C. Domestic and Social Arrangements

• Author: John D. McCamus
• Profession: Professor of Law. Osgoode Hall Law School, York University
• Pages: 129-136

Page 129

The general presumption against the finding of an intention to create legal relations in family and social settings draws its strongest support from the leading case of Balfour v. Balfour⁶⁴in which the plaintiff wife brought a claim against her husband to enforce a promise to pay her an allowance. The couple had been living together in Ceylon, where the husband held a government posting. On a temporary visit home in England, it became clear that, for reasons of health, the wife would not be able to return to Ceylon with her husband for at least several months. On the eve of his departure, the husband undertook to provide his wife with a monthly allowance of a certain sum. Some months later when the couple had decided to live separate and apart, the wife brought an action to enforce that undertaking. Although the wife enjoyed success at trial, the Court of Appeal reversed this decision on the basis that arrangements of this kind between husband and wife "are not contracts because the parties did not intend that they should be attended by legal consequences."⁶⁵

In a well-known passage, Atkin L.J. provided the following explanation:

They are not sued upon, not because the parties are reluctant to enforce their legal rights when the agreement is broken, but because the parties, in the inception of the arrangement, never intended that they should be sued upon. Agreements such as these are outside the

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realm of contracts altogether. The common law does not regulate the form of agreements between spouses. Their promises are not sealed with seals and sealing wax. The consideration that really obtains for them is that natural love and affection which counts for so little in these cold Courts. The terms may be repudiated, varied or renewed as performance proceeds or as disagreements develop, and the principles of the common law as to exoneration and discharge and accord and satisfaction are such as find no place in the domestic code. The parties themselves are advocates, judges, Courts, sheriff’s officer and reporter. In respect of these promises each house is a domain into which the King’s writ does not seek to run, and to which his officers do not seek to be admitted.⁶⁶A similar explanation was offered by Salmon L.J. in a more recent authority⁶⁷in the following terms: as a rule when arrangements are made between close relations, for example, between husband and wife, parent and child, or uncle and nephew in relation to an allowance, there is a presumption against an intention of creating any legal relationship. This is not a presumption of law but of fact. It derives from experience of life and human nature which shows that in such circumstances men and women usually do not intend to create legal rights and obligations, but intend to rely solely on family ties of mutual trust and affection.⁶⁸In determining that the particular agreement at issue in Balfour v. Balfour fell into the category of informal and unenforceable family arrangements, it was of critical importance that the couple had not agreed to separate at the time of the agreement and the agreement was therefore one made, in effect, by a couple living together in amity. Where parties have agreed to live separately, however, it is clearly established that similar arrangements to provide an allowance or support are normally enforceable. As Lord Denning explained in Merritt v. Merritt:⁶⁹"It is altogether different when the parties are not living in amity but are separated, or about to separate. They then bargain keenly. They do not rely on ongoing understandings. They want everything cut and dried.

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It may safely be presumed that they intend to create legal relations."⁷⁰

The negotiation and enforcement of so-called separation agreements is both a commonplace phenomenon and a matter that is subject to regulation by provincial family law legislation.⁷¹The general presumption of unenforceability has often been applied to arrangements entered into by spouses,⁷²but the presumption may apply to arrangements entered into by other family members. Thus, in a Canadian case⁷³an agreement among siblings that all of the income from their late father’s estate should be applied to the support of their mother was held to be an informal arrangement that was not intended to be legally enforceable. On the other hand, it is quite conceivable, of course, that family members could enter into agreements with the intention that they be enforceable. Commercial arrangements between family members may obviously be intended to create enforceable agreements. Even in non-commercial settings, however, it is quite possible for the requisite intention to be present. Thus, an individual in need of care might enter into an agreement to compensate another member of the family in return for the provision of services of this kind. Such arrangements may be intended to be enforceable.⁷⁴In Dugas v. Dugas’ Estate⁷⁵an arrangement under which an adult son returned home after an unsuccessful marriage and agreed to pay for his room and board was held enforceable. So too, was an obligation to repay monies lent to him by his father.⁷⁶In a leading English case,⁷⁷an arrangement under which a father promised to transfer ownership of a home to his son and daughter-in-law, provided that the couple first paid all of the instalments of the purchase price, was held to be binding. As in this case, it is a common feature of the cases in which an intention to create legal relations is found to be present that the party seeking to enforce the agreement has detrimentally relied on the assumed enforceability of the agreement.

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In Jones v. Padavatton,⁷⁸on the other hand, the presence of substantial detrimental...