Canadian Lawyer

12 A U G U S T 2 0 1 6 w w w . C A N A D I A N L a w y e r m a g . c o m O ral contracts can be tricky in a divorce case. Courts are often left to decipher what the parties agreed to in the marriage and the subsequent divorce. The pitfalls of making an oral marriage agreement are evident in Brown v. Brown (2016 BCSC 1037), where a lawyer married a doctor and both had assets prior to the marriage. At the heart of the oral marriage agreement was a Ross street home in Vancouver, which the wife, a law- yer, maintained should be excluded as family assets in return for her agreement that the doctor's registered retirement savings plan and a divorce settlement from an earlier marriage were excluded. However, when the marriage fell apart, so did the doctor's mem- ory regarding the wife's property, which had escalated in value to more than $1 million, while the doctor had spent the proceeds in his RRSP on an expensive vehicle. Roxanne Brown, also known as Roxanne Vachon, and Dr. Roy Alan Brown were married in Las Vegas on Dec. 30, 2011. They agreed to a separation date of Oct. 5, 2014 and a divorce, which took effect a year after the BCSC hearing on dis- position of their assets and debts. Ms. Brown had taken proceeds from an earlier divorce settlement and invested them in the Ross Street property, where she lived with her two sons (during shared custody with her former husband) before her marriage to Dr. Brown. She was able to purchase her own home on Ross Street for $575,000 with a $431,250 mortgage. Ms. Brown paid the mortgage and all other expenses for the property. When she mar- ried Dr. Brown in December 2011, the Ross Street property had an assessed value of $760,000 and a mortgage of approximately $380,000. However, by the time it was assessed at trial, the proper- ty value had increased to $1.2 million. Before the wedding, Ms. Brown had suggested that the couple discuss a marriage agreement. They would each address their own debt, share common expenses, and have their own bank accounts, keeping personal finances separate. Dr. Brown said he didn't want to live in the house because it was too far on the east side of the city and if he lived in the house it would be considered family property. Instead, the couple rented a house for $6,000 and turned the Ross Street house into a rental. The Browns' agreements were all made orally. Dr. Brown, though, turned out not to be the rich man he earlier claimed to be, and as the marriage progressed, Ms. Brown became increasingly concerned about Dr. Brown's mounting debt and his seeming lack of activity to address it. He owed Revenue Canada back taxes, had overbilled the B.C. Medical Services Plan for a period before his marriage, and spent more than he could afford on trips abroad, a Porsche, expensive club memberships, and a US$575,000 condo in Palm Springs. His wife maintained she was not able to afford half the condo and he assured her at the time he had the cash; however, circumstances later showed he could nei- ther afford it nor had the funds. He had also lost a lucrative con- sulting job with St. Paul's Hospital and was embroiled in a lawsuit with his former wife. At the end of 2013, the Canada Revenue Agency was pressur- ing Dr. Brown for more than $260,000 owed and froze his assets. Problems with the B.C. Medical Services Plan (audits and over- billing) meant that Dr. Brown could face a judgment of more than $400,000. Ms. Brown attempted to help her husband through his difficulties and curb his spending but to no avail. Ms. Brown told her husband that they could no longer afford their expensive rent- al home and they needed to move to the Ross Street home, but he would have to sign an agreement that he would lay no claim to the property. Dr. Brown decided to end the marriage after three years \ AT L A N T I C \ C E N T R A L \ P R A I R I E S \ W E S T REGIONAL WRAP-UP W E S T Oral marriage contract upheld in divorce case Canadian Franchise Guide, Second Edition Osler, Hoskin & Harcourt LLP Managing Editors: Andraya Frith, Dominic Mochrie, and Gillian Scott Order # 986422-65203 $394 4-volume looseleaf supplemented book 2-3 supplements per year 978-0-7798-6422-5 Supplements invoiced separately The trusted franchise law resource for every practitioner Available risk-free for 30 days Order online: www.carswell.com/franchise Call Toll-Free: 1-800-387-5164 In Toronto: 416-609-3800 00235YX-A54918

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