Get Advice Before You Sign

In Smith v. Smith 2017 ONCA 759 (CanLII), the Ontario Court of Appeal recently held up a pre-nuptial cohabitation agreement, even though the wife did not have legal advice.

The couple signed this domestic contract before purchasing a home.  Even though the wife was given a chance to obtain independent legal advice, she did not.  The agreement had a spousal support release that said that each party releases the other from all spousal support claims, or maintenance, whether periodic or lump sum.  The parties had two children.  The agreement was signed 5 years before marriage, 4 years before the couple’s first child was born, 6 years before their second child was born and 16 years before separation.

The trial judge held up the prenup agreement and dismissed the wife’s spousal support claim.  The Ontario Court of Appeal applied the two-stage analysis in Miglin v. Miglin, 2003 SCC 24 (CanLII), and considered:

  1. the circumstances surrounding negotiation and execution of the agreement to determine whether there is any reason to discount it; and
  2. the substance of the agreement to determine whether it was in substantial compliance with the general objectives of the Divorce Act at the time of its formation.

The Court of Appeal found that the trial judge found no error of law or misapprehension of fact.  The trial judge made the following findings of fact:

a) The wife was aware of the husband’s desire to have a cohabitation agreement.

b) The parties had discussed the cohabitation agreement before the wife received it.

c) The wife was aware of all of the husband’s sources of income and assets and did not pursue further disclosure.

d) The wife skimmed over the cohabitation agreement and read some parts of it and not others.

e) There was no fraud, coercion, or duress.

f) Although given the opportunity, the wife did not seek independent legal advice even though – on her evidence – she had six weeks to do so.

g) 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.

h) The agreement is in substantial compliance with the Divorce Act.  Both parties suffered economic disadvantages arising from the marriage, and more importantly, even if the cohabitation agreement did not exist, the wife would not be entitled to spousal support.

The Court of Appeal gave deference to the trial judge’s findings of fact, and accordingly dismissed the wife’s appeal with costs.  The fact that there was limited disclosure, and the wife did not obtain legal advice, in itself, was not enough to set aside the pre-nuptial agreement.

The best advice is to get legal advice early if you are considering a prenup, prenuptial agreement, cohabitation agreement, separation agreement or domestic contract of any kind.  You will be in the best position to avoid entering into a bad agreement if you obtain legal advice to understand what you are about to sign.

If you have questions about a prenup, prenuptial agreement, cohabitation agreement, separation agreement or domestic contract contact Windsor family law lawyers Mary Fox, Tanya McNevin or Thomas MacKay today by calling 519-259-1820.   We serve clients in Windsor, Tecumseh, Lasalle, Essex, Leamington, Kingsville, Belle River, Lakeshore, and throughout southern Ontario.

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