Understanding Informal Family Property Agreements: Insights from Anderson v. Anderson

Author: Marwah Law | | Categories: Law Firm , Lawyers , Legal Services , Real Estate Law , Real Estate Lawyers

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In a recent decision, Anderson v. Anderson 2023 SCC 13, the Supreme Court of Canada provided valuable guidance on the weight given to informal spousal agreements concerning family property. This landmark case involved a couple who, after an unsuccessful reconciliation meeting, signed what is commonly known as a "kitchen-table agreement." While the agreement lacked certain formalities required for enforceability, the court's ruling shed light on the implications of such informal property agreements across Canada. In this blog post, Marwah Law will delve into the key takeaways from the Anderson case and explore the framework established by Justice Andromache Karakatsanis to evaluate the validity and weight of informal property agreements.

1. Understanding the Status of Informal Agreements
   - The absence of financial disclosure and independent legal advice rendered the Anderson agreement ineligible as an enforceable "interspousal contract" under certain provincial laws.

2. The Journey through the Courts
   - At the trial level, Justice Darryl J. Brown deemed the agreement non-binding.
   - The Court of Appeal overturned the decision, attributing "great weight" to the agreement based on a Miglin analysis (Miglin v. Miglin [2003] 1 S.C.R. 303), resulting in a binding  agreement.
   - Ultimately, the Supreme Court, through Justice Karakatsanis, deemed the agreement binding, fair, and equitable.

3. Formal Requirements vs. Grounds for Set-Aside
   - Various Canadian family property statutes necessitate written agreements signed and witnessed by the parties. Additional requirements, such as lawyer acknowledgment, exist in certain provinces.
   - Formal requirements should be distinguished from grounds for setting aside a domestic contract and from an agreement's potential impact on the unequal division of property.

4. Clarifying the Applicability of the Miglin Framework
   - The Supreme Court clarified that the Miglin framework solely pertains to spousal support agreements and does not extend to property agreements.

5. The Framework for Evaluating Informal Property Agreements
  - Justice Karakatsanis presented a framework to assess the weight of informal property agreements.
  - Validity: The party claiming an informal agreement must demonstrate a valid contract, establishing a consensus on essential terms, even if the agreement only partially addresses family property matters.
  - Unfairness: To challenge the agreement, the opposing party must illustrate unfairness in negotiation, such as undue pressure, exploitation of power imbalance, or defects in the bargaining process. Disclosure and legal advice play a role in fairness, but substantive fairness may compensate for informational deficiencies.
  - Substantive Fairness: If the informal agreement is both valid and fairly negotiated, its weight depends on its adherence to what is fair and equitable under family property legislation, including provisions for unequal division.

The Anderson v. Anderson decision provides valuable insights into the evaluation of informal family property agreements. While the ruling offers clarity, some concerns persist, such as the court's assessment of sufficient financial disclosure in the case. Nevertheless, the framework outlined by Justice Karakatsanis will assist legal practitioners and individuals in navigating the complexities of informal property agreements.

For legal advice and assistance regarding informal family property agreements, contact Marwah Law today. Our experienced team is ready to help you navigate the intricacies of Canadian family law.