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Should (Another) 20-Year-Old Cohabitation Agreement Be Upheld?

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Should (Another) 20-Year-Old Cohabitation Agreement Be Upheld?

A few weeks ago, I wrote about a case in which the court was asked whether a separation agreement signed by a couple 20 years earlier should be upheld.

Coincidentally, another recent Ontario Court of Appeal case involved a similar circumstance.

When the couple started living together 20 years ago – and at the husband’s insistence, since he’d had a prior relationship end acrimoniously – they signed a cohabitation agreement.  The husband took care of having it drafted, and he presented it to the wife for her signature.  He wanted the security of having the agreement in place before moving forward in the relationship and buying a home with her.

The wife did not have independent legal advice at the time, although she was given the opportunity to obtain it.  Under the terms of the agreement she signed, the wife agreed to give up all her claims to spousal support.

Still, when they separated 20 years later, she claimed for spousal support nonetheless.  The trial judge upheld the separation agreement, and dismissed her claim for support.  The wife brought an appeal.

In evaluating whether to allow that appeal, the court had to embark on a two-stage analysis, the first stage of which required it to:

1) look at the circumstances surrounding the negotiation and execution of the agreement, to determine whether there was any reason to discount it; and then

2) consider the substance of the agreement, to determine whether it was in substantial compliance with the general objectives of the Divorce Act at the time it was formed.

Then, in the second stage, the court had to consider – now 20 years later – whether the wife had established that the agreement no longer reflects the original intention of the parties, and whether the cohabitation agreement is still in substantial compliance with the legislated objectives of the modern-day Divorce Act.

Applying those standards here, the wife argued that the agreement was invalid, and that the trial judge failed to consider certain important facts when applying this two-stage test, namely:

  • That there was a power imbalance between her and the husband;
  • That she had not discussed spousal support with the husband;
  • That the husband’s financial disclosure was incomplete; and
  • That she did not have independent legal advice.

While conceding that she was not coerced, the wife argued that the agreement simply did not align with the overall objectives of the Divorce Act, whether now or back when it was signed.  This was particularly true since the couple went on to have an 18-year relationship, they had two children together for whom the wife bore the primary responsibility, and his income exceeded hers.

The Appeal Court considered the wife’s arguments.  After examining the objectives of the legislation, it rejected her spousal support request. There had been no error of law or misapprehension of fact by the trial judge, who carefully reviewed the relevant test and found:

  • The wife was aware of the husband’s desire to have a cohabitation agreement.
  • They had discussed the cohabitation agreement before the wife received it.
  • She was aware of all of the husband’s sources of income and assets, but did not pursue further disclosure.
  • She skimmed over the cohabitation agreement, reading some parts but not others.
  • There was no fraud, coercion, or duress.
  • Although given the opportunity, the wife did not seek independent legal advice even though – on her evidence – she had six weeks to do so.
  • At the time of signing the agreement, the wife thought it was fair and that it fairly outlined the parties’ discussions regarding the purchase of a house.
  • The agreement is in substantial compliance with the Divorce Act.

The court noted that the trial judge was entitled to make the findings that he did on the evidence, and are entitled to deference from appeal court.  It added that even if the cohabitation agreement did not exist, on all the facts the wife would not be entitled to spousal support anyway.  The court dismissed her appeal.

For the full text of the decision, see:

Smith v. Smith

At Russell Alexander, Family Lawyers our focus is exclusively family law, offering pre-separation legal advice and assisting clients with family related issues including: custody and access, separation agreements, child and spousal support, division of family property, paternity disputes, and enforcement of court orders.  For more information, visit us at RussellAlexander.com

 

 

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