or exhaustive, a court should pay particular attention to the following: (

i) evidence of the conditions of the parties, i.e., whether there is any indication of “oppression, pressure or other vulnerabilities” in the circumstances at hand that would warrant a finding that the negotiation process was fundamentally flawed ( Miglin at para 81 ); and (ii) evidence as to the “conditions under which the negotiations were held”, e.g., the duration of the negotiations, whether professional assistance was provided, etc. (

c) Step three – if no issues arise with respect to the negotiation or execution of the agreement, a court must go on to examine the substance of the agreement to determine if its terms are fair and reasonable in the sense that they are in substantial compliance with the general objectives of the FPA . In keeping with the dicta in Miglin , “Only a significant departure from the general objectives of the Act will warrant the court’s intervention on the basis that there is not significant compliance with the Act ” (at para 84). (

d) Step four – where the agreement is found to be in substantial compliance with the general objectives of the FPA at the time it was prepared, great weight should be given to it, unless a new or a changed circumstance has arisen such that its terms “no longer reflect the parties’ intentions at the time of execution” or are no longer in substantial compliance with the general objectives of the FPA (at para 88).

In this respect, the test is not strict foreseeability; rather, a court will examine “the extent to which the unimpeachably negotiated agreement can be said to have contemplated the situation before the court at the time of the application” (at para 89). If the change in circumstance can be said to have been within the contemplation of the parties at the time of execution, then the agreement may be given great weight. 4. The trial judge’s

interpretation of the 2015 Agreement [ 59 ] The trial judge began his analysis by stating, “[t]he initial question here is whether the agreement was, at the time it was executed, fair and reasonable” (at para 90). However, this observation was not the first focus of his inquiry. Instead, the trial judge turned his attention to the question of whether there had been a meeting of the minds, ultimately concluding there was no consensus ad idem because the parties had not agreed to essential terms.

He gave several reasons for this conclusion. [ 60 ] First, the trial judge commented on the absence of legal advice, stating that he found it “most troubling”, which, on its own, he said, was “sufficient to make the agreement unenforceable” (at para 108).

The involvement of counsel, the trial judge said, provides most people with the best chance to ascertain their rights with respect to family property. [ 61 ] The second premise for the trial judge’s conclusion stemmed from his finding that the parties had not fully agreed to the disposition of their assets, pointing specifically to the family home, and that they had “little understanding of the value of the assets and debts the other had, how exemptions for assets brought in to the marriage might operate, or what their entitlement on a fully analysed legally compliant family property division might be” (at para 111). [ 62 ] The third reason proffered by the trial judge concerned Ms.

Anderson’s actions after the agreement was executed, which he construed as undermining her assertion that the parties had reached a binding agreement. As mentioned, Ms. Anderson’s legal counsel had, after the 2015 Agreement was signed, sought to have Mr.

Anderson execute a more formal interspousal agreement and to disclose financial information with respect to his business interests. [ 63 ] For those reasons, the trial judge concluded there was no consensus ad idem “so as to make it enforceable according to its terms” (at para 115), and that it was “more akin to an agreement to agree than a contract” (at para 114). [ 64 ] The trial judge held that even though there was no consensus ad idem , he was empowered by s. 40 of the FPA to examine the agreement “in a way that recognizes the parties’ desires in a way that also considers what they did not know at the time it was executed and the gaps that existed in July 2015” (at para 116).

The agreement, he said, would be taken into account in his overall assessment of the equities at play. [ 65 ] Ms. Anderson challenges these findings. I will deal with each of her arguments in turn. a. The absence of independent legal advice [ 66 ] The trial judge began his analysis by speaking to what he called the “glaring absence” of independent legal advice that, on its own, was “sufficient to make the agreement unenforceable” (at para 108).

While it is not completely clear whether these statements were directed to unenforceability in the context of s. 38 or s. 40 , I find, on balance, his reference was aimed at the latter provision. If so, and with the greatest of respect to the trial judge, it conflicts with the existing case law.

Section 40 clearly stipulates that a court may consider any agreement that is not an interspousal contract. An interspousal contract is defined in s. 2 of the FPA to mean a binding contract made in accordance with s. 38. In sum, an agreement that falls short of meeting the requirements and criteria of s. 38 is not an interspousal contract, but it may still be considered by a court. [ 67 ] The absence of independent legal advice is, more often than not, the reason why an agreement falls outside the parameters of s. 38, but that fact, on its own, does not make the agreement unenforceable: see Iverson and Elash .

To the extent the trial judge concluded the 2015 Agreement was unenforceable solely because the parties’ did not have independent legal advice, he erred in principle. Further, as noted in Banilevic and C.M ., whether the parties had legal counsel to assist and provide them with some guidance in connection with an agreement is a relevant factor that must be taken into account as one part of the specific “circumstances surrounding the negotiation and execution of the agreement …” ( Miglin at para 92 ), but it is not the sole contextual factor.

Moreover, the absence of legal advice does not, on its own, override the parties’ contractual autonomy or lead inexorably to a finding that the agreement reached was not “in substantial compliance” with the general objectives of the FPA at its time of creation ( Miglin at para 66 ).

[ 68 ] The trial judge went on to comment on how independent legal advice is particularly important to address imbalances of bargaining power that can arise in a marital breakdown. He appears to have determined that the emotional stress of the parties’ separation was an added rationale for finding the 2015 Agreement unenforceable when he stated, “[a]greeing to a significant disposition when emotions are still raw absent a clear understanding of what the law provides raises the requirement for additional vigilance. This glaring absence alone is sufficient to make the agreement unenforceable” (at para 108).

The trial judge correctly considered the possibility that a bargaining imbalance and emotional strain can skew the negotiations. Indeed, courts have observed on numerous occasions that marriage breakdown gives rise to periods of stress and raw emotion; but, as the jurisprudence makes clear, that alone does not result in an imbalance of bargaining power or a vulnerability that is fatal to enforcement of the agreement.

In fact, the trial judge’s statement seems to ignore what the Supreme Court had to say about this issue in Miglin : [82] … the court should not presume an imbalance of power in the relationship or a vulnerability on the part of one party, nor should it presume that the apparently stronger party took advantage of any vulnerability on the part of the other. Rather, there must be evidence to warrant the court’s finding that the agreement should not stand on the basis of a fundamental flaw in the negotiation process.

Recognition of the emotional stress of separation or divorce should not be taken as giving rise to a presumption that parties in such circumstances are incapable of assenting to a binding agreement . (Emphasis added) [ 69 ] As Miglin provides, there must be evidence sufficient to warrant a finding of an imbalance or vulnerability that undermined the parties’ contractual autonomy in the negotiation process. As discussed below, an evidentiary foundation for that finding did not exist in this case. [ 70 ] Finally, an

interpretation of s. 40 that effectively mandates independent legal advice for it to be assigned significant or any weight would essentially render that

section meaningless. To hold that a lack of independent legal advice, which is fatal under s. 38, is also fatal for purposes of s. 40 or leads to significantly less weight being assigned to it, would mean that no agreement entered into by spouses without the benefit of independent legal advice is of value and that it does not achieve its intended purpose.

This is not what the Legislature intended or what the case law, including Miglin , provides. [ 71 ] To conclude, while the absence of independent legal advice invalidates a purported s. 38 interspousal contract, it does not, on its own, render an agreement unenforceable or without probative value for purposes of s. 40 : see, for example, Crook , Dmyterko and Montour . To the extent the trial judge relied solely on the absence of independent legal advice to automatically discount the 2015 Agreement, I find he erred in principle. b.

Consensus ad idem [ 72 ] The trial judge correctly identified Tether as the touchstone authority on the issue of whether spouses have reached a consensus ad idem on family law issues. Tether synthesized the relevant law into the following three-part test (repeated here for reference): [62] In

summary, there can be three distinct lines of inquiry. Firstly, was there a “meeting of the minds”, or consensus ad idem , that was manifest to the reasonable observer. Secondly, was there consensus on all the essential terms of the agreement, for if a material term is not resolved, and is left vague and imprecise, without the tools to refine it, the agreement is illusory and the parties are simply asking the court to make an agreement for them.

Thirdly, did the parties make their agreement conditional upon, and subject to, execution of a formal document. [ 73 ] Even though the trial judge focussed solely on the second part of the Tether test – i.e., whether there was consensus with respect to the essential terms of the agreement – I will briefly address the other two aspects of that formulation. i. Meeting of the minds [ 74 ] The first part of the Tether test asks whether there was a meeting of the minds manifest to the reasonable observer. The evidence on this point was strong in this case. From her perspective, Ms.

Anderson saw the 2015 Agreement as representing how the parties had sorted out their property issues flowing from the end of their short, three-year marriage. Essentially, each would keep the assets and liabilities they brought into the marriage, Ms. Anderson would transfer the Tundra truck into Mr. Anderson’s name and she would make no claim to his corporate interests. [ 75 ] Ms. Anderson presented a copy of an agreement she had drafted to Mr. Anderson at a reconciliation meeting and gave copies of it to their friends who had also attended the meeting. As far as Ms.

Anderson was concerned, they were aware of each other’s assets and liabilities; and Mr. Anderson had never, at any time, suggested he disagreed with the proposed terms, questioned the document in any way or expressed reluctance to sign it. When Ms. Anderson was asked to confirm that Mr. Anderson had not received legal advice, she testified to having said to him at the time, “Don’t sign it. I would like you to take it to a legal counsel for legal advice before you sign it”. Yet, Mr. Anderson signed it that day, presumably choosing to forgo legal advice.

This body of evidence went in unchallenged and was not contradicted. [ 76 ] Ms. Anderson was aggressively cross-examined on whether she considered herself bound by the 2015 Agreement in view of the more formal, draft separation agreement she had commissioned and the financial disclosure she had subsequently pursued through her legal counsel. When probed as to why she would instruct her lawyer to take such action if she thought the 2015 Agreement was binding, she simply said that she had done so “to make things more legal” and to ensure that their agreement would “stand up”. [ 77 ] Under cross-examination, Mr.

Anderson agreed that he had read and signed the document in the presence of two mutual friends. He agreed the thrust of the 2015 Agreement was for him to keep everything he owned prior to the marriage (RRSPs, GICs, business interests, debts and the Tundra truck) and, conversely, that Ms. Anderson would retain everything she previously owned. Mr. Anderson further agreed with the suggestion that the document constituted their mutual arrangement. When he was re-examined, Mr. Anderson confirmed that at no point did he indicate to Ms. Anderson that he disagreed with the terms of the 2015 Agreement and,

until he filed a counter-petition, confirmed that neither of them had expressed an interest in ceasing to be bound by it. [78] Following its execution, Mr. Anderson retrieved his furniture from the family home, Ms. Anderson transferred the Tundratruck to him, and they accepted the division of assets and liabilities in the manner set out in the 2015 Agreement and dealt with themaccordingly. Mr. Anderson, for instance, acknowledged that he cashed in some of his RRSPs. [79] The parties’ understanding of their agreement is reflected in their pleadings.

Both parties referred to the 2015 Agreement underthe heading “Proceedings and Agreements”. In her claim, Ms. Anderson described it as one “which dealt with all of our property as well asspousal support”. In his answer and counter-petition, Mr. Anderson acknowledged the existence of the 2015 Agreement as well; albeit, heseemed to qualify its enforceability by asserting that it was “[s]igned with no legal advice and under duress”.

However, as discussedbelow, there was no evidence of duress led at trial; and, as noted, the absence of legal advice was but one factor for the trial judge toconsider under s. 40. [80] Based on the evidentiary record, I am satisfied that it would have been manifest to an objective and reasonable bystander withknowledge of the facts that there had been a meeting of the minds between the parties. ii.

Consensus on essential terms [81] The second Tether line of inquiry examines whether the parties had achieved consensus on the essential terms of the contract.In the matter at hand, the trial judge found the essential terms were yet to be finalized, by focussing primarily (if not exclusively) on thefamily home. Here, he said as follows: [114] The July 2015 Agreement is more akin to an agreement to agree than a contract. This is clearly the case with respect to the familyhome. If the parties were unable to agree on its division, or to a buyout of one of the other, it was to proceed to mediation.

I note this issimilar in many ways to the agreement at issue in Berthin [2016 BCCA 104] which also was determined, on appeal, not to be a bindingagreement. [82] It is trite law that no contract is formed absent a meeting of the minds on the essential terms of an agreement. Mr. Andersonsays the trial judge got it right: they had not yet reached an agreement with respect to the family home and it would have been improperfor the court to discern their intentions.

In consequence, he says, the agreement must fail for uncertainty of contract. [83] In 101090442 Saskatchewan Ltd. v Harle, 2014 SKCA 6, [2014] 4 WWR 783, this Court framed the doctrine of uncertainty ofcontract in this way: [41] … The doctrine of uncertainty of contract may be considered according to these categories: (

i) incompleteness – in the sense of anagreement that lacks an essential term; (ii) agreements to agree – in the sense that the parties have stipulated in an agreement that theyintend to reach an agreement in the future; and (iii) vagueness associated with an important term – in the sense of incurable uncertainty. [84] In finding the agreement was much closer to an agreement to agree, I understand the trial judge to have focussed on the secondof those three bases: that is, the parties had simply stipulated an intention to reach an agreement on the family home in the future. [85] The common law doctrine of certainty of contract evinces a tension in its application between two competing objectives.

Withparticular attention to parties who had not been advised by lawyers, John D. McCamus, The Law of Contracts, 3d ed (Toronto: Irwin Law,2020), discusses this tension in this way (at 98): The law of certainty of terms, then, reflects this tension between a requirement that the parties reach a complete and intelligible agreementand a reluctance to defeat the expectations of the parties that an enforceable agreement has been created.

As Lambert JA observed inGriffin v Martens [(1988), (BC CA), 27 BCLR (2d) 152 (CA)], “As long as an agreement is not being constructed bythe court, to the surprise of the parties, or at least one of them, the courts should try to retain and give effect to the agreement that theparties have created for themselves”.

As we shall see, the leading and modern authorities tend to place particular emphasis on the need togive effect, where possible, to the expectations of the parties that they have entered into a valid and enforceable agreement. (Footnotes omitted) [86] Frolick v Frolick, 2007 BCSC 84, 68 BCLR (4th) 334, is an example of where a court confirmed the existence of a family lawcontract, even though not all of the issues were addressed by the parties: [31] If the parties fail to reach a meeting of the minds on the essential terms of their agreement, or fail to express themselves in such afashion that the meaning of the terms they agreed upon cannot be reasonably divined by the court, then the agreement will fail for lack ofcertainty.

However, the requirement of certainty of the terms is always balanced with the reality of transactional negotiations. Partiesmay intentionally leave gaps in the terms of an agreement to provide for future or mutually satisfactory accommodations.

In thosecircumstances, the court should not apply the doctrine of certainty so rigidly so that the intentions of the parties to create a bindingagreement are thwarted. (Emphasis added) See also Jans v Jans Estate, 2016 SKQB 275 at paras 184–194, 21 ETR (4th) 35, rev’d in part, 2020 SKCA 61 (but not on this point), andGichuru v Ash Estate, 2010 BCSC 849 at para 23 [Gichuru]. [87] Moreover, as noted in Tether and Gichuru, a contract will not be found to be uncertain where the parties have seen fit to includea mechanism or tool in the agreement to assist them in refining an essential term.

Tether, for instance, contrasted an agreement to agreewith “an agreement to divide personal possessions by reference to an objectively verifiable method, as, for example, an agreement that theparties will each retain the property in their possession, or that the goods will be sold by auction and the proceeds divided equally” (atpara 63).

[ 88 ] In the instant case, paragraph 6 of the 2015 Agreement dealt with the family home in these terms: 6. The resolve of 5 Rosewood Bay will be determined at a later date. It is agreed by both parties that a Real Estate evaluation will be performed. The household goods/appliances/furniture, and of the like mutually purchased (with the exception of goods/appliances/furniture/tools purchased/owned by each individual prior to the marriage) during ownership of 5 Rosewood Bay will remain with the property, if buyout is mutually agreed upon by either party.

If sale of the above noted property is mutually agreed to by the parties, the household goods/appliances/furniture/tools mutually purchased during the marriage will be itemized and agreed to either buyout or division of goods. If no agreement between parties can be reached, the parties will seek mediation. [ 89 ] Ms. Anderson testified that the combination of a decline in market value and a penalty provision in their mortgage made the sale of the family home in July of 2015 financially unattractive to the parties.

For these reasons, she said, they agreed to obtain a real estate evaluation and, with that information in hand, to proceed with two possible courses of action: (

a) one party would buy out the other, in which case the mutually purchased household goods would be included with the family home, or (

b) the property would be sold and the household goods divided between them. Ms. Anderson testified that, as drafted, it was open to one of the parties to buy out the other before putting the family home on the market. Finally, she said they agreed that, in the event of an impasse as to which of the two courses they would pursue, it would go to mediation. [ 90 ] Following execution of the 2015 Agreement, Ms. Anderson tried to engage Mr. Anderson about the family home and made several offers to buy out his interest in it. Ms. Anderson received no response whatsoever from Mr.

Anderson. [ 91 ] Respectfully, I find the trial judge interpreted Tether too narrowly. As noted, Tether draws a contrast between an agreement to agree and “an agreement to divide personal possessions by reference to an objectively verifiable method , as, for example, an agreement that the parties will each retain the property in their possession, or that the goods will be sold by auction and the proceeds divided equally” (emphasis added, at para 63).

With respect to their family home, the parties had agreed to obtain an independent evaluation of its market value, agreed the household goods would remain with it or, in the alternative, be itemized and divided, and had agreed to resolve any disputes through mediation. All of this leads me to conclude that the 2015 Agreement contained an objectively verifiable method that allowed the parties to address the equity (if any) in the family home. [ 92 ] True, the agreement did not specify that the value of the family home would be divided equally upon either buyout or sale.

That said, s. 22 of the FPA creates a presumption of equal distribution of a family home; and, in any event, the parties were joint owners on title and equally liable on the mortgage. They paid the same amount for the down payment and split the monthly mortgage payments, taxes and utilities evenly. The fair market value of the home would presumably have been determined by the independent evaluation. Taking those factors into consideration, the gaps in the agreement were intentionally designed to build in flexibility and accommodate the most fiscally appropriate path for the parties.

In the circumstances, I find the trial judge’s rigid application of the doctrine of certainty of contract thwarted the mutual intention of the parties. [ 93 ] Finally, the trial judge drew support for his conclusion from Berthin v Berthin , 2016 BCCA 104 , 398 DLR (4th) 526 [ Berthin ], which he considered to be factually similar. However, the arrangement in question in Berthin – which was determined to be a mere agreement to agree – was vastly different from the 2015 Agreement.

The Berthin settlement included open-ended and discretionary terms such as “‘work collaboratively’ towards the purchase … of a new residence” for the wife, which was to be “‘financed in the best way possible’” (at para 13) and that if the husband’s business “grows very significantly … [he] will provide [the wife] with additional payments which in [the husband’s] view are proportional and fair …” (at para 16).

As these passages indicate, unlike the 2015 Agreement, the Berthin agreement was plagued by ambiguous and uncertain language that did not contemplate any form of neutral party dispute resolution process nor a mutually agreed upon, independent valuation method. Because it was distinguishable on its facts, the rigid application of the ratio in Berthin to the circumstances of the present appeal, in my view, led the trial judge to erroneously conclude there was no consensus on essential terms. iii.

Expectation of a formal agreement [ 94 ] The third Tether line of inquiry asks whether the agreement was made conditional on or subject to a formal agreement. As the trial judge’s concern with respect to the post-execution involvement of Ms. Anderson’s legal counsel is best seen through the lens of the third prong of the Tether test, I will address this part of his reasoning accordingly. [ 95 ] On her instruction, Ms. Anderson’s legal counsel drafted a more formal interspousal agreement and followed up with letters to Mr. Anderson after the 2015 Agreement was signed. The trial judge found Ms.

Anderson’s approach to be indicative of the fact that “the July 2015 agreement was not a completed agreement” (at para 112) and that “[t]he parties had no real idea of the extent of each other’s assets …” (at para 113). As he put it, “even [Ms. Anderson] was aware of the potential problems her agreement presented” (at para 110). [ 96 ] The analysis of this issue must begin with a recognition that nothing in the 2015 Agreement made it subject to a formal agreement or, for that matter, any other subsequent condition. Furthermore, I find the trial judge’s statements are misplaced.

Having found the 2015 Agreement was not an interspousal contract within the meaning of s. 38 – a point Ms. Anderson conceded at trial – the issue was not whether the 2015 Agreement brought the parties outside of the FPA regime but how much weight it should be assigned within that regime. [ 97 ] Legal counsel operating with a basic understanding of the FPA would have known that, on the face of it, the absence of independent legal advice meant the 2015 Agreement was not enforceable under s. 38. Ms. Anderson’s testimony seemed to back this up.

She said she wanted to “make things more legal”, understood that the 2015 Agreement may not stand up as an interspousal contract and that she wanted it “done proper”. To that end, as the trial judge noted, “her counsel indicated a properly drafted agreement executed in conformity with s. 38 should be obtained” (at para 93). I see nothing wrong or improper with Ms. Anderson’s approach and find that it does not undercut her contention that the parties had reached an agreement as per the 2015 Agreement. [ 98 ] While Ms. Anderson’s pursuit of financial information concerning Mr.

Anderson’s business interests somewhat undermines her position that the 2015 Agreement was a full and final settlement, she explained her actions in this regard as an attempt to get Mr. Anderson’s attention. She desperately wanted him to respond to the draft interspousal agreement that had been prepared by her legal

counsel and to engage in discussions about the family home, but he had ignored all of her overtures: Q So you would have still negotiated, but you were willing to say, go after Mr. Anderson for his business because you didn’t feel he was negotiating; is that correct? A I think it’s an attention -- you know, I want your attention, can we negotiate? Q Okay, recognizing that there was not a binding agreement? A Well, if he -- if he refused to negotiate the house, who broke the agreement? Q Okay. So with matters being in dispute why didn’t you claim property distribution on December 10th, 2015?

A Because all I wanted was a divorce, costs and the house. Q But you knew that there were other -- other assets in the family property that might need to be resolved? A I didn’t want Globe-Elite. [ 99 ] While the trial judge commented on Mr. Anderson’s intransigence when Ms. Anderson tried to move things to a conclusion – and that she had taken these measures to get his attention – he made no findings of fact with respect to Ms. Anderson’s evidence in that regard. Nonetheless, he was left with Ms. Anderson’s unchallenged evidence and the pleadings, where Mr.

Anderson had conceded the existence of an agreement but sought to have it declared unenforceable because the parties did not have legal advice, and he had executed it under duress. As discussed, the first of his complaints was of marginal legal significance and the second is not supported by the evidence at trial. c. Conclusion on consensus ad idem [ 100 ] In my view, the trial judge erred in both law and fact in finding there was no consensus ad idem . 5.

The weight to be assigned to the 2015 Agreement [ 101 ] Having found the trial judge erred by concluding that the 2015 Agreement was not an agreement between the spouses that he could take into account within the meaning of s. 40 of the FPA , it falls to this Court to determine the weight to be assigned to that agreement. I propose to do so utilizing the Miglin approach: (

a) analyzing how the agreement was formed, and (

b) determining whether the agreement matched the original intention of the parties. [ 102 ] I have undertaken much of the first stage of a Miglin analysis already. This first stage entails an examination of the circumstances in which the agreement was negotiated and executed to determine if there is any reason to discount it.

In assessing the factual backdrop to the negotiation and execution of an agreement, courts are instructed to “be alive to the conditions of the parties, including whether there were any circumstances of oppression, pressure, or other vulnerabilities …” overall and whether legal counsel was involved (at para 81). Miglin cautions courts to be “loathe to interfere” where vulnerabilities are not present (at para 83). [ 103 ] From my review of the evidence concerning how the 2015 Agreement came about, I am unable to discern any vulnerability on the part of Mr. Anderson.

He did not assert the existence of any power imbalance, nor did he allude to inadequate disclosure or uneven knowledge of the parties’ respective assets and liabilities. He acknowledged that they had reached an agreement that contemplated (

a) each party keeping what they had prior to marriage, (

b) Ms. Anderson transferring the Tundra truck into his name, and (

c) Ms. Anderson making no claim to his interest in Globe-Elite. Mr. Anderson understood the family home was not dealt with in final detail because they would have lost money if it had been sold at that time. The 2015 Agreement was signed in the presence of two mutual friends, and, at the time of execution, Mr. Anderson did not express disagreement with its terms or take exception to the manner of resolution. After it was signed, both parties dealt with the divided property as they saw fit. For his part, Mr.

Anderson retrieved his furniture from the family home, cashed in some of his RRSPs and carried on with his business. [ 104 ] Ms. Anderson proceeded with pursuit of a divorce and, believing the parties had resolved their property issues, made no claim for property division. It was not until mid 2017 that this matter raised its head, when Mr. Anderson put property in issue through his answer and counter-petition. In any event, pursuant to paragraph 35 of his pleadings, he acknowledged the existence of the 2015 Agreement.

As I read his pleadings, he only took issue with its enforceability because it had been “[s]igned with no legal advice and under duress”. However, I have found nothing in his testimony or other evidence to support the latter allegation. Furthermore, while neither party had the benefit of legal counsel, this was a short, three-year marriage and an uncomplicated agreement pursuant to which “each of the parties was to keep the property that they owned and which was registered to them and leave the other’s property to the other, excepting the Tundra truck …” ( Trial Decision at para 87). That finding or

interpretation by the trial judge must be scrutinized in further detail because, under the second prong of the first stage of the Miglin approach, a court must examine the substance of the agreement to determine if it took the objectives of the FPA into account. If it did, “Only a significant departure from the general objectives of the Act will warrant the court’s intervention on the basis that there is not substantial compliance with the Act” ( Miglin at para 84 ). [ 105 ]

Section 20 of the FPA is relevant to this inquiry. It establishes a presumption of equal distribution of the family property, subject only to the exceptions, exemptions and equitable considerations mentioned in the FPA .

The duration of the marriage ( s. 21(3) (b)), the date when the family property was acquired ( s. 21(3) (d)), and the debts or liabilities of a spouse ( s. 21(3) (o)) are relevant considerations in the matter at hand. [ 106 ] The trial judge made relatively few findings of fact concerning the value of the assets and debts the parties had each brought into their marriage in 2012, other than to remark as follows: “Each party brought a certain amount of property to the marriage. It was not equal but also not so imbalanced that it was an unreasonable economic alliance” (at para 268).

That comment lends support to the conclusion that the agreement achieved the objectives of the

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