Under subsection 56(4) of the Ontario Family Law Act (FLA), a court may set aside a marriage contract if it finds that there was a failure to disclose significant assets and liabilities at the time a marriage contract was made. Proper financial disclosure is essential to a marriage contract’s validity and enforcement by courts.
In the past five years, challenges to domestic contracts have become more common. One of the reasons for these challenges (as identified in the article) is that there are few risks to attacking an agreement. The result is either a settlement for more money than was available under the contract; or, because judges strive to be balanced, if litigation ensues a significant amount of disclosure is ordered – more than was intended by the disclosing party under the contract.
The author suggests the inclusion of three key clauses to deal with releases & waivers, summary judgment, and bifurcation. The text of each clause is provided in the article, and each is based on a different Supreme Court of Canada family law case. Careful attention to the procedures used to conduct the file may ensure that the agreement produced is fair and not unconscionable, with full financial disclosure.
Inclusion of the three key clauses may ensure that if the agreement is challenged in the future, the challenge is much less likely to succeed.
- The recent increase in successful challenges to marriage contracts may require the inclusion of three types of clauses – releases & waivers, summary judgment, and bifurcation – all of which should be consistent with recent SCC decisions in Hartshorne v. Hartshorne; Miglin v. Miglin; and Hryniak v. Mauldin.
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