From: Jason Neyers <jneyers@uwo.ca>
To: obligations@uwo.ca
Date: 12/06/2009 19:26:25 UTC
Subject: ODG: New SCC case

Dear Colleagues:
 
Those interested in unconscionability will be interested in the new(ish) SCC decision in Rick v. Brandsema, 2009 SCC 10.  The facts were as follows:
The parties married in 1973 and separated in 2000.  During their 29 years together, they had five children and acquired a dairy farm in which they were equal shareholders, as well as other real property, vehicles and RRSPs.  The parties were intermittently represented by lawyers and also used the services of mediators during their negotiation of a separation agreement.  Approximately a year after their divorce, the wife sought to set aside the agreement on the grounds of unconscionability or, in the alternative, a reapportionment order under s. 65 of British Columbia’s Family Relations Act.  The trial judge found that the agreement was unconscionable because the husband had exploited the wife’s mental instability during negotiations and had deliberately concealed or under\u8209 -valued assets.  This resulted in the wife receiving significantly less than her entitlement under the Act, despite the fact that it was the parties’ express intention to divide their assets equally.  As a result, the trial judge made an order awarding the wife an amount representing the difference between the negotiated equalization payment and the amount she was entitled to under the Act.  The Court of Appeal disagreed with the trial judge’s conclusions about the extent of the wife’s vulnerabilities and concluded that, in any event, they were effectively compensated for by the availability of counsel.

 Held:  The appeal should be allowed.

 The case is interesting since it states at [66] that equitable compensation is available as a remedy (instead of rescission) to a party who is wronged as a result of another's unconscionable behaviour. (For what is worth the court seems to be confusing a financial adjustment in lieu of rescission and compensation for loss based on a wrong, but others might disagree).
 
For the life of me I can't figure out why the lawyers did not argue this as a fraudulent misrepresentation case (or why the court did not treat it as such) since the husband lied to the wife and thereby caused her financial loss.
 
All the best,
 
--
Jason Neyers
Associate Professor of Law & 
Cassels Brock LLP Faculty Fellow in Contract Law
Faculty of Law
University of Western Ontario
N6A 3K7
(519) 661-2111 x. 88435