Marriage Contracts and Cohabitation Agreements Revisited
| Author | Stephen M. Grant and Gerald P. Sadvari |
| Pages | 349-372 |
Marriage Contracts
and
Cohabitation
Agreements
Revisited
Stephen
M.
Grant
and
Gerald
P.
Sadvari"
A.
INTRODUCTION
Once again, into
the
breach,
so to
speak.
We are
examining
the
current
legal
efficacy
of
domestic contracts other than separation agreements,
with
a
particular
focus
on
property rights. While such contracts
can
deal with custodial matters,
the
courts retain jurisdiction
to
override
any
such provisions
if
circumstances warrant
it.
With respect
to
child sup-
port,
the
same moral pertains, more
or
less. Regarding spousal support
provisions,
the
test outlined
by the
Supreme Court
of
Canada
in
Miglin
v.
Miglin
is
applicable
and is
canvassed elsewhere
in
these lectures. Hence
our
focus
on
property rights.
At
the
1993 Special Lectures,
one of the
authors presented
a
paper
entitled "Marriage Contracts: What
are the
Chances
Yours
Will
Be Set
Aside?"
It is
attached
as
Appendix
A to
this
paper
and
represents
a
still-
pertinent overview
of the
essentials relating
to the
upholding
of
mar-
riage
contracts.
However, that paper
was
written
before
the
dramatic changes that
the
last half-dozen years have brought
in
relation
to the
degree
of
respect
given
to
these contracts,
and in the
present paper
we
will discuss these
changes
in
considerable detail.
It is
fair
to say
that today,
the
property
provisions
in
marriage contracts
can be
safely
relied
on in
most cases,
and
certainly whenever
the
simple rules outlined below
are
followed.
Stephen.
M.
Grant
and
Gerald
P.
Sadvari,
partners
at
McCarthy
Tetrault,
Toronto.
349
350
STEPHEN
M.
GRANT
AND
GERALD
P.
SADVARI
Since
the
Supreme Court
of
Canada
has
made
it
clear that common
law
couples
do not
have statutory property rights,
but are
limited
to
common
law
rights
and
claims that everybody
may
advance,
our
focus
is on
marriage contracts
and
variations
of the
statutory rights provided
in
each province
to
married
and
separating couples.
The
most common circumstances
in
which
a
party seeks
the
protec-
tion
of a
marriage contract are:
1.
in a
second marriage, particularly where there
are
children
from
the
first
marriage;
2.
where
one
spouse-to-be already owns
a
home that will become
the
matrimonial home;
3.
where
a
spouse-to-be
has
accumulated
significant
assets, usually
business assets,
before
marriage
and is not
satisfied with
a
mere
de-
duction
for the
present value;
and
4.
where
the
family
of the
spouse-to-be
has
assets
(an
active business,
substantial
investments,
a
large
family
trust,
and so on)
that they
wish
to
protect beyond
the
value
of a
deduction.
With
respect
to (i)
above,
the
spouse wants
to
ensure that
his
chil-
dren
will
benefit
from
the
majority
of the
estate.
This
is
quite
under-
standable. With respect
to (2)
above, this
is an
anomaly under
the
Family
Law
Act
that does
not
permit
a
deduction
for
property
if it is the
matri-
monial home
at
both
the
beginning
and end of the
marriage. Most peo-
ple are
content
to
simply
rectify
the
anomaly
and
create
a
deduction
for
the
value
of the
home, allowing
for the
sharing
of any
increase
in
value.
Circumstance
(3) is
driven
by the
spouse-to-be, whereas
(4) is
driven
by
the
family
in
many cases.
In
both
of the
last
two
circumstances, there
is
a
belief
that
the fiance has not and
cannot possibly earn
any
entitlement
to
these assets,
no
matter
how the
value
of the
assets change during
the
marriage.
They
are
usually treated
as
excluded property under
the
Fam-
ily
Law
Act, which
is the
simplest way.
B.
WHERE
WE ARE
TODAY?
The
1993 paper ended lauding
Mr.
Justice Finlayson's dissent
in
Bosch
v.
Bosch.1
Where
the
majority
stated
that
it
wished
to
give
effect
to the
intention
of the
parties,
in the
result
it did not do so.
Justice Finlayson's
liberal interpretation
of the
language, which clearly expressed
the
inten-
i
(1999),
6
O.K. (3d)
168
(C.A.).
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