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DOMESTIC CONTRACTS AND SEPARATION AGREEMENTS - Consensus, lack of - Unconscionable transactions

Tuesday, March 17, 2020 @ 9:21 AM  


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Appeal by the wife from trial judgment refusing to set aside the parties’ marriage agreement and to reapportion the assets. The parties divorced after a two-year marriage. At the time of their divorce, they entered into an agreement prepared by the appellant agreeing that ownership of their various properties would be allocated to the registered owner of each parcel. The respondent was the registered owner of the Richmond property. The appellant paid the $50,000 deposit. She also transferred just over $488,000 to the respondent. The remainder of the purchase price was funded by a mortgage in the respondent’s name for $1,071,000. Within a year after the divorce, the appellant brought proceedings seeking a reapportionment of the family assets and specifically the Richmond property. The appellant argued that in the context of a short duration, the contributions to the family assets, and particularly to the Richmond property, were so unequal as to make the agreement they had signed unfair. The trial judge concluded that the appellant did not meet her burden of showing the agreement was unfair and declined to order reapportionment. She found the respondent paid the claimant back some of the purchase price of the properties in China and the Richmond property, that mitigated the presumptions associated with a short marriage. The judge also found the appellant was a sophisticated businesswoman who throughout their short marriage drafted documents relating to property and financing and insisted the respondent sign. It was thus inconceivable that those circumstances differed when the parties signed the Divorce Agreement. The judge found the appellant signed the Agreement voluntarily, fully aware of its consequences, including that it assigned to the respondent ownership of the Richmond property.

HELD: Appeal dismissed. The judge considered money paid to the appellant by the respondent was a contribution to the Richmond property and there was evidence from which she could reach that conclusion. Any errors in respect to the assessment of the payment, if not purely typographical, did not amount to palpable and overriding errors warranting appellate intervention. The trial judge did not err in concluding that by signing the mortgage on the Richmond property, the respondent was taking all the financial risk for the property. The judge was responding to the main theory of the appellant, that the contributions of the parties to the assets, and particularly the Richmond property, were so unequal as to render the Agreement unfair. The judge regarded the fact that the respondent alone was on the mortgage, together with the direct financial contribution, to be relevant factors in that assessment. It was open to the judge on the evidence to come to that conclusion. The trial judge did not err in her consideration of the factors for reapportionment, particularly the duration of the marriage and the needs of each spouse to become or remain economically independent and self-sufficient. Although the starting point for reapportionment was not the presumption of equality in this case, but the division of assets made by the parties in their marriage agreement, the presumption of equality expressed by the trial judge did not appear to have affected her analysis. Duration of the marriage in this case must be assessed in light of the time within the marriage when the marriage agreement was made, and the circumstances anticipated by the parties at that time.

Xie v. Yuan, [2020] B.C.J. No. 151, British Columbia Court of Appeal, P.M. Willcock, G.J. Fitch and J.J.L. Hunter JJ.A., February 4, 2020. Digest No. TLD-March162020003