Case involves interplay between a cohabitation agreement and alleged spoken investment agreements
The British Columbia Supreme Court recently dismissed an application for summary judgment in a case involving a financial dispute between two former romantic partners.
The case will proceed to trial, where the court can fully examine the factual and legal issues surrounding alleged oral investment agreements and their relationship to a cohabitation agreement.
The plaintiff in this case was a chartered accountant and entrepreneur, while the defendant was a visual effects producer. The two men began a romantic relationship in June 2013.
The defendant won nearly $12 million in an online slot game in November 2016. The couple moved into a home, which was purchased with the defendant's winnings and which was registered solely in the defendant’s name.
In August 2017, the couple signed a cohabitation agreement, which established a regime of financial independence between them. It stipulated that the defendant’s lottery winnings were his separate property and that any property acquired from those winnings would remain his unless explicitly designated as shared property. The agreement also included an “entire agreement clause”.
The plaintiff alleged that, after the defendant's lottery win, they both entered into an oral fee agreement distinct from the cohabitation agreement. The plaintiff claimed that this agreement stipulated that he would manage and grow the defendant’s investments and that he would receive compensation through a 50-percent share of any growth in those investments.
The defendant denied the existence of any alleged oral investment agreements. He argued that the cohabitation agreement and the alleged oral agreements had contradictory terms and that the cohabitation agreement should supersede the alleged oral agreements.
The defendant also claimed that the entire agreement clause should prevent the plaintiff from claiming any interest in the lottery winnings or related investments based on the alleged oral agreements.
Court analysis and decision
In Johnston v Goodwin, 2024 BCSC 1384, the British Columbia Supreme Court refused to resolve the case by summary judgment. The court found genuine issues of material fact and law that required a full trial.
This case involved complex issues concerning the interpretation of the cohabitation agreement, the scope of its entire agreement clause, the enforceability of the alleged oral investment agreements, and the relationship of the alleged oral agreements to the cohabitation agreement, the court said.
Resolving these complex issues needed a full examination of the evidence about the surrounding factual circumstances, which was not fully available at this stage of the proceedings, the court explained.
The court noted that it still had questions about whether the entire agreement clause in the cohabitation agreement, upon which the defendant relied, was intended to supersede all prior and subsequent agreements between the parties or merely those relating to their personal financial relationship.
