Can A Couple Orally Agree Not to Divide Their Property? Will a Court Respect that Agreement?

GeorgiaLeeLang059Today’s decision of Mr. Justice Kelleher of the British Columbia Supreme Court  provides an answer to the two questions posed above.

If a couple decide to live together, have no children, and confirm with one another that everything each of them owns or will own will always remain separate if the couple separate, will a court interfere?  In the case of Doell v. Prentice 2018 BCSC 1115 the Court said “yes” it will.

This common law couple lived together for 23 years on property purchased with Mr. Prentice’s savings. He was a highly skilled bricklayer and stone mason, while Ms. Doell, who had a university degree, worked in menial positions taking care of dogs and horses. Her annual income was less than a full-time minimum wage job.

Many witnesses testified they were aware of the couple’s financial arrangements which were apparently openly discussed with their friends and relatives. Ms. Doell reputedly said that if their relationship ended she would leave with her belongings but nothing of her husband’s. However, after she left the home she shared with Mr. Prentice she changed her mind and brought a court action seeking an equal division of property and spousal support. Mr. Prentice argued that she should receive no property and no spousal support despite her status as a common law spouse under the law.

The judge reviewed the evidence finding they never shared property, had no joint accounts or joint credit cards; she paid for her expenses and he paid for his. When they ate at a restaurant they each paid their way. Mr. Prentice bought several other properties and fixed them up. When he sold a property he did not share the sale proceeds with  his wife.  Ms. Doell was of the view that she would not work on the properties as they were not hers and she would get nothing back for her services.

Later, during the relationship, Ms. Doell purchased a property in joint tenancy with her mother and made it clear that it was not intended to be shared with Mr. Prentice. At that point she moved her dog care business to her new property. Unfortunately, Ms Doell fell off her horse and had a concussion which caused migraine headaches. Still later several of her animals unexpectedly died which caused her upset and depression. She changed her will deleting any gift to Mr. Prentice.  By this time the relationship was clearly coming to an end.

The Court was satisfied that the parties entered into an oral contract to keep their property separate. As for spousal support, there was no definitive evidence that Ms. Doell had agreed to give up that claim.

The Court reviewed s. 95(2)  of the Family Law Act to determine if it would be “significantly unfair” not to deviate from the oral agreement:

(2)        For the purposes of subsection (1), the Supreme Court may consider one or more of the following:

(a)        the duration of the relationship between the spouses;

(b)        the terms of any agreement between the spouses, other than an agreement described in section 93 (1) [setting aside agreements respecting property division];

(c)        a spouse’s contribution to the career or career potential of the other spouse;

(d)        whether family debt was incurred in the normal course of the relationship between the spouses;

(e)        if the amount of family debt exceeds the value of family property, the ability of each spouse to pay a share of the family debt;

(f)         whether a spouse, after the date of separation, caused a significant decrease or increase in the value of family property or family debt beyond market trends;

(g)        the fact that a spouse, other than a spouse acting in good faith,

(i)  substantially reduced the value of family property, or

(ii) disposed of, transferred or converted property that is or would have been family property, or exchanged property that is or would have been family property into another form, causing the other spouse’s interest in the property or family property to be defeated or adversely affected;

(h)        a tax liability that may be incurred by a spouse as a result of a transfer or sale of property or as a result of an order;

(i)         any other factor, other than the consideration referred to in subsection (3), that may lead to significant unfairness.

After reviewing similar cases, the Court ordered that the property of the parties would be divided 80/20 in favour of Mr. Prentice, however, he would pay indefinite spousal support of $850 per month.

Would it have made a difference if this couple had written down their agreement? Probably not. After 23 years together it is unlikely that an agreement not to share assets, where one party has an abundance and the other, very little, would be upheld by a court in British Columbia.

Lawdiva aka Georgialee Lang

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