Anderson v Anderson: The Enforceability of Kitchen Table Agreements

Amongst the profession, we often refer to domestic contracts prepared by the parties themselves without legal advice as “kitchen table agreements”. In May 2023, the Supreme Court of Canada rendered a decision in Anderson v Anderson, which dealt with the enforceability of a Separation Agreement prepared by the parties in Saskatchewan dividing property without financial disclosure or independent legal advice. Are these “kitchen table agreements” enforceable?

Understandably, the Supreme Court’s comments on and treatment of this case will have significant implications for: i) people contemplating resolving the issues from their relationship breakdown by way of a “kitchen table agreement”, and ii) for matters in which a party is seeking to have the Court set aside a “kitchen table” agreement. This blog post will provide an overview of the background, Trial, and appeal to the Saskatchewan Court of Appeal. Stay tuned for blog posts providing more detailed consideration of the subsequent Supreme Court of Canada decision, and a discussion of the implications of the Supreme Court’s decision on similar matters in Ontario, including a look at case law that has followed.

Background Facts

1. The parties were married for 3 years;
2. There were no children of the relationship;
3. Both parties had been married previously;
4. Both parties brought considerable property into the marriage; and
5. The wife advised the husband to think over the Separation Agreement and talk to a lawyer. The husband declined and signed immediately.

Basic Terms of the Separation Agreement

1. All family property divided, with the exception of the matrimonial home;
2. The truck was to be reconveyed by the wife to the husband;
3. The wife waived any right to the husband’s business interests; and
4. The home, which was equally paid for, would be dealt with later. The parties would have the home valued, and if they could not agree on how to resolve this issue, would seek the assistance of a mediator.

Developments

After the Separation Agreement was signed with witnesses, the parties began to follow the terms of the Agreement. The wife obtained legal advice and her lawyer subsequently attempted to contact the husband to formalize the Separation Agreement and value his business interests. The husband did not respond or seek to challenge the Separation Agreement.

Roughly 6 months after the Separation Agreement was signed, the wife initiated a Divorce. Nearly 1.5 years after the Divorce Application was filed, and nearly 2 years after the Separation Agreement was signed, the husband responded to the Divorce Application and sought to set aside the Separation Agreement, arguing it was signed under duress and without independent legal advice. The parties went to Trial.

Trial

At Trial, the Court found that the Separation Agreement was unenforceable, particularly given the absence of legal advice. The Court did not give the Separation Agreement any weight and ordered that family property be equalized in accordance with the Family Property Act. The Trial judge reduced the equalization payment owing by the wife to the husband by $8,000 due to his refusal to communicate and his delay in making his claim. The net equalization payment owing by the wife to the husband was roughly $90,000.

Appeal

The wife appealed the Trial Decision, and the Saskatchewan Court of Appeal set aside the Trial judge’s Decision, finding:

1. The Trial judge placed too much weight on the lack of independent legal advice, which is not a requirement under section 40;
2. The Separation Agreement was a binding contract and was entitled to great weight;
3. Property values for the family property to be divided should be those closest to the date of the Agreement; and
4. The husband was to pay the wife $4,914.95.

The husband sought leave and appealed to the Supreme Court of Canada.

Supreme Court of Canada

The Supreme Court was left with the question: If the Agreement does not meet the formal requirements of section 38, which would make it presumably enforceable, how should the Agreement be evaluated?

To be continued…

This blog post was written by a former member of the Family Law team.  For further information, please email family@mannlawyers.com.