Marriage Contract Upheld

Ward v. Ward is an important family law decision upholding domestic contracts entered into by separating parties.  In this case, the husband and wife married in 1988 and separated in 2005.  The husband was a doctor in Ontario and the wife was employed as an x-ray technologist at the local hospital.  Prior to their marriage, the parties entered into an agreement whereby the husband’s pre-marriage property was precluded from equalization in the event that the two separated in the future.  While this contract was raised by the husband during the trial, the validity of this agreement was never called into question.

The issue arose with respect to a second agreement that the parties entered into post-separation.  Following the dissolution of their marriage, the parties took part in the collaborative family law process in an effort to resolve the issues arising from their separation.  Financial disclosure was not exchanged by the parties, and the figures used for the purposes of negotiation were prepared by Mr. Wetstein, a chartered accountant with experience in family law matters, who was also a business partner of the husband and the accountant for the husband’s medical practice.

During their eighth collaborative meeting the parties reached a resolution, the terms of which were set out in a Memorandum of Agreement (“MOA”).  The MOA was duly executed by the parties and each party’s signature was witnessed by his or her respective counsel.  The MOA were hand-written by counsel and the preamble of the MOA specified that the terms were subject to counsel “working out a separation agreement with satisfactory language.”  Among the terms of the MOA, the husband was to pay the wife a payment of $250,000.00.  The latter payment was made by the husband and accepted by the wife in a timely fashion.  However, the wife ultimately initiated a proceeding seeking to set aside the MOA.

At trial, it was decided that the MOA was no more than an outline for a binding separation agreement and that much more information was required to form a binding agreement.

At appeal, the husband argued that that the trial judge erred in determining that the MOA did not constitute a valid agreement and sought a declaration that the MOA was a final and binding agreement.

On appeal, the judge rejected the wife’s claim that as a result of her depression and the pressure resulting from the need for financial support, she was unable to appreciate the nature and consequences of the MOA.  On the contrary, the appeal judge found that with representation by experienced family law counsel, there was an increased likelihood that the wife was able to appreciate the details of the MOA even more.  Further, the wife’s argument that the lack of financial disclosure rendered any agreement made with respect to finances in the MOA unenforceable was rejected on appeal as the collaborative process did not mandate the exchange of sworn financial statements.  In addition, the appeals judge found that the detailed net family statement prepared by the husband’s accountant which was relied on by all parties’ throughout negotiation as well as the financial disclosure the husband made with respect to his income from 2000 to 2004 was sufficient for the purposes of these negotiations.  Further, the MOA took into consideration any future fluctuations and contained provisions which allowed for future negotiations with respect to the review of child and spousal support.

Essentially, the husband’s appeal was allowed on the ground that the parties executed the MOA on the basis that the document contained the essential terms of an agreement.  Further, since the parties started to execute the terms of the agreement, their actions furthered the husband’s position that the MOA was intended to be binding and final agreement and should be upheld as such.  Essentially, the appeal decision in this case upholds the meaning of the old time proverb “If it walks like a duck, quacks like a duck, looks like a duck, it must be a duck”.

Andrew Feldstein

The Feldstein Family Law Group (FFLG) is one the largest family law firms that practices Family Law exclusively in Greater Toronto, with ten lawyers and counting. The boutique law firm has won the Top Choice Award for Family Law™ in Toronto for the past eleven years (2007 to 2017 inclusive).

Managing Partner Andrew Feldstein has been practicing family law for more than 20 years and frequently comments on Family Law issues through the media. The Feldstein Family Law Group offers vast written, video, and media resources on its website to those who find that they need to end their relationship.

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