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:
Rick v. Brandsema, 2009 SCC 10 (CanLII),  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.)