J.H.M. v. L.D.M.

IN THE SUPREME COURT OF BRITISH COLUMBIA Citation: J.H.M. v. L.D.M., 2005 BCSC 1488 Date: 20051020 Docket: E019843 Registry: New Westminster Between: J.H.M. Plaintiff And L.D.M. Defendant Before: The Honourable Madam Justice Koenigsberg Reasons for Judgment Counsel for the plaintiff C.W. Hickman Counsel for the defendant J.S. Harvey Date and Place of Trial/Hearing: September 27, 2005 New Westminster, B.C. [1] This matter is concerned with cross applications arising from Minutes of Settlement executed by the parties on February 4, 2005 in this action. [2] The parties' action is a family dispute wherein a division of property and spousal maintenance are the issues. The defendant seeks an order that the action be stayed and an order confirming the Minutes of Settlement. The plaintiff seeks an order that the Minutes of Settlement be set aside and an order for interim spousal support. Background Facts [3] The plaintiff and defendant are now respectively 51 and 55 years of age. They began cohabiting around 1980 and separated April of 2004. At the time of separation, the parties jointly owned a blueberry farm and other property. During the time of the parties' cohabitation, each worked outside the home. The defendant has worked for C.[ ] for about 35 years primarily as a pipe fitter. He currently earns approximately $52,000 per year. [4] A clear picture of the plaintiff's employment

income is not available; however, she was earning employment income outside the home/farm until June of 2004, or until two months following the parties' separation. Whatever the plaintiff's income was, it never equalled the defendant's. It may have been in the neighbourhood of $13,000 to $14,000 per year. She is currently unemployed, and except for minor employment opportunities since the parties' separation, including completing the blueberry harvest and starting a home business, the plaintiff has suffered ill health and it appears has been unable to work for over six months. The evidence is unclear on her present or future employment opportunities. [5] At the time of separation, the plaintiff moved into a trailer and the defendant signed over his one-half of the couple's RRSP/Mutual Funds. The plaintiff thus received approximately $25,000. It was agreed between them at that time that she was entitled to one-half of the farm property. She was employed at the time. It was approximately two months later that the plaintiff quit her sole job and took stress leave as of June 2004. She has been unable to collect employment insurance. The plaintiff commenced this action in July of 2004. In August of 2004, the plaintiff's mobile home burned. Many of her belongings as well as the home were lost. These are the subject of an insurance claim. The plaintiff moved back to the farm at the

end of August. [6] The farm was sold and possession by the new owners was taken on October 30, 2004. The net proceeds of the sale were $474,702.28. The blueberry harvest was completed before the sale and there is a dispute between the parties as to how much profit was obtained from it. However, whatever the profit, the plaintiff received it. [7] Each of the parties sold several of what are acknowledged to be joint family assets. [8] Each party provided financial statements in September of 2004. In or about November of 2004, the plaintiff applied for interim distribution of the net sale proceeds of the farm held by her counsel. By way of a consent order dated November 23, 2004, each party received $100,000 from the proceeds, and the defendant was ordered to pay the plaintiff $850 per month commencing December 2004 for as long as he was on disability. When he returned to work, he was ordered to pay $1,500 per month until trial. Appraisals of the parties' other assets were ordered. [9] A trial date was set for March 5, 2005 for five days. At the end of January, the plaintiff phoned the defendant and advised him she wished to settle all matters between them without lawyers. She asked that they engage in settlement discussions including two friends of hers as facilitators or witnesses. She said she needed an immediate payout from the monies in trust of at least $28,500 to complete

the purchase of a trailer she had put a deposit on. The defendant agreed. The parties met and came to an agreement ("Settlement Agreement"). At the plaintiff's insistence, the defendant's lawyer was asked to draft the Settlement Agreement as soon as possible. The plaintiff explained she needed the $28,500 at the latest by February 28 but because she had plans for a holiday before that, she needed to complete the transaction as soon as possible and take possession of the trailer. [10] The parties' evidence is consistent that the pressure to achieve settlement in the way it was achieved, and to use only the defendant's lawyer, was due entirely to the plaintiff's insistence. [11] The defendant's lawyer, after carefully ascertaining that the plaintiff was, in fact, no longer represented by counsel (by contact with her previous counsel) did draft the Minutes of Settlement as dictated to her by the defendant. The plaintiff contacted defendant's counsel by phone on February 4, 2005. Counsel offered for the plaintiff to either pick up the Minutes of Settlement or she would courier them to her. The plaintiff indicated she would like to attend counsel's office and sign the Minutes there. The plaintiff also asked counsel to ask the defendant to come in to sign the Minutes the same day so that she could receive the funds as soon as possible. She was advised by defendant's counsel that she

could take the Minutes elsewhere to review them and receive legal advice. The plaintiff declined this. [12] The plaintiff received the Minutes in private in counsel's office. She requested at some point to speak to the defendant who was waiting in another part of the office. The parties spoke, however, the parties do not agree on the details of what transpired in that discussion. The plaintiff signed the Minutes and left the office. She appeared upset at some point to the receptionist. [13] The defendant signed the Minutes and copies of same were given to him. When the defendant left the office, he saw the plaintiff in the parking lot and gave her one of the executed copies of the Minutes. The parties do not agree on either the plaintiff's demeanour at the time, nor on anything else which was said. [14] On February 7, defendant's counsel sent a fully executed copy of the Minutes to the plaintiff by courier. The plaintiff, on the same day, faxed defendant's counsel instructing her to forward the Minutes to her previous counsel who still held the balance of the proceeds from the sale of the farm. The fax was as follows: Feb 07/05 att: Caroyln Please sent Minutes of Settlement to Carel Hickman. Reqeust funds to be released immedially. Could you also cancel any and all future court dates that has been set up for L.D.M. and I. I'm sending a copy of "Notice of intention" and would

like my files to be released soon, as I'm going on holidays Feb 09/05. Thank you, J.H.M. [The handwritten fax is reproduced verbatim.] [15] On February 7, 2005, the Minutes were forwarded to the plaintiff's previous counsel including the request for immediate release of the funds. [16] By return letter, plaintiff's counsel acknowledged receipt of the Minutes and complied with the request to immediately release $28,500 to each of the parties pursuant to the Settlement Agreement. On February 10, 2005, after receiving her cheque for $28,500 and upon discussing the Minutes with her previous counsel, the plaintiff instructed her previous counsel to write to defendant's counsel and advise that the plaintiff was unhappy with the Minutes and that previous counsel may be retained to act. [17] The Minutes of Settlement are set out below: These Minutes constitute a full and final settlement of all issues arising in this action and out of the status of the Plaintiff and Defendant as spouses and otherwise. It is a term of this settlement that the Plaintiff and Defendant shall consent to a Judgment of the Court in this action on the following terms: 1. The Defendant will pay spousal support to the Plaintiff: (a) From June 1, 2004 to July 1, 2004 (inclusive) the amount of $850.00 per month and from August 1, 2004 to November 1, 2004 (inclusive) the amount of $1,500.00 per month, for a total

of $7,700.00 owing (the "Retroactive Spousal Support"); (b) The Retroactive Spousal Support shall be paid to the Plaintiff directly from the net sale proceeds from the sale of the former Family Residence which are currently held in trust by Ms. Carol Hickman, Barrister & Solicitor (the "Net Sale Proceeds"); (c) On December 1, 2004 the Defendant paid to the Plaintiff $850.00 in spousal support; (d) Commencing January 1, 2005 up to and including February 1, 2005 the Defendant has paid to the Plaintiff $1,500.00 per month in spousal support; (e) Commencing March 1, 2005 the Defendant will pay to the Plaintiff $1,000.00 per month in spousal support up to and including February 1, 2006 at which time spousal support shall terminate absolutely and forever.

2. The parties agree to release $28,500.00 to each party from the Net Sale Proceeds forthwith, with the balance of the Net Sale Proceeds to be release upon execution of a Consent Order on the terms of these Minutes of Settlement.

3. The remaining balance of Net Sale Proceeds (after payment to each party of the $28,500.00 listed above in Clause 2) will be divided equally subject to the following: (a) The Plaintiff will receive the Retroactive Spousal Support from the Defendant's share of the Net Sale Proceeds; and (b) The Plaintiff will receive an additional $20,000.00 from the Defendant's share of the Net Sale Proceeds.

4. The Defendant's C.[ ] Pension Plan will be divided pursuant to Part 6 of the Family Relations Act with the Plaintiff's entitlement period being from January 1, 1981 to April 1, 2004.

5. The Plaintiff will be entitled to the money owed to the parties from R.F. in the amount of $15,000.00.

6. The Defendant will be entitled to keep for his own use absolutely, free from any future claim from the Plaintiff his C.[ ] Share Purchase Plan.

7. The parties' unadjusted pensionable earnings under the Canada Pension Plan will not be equalized under ss. 55.1 and 55.2 of the Canada Pension Plan Act (Canada), and neither party will apply for an equalization of the parties' unadjusted pensionable earnings.

8. Each party will keep the motor vehicles, equipment, tools, chattels, household goods, furniture, personal effects and items in their respective possession free from any future claim from the other.

9. Each party will be responsible for his or her own costs of this action. Dated: February 4, 2005 Analysis [18] But for the plaintiff's motion seeking to set aside the Settlement Agreement, the Minutes of Settlement would be confirmed. Although initially suggested, there is absolutely no basis to set aside these Minutes except to the extent that on all the facts they may be "unfair". [19] The circumstances surrounding the making of the Agreement leading to the Minutes being drafted, and the circumstances surrounding the execution of the Minutes were all circumstances brought about at the insistence of the plaintiff. Having received part performance of the Minutes, she then said the Minutes did not accord with the agreement reached by the parties. If that were the basis upon which this Court should set aside the Minutes, I would not do so. [20] However, a decision of the Court in Schlenker v. Schlenker (1999), 72 B.C.L.R. (3d) 203 (S.C.), sets out a thorough review of the relevant law applicable to the facts of this case. These parties never married but were common law spouses for 24 years. Their Agreement falls under s. 120.1(1) of the Family Relations Act, R.S.B.C. 1996, c.

128. Thus, for the reasons set out in Schlenker, the Minutes are subject to a review for prima facie fairness considering Parts 5 and 6 of the Family Relations Act. Although, this matter did not come before the Court as a consent order, the effect of confirming the Minutes as requested by the defendant raises the same issue and the same principles apply. [21] In this case, there is insufficient evidence for the Court to carry out any such review. While the plaintiff has given up any right she may have had to the plaintiff's C.[ ] Share Purchase Plan and equalization of CPP and to spousal support for an extended period, she received numerous other benefits. The Court cannot evaluate the fairness without knowing the value of what was given up. [22] In the circumstances, each of the parties' applications is dismissed. Each is at liberty to bring the matter forward on proper material to obtain the remedy each seeks. [23] Costs in the cause. "M.M. Koenigsberg, J." The Honourable Madam Justice M.M. Koenigsberg