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Posts from the ‘Settlements’ Category

“Property” or “Income”? Appeal Court Rules on Structured Settlement Annuities

Image result for structured settlement annuity

“Property” or “Income”? Appeal Court Rules on Structured Settlement Annuities

Recently the Ontario Court of Appeal delivered a ruling on a very narrow, but important, issue:  Whether structured settlement annuity payments are considered “property” or “income” under Ontario family law legislation dealing with property-division by spouses on separation.

In Hunks v. Hunks, the wife had been injured while shopping at a supermarket.  She was hit by either a shopping cart or a pallet, and sued the store for damages.  When her claim was later settled, about $300,000 from the proceeds of her settlement were used to create a structured settlement annuity.  This paid out funds to her on a regular, pre-determined basis since she was no longer able to work.

At the point when she and the husband separated, the wife was still entitled to receive about 13 years’ worth of payments from the annuity.

In the context of determining their respective Net Family Property amounts for the purposes of equalization, a legal question arose as to whether the wife’s annuity payment entitlement should be counted as “property” or as “income” as those terms are used in the Ontario Family Law Act.

This was an important distinction:  If they were “income”, then they would be taken into account when calculating spousal support obligations.  If they were “property”, then their treatment would depend on other provisions of the Act that might allow for their exclusion.

The Court of Appeal concluded that such structured settlement annuities are properly considered “income” under the Act.

The key was that the annuity arose from a structured settlement, which is created when some or all of a personal injury settlement is deposited with a life insurance company in exchange for guaranteed, tax-free payments for the recipient’s lifetime, or for a specific number of years.  The court noted that annuities arising from personal injury settlements are very specialized contracts, and are subject to certain legal contingencies and stipulations.

The net result is that the casualty insurer is actually the legal owner and beneficiary of the contract.  Using the wife’s case as an example, it was the casualty insurer that purchased the annuity, and made an irrevocable direction to the issuer of the annuity contract to make all payments directly to the wife.  The court noted that an individual, such as the wife, is not entitled to purchase a structured settlement him or herself.

With that vantage-point, it could not be said that during the marriage the wife “received” the $300,000 used for the structured settlement.   The court also noted that payments received pursuant to a structured settlement annuity were analogous to disability benefits, which was another reason they should be treated as income.  Like disability benefits – which prior courts have concluded are “income” for these purposes – structured settlement annuity payments are meant to replace employment income that the wife would have earned if she had been able to work.  Since they provide her with financial support because she cannot work, they are “of the same nature as the income she would have earned had she not been injured.”

For the full text of the decision, see:

Hunks v. Hunks

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


Did Wedding Planning Make Bride Vulnerable to Signing a Bad Separation Agreement?

wedding planner

Did Wedding Planning Make Bride Vulnerable to Signing a Bad Separation Agreement?

Did the fact that a bride-to-be was absorbed in wedding-planning details make her vulnerable and prone to signing an improvident separation agreement with her future husband? Did this give rise to a situation of “unconscionability”?

That was the essence of the issue in a recent Ontario case called Toscano v. Toscano, where the court reflected on what constitutes “unconscionability” in the particular context of two spouses who had negotiated a separation agreement just before their wedding.

The threshold test is an important one, because under section 56(4) of the Ontario Family Law Act, a court can set aside and invalidate even the most earnestly-negotiated, mutually-acceptable separation agreement if it finds that the situation and circumstances under which it was negotiated was nonetheless “unconscionable”.

(And it’s important to note that the unconscionability test that governs whether a separation agreement can be set aside refers to the circumstances at the time of drafting and signing the agreement – not the results of the agreement).

With that in mind, the court in Toscano started its examination with this comment:

Matrimonial negotiations occur in a unique environment and therefore unconscionability in the matrimonial context is not equivalent to unconscionability in a commercial context.

Drawing next from prior family decisions – including one called Rick v. Brandsema that went all the way to the Supreme Court of Canada – the court in Toscano observed that the relevant question is whether there were “any circumstances of oppression, pressure, or other vulnerabilities, and if one party’s exploitation of such vulnerabilities during the negotiation process resulted in a separation agreement that deviated substantially from the legislation”.

The court then gave some examples:

• There may be a situation of inequality of bargaining power – i.e. one party might be intellectually weaker than the other. This may encompass an economical weakness, a situational weakness, or a disease of the mind.

• Or, one spouse may be more vulnerable than the other, due to a special relationship of trust and confidence.

But that does not necessarily determine the matter, either. The court in Toscano referred to another decision called Rosen v. Rosen where the Ontario Court of Appeal said:

However, just because one party is vulnerable it does not mean that – without more – a court will intervene. Sometimes the inherent inequality of bargaining power can be negated by outside factors – such as professional assistance [e.g. legal advice].

The primary question to be answered in determining “unconscionability” is whether there was inequality between the parties, or a preying of one upon the other, that placed an onus on the stronger party to act with scrupulous care for the welfare and interests of the vulnerable. As the Court in Rosen pointed out, it is “not the ability of one party to make a better bargain that counts. Seldom are contracting parties equal. It is the taking advantage of that ability to prey upon the other party that produces the unconscionability.”

Returning to the facts in Toscano, the court concluded that there had been no unconscionability in the circumstances leading up to the marriage contract as signed. The court said:

In this case, the marriage contract was a freely negotiated agreement between two educated and knowledgeable adults. Although Ms. Toscano was in a somewhat vulnerable position given the pressure of planning a large wedding which was to take place very soon, I do not find that pressure resulted in an overwhelming imbalance in the power relationship between the parties nor do I find Mr. Toscano took advantage of Ms. Toscano’s vulnerability to the extent necessary to demonstrate unconscionability in this context. Ms. Toscano was not under pressure or subject to other vulnerabilities that were not effectively compensated for by the ongoing involvement and presence of her independent legal counsel.

The court therefore declined to set the separation agreement aside on this particular ground.

For the full text of the decisions, see:

Toscano v. Toscano, 2015 ONSC 487 (CanLII)

Rick v. Brandsema, 2009 SCC 10 (CanLII), [2009] 1 S.C.R. 295

Rosen v. Rosen (1994), 1994 CanLII 2769 (ON CA), 3 R.F.L. (4th) 267 at para. 12 (Ont. C.A.)

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

Wife Rejects Husband’s Billion Dollar Settlement Cheque


Wife Rejects Husband’s Billion Dollar Settlement Cheque

We recently came across Jeff Lander’s article A Multi-Billion Dollar Divorce: What All Divorcing Women Can Learn From Sue Ann Hamm published in Forbes. Jeff provides insight into the lessons that can be learned from the divorce of Sue Ann Hamm from her estranged husband, Oklahoma oilman Harold Hamm in what he refers to as “teachable moments.”

Unlike the Ontario Family Law Act which provides for equalization of matrimonial property and assets, this case focuses on the principle of “equitable distribution” which includes factors such as “active and passive appreciation”. The Canadian approach to these concepts can be loosely found in cases involving constructive and resulting trust claims.

The Hamm divorce also raises important questions and issues regarding the parties’ date of separation (DOS). Similarly, Ontario’s Family Law Act utilizes the DOS as an important factor in calculating equalization and how married couples are to share their property when they divorce.

Not surprising, the Hamm case continues to make headlines as Sue Arnal, the wife’s lawyer, recently refused the oil baron husband’s cheque for $974,790,317.77.

To learn more about divorce in Ontario Russell Alexander, Collaborative Family Lawyers focuses exclusively on 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

More on Do-It-Yourself Agreements: What Not To Do


More on Do-It-Yourself Agreements: What Not To Do

Recently I wrote about the case of Cramer v. Cramer in The Dangers of “Kitchen Table” Separation Agreements – Court Does a Re-Write where a court essentially re-wrote parts of a divorcing couple’s “kitchen table” separation agreement. They had prepared it with the help of an office-supply store kit; unfortunately it not only overlooked some very key provisions, it also ran afoul of Ontario family law.

Another recent case, Demaine v. Racine, provides further illustration of how a couple’s attempt to minimize legal fees actually ended up with a costly day in court.

There, the couple had drafted their own cohabitation agreement in 2005, based on a sample they found on the Internet. Once again, the agreement was created without benefit of independent legal advice on either side. (This was an attempt to save money: They had both recently ended prior relationships, and had spent substantial funds to extricate themselves). The goal was to protect their respective pre-relationship assets in advance of their 2006 marriage, which consisted mainly of the wife’s cottage, and the husband’s military pension. It was signed at their Ottawa home in presence of the wife’s friend, who served as the witness.

But when they separated in 2011, the husband denied ever signing the agreement at all. He applied to the court to have it set aside, and claimed that even if he did sign it, it was not fair or reasonable. Not surprisingly, the wife asked to have it declared enforceable.

The court found in the wife’s favour: The agreement was a valid domestic contract.

For one thing, the court found the husband’s claim that he was even in town at the time to be unconvincing, and found his evidence lacking:

17 The [husband] testified that he may not have even been at home in Ottawa on the date the Cohabitation Agreement was allegedly signed as he had been away a lot in Petawawa, in Toronto and in other locations at that time on pre-deployment training. He stated that he could have requested proof of his travel expenses submitted to the military for that time period but that it would have taken considerable time to get them just as it apparently took 13 months to get his pension information. However, the [husband] testified that he did not request the travel expense information until 3 months ago even though the [husband] has been aware of this issue for over 18 months. The [husband] stated that he could have called people who were on course with him to testify regarding the dates but he didn’t want to put them in a difficult position as they also know the [wife]. In summary, the [husband] produced no proof that he was away from Ottawa at that time and I am unable to find that he was away from Ottawa at that time.

(In fact, the court concluded the signature matched certain sample documents that had been signed by the husband.)

Next, the court concluded that there were no legal grounds for setting aside the agreement at all: the couple had each adequately (though not perfectly) disclosed their financial information to the other prior to signing the agreement; there was no evidence of duress; and no misrepresentations on either side. It complied with all the legal formalities required by Ontario law (i.e. an agreement in writing, signed by both parties, and witnessed). Both parties benefited under the agreement; it was not tilted in anyone’s favour.

Finally, the court dismissed the husband’s claim that he did not understand the nature or consequences of the agreement because he did not have independent legal advice. This was the husband’s choice, as he was keen to save legal costs. (In any case, the court found that the husband understood the agreement and its ramifications even without a lawyer). This alone was not a reason to set aside the agreement, absent other factors. The agreement was fair, freely-negotiated, and valid.

For the full text of the decision, see
Demaine v. Racine, 2013 ONSC 2940 (CanLII)

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. To learn more visit us at


Top 10 Familyllb’s Blogs of 2012

top 10

Top 10 Familyllb’s Blogs of 2012

Well it has been another busy year for us as our blog has been viewed over 150, 000 times and we have received over 500 comments.  Thank you to everyone for your continued comments and support.

So in keeping with the year in review theme, here are our Top 10 Blog posting for 2012.

Number 10: New Proof of Parentage Requirements When Travelling with Children

This Blog examined why it’s important for parents to know that effective December 1, 2011, there are new proof-of-parentage requires for applications relating to travel by a child. These requirements are aimed at protecting Canadian children against child abduction, and designed to further enhance the security of the Canadian passport system.

New “proof of parentage” documentation required.

After December 1, 2011, for standard passport applications respecting children under the age of 16, the change involves a new requirement:  every application must be accompanied by “proof of parentage” documentation.

Number 9: Top Five Lottery Cases in Family Law

Lottery wins are a once-in-the-lifetime stroke of good fortune.   (At the least, they certainly happen less frequently than anyone hopes).  But in the case of married or common-law couples who buy the winning ticket, the joy of having a monetary windfall can quickly become tainted if they later separate or divorce, because issues often arises as to who gets the money, or how it is to be split.

So, in the unlikely event that these become relevant to our readers, this Blog reviewed the top five interesting lottery cases from across Canada.

Number 8: Ontario’s Bill 133 & Regulation for Pension Division to Commence January 2012

This Blog reviewed Ontario’s Attorney General Chris Bentley report that starting January 1, 2012, the pension division and valuation provisions in the Family Statute Law Amendment Act, 2009 will come into force. The changes are designed to make the family justice system more affordable, faster, simpler and less confrontational

Number 7: Top 5 Web Resources for Kids of Divorcing Parents

One of the most regrettable and usually unavoidable aspects of separation and divorce is the impact it can have on the children of the marriage. Even the most amicable separation-and-divorce scenarios are rife with challenges for all the parties, not the least of which are endured by the children who are the most emotionally ill-equipped to handle them. Parents may have difficulty knowing how best to support and accommodate their children’s needs during the difficult transitional period that inevitably accompanies the change in family lifestyle.

This Blog provided a list of the “Top 5” websites aimed at helping children through this phase.

Number 6: Wife Plans to Sue Ontario Family Responsibility Office for Husband’s Suicide

In the past few years, the government of Ontario implemented legislative amendments allowing drivers’ cars to be impounded and / or their licenses to be suspended in cases where they have failed to pay child support. This Blog took a look at how, according to a London, Ontario woman, this impact has directly caused the suicide of her common-law husband.

Number 5: 5 Ways to Make Sure Your Separation Agreement is Valid

Separation agreements can be a useful means by which separating spouses can take first steps toward unwinding their financial and family-related affairs by way of a mutual agreement. This Blog provided aa list of the top five ways to ensure that a separation agreement is valid and enforceable in Ontario.

Number 4: Top 5 Things to Know About the Canada Child Tax Benefit

 Soon it will be time to start thinking about individual income taxes, and all of the various components that go into providing the federal government with a financial “snapshot” for the past year.

For separated or divorcing spouses with children, one of those components is the Canada Child Tax Benefit (CCTB).

The Canada Revenue Agency (CRA) administers the CCTB, which is a monthly, tax-free benefit received on behalf of a child under the age of 18. Its purpose is to assist families with child-raising costs, and its value depends on family income, among other things.

This Blog examined 5 things to keep in mind about the CCTB.

Number 3: Top 10 Things to Know About Children and Passports

In this Blog we examined the relatively recent changes to children and the need to travel with passports.

Since June 1, 2009 all Canadians, including children travelling to the U.S., must present a document that is compliant with the Western Hemisphere Travel Initiative (WHTI). For entry into the U.S., this includes a Canadian passport or a NEXUS card when available.

Number 2: Top 5 Questions About Adultery and Divorce in Ontario

It seems that celebrity gossip tabloids will never have a shortage of topics to cover, as long as there are stories about extramarital affairs by successful, high-profile celebrities. Most recently, it has been alleged that Arnold Schwartzenegger fathered a child with the housekeeper employed in the home he shared with his wife of 25 years; prior to that, Tiger Woods has admitted to having sexual trysts with at least 14 women outside of his relatively short marriage.

In this blog we examine the role of adultery and Divorce in Ontario.

Number 1: 10 Things You Should Know About Child Support

This continues to be a very popular post and is evidence of the ongoing need that parents have to for information about child support.  This blog examines how all dependent children have a legal right to be financially supported by their parents. When parents live together with their children, they support the children together. Parents who do not live together often have an arrangement in which a child lives most of the time with one parent. That parent is said to have custody of the child. This arrangement can be written in a separation agreement or court order (sometimes called legal custody), or may occur without a written agreement or court order (sometimes called “de facto” custody). Either way, the parent with custody has the main responsibility for the day-to-day care of the child and has most of the ordinary expenses of raising the child. The other parent should help with those expenses by paying money to the parent with custody. This is called child support.

There you have it.  Our Top 10 Blogs for 2012.  Thank you  again to everyone who have visited our Blog and all your continued comments and support.

A Couple of Cases on Costs

A Couple of Cases on Costs

In todays’ Blog we briefly touch on two cases that concern costs awards in family law litigation.  As you may already know, costs orders are made by a court in accordance with its overall discretion; however, they are often – though not always – awarded to the successful party at trial or on a motion.  Essentially, they are a means for having the unsuccessful party pay for at least some of the litigation costs incurred by the party who emerged victorious in court.

With that said, here are a couple of interesting cost-related questions:  

1) Who gets costs if both parties disobey the court?

In Vickers v. Vickers, the court as part of a divorce action ordered the spouses to agree upon and retain: a) a “certified real estate valuator” to appraise their matrimonial home, and b) a real estate agent to sell it.  The court also ordered the house to be listed for sale by a certain date.  

However, the spouses deliberately did not comply with the court’s order: instead they mutually agreed to dispense with the services (and cost) of a “certified real estate valuator,” since they felt that they could obtain a valuation from the experienced real estate agent(s) they were planning to hire.  

Unfortunately, this plan to use real estate agents did not play out as intended; after obtaining several different assessments the parties were unable to agree on a single valuation figure.   Indeed, a full year after the court’s order, the house had still not been listed.   The matter came back before the court; after devising a formal plan to eliminate the valuation stalemate, the court addressed the costs question as follows:

Neither party complied diligently with the Order, with the result that the disposition of the home and its contents and, therefore, the resolution of the property issues in the proceeding, has been delayed.  …

d)  Costs

This motion was made necessary, in large part, by both parties’ non-compliance with the Order dated January 7, 2011.  In these circumstances, it is appropriate that each party bear his or her own costs of the motion.

2) Must a party make an offer that he or she knows will be rejected?

Next, a case called Mudronja v. Mudronja deals with an interesting question:   Is a party to family litigation obliged to make a formal offer to the other party, even if he or she knows that the offer will be turned down?  
The answer, apparently, is “yes”.  Moreover, in these kinds of circumstances the fact that a party made a sure-to-be-rejected offer is still a prime factor in awarding costs.  The court in this case wrote:

There were no Offers to Settle made in connection with these motions.  Eddy says he did not make an Offer because the relief sought by the Respondent was so clearly unreasonable that no Offer to Settle other than a consent to dismissal would have made any sense, and, in addition, would have been an Offer that would never have been accepted.

With all due respect, the fact that an Offer might not be accepted is no reason not to make an Offer.  A reasonable Offer to Settle is a major consideration when deciding whether costs are awarded and if so, the scale of a costs award.

For the full text of the decisions, see:

Vickers v. Vickers, 2012 ONSC 973 (amending 2012 ONSC 847)

Mudronja v. Mudronja, 2012 ONSC 3592

Additional reasons to:

Mudronja v. Mudronja, 2012 ONSC 2655

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



Fraudsters are Everywhere – Even in Family Law Matters

Fraudsters are Everywhere – Even in Family Law Matters

Around the holidays, when people are inundated with shopping opportunities and may be encouraged to spend beyond their limits, we hear a lot about the various thefts, frauds and scams that get perpetrated, and how they are apparently on the rise.  This is despite the flurry of pre- and post-holiday sales, enticingly low prices, and attractive “Boxing Week” opportunities.   And the upsurge in theft is not limited to shoppers; according to a recent article  in a Toronto newspaper, the incidence of shoplifting by store employees increases by up to 50% around the holidays.  According to another article, an estimated $1.8 billion in merchandise was shoplifted from U.S. retailers in the four weeks leading up to Christmas.

As lawyers, we also see our share of scams and fraud, and not just in terms of the matters that come through our door.   Indeed, there has been a spate of attempted frauds against lawyers themselves, perpetrated by con artists of all types.

One particularly fertile area for fraud is in the realm of real estate law, where in the past fraudsters have tried to bilk mortgagees and banks (and – by extension – their lawyers) out of hundreds of thousands of dollars through sham real estate transactions and mortgages registered against homes with falsely-inflated prices.  The problem was becoming so rampant, in fact, that the Ontario government was prompted a few years ago to enact Bill 152, which changed the relevant real estate statutes (including the Land Registration Reform Act, the Land Titles Act, and the Registry Act) to close a legal loophole that could be exploited by mortgage fraudsters.

But this phenomenon is not restricted to real estate law; family law lawyers collectively see their share of scam attempts too.  One form of family law-related fraud that has regularly been making the rounds in recent years involves a purported potential “client” who contacts the lawyer by e-mail.  The so-called “client” – usually a woman, and always writing from some far-away country (typically Japan, China, Taiwan, or Korea) – details how she has obtained a sizeable divorce judgment against her ex-husband but has succeeded in collecting only a portion of it from him.   She apparently needs the help of a lawyer to collect the money; naturally at some point the lawyer is asked to advance funds in anticipation of the receipt of payment by the ex-husband of the remaining settlement funds.

(And if this scenario sounds vaguely familiar, it’s merely a family law twist on advance-fee fraud commonly known as the “Nigerian Scam”, which has made its rounds by e-mail and internet in various forms for about a decade now).

Unless you are a retailer, involved in real estate, or a lawyer, you may think these tales of theft and fraud don’t concern you.   But no matter what your situation or line of work, these illustrations highlight a point that everyone should heed:  Being alert to the potential to be defrauded – and seeing the “red flags”—is half the battle.  And taking steps to protect oneself is the other half.

For the referenced articles, see:

For a description of the “Nigerian Scam” see:



No Need to Disclose Affair When Negotiating Separation Agreements

No Need to Disclose Affair When Negotiating Separation Agreements

In D’Andrade v. Schrage, a recent decision of the Ontario Superior Court of Justice, the court tackled the question of how much personal disclosure is required whenever spouses negotiate their separation agreements, specifically whether they are obliged to disclose the existence of an extra-marital affair.

The husband and wife started living together in 1998, and got married in 2001.   At the time, the husband – who had been married twice before — was in his 60s, while the wife was in her 30s.  It was her first marriage.

Throughout their relationship, the husband had the wife sign a succession of domestic agreements, providing her with financial support but making it clear in a specific clause that any payments were gratuitous and were not to be considered as legal support or maintenance, and emphasizing that he was under no legal obligation to her whatsoever.  Essentially, this “husband’s discretion” clause gave the husband the power in the event of separation to use his judgment in giving the wife whatever financial assistance he considered was fair.  

The last of these agreements was entered into in 2007.   It provided that the wife released all her rights to spousal support, and to an equalization of net family property; it also set out her entitlements to various properties that they owned together.  

However, this 2007 agreement was different from all the prior ones in two respects:   for one thing, it inadvertently omitted the “husband’s discretion” clause that had appeared in every other prior version.  More importantly, the 2007 agreement had been negotiated and entered into at a time when – unbeknownst to the husband — the wife was having an affair, and was considering separating from the husband.  With the assistance of her lawyer, the wife negotiated with this potential prospect in mind.

The husband paid the wife almost everything she was entitled to under that 2007 agreement; however, he found out about the affair and did not go through with the obligation to buy her a home worth at least $250,000 as he had promised.

The wife came to court arguing that the 2007 agreement should be enforced, and that – because the “husband’s discretion” clause was missing – the issue of the amount of support she should get was now wide open. In opposition, the husband claimed that the 2007 agreement should be set aside; he argued that the wife had a duty to negotiate and execute the 2007 agreement in utmost good faith.   Specifically, he claimed that the 2007 agreement was invalid and should be set aside because when the wife signed it, she was having an affair and was contemplating separation.  

The court found for the wife, holding that the agreement should be enforced.

First of all, the court confirmed that in principle it had the power to set aside any domestic contract under the Family Law Act, in cases where one party had failed to disclose significant assets or debts, or failed to understand the nature or consequences of the domestic contract.

Next, respecting the omission of the “husband’s discretion” clause in the 2007 version of the agreement, the court found that there was no evidence that there was a fraudulent or innocent omission on the part of his lawyer who did the drafting.    The contract could not be set aside on that basis alone.

The court then considered – but ultimately rejected – the husband’s argument that the wife’s failure to disclose her affair and possible intention to leave was evidence of a lack of good faith and therefore fatal to the agreement’s validity.   To the contrary, it found that not only was there no concrete evidence to show that the wife had actually decided to separate from the husband when the 2007 agreement was signed, but also that it was unreasonable to expect that as part of the negotiating process either party must disclose their respective thoughts about the likelihood of separating, or their involvement in any extra-marital affairs.  On this point, the court wrote:

“To require spouses to disclose their thoughts about the likelihood of separation or their involvements in extra-marital sexual activity before signing a marriage contract could have serious implications for the survival of marital relationships. If the obligation to disclose is limited to thoughts of separation, the question becomes how serious those thoughts of separation were. Does there have to be evidence that the decision to separate has been actually made? If there does, the evidence in this case does not reach that threshold. Among other things, it was Mr. Schrage who actually made the decision that he and Ms. D’Andrade should separate. If this is not the threshold then what is? Is it any thought of separation or only serious thoughts of separation? If it is the latter, how “serious” is serious enough?”
(The court also found that the wife’s lawyer had no duty toward the husband, and therefore was under no obligation during negotiations to disclose the wife’s possible intentions, either.)

Finally, the court emphasized that domestic contracts are financial arrangements; they are not aimed at enforcing personal obligations, such as the duty to remain faithful.   As such, the only duty of fairness that arises on parties that is the one in connection with disclosing their individual financial situations.

As a result, the court upheld the 2007 agreement in this case.

For the full text of the decision, see: D’Andrade v. Schrage, 2011 ONSC 1174