Family Verbal Agreement re Property Upheld

In Sojka v Sojka 2023 BCSC 52 the court upheld a verbal agreement made amongst family members as to the beneficial ownership of a parcel of property.

In Suenv Suen 2013 BCCA 313 the British Columbia Court of Appeal addressed agreements between family members:

[40] A contract is promissory in nature, that is, it is an undertaking by the promisor to do something for the promise in exchange for something. The exchange of promises is enforceable only if there is an agreement or consensus on the “existence, nature and scope of their [respective] rights and duties”
or the concept of a bargain, as an essential feature of the common law of contract at 8:

…what is an essential ingredient of a valid, enforceable, legally acceptable contract, is an agreement that can be called “serious,” that is, made with the kind of serious, binding intent that demarcates the casual promise, undeserving of legal recognition, from a promise which should be effective in law and should be obligatory on the future action, as well as the conscience of the promisor.

[42] The common law of contract is distinguishable from equitable or promissory estoppel where, absent consideration, reliance on a promise that is not fulfilled and gives rise to injury or damage, may be actionable. Consequently, if a promise is support only by “moral consideration”, it is generally not enforceable at common law:
The idea that moral justification could be the basis of a contract, for example, where a promise was made because of the familial relation of the parties, or out of “natural love and affection,” has long since been rejected by the common law (Fridman at 9).

[43] Communications in the family context are often no more than statements of intent or wishes. For a promise, in that context, to rise to the level of a binding enforceable contract there must be strict proof of the terms of the bargain including: the parties, the property, and the consideration. See McKenzie v. Walsh (1920), 61 S.C.R. 312 (S.C.C.), and Ross v. Ross (1957), [1958] O.R. 49, 11 D.L.R. (2d) 561 (Ont.C.A.)

The Court, in determining whether there is a verbal agreement, must apply the objective reasonable bystander test, and consider how the promisor’s conduct would appear to a reasonable person in the position of the promisee: Le Soleil at paras. 324–325. The party alleging the existence of a verbal agreement must prove its existence on a balance of probabilities: Bell v. Bell, 1998 CanLII 3194 at para. 14, [1998] B.C.J. No. 1457 (S.C.).

Where there is no written agreement between the parties but a verbal agreement is alleged, the credibility of each party is a key issue. Their evidence must be “tested against those facts that are not seriously in dispute and with the preponderance of the evidence and the probabilities surrounding the events”: Piga v. Uffelman, 2022 BCSC 983 at para. 14.

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