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Marriage contracts, which are often referred to as prenuptial agreements, or “prenups” may not be an easy topic to bring out when planning a wedding, but they can be a useful tool in avoiding potential conflict in the event of a breakdown of a marriage. A marriage contract will often outline what will happen to each partner’s assets and finances in the event the marriage breaks down. But what happens when one party decides they should not have to stick to the terms agreed to in the marriage contract? Can they be annulled? If so, how long does a party have to annul a contract? These were some questions recently addressed by the Ontario Superior Court of Justice.
The marriage contract
The parties to the marriage began dating in 2000 and started living together in June 2004. They were engaged in August 2004 and a wedding date of July 20, 2005 was quickly decided on. Less than a week before the wedding the parties entered into a marriage contract. The wife prepared it from a template she found online.
The marriage contract stated that the parties would waive spousal support and indicated they would be separate as to property and not be subject to an equalization of net family property. The agreement also stated that each party would retain a lawyer for independent legal advice, though neither of them did.
Finally, the parties also failed to formally exchange financial disclosure, which they did not do.
Different opinions on the purpose of the contract
The wife stated that the marriage contract was an uncontentious matter. Each of the parties had been married before and had different financial philosophies. She saw the marriage contract as a way to eliminate conflict and it was just one more thing to get done before the wedding.
The husband said he did not want to enter into a marriage contract, but that the wife presented it to him within a week of the marriage and told him she would not marry him unless he signed it (something she denied). The husband also claimed the wife told him not to worry about getting legal advice, which she also denies.
The marriage comes to an end
The parties separated on August 13, 2012, at which time the husband moved out of the matrimonial home. The wife provided him with $1,600 to help with the first and last month’s rent on an apartment, instructing him he could expect nothing further. It was after the separation that the husband sought legal advice and negotiations to end the marriage began. However the husband, who has mental health problems, experienced a setback in the spring of 2013. He abandoned the negotiations at that time. In 2015 his lawyer wrote to the wife’s lawyer asking whether they would accept documents on her behalf, but they said they were no longer retained. It was not until August 24, 2017 that an application for spousal support and equalization of net family property was made. The wife argued that the husband’s claim to set aside the marriage contract was statute barred pursuant to the Limitations Act, which sets the limitation period at two years.
The court’s analysis
The court agreed that the husband’s application was indeed subject to a two-year limitation period. However, when that two-year clock started ticking still had to be determined since the clock is only supposed to start ticking once the claim was discovered.
The date of discovery can be established by determining when the husband knew he had suffered some loss as well as when he became aware that a legal proceeding was the most appropriate way to find resolution.
The court determined that the date of discovery was in 2012 when the husband went to visit his lawyer to begin divorce negotiations. As a result the two-year limitation period had long since lapsed.
At Gelman & Associates, we can help you draft a marriage contract, or enforce a pre-existing agreement. Contact us todayto learn how a marriage contract drawn up by experienced family law lawyers can help protect your rights and assets upon separation. In order to be available to clients and prospective clients, our phone lines are open Monday to Friday from 8 AM to 8 PM. Call us at (844) 769-0737 or 1-844-769-0737 or contact us online for a confidential initial consultation.
