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29

Common law Alberta (Part 4): Legal Requirements

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Common Law Alberta

Please note that the information provided herein is not legal advice and is provided for informational and educational purposes only. If you need legal advice with respect to a cohabitation agreement in Alberta, you should seek professional assistance.

This is the fourth of a series of blogs I’m writing about common law relationships in Alberta. As previously discussed in blogs I wrote on this website, being in a common law relationship (or an “adult interdependent relationship”) can have significant financial implications.

Specifically, if you are living together with someone in Alberta and that relationship becomes an “adult interdependent relationship”, then support obligations may arise under the Family Law Act and Dependants Relief Act and property claims may arise under the Family Law Act (for possession of the “Primary Home”), the Matrimonial Property Act (for possession of the Matrimonial Home once the common law couple get married) or based on the doctrine of unjust enrichment and constructive trust. Furthermore, if the parties enter into an “adult interdependent partner agreement”, then their Wills MAY get revoked (unless there is a declaration in the Will that it is made in contemplation of entering into an adult interdependent partner agreement). Finally, a person who dies without a Will and leaves behind a surviving adult interdependent partner may end up having their estate (in whole or in part) distributed to that partner. Now, to manage or avoid some or all of these financial consequences (that arise from living in a conjugal relationship with someone), parties can enter into a Cohabitation Agreement.

FYI, you can purchase a Cohabitation Agreement for Alberta on this website that tries to avoid financial obligations (by waiving support and claims to the other person’s property, etc.) and which terminates upon marriage or continues past marriage to become a Prenuptial Agreement or Marriage Contract.

Legal Requirements for a Cohabitation Agreement in Alberta

Under the Family Law Act, for support obligations to be waived through a Cohabitation Agreement, that Agreement must be in writing, must be equitable, and:

  • the adult interdependent partners must have received independent legal advice upon entering into that Agreement;
  • the adult interdependent partners must not have married each other after entering into the agreement; and
  • one of the adult interdependent partners must not be in receipt of government financial assistance without reasonable support from the other adult interdependent partner.

When it comes to property claims, the Adult Interdependent Relationships Act, the Family Law Act, and the Dependants Relief Act do not provide any particular requirements for trying to avoid ownership, division, and possession of property claims. That leaves us with basic principles of contract law. The Cohabitation Agreement itself must be clear, complete, and certain enough to be enforceable. It must also be entered into voluntarily by the parties (i.e. no duress, undue influence, misrepresentation, mistake, and the Agreement must not be unconscionable). It is advisable that each party retain separate legal counsel. Family law lawyers can help draft, negotiate, and explain cohabitation agreements to you. The last thing you want is for one party to claim that he or she did not understand the Cohabitation Agreement, entered into under duress, and did not receive independent legal advice concerning it!

Legal Requirements if the parties get MARRIED

Now, if the parties to a Cohabitation Agreement wish to get married and they want to determine the ownership and division of certain property during the course of their marriage (and outside the Matrimonial Property Act regime), then a number of legal requirements WOULD NEED TO HAVE BEEN MET at the time of entering into that agreement. Generally, when a couple gets married and then divorced or separated, certain of their property is divided by a Court in a just and equitable manner (typically equally) under the Matrimonial Property Act. If the parties want to exclude certain property from being included in this so-called equalization, they can do so by having an agreement (e.g. a “Cohabitation Agreement” that survives marriage for unmarried couples who eventually get married, a “Prenuptial Agreement” for a couple contemplating getting married, or a “Marriage Contract” for spouses that are already married). Now, in order for such an agreement to be valid, Sections 37 and 38 of the Matrimonial Property Act say that it must be in writing and each spouse must separately acknowledge in writing before a lawyer (other than the lawyer acting for the other spouse or before whom the acknowledgment is made by the other spouse) the following:

  • That they are aware of the nature and effect of the agreement;
  • That they are aware of the possible future claims to property the spouse may have under the Matrimonial Property Act and that the spouse intends to give up these claims to the extent necessary to give effect to the agreement; and
  • that the spouse is executing the agreement freely and voluntarily without any compulsion on the part of the other spouse.

These statutory requirements were discussed by the Alberta Court of Appeal in Hanson v. Hanson, [2009] A.J. No. 623 at paragraphs 11 and 12:

11 Section 37 of the MPA permits parties to avoid its operation if they have entered into an enforceable contract. In order for the contract to be enforceable, section 38 requires each spouse to acknowledge certain things in writing, apart from the other spouse, before an independent lawyer.

12 “The purpose of the statutory formalities of execution is to offer some protection to spouses from agreements that are not the result of free and informed consent.”: Corbeil v. Bebris (1993), 141 A.R. 215 at para. 32, 105 D.L.R. (4th) 759 (C.A.). However, “[e]ven if the statutory formalities of execution are met, the contract may be invalid or unenforceable for a reason sounding in contract law …”: ibid at para. 15. In other words, a contract under the MPA will not be enforceable absent the statutory formalities. But it may be unenforceable for reasons that have nothing to do with statutory formalities, including factors such as duress or undue influence (see e.g., Radhakrishnan v. University of Calgary Faculty Association, 2002 ABCA 182, 312 A.R. 143 at paras. 30-31) as modified by the statutory formality requiring the executing spouse to acknowledge he or she is free from “compulsion on the part of the other spouse or person”: s. 38(1)(c). As observed by Slatter J. (as he then was) in Hearn v. Hearn, 2004 ABQB 75, 352 A.R. 260 at para. 61, this provision “[a]t the very least … should create a common law estoppel in cases where the alleged duress does not arise from any deliberate or direct action of the other spouse”.

14 The purpose of a certificate signed by an independent lawyer in the context of section 38 of the MPA is to indicate that the statutory formalities have been met and nothing more. If in fact the statutory formalities have not been met, and the acknowledging spouse suffers a resulting loss, he or she may have a claim against the independent lawyer. For example, if the certifying lawyer did not in fact give independent advice and the agreement is nevertheless found binding, the acknowledging spouse may argue that the independent lawyer was negligent and liable in damages.

By the way, if you’re looking for a Cohabitation Agreement in Alberta that either terminates upon marriage or survives marriage (and becomes a prenuptial agreement or marriage contract), then you’ve come to the right place:

Cohabitation Agreement – Terminates Upon Marriage

This legal form can be used by non-married couples in Alberta who wish to avoid creating obligations through their cohabiting (i.e. living together) with each other. This particular cohabitation agreement waives support obligations and divides property according to legal ownership (in other words, what’s mine is mine; what’s yours is yours). This cohabitation agreement terminates when the parties get married to each other. If you want the cohabitation agreement to continue past marriage (i.e. continue to be valid and enforceable past marriage), then you can check out the cohabitation agreement below:

Cohabitation Agreement – Continues Past Marriage

This legal form can be used by non-married couples in Alberta who wish to avoid creating obligations through their cohabiting (i.e. living together) and their marriage to each other. It essentially becomes a Prenuptial Agreement or Marriage Contract when the parties marry each other. This particular cohabitation agreement waives support obligations and divides property according to legal ownership (in other words, what’s mine is mine; what’s yours is yours). This cohabitation agreement continues to be valid and enforceable past marriage.

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