Marriage Contract Amendment Dispute Sees Wife Awarded Interim Costs

Written on behalf of Arbesman Hamilton LLP

A marriage agreement, often referred to as a prenuptial agreement or “pre-nup” are agreements made between couples prior to their marriage. They can be an effective way to protect one another’s assets and interests in the unfortunate event of a relationship breaking down. Marriage contracts often specify what happens to a couples’ assets upon separation. They can also discuss issues such as spousal support . Ideally, they also serve to help clients avoid conflict and litigation. However, as seen in a recent decision from the Ontario Superior Court of Justice, even the best intentions to avoid litigation don’t always succeed.

The parties’ history

The couple started living together in 2008. They got married in 2011, signing a marriage contract the day before the wedding. Both parties had legal advice and provided financial disclosure. The contract provided that neither party would be responsible for spousal support and it also set aside certain assets as matrimonial, leaving others alone.

A new marriage contract as presented to the wife in March 2017. In addition to releasing the husband from spousal support, it also provided a clause leaving him with the matrimonial home, stating the wife “made no financial contribution to the building of the matrimonial home or payment of the mortgage.” The wife signed the order, though she did not obtain legal advice and there was no financial disclosure provided.

The wife testified that the marriage had begun to break down in 2017, prior to the signing of the second marriage contract. She alleged the husband had become increasingly abusive by that point. She brought an action against the husband claiming the second agreement was forced on her and sought to have the agreement set aside as unconscionable. Prior to the hearing about the amended agreement, the wife brought a motion for advanced payment of interim costs and disbursements, stating she was out of money, with the separation leaving her with only her $200,000 in RRSPs.

The court’s analysis

The court noted that the provinces Family Law Rules allow the courts to make such orders. The Act states, “The court may make an order that a party pay an amount of money to another party to cover part or all of the expenses of carrying on the case, including a lawyer’s fees.” A leading 2001 decision from the Ontario Supreme Court identified seven “themes” concerning the granting of interim disbursements. They are:

  • The ordering of interim disbursements is discretionary;
  • The claimant must demonstrate that the interim disbursements are necessary to pursue her case.  She must, according to Rogers J., “demonstrate that absent the advance of funds for interim disbursements, the claimant cannot present or analyse settlement offers or pursue entitlement.”
  • The interim disbursements must be shown to be necessary;
  • The claim advanced must be meritorious;
  • The exercise of discretion should be limited to exceptional cases;
  • Interim costs are for the purpose of leveling the playing field;
  • Monies may be advanced against an equalization payment.

The wife was asking for $150,000, and the court agreed to award her an advance of $40,000, stating that the threshold to the wife had to demonstrate had been met, being she was able to show it was reasonable for someone of modest means to spend legal fees on the case. The husband had agreed that his $1,000,000 in RRSPs were his only significant asset, the court responded that it wasn’t fair that he shouldn’t have to dip into his savings if the wife was being forced to do the same.

At Arbesman
Hamilton LLP
 in Toronto, our family lawyers can review a
pre-existing marriage agreement or draft a new agreement. We will also fight to
enforce marriage contracts if necessary and help you secure what you are
entitled to. We are dedicated to protecting you and your assets, and helping
you plan for your new life. Contact us online or at 416-481-5604 to
book a consultation.