Prenuptial Agreements in Canada
by
Jeremy D. Morley

Prenuptial agreements are generally enforceable in Canada. Courts in Ontario and other common law provinces of Canada previously considered marriage contracts to be contrary to public policy and unenforceable, but the 1978 Family Law Reform Act (now continued in the Family Law Act) in Ontario and similar legislation in other provinces specifically authorizes them.

Prenuptial Agreements in Ontario: The Family Law Act of Ontario authorizes marital contracts between two people who are married or intend to be married to each other. The agreements must be in writing, signed by the parties and witnessed. They may deal with a broad range of matters, including the ownership or division of property, support obligations, matters concerning the education and "moral training" of children (but not issues concerning custody of or access to children) and "any other matter."

The legislation precludes spouses from opting out of those provisions in the Act that protect the rights of each of spouses to the matrimonial home.

The Act provides that a court may set aside a provision for support or a waiver of the right to support in a marriage contract and may determine and order support even though the contract contains an express provision excluding the application of this section:

• If the provision for support or the waiver of the right to support results in unconscionable circumstances;
• If the provision for support is in favor of, or the waiver is by or on behalf of, a dependent who qualifies for allowance for support out of public money; or
• If there is default in the payment of support under the contract or agreement at the time the application is made.

As a result, a provision in the marriage contract either limiting or precluding a claim for future support is very much subject to the discretion of the court at the time an application for support is made.

The Act allows a court to set aside a marriage contract, either in whole or in part, if:

• A party failed to disclose significant assets, debts or other liabilities;
• A party did not understand the nature or consequences of the contract; or
• The law of contract so requires, meaning that the enforcement of the agreement is barred by duress, undue influence, fraud, fundamental breach or unconscionability.

The Ontario legislation does not expressly require that a party must receive independent legal advice but the failure to receive such advice is a clear "red flag."

Prenuptial Agreements in British Columbia:  The Family Relations Act of British Columbia recognizes the validity of marriage agreements but authorizes allow the court to set aside or vary them if they are found to be unfair in all of the circumstances.

The Act requires that such agreements must be in writing, signed by both spouses, and witnessed by one or more other persons.

Specifically, Sec. 65(1) of the Family Relations Act, R.S.B.C. 1996, c. 128, provides that upon a divorce the court may divide the marital property as it deems fit “[i]f  the provisions for division of property…would be unfair having regard to (a) the duration of the marriage, (b) the duration of the period during which the spouses have lived separate and apart, (c) the date when property was acquired or disposed of, (d) the extent to which property was acquired by one spouse through inheritance or gift, (e)      the needs of each spouse to become or remain economically independent and self-sufficient, or (f) any other circumstances relating to the acquisition, preservation, maintenance, improvement or use of property or the capacity or liabilities of a spouse.”

In Dowell v. Dowell, 2008 BCSC 138, the British Columbia Supreme Court reviewed a marriage agreement that had been entered into between two retired people who then shared a long marriage. The Agreement provided that each party would retain their pre-marriage assets. The Court expressed concern that the agreement did not contain any provision for support and that the wife had not obtained independent legal advice. It varied the agreement by awarding 22% of the family assets to the wife and the balance to the husband.

This office handles many international family law cases that concern Canada. The firm always acts with local counsel in Canada as appropriate.

In particular we frequently handle U.S. - Canada prenuptial agreements.

Jeremy D. Morley formerly taught law as an Assistant Professor at the Law Faculty of  the University of New Brunswick, Fredericton, Canada.