A Brief Analysis of Anderson v. Anderson, 2023 SCC 13
The Supreme Court of Canada released its decision in Anderson v. Anderson, another important family law decision, on May 12, 2023. In what might be best described as succinct common sense reasons, the Supreme Court held that a Separation Agreement entered into between parties in Saskatchewan after a relatively short-term marriage, without independent legal advice and absent financial disclosure, pursuant to which each party was to keep the property held in their name and give up the rights to the other's property (aside from the family home and household goods), was valid.
The Supreme Court's decision supports the idea that in appropriate cases, these so-called "kitchen table" agreements, or variations thereof, can be upheld where provincial legislation permits. This provided that there is no overreach such as triggering issues of fundamental unfairness, duress, undue influence, or contractual overrides.
This decision should not be taken to mean that parties should routinely enter into agreements on their own without disclosure and without independent legal advice. Such endeavours still ought to be discouraged as they are fraught with risk and might well trigger challenges on the basis of unfairness, undue influence, duress, or similar fundamental contractual issues, or, in the case of spousal or common-law partner support, a judicial override.
The basic principle that the presence of independent legal advice and relevant disclosure helps to level the playing field, and to the extent possible, ensures that both parties understand the significance of the family agreements they enter, remains the case. This in turn increases the likelihood of successfully repelling challenges later.
In Anderson, the fact that the parties had a relatively short-term marriage of three years and that the relevant Saskatchewan property legislation permitted the court to consider such agreements, were both critical factors. Had the facts been otherwise, the outcome might well have been different. Here the court was dealing with property agreements arising on separation, not support agreements which remain governed by the two-stage Miglin test (see Miglin v. Miglin. 2003 SCC 24 (CanLII), [2003] 1 SCR 303).
In this instance, the Supreme Court held that domestic contracts should generally be encouraged and be supported by courts provided that they exist within the bounds permitted by the legislature, and there is no compelling reason to discount the agreement (fundamental contract issues and fairness where applicable). The Supreme Court upheld the principle that recognizes the self-sufficiency of parties, their autonomy, and the important objective of finality in the family law context.
In some provinces in Canada, the court is obliged by their governing property legislation to look at principles of fairness in deciding property division claims. Manitoba however is not a pure "fairness" jurisdiction when it comes to property division. Manitoba's governing legislation (The Family Property Act) does not mandate the court to look at fairness as a factor in deciding property division with few exceptions (for non-exhaustive example, certain unequal division claims). In most instances, Manitoba legislation prefers finality, although our legislation still requires that the process is unimpeachable from a contractual principle standpoint.
While considering the Saskatchewan legislation and the facts of this case, the Supreme Court had to balance two sometimes competing interests. On the one hand, parties themselves generally are better positioned than courts to understand their own needs and circumstances of their private relationship. On the other, domestic contracts sometimes are "particularly vulnerable to unfairness and exploitation, given the unique environment in which domestic contracts are negotiated and concluded".
The Supreme Court held that while the law has long supported the freedom of parties to settle their domestic affairs privately, "respect for private order cannot be permitted to thwart the public policy objectives enshrined in the family law legislation".
The court determined that when dealing with property matters, there is no judicial override, as was held to be applicable in spousal support cases that arise in the face of an agreement purporting to waive or release support claims (Miglin v. Miglin, supra). In Anderson, the Court commented that the Miglin framework arose in a different statutory context, and was not intended to be overlaid on provincial family property legislation.
The Take Away
In entering any of these contracts it is critical that both parties understand the full nature and extent of the agreement. It is also critical that the agreement is written and signed. If at all possible, there should be independent legal advice, and relevant financial disclosure as that will help even the playing field, and make an argument that parties do not understand the terms of the agreement less viable.
There should be an attempt at a principled resolution. The clarity in such agreements, and careful consideration of the terms of the agreement, perhaps including some form of payment in appropriate cases, might well be more likely to lead to an agreement being upheld later if challenged.
Having said that, it is plain that in Manitoba, when dealing with property agreements arising at separation, the absence of financial disclosure, and/or independent legal advice alone will not be enough to invalidate a separation agreement in appropriate cases. From a common sense perspective, everything else being equal, it appears that the shorter the union, the greater the deference paid to the autonomy of parties to contract and thus the greater the likelihood such agreements will be upheld.
In Manitoba we are fortunate to have principled legislation that contemplates the autonomy of individuals and principles of certainty, but still recognizes the uniqueness of family law and has room enough to balance the competing interests at play.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
