The Court of Appeal recently dismissed a wife’s claim for spousal support based on the language in a cohabitation agreement that had been signed almost two decades before.

What Happened?

The parties in question moved in together in March 1997. The husband had previously gone through a contentious breakup and wanted to avoid a similar situation. When the parties began to talk about purchasing a home, he asked the wife to sign a cohabitation agreement. Although she was given the chance to obtain independent legal advice prior to signing the agreement, the wife did not do so and signed the agreement in October 1997.

The couple had two children in 2001 and 2003, and eventually married after the birth of the second child.

A Bar to Any Future Claims for Spousal Support

The agreement included language that would prevent the wife from making any future claims for spousal support:

NO CLAIM FOR SPOUSAL SUPPORT AND MAINTENANCE

a)   Each party releases the other from all claims that each may have against the other for the payment of interim or permanent support or maintenance whether periodic or lump sum under the laws of any jurisdiction, and in particular under the provisions of the Act, or any successors thereto;

b)   Should either party hereafter make a claim against the other for support or maintenance, the provisions of this paragraph may be pleaded as and shall be a full and complete defence to any such claim;

c)   Each party acknowledges that he or she is self-supporting or fully capable of being self-supporting and requires no financial assistance from the other;

d)   Each party acknowledges that each may suffer or enjoy drastic changes in health, income, assets and debts, or changes in fortune by reason of unforeseen factors, but nevertheless agree that under no circumstances, however catastrophic or unconscionable, will any change, direct or indirect, or unforeseen, give either the right to claim any support or maintenance from the other.

Original Trial Decision

The couple ended up separating in September 2013. After the separation, the wife made a claim for spousal support. The original trial judge upheld the terms of the cohabitation agreement and dismissed her support claim. In determining the couple’s income for child support purposes, the trial judge imputed income to the wife and reduced the husband’s income because of his health issues.

The “Miglin Test”: The Supreme Court of Canada on Spousal Support

The Supreme Court of Canada’s decision in Miglin v. Miglin sets out a two-step test to apply in situations in which an agreement (cohabitation agreement or pre-nup) purports to limit spousal support.

The first stage of the test requires a court to consider the circumstances at the time in which an agreement (cohabitation, pre-nup, etc.) was created, including:

  • Looking at the circumstances around the negotiation and execution of the agreement to determine whether there is any reason to discount it; and
  • Looking at the substance of the agreement to determine whether it was in substantial compliance with the general objectives of the Divorce Act at the time the agreement was made.

The second stage of the test requires a court to consider whether the person seeking spousal support has established, at the time of their application for it (in this case, the wife more than 20 years after the agreement in question was made), that the agreement no longer reflects the original intention of the parties, and whether the agreement continues to be in substantial compliance with the objectives of the Divorce Act.

The main objectives of the Divorce Act are “certainty, finality and autonomy”. In addition, s. 15.2(6) of the Act states that a spousal support order should:

  • Recognize any economic advantages or disadvantages to the spouses stemming from the marriage or its breakdown;
  • Distribute any financial consequences stemming from the care of any children between the spouses (above and beyond any child support obligations);
  • Relieve any economic hardship that may result to either spouse due to the breakdown of the marriage; and
  • Promote the economic self-sufficiency of each spouse within a reasonable period of time (as much as this is possible).

The Wife’s Appeal

The wife appealed the original trial decision, arguing that the trial judge had erred in upholding the terms of the cohabitation agreement because the release of spousal support was not in compliance with the Divorce Act.

The wife argued that the original trial judge did not consider several important facts when he went through the Miglin analysis. She claimed, among other things, that:

  • there was a power imbalance between her and her husband;
  • she had not discussed spousal support with him;
  • the financial disclosure had been incomplete;
  • she had not obtained independent legal advice (but that she had not been coerced);
  • the agreement did not comply with the overall objectives of the Divorce Act, both at the time of signing and at the time of her request for support because of the length of their relationship (18 years), the fact that she bore primary responsibility for the two children, and because the husband’s income exceeded hers.

The Court of Appeal’s Decision

The Court of Appeal did not accept the wife’s arguments, stating that she had not shown any error of law or misapprehension of facts by the original trial judge.

The original trial judge had carefully applied the Miglin test and had made a number of findings:

  • the wife had been aware of the husband’s desire for a cohabitation agreement;
  • the couple had discussed the agreement before the wife even received a copy of it;
  • the wife had been aware of all of the husband’s sources of income and assets and had not pursued further disclosure;
  • the wife had skimmed over the agreement, reading some parts and omitting others;
  • there was no fraud, coercion, or duress;
  • even though she had been given six weeks to do so, the wife did not seek independent legal advice;
  • at the time the parties signed the agreement, the wife thought it was fair and had fairly outlined the discussions the parties had about the purchase of a home;
  • the agreement was in substantial compliance with the Divorce Act. Both parties had suffered economic disadvantages because of the marriage and even if the agreement did not exist, the wife would not have been entitled to spousal support.

The Court of Appeal found that these conclusions had been open to the trial judge to make based on the evidence that had been presented, and that the previous decision was entitled to deference from the Court of Appeal.

The wife’s appeal was dismissed with $12,000 in costs payable to the husband.

At Borden Family Law, we have been advising clients on cohabitation agreements, pre-nups and related issue for 17 years. Our practice is focused solely on family law, and over the years we have built a strong base of knowledge and experience in the nuances and specificities of separation, divorce, and spousal support issues. We rely on this focused experience to provide exceptional guidance to clients seeking assistance following the breakdown of their relationship. We serve clients in Oshawa, Ajax, Pickering, Brooklin, and the surrounding areas. To see how we can help you resolve your issue, call us at 905-576-6090 or contact us online.