International and Out-of-Province Marriage Contracts: Are They Enforceable under Ontario Family Law?

 By: Nikki Pangilinan and Kaitlyn Matthews

Before marriage, prospective spouses may enter into what is commonly known as a “prenup” or “prenuptial agreement” to define their rights and obligations in the event of a breakdown in their relationship. In Ontario, this type of agreement is legally known as a marriage contract. By entering into a marriage contract, prospective spouses may address certain issues in advance, such as how property will be divided and whether or not spousal support will be payable. Entering into a marriage contract allows prospective spouses to tailor an agreement unique to their circumstances and create greater certainty for the future. While the law in Ontario generally allows individuals to arrange their family affairs by contract, there are limits on what provisions are recognized and enforceable in Ontario – even where the contract is otherwise considered valid in a jurisdiction outside of Ontario.

What does the Ontario Family Law Act say about foreign marriage contracts?

A marriage contract is a type of “domestic contract.” Section 58 of the Ontario Family Law Act states that the essential validity and effect of a domestic contract are governed by the proper law of the contract – either chosen by the parties, or if the contract is silent on what the proper law is, then the law most closely connected to the contract. For example, if parties entered into a marriage contract in New York, the proper law is the law in the jurisdiction of New York. The out-of-jurisdiction contract will only be enforceable in Ontario, however, if the contract is entered into in accordance with Ontario’s internal law. Particularly, section 55 (1) of the Family Law Act provides that a contract is enforceable in Ontario if it is:

1. in writing;
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2. signed by both parties; and
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3. witnessed [1].

Even if these terms are met, a marriage contract may still be set aside under section 56(4) of the Family Law Act, if:

• a party did not disclose significant assets, debts or liabilities that existed when the contract was made;
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• a party did not understand the nature and consequences of the contract; or
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• the contract is not valid under general contract law principles, such as if a party signed the contract under duress [2].

Further, the law in Ontario places limits on the types of issues that parties may address in a marriage contract. If a marriage contract entered into outside of Ontario addresses issues outside of the scope of what Ontario law permits, then those parts of the contract maybe set aside.  

Parenting Time and Decision-Making

Section 58 of the Family Law Act states that a provision in a marriage contract regarding the right to decision-making responsibility or parenting time is not enforceable in Ontario [3]. It does not matter where the parties made the contract or what the proper law of the contract allows. In Ontario family law, the “best interests of the child” test is the primary legal test courts use to determine decision-making and parenting time issues, consistent with section 24 of the Children’s Law Reform Act and section 16 of the Divorce Act [4].

Therefore, provisions in marriage contracts related to parenting time and decision-making authority are generally not enforceable. Ontario courts have the power to override most of these provisions based on the child’s best interests. The rationale is that children are not parties to the agreement, and their circumstances, needs, and relationships may change over time. Allowing parents to permanently determine these issues through contract could prevent the court from responding to what is in the child’s best interests in the future.

Child Support

Child support is the right of the child, and the Court has an obligation to ensure reasonable arrangements have been made for a child’s continued financial support.

As a result, while parties may agree to terms regarding child support in a marriage contract, those provisions cannot override the court’s obligation to ensure that child support is consistent with the child’s best interests and the applicable Child Support Guidelines [5]. Even where a contract is otherwise valid, child support remains subject to review and variation. Under section 17 of the Divorce Act and section 37of the Family Law Act, courts retain the authority to vary child support where circumstances change or where the existing arrangement no longer reflects the child’s needs or entitlement [6].

Similarly, when a party has stood in loco parentis (which means in the place of a parent) to a “stepchild,” a provision in a marriage contract denouncing they are in loco parentis may not be enforceable. Whether a person stands in loco parentis does not depend merely on what is written in a contract, but rather on the actual nature of their relationship with the child, including an assessment of the circumstances and whether the purported parent has been holding themselves out to be the parent of the child.

Spousal Support

Unlike child support terms, spousal support terms in out-of-jurisdiction marriage contracts are generally more likely to be recognized and enforced by Ontario courts. These terms must, however, still meet the minimum statutory requirements under the Family Law Act and the Divorce Act. The terms must also be consistent with the principles set out in, Miglin v Miglin, 2003 SCC 24 (CanLII), [2003] 1 SCR 303, which is the leading case on the treatment and enforceability of spousal support terms in domestic contracts.

Although a claim for spousal support by married spouses may be determined under the federal Divorce Act, the validity and enforceability of a marriage contract is governed by provincial law. So, the Court will turn to both the Family Law Act and the Divorce Act to determine whether the marriage contract, or a provision of it, should be set aside.

Section 33(4) of the Family Law Act allows the court to set aside a provision for spousal support or a waiver of the right to spousal support, even if the contract contains an express provision excluding the application of these spousal support sections if:

• the provision results in unconscionable circumstances;
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• the provision for spousal support is in favour of, or the waiver is by or on behalf of a dependent who qualifies for an allowance for support out of public money; or
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• if there is default in the payment of support under the contract at the time the application is made. [7]

Further, a two-stage analysis must be considered, pursuant Miglin v Miglin:

• at the first stage of the analysis, the court will consider whether the circumstances surrounding the negotiation and execution of the agreement were fair and free of any coercion, undue influence or power imbalances; and whether the parties fully understood the agreement and exchanged all relevant disclosure; and
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• at the second stage of the analysis, the Court will consider whether the substance of the agreement substantially complies with the legislation and whetherthe agreement continues to reflect the parties’ original intentions. [8]

An example of an Ontario court considering spousal support provisions contained in an out-of-jurisdiction marriage contract is Murray v. Choudhary, 2021 ONSC 883 [9]. In Murray, the Applicant Wife and Respondent Husband initially lived in Virginia and Quebec, respectively, prior to getting married in Jamaica while on holiday. The Wife later moved from Quebec to Kanata, Ontario, which is why this matter was heard in Ontario. While the parties were in Jamaica, the parties entered into a “prenuptial agreement,” including terms that the parties were to be separate as to property and that in the event of separation, there will be no spousal support paid, except if one party suffers a medical disability.

The Wife sought orders to enforce the property provisions of the agreement and an order that the Husband be precluded from advancing any spousal support claims against the Wife at any time, regardless of any material changes. While the agreement was a valid and enforceable contract in Jamaica, the Court held that the spousal support release provision did not preclude the Husband seeking spousal support in the future under the Divorce Act [10]. In addition, the wording of the agreement was inconsistent and unclear.  One section of the parties’ agreement allowed spousal support claims in specific circumstances (i.e., spousal support would only be payable in the event one party suffers from a medical disability, and the other party is physically able and employed) and another section waived all spousal support claims. While the Court ultimately barred the Husband from advancing a spousal support claim until he satisfied his costs awards and arrears owing to the Wife -  this case highlights the importance of drafting clear spousal support release provisions.

Property

The caselaw establishes that there is a high threshold for finding that property provisions in an out-of-jurisdiction contract prevail over the Family Law Act’s equalization provisions [11].So, out-of-jurisdiction contracts must contain the requisite language and releases pursuant to Ontario’s internal law, to make the parties’ intentions with respect to their property abundantly clear.

An example of where an Ontario Court considered property terms in an out-of-jurisdiction marriage contract is in Torgersrud v. Lightstone, 2023 ONCA 580. In this case, the Appellant Husband sought to appeal the lower court’s decision setting aside the parties’ Quebec marriage contracts. [12]

The parties lived in Quebec, where they married and entered into two marriage contracts: the first mainly protected the Appellant Husband’s business interests, while the second opted them out of Quebec’s “family patrimony regime,” which is similar to Ontario’s equalization regime. The contracts provided that the parties are to be “separate as to property,” which, under Quebec law would result in no division of assets or transfer of value on separation. After six years of marriage, the parties moved to Ottawa and later separated there. The Wife claimed equalization under Part I of Ontario’s Family Law Act. The Husband argued that the Quebec marriage contracts ousted the Family Law Act equalization regime.

Although expert evidence from Quebec legal practitioners demonstrated that the property provisions would have been enforceable in Quebec, the Ontario Court of Appeal upheld the trial judge’s finding that the words “separate as to property” were not sufficient to oust Ontario’s equalization scheme. The marriage contracts did not include any renunciation, releases, or waivers, and did not otherwise “deal with” or release equalization claims. In the alternative, the trial judge held that she would have set aside the contracts because there was a lack of full financial disclosure. The Court found no error in the trial judge’s decision to set aside the marriage contracts and dismissed the Husband’s appeal.

Recommendations

Parties who relocate to Ontario with an existing international or out-of-province “prenuptial agreement” or marriage contract should consider taking steps that may strengthen the enforceability of their foreign contract or reduce the risk that it will be set aside. The following steps should be considered:

• Carefully review the agreement with an experienced family law lawyer to confirm itcomplies with Ontario’s legal requirements.
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• Exchange updated financial disclosure if the original disclosure was incomplete.
  
  • In Ontario, parties should exchange comprehensive financial disclosure as at the date of marriage and up-to-date financial disclosure. Not all jurisdictions have this requirement. For example, France, Belgium and the Netherlands do not have similar financial disclosure requirements to Ontario. Where a contract has been entered into in one of these jurisdictions, financial disclosure exchanged should be reviewed to determine if it meets Ontario’s requirements.
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• Consider obtaining independent legal advice if either party did not receive it previously.  
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• Consider amending the contract to use clear language that explicitly addresses Ontariostatutory rights.
  
  • Avoiding ambiguous and unclear language is crucial. For example Torgersrud highlight the difficulties that arise when a marriage contract does not use such language to express the parties’ intentions in line with Ontario statutory requirements.
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• Consider drafting a new contract under Ontario law.
  
  • In some cases, this may be the best step, particularly in cases that involve material lack of disclosure, ambiguous or unclear language, or a concern that the circumstances surrounding the execution of the contract could point to a lack of understanding of the consequences. A properly drafted Ontario agreement provides greater certainty and reduces the likelihood of future disputes.

These recommendations are not exhaustive but rather represent key considerations for parties residing in Ontario with an international or out-of-province marriage contract. Each family’s circumstances are unique, and the appropriate approach will depend on the specific facts of the case.

Conclusion

If you have an international or out-of-province marriage contract and either currently reside in Ontario or are planning to move to Ontario, it is important to seek legal advice from an experienced family law lawyer in Ontario to ensure your agreement will be recognized and enforceable in Ontario. An Ontario family lawyer can review your agreement, explain how Ontario law may apply, and advise you of any steps that may be necessary to protect your interests in the specific circumstances of your case.

This blog is intended to provide legal information only. This blog does not provide legal advice. If you need advice, contact us or another experienced family law lawyer.

References

[1] Ontario Family Law Act, RSO 1990, C F 3, s 55(1).

[2] Ontario Family Law Act, RSO 1990 C F 3 s 56(4).

[3] Ontario Family Law Act, RSO 1990, C F 3, s 58.

[4] Ontario Children’s Law Reform Act, R S O 1990, C 12, s 24; Divorce Act, RSO 1985 C 3,s 16.

[5] Child Support Guidelines, O Reg 391/97.

[6] Divorce Act, RSO 1985 C 3,s 17; Ontario Family Law Act, RSO 1990 C F 3 s 37.

[7] Ontario Family Law Act, RSO 1990 C F 3 s 33(4).

[8] Miglin v Miglin, 2003 SCC 24 (CanLII), [2003] 1 SCR 303.

[9] Murray v. Choudhary, 2021 ONSC 883.

[10] Murray v. Choudhary, 2021 ONSC 883, at paras 7- 8 and 54.

[11]Torgersrud v. Lightstone, 2023 ONCA 580, at para. 6.

[12]Torgersrud v. Lightstone, 2023 ONCA 580.

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