By Emily Davies

The recent decision of Bradley v. Callahan, 2024 BCSC 163 (“Bradley”) before the Supreme Court of British Columbia outlines the importance of sufficient independent legal advice and the impact it can have on protecting your client’s property during separation.

In Bradley, the key issue before the court was whether the marriage agreement was binding on the parties. The marriage agreement stated that Mr. Callahan’s business interests were not to be subject to property division at separation. The agreement was the result of negotiations between the parties, with each party having a lawyer engaged for over a month before the execution of the agreement. Upon execution of the marriage agreement, the lawyer for Ms. Bradley provided a certificate of independent legal advice to Mr. Callahan’s counsel.

Ms. Bradley sought an equal division of the value of the business assets, despite the terms of the marriage agreement. In considering whether the marriage agreement should be applied, the court considered whether the agreement operated fairly at the time of distribution.

To determine this, the court had to apply the property division as stated in the agreement. The finding on whether the agreement was to be applied had a significant impact on the division of property as, at the time of separation in 2014, the business assets were valued at between $82.9 million and $87 million. At the time of trial, the value of the assets had grown to between $227 million to $239 million. This is in contrast to the estimated value of $2 million at the time of the agreement in 1997.

Was the Marriage Agreement Valid?

Ms. Bradley argued the agreement should be set aside due to the adequacy of legal advice, the preparation and execution of the marriage agreement, or the sufficiency of disclosure.

The importance of independent legal advice can be seen in the Bradley court’s consideration of the adequacy of legal advice and the preparation and execution of the agreement.

Since the marriage agreement was made with the help of lawyers, who were involved well before the execution of the agreement, the court found that the marriage agreement was comprehensive and formed through negotiations. After execution, Ms. Bradley’s lawyer provided Mr. Callahan’s lawyer with a certificate of independent legal advice that read (in part):

On the 31st day of July, 1997, and in subsequent telephone conferences on August 25, 1997 and September 3, 5, 8, 10, and 11, 1997, I was consulted by Norval Bradley, (“Ms. Bradley”) as to her execution of a Marriage Agreement between Edward James (“Ted”) Callahan and Norval Bradley, an executed copy of which is attached to this Certificate (the “Agreement’).

I explained to Ms. Bradley the nature of the Agreement and advised her fully as to the content of the Agreement. Ms. Bradley has informed me and I am satisfied that she fully understands the nature and effect of executing the Agreement and that in executing the Agreement she is acting freely and voluntarily and not under any undue influence exercised by Edward James (“Ted”) Callahan or Russell & DuMoulin, or any other person. Further, I advised Ms. Bradley of the current law concerning the division of property between spouses and maintenance obligations upon marriage breakdown as provided for in current legislation; that the law provides for judicial intervention if this Agreement is considered unfair in future circumstances in which it is intended to operate; and that the current legislation concerning the obligations between spouse and marital breakdown could change.

I have given this advice to Ms. Bradley as her solicitor and in her interest only and without regard to or consideration for the interest of Mr. Callahan, Russell & DuMoulin, or any other person. I am not acting on behalf of Mr. Callahan, Russell & DuMoulin, or any other person in connection with this matter.

In the certificate, Ms. Bradley acknowledged:

I hereby acknowledge that all of the statements made in this Certificate are true and that Jack (I.J.) Aaron, in advising me herein was consulted by me as my personal solicitor and in my interest only.

Due to this certificate, and the fact that Ms. Bradley’s lawyer was not called as a witness, there was no evidence to support Ms. Bradley’s assertion that she received inadequate legal advice.

In arguing for the inclusion of the business assets in family property, Ms. Bradley submitted that Mr. Callahan wished to have a marriage agreement that would protect his family and that whatever he acquired would be shared between them.

The court did not agree.

The court found that since there was independent legal advice provided to both parties, if that was the intention of Mr. Callahan, the terms of the agreement would have read much differently than it did. The court concluded that Ms. Bradley did have proper independent legal advice, and as she acknowledged, she was advised “fully as to the content of the marriage agreement”.

Regarding Ms. Bradley’s argument that the agreement should be set aside due to the preparation and execution of the agreement, the court found that Ms. Bradley’s lawyer provided her with a draft of the marriage agreement and that they discussed and revised it. Ms. Bradley’s lawyer then certified he was satisfied that Ms. Bradley fully understood the nature and effect of executing the agreement. The court concluded that the agreement was prepared and executed with proper independent legal advice, resulting in a legally binding agreement.

The court determined that the marriage agreement, therefore, applied, and Mr. Callahan’s business assets were not subject to division.

Take Away

Bradley emphasizes the importance of independent legal advice. If Ms. Bradley had not had independent legal advice, or had insufficient records of it (for example, no certificate of independent legal advice), the court could have had the grounds not to apply the marriage agreement.

This would have been detrimental to Mr. Callahan’s interests and would have gone against the intentions of the parties. This goes to show the impact that properly administered independent legal advice can have on your clients.

If you or someone you know needs or has questions about independent legal advice, please contact Clark Wilson Family Law group for more information.