Law Times

Page 12 November 13, 2017 • Law Times www.lawtimesnews.com Litigants face battles over domestic contracts BY MICHAEL MCKIERNAN For Law Times A recent Ontario Appeal Court judgment sug- gests litigants face an uphill battle to overturn domestic contracts, according to lawyers at some of the province's family law boutiques. In Smith v. Smith, a unani- mous three-judge panel of the province's top court rejected a woman's attempt to have her 20-year-old cohabitation agree- ment — which waived any claim for spousal support — set aside. That was despite evidence that she signed the document without independent legal advice and had incomplete financial disclosure from her former part- ner, two factors that have formed the traditional bedrock of a suc- cessful challenge to prenuptial agreements, according to Russell Alexander, a Lindsay, Ont.-based family lawyer. "Lack of legal advice and im- proper or misleading financial disclosure used to be pretty good grounds to attack these types of agreement, but this decision suggests that they won't always carry the day anymore, and you're going to need some really exceptional facts to get them set aside at trial," says the principal at Russell Alexander Collaborative Family Lawyers. "The pendulum appears to have swung toward holding people to their contracts. If you had a chance to get a law- yer, you could be stuck with the bargain you made." Paul Marshall, the Oakville, Ont. lawyer who acted for the appellant in the case, says the appeal court's decision brings the concept of "buyer beware" to family law. "From what I have witnessed in this decision, courts are in- clined to uphold the private agreements of the parties in- volved, and they are reluctant to intervene," says Marshall, of the firm Marshall Kirewskie Law- yers. "If you're entering into an agreement of this nature, then you must be vigilant. It would behoove one to have a lawyer involved, and to ensure that full disclosure is obtained." If disgruntled spouses have a difficult time convincing a trial judge to let them renege on a do- mestic contract, then Alexander says it'll take a Herculean effort to overturn an unfavourable trial judgment on appeal. "You need to take a long hard look before deciding to appeal, because it's a much tougher stan- dard now with this decision out there. If we see similar cases being appealed in the next year or two, I think they'll be dealt with quite summarily with this precedent in place," he says. "The Court of Appeal is telling us that they will defer to a trial judge's discretion, and not interfere with it lightly. A lot of these cases are fact driven, so the judge who hears the case is the one in the best position to determine the facts." Alexander says the signal by courts that they will show a high level of deference toward con- tracts and trial court findings may be motivated in part by a desire to discourage people from turning to the courts to settle their family law disputes. "They seem to be holding people to their agreements as long as they're reasonably fair, even when it seems, on the face of it, that there may be some un- fairness," he says. "It could be a resource-based analysis. We have lots of unrepresented people in this area and a huge backlog in the court system." According to the appeal court decision, the Smith case dates all the way back to March 1997, when Denise and Johnny Smith moved in together before their eventual marriage. Johnny Smith was coming off a previous ugly separation, and he wanted to pre- vent a repeat occurrence, so he insisted on a cohabitation agree- ment before the pair could con- tinue with the relationship and buy a house together. He had the agreement drafted and presented it to Denise Smith, who was given a chance to get independent legal advice. How- ever, she failed to take up the op- portunity of consulting a lawyer before signing the agreement in October 1997. Sixteen years later, when the couple separated, the key passage would relate to spousal support. In the meantime, the pair had married and had two children, but the agreement barred either of the Smiths from making a claim for "interim or permanent support or maintenance." Both parties acknowledged in the contract that they were "self- supporting or fully capable of be- FAMILY LAW BOUTIQUES David Frenkel says lawyers should still take care to inform clients that there are no guarantees when it comes to domestic contracts. Integrated Legal Marketing Solutions LawyerMarketingCanada.com/solutions Put Your Digital Marketing Tactics into High Gear Untitled-1 1 2017-11-07 8:51 AM Untitled-1 1 2017-11-08 4:19 PM See Move, page 13 From what I have witnessed in this decision, courts are inclined to uphold the private agreements of the parties involved, and they are reluctant to intervene. Paul Marshall

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