Rick V. Brandsema

By Ronald S Foster Q.C. With assistance from Lianne M. Cihlar and  Emma Neary Foster LLP

If there is any concern that decisions from the Supreme Court of Canada in family law have resulted in confusion and a lack of clarity, this has not been the outcome in the years following the release of the decision in Rick v. Brandsema [Rick].  Rick provides clear factors to determine the validity of a marital contract.  The environment in which the negotiations took place is crucial, as two requirements must be met: the parties must negotiate in a context that is “free from oppression, pressure, or other vulnerabilities”[1] and there must be “full and honest disclosure of all relevant financial information”.[2]  Since the release of the decision, Rick has been cited in 72 decisions,[3] 57 of which have been in the area of family law[4]. This article will highlight some of the important decisions since the release of Rick and provide further guidance on how the principles of financial disclosure and vulnerability have been treated.

Disclosure

Rick emphasized not only the importance but also the necessity of providing complete and accurate financial disclosure when completing a marital contract.  Where there is incomplete or inaccurate financial disclosure, the courts are more inclined to overturn or vary an agreement.  This is due to the unique and highly emotional atmosphere in which most separation or divorce contracts are negotiated. In Rick, Abella J. stressed the importance of full disclosure, a continuation of the Supreme Court’s decision in Miglin v. Miglin[5][Miglin]:

[47] In my view, it flows from the observations and principles set out in Miglin that a duty to make full and honest disclosure of all relevant financial information is required to protect the integrity of the result of negotiations undertaken in these uniquely vulnerable circumstances.  The deliberate failure to make such disclosure may render the agreement vulnerable to judicial intervention where the result is a negotiated settlement that is substantially at variance from the objectives of the governing legislation.

Generally, other courts have agreed that full and accurate disclosure of all assets and liabilities is required when negotiating a marital contract.  However, an area on which the courts have differed is whether or not a spouse has a duty to inquire further when they have some pre-existing knowledge of a specific asset or debt.  Some courts require spouses to provide complete financial disclosure and comment that there is a fiduciary duty to disclose and have held that the failure to do so is potentially fatal to the enforceability of the agreement[6]. Other courts have determined that a spouse who had some knowledge of the existence of an asset or debt has a duty to request further information if they were dissatisfied