The parties were married in 2012 and separated in 2019. The wife in this case was the sole owner of a home prior to marriage. After the parties married, the husband proceeded to move into the home owned by the wife. This home inevitably became the matrimonial home of the parties. In 2016, the parties entered into a marriage contract to which the husband had received independent legal advice. In this contract, there was a property section that dealt with the solely owned property of the wife which stated the husband, despite the property being designated a matrimonial home, he did not have any interest in it. There was an express exclusion of this property from any division of property or equalization calculation. The contract explicitly ensured the exclusion of the proceeds of the sale of the property from being included in any equalization in the future, even if the funds were put into a subsequent property.
The property was sold and the parties jointly purchased a new home with the proceeds from the sale of the first property. Following separation, the husband made a claim for equalization and for unjust enrichment. He wanted the court to set aside the marriage contract on the basis that he has not received full and proper independent legal advice and that the wife did not provide the necessary disclosure to show the exact value of the property prior to signing the contract. Citing the fact that the husband had obtained independent legal advice and that she had disclosed the fact that she owned the property, the wife argued that the contract should stand.
In assessing whether to set the marriage contract aside, the judge examined section 56(4) of the Family Law Act, which provides criteria for setting aside a domestic contract. The judge then outlined the two-step process established by case law. First, the party seeking to set aside the contract must show that one of the circumstances in s. 56(4) has been engaged. Second, the court must consider whether it is appropriate to exercise its discretion to set aside the agreement or a provision within it. Citing s. 56(4) the husband claimed lack of disclosure by the wife regarding the value of the property and that he had inadequate independent legal advice. The court cited case law which explained that adequate disclosure of assets is necessary to uphold a marriage contract, but the value of the asset does not necessarily need to be disclosed.
The judge noted that a party cannot enter into a marriage contract knowing there could be shortcomings in the disclosure beforehand and claim these shortcomings as a tactic to have the contract set aside. In this case, the husband could have inquired as to the value of the home, as he was living in it, but chose not to prior to signing the contract. Here it was not necessary for the wife to disclose the exact value prior to the parties signing the marriage contract. The court reviewed the husband’s argument that the legal advice he was given was inadequate. As the husband did not produce any documentation which could point to this except for the Certificate of Independent Legal advice which the husband signed, section 56(4) could not be used to void the marriage contract. Therefore, the court decided there was no issue requiring trial. The husband attempted to make a third argument which he claimed he was under influence or duress at the time of signing, the court concluded that this was simply a case of regret on the part of the husband and that the marriage contract was to be of full force and effect.
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