Family Law Act Variation of Agreements by the Court

Family Law Act

Cohabitation Agreements are not 100% certain and there are provisions within the Family Law Act which allow the court to vary or set aside Agreements.

Sections 93(3) and (5) and 164(3) and (5) of the Family Law Act deal with setting aside agreements:

Setting Aside Agreements Respecting Property Division

93 (3) On application by a spouse, the Supreme Court may set aside or replace with an order made under this Part all or part of an agreement described in subsection (1) only if satisfied that one or more of the following circumstances existed when the parties entered into the agreement:

1. a spouse failed to disclose significant property or debts, or other information relevant to the negotiation of the agreement;
2. a spouse took improper advantage of the other spouse’s vulnerability, including the other spouse’s ignorance, need or distress;
3. a spouse did not understand the nature or consequences of the agreement;
4. other circumstances that would, under the common law, cause all or part of a contract to be voidable.

93 (5) Despite subsection (3), the Supreme Court may set aside or replace with an order made under this Part all or part of an agreement if satisfied that none of the circumstances described in that subsection existed when the parties entered into the agreement but that the agreement is significantly unfair on consideration of the following:

1. the length of time that has passed since the agreement was made;
2. the intention of the spouses, in making the agreement, to achieve certainty;
3. the degree to which the spouses relied on the terms of the agreement.

Setting Aside Agreements Respecting Spousal Support

164  (3) On application by a spouse, the court may set aside or replace with an order made under this Division all or part of an agreement described in subsection (1) only if satisfied that one or more of the following circumstances existed when the parties entered into the agreement:

1. a spouse failed to disclose income, significant property or debts, or other information relevant to the negotiation of the agreement;
2. a spouse took improper advantage of the other spouse’s vulnerability, including the other party’s ignorance, need or distress;
3. a spouse did not understand the nature or consequences of the agreement;
4. other circumstances that would under the common law cause all or part of a contract to be voidable.

164 (5) Despite subsection (3), the court may set aside or replace with an order made under this Division all or part of an agreement if satisfied that none of the circumstances described in that subsection existed when the parties entered into the agreement but that the agreement is significantly unfair on consideration of the following:

1. the length of time that has passed since the agreement was made;
2. any changes, since the agreement was made, in the condition, means, needs or other circumstances of a spouse;
3. the intention of the spouses, in making the agreement, to achieve certainty;
4. the degree to which the spouses relied on the terms of the agreement;
5. the degree to which the agreement meets the objectives set out in section 161 [objectives of spousal support].

The factors a court will consider are as follows:

1. Procedural fairness when the document was signed.
2. Whether the Agreement is “significantly unfair” having regard to the criteria set out in sections 93(5) and 164(5).

Because one of the criteria the Court will consider is the length of time that has passed since the agreement was made, Cohabitation and Marriage Agreements should provide for a review every few years (i.e. 2 to 5 years). This review is important and should be documented to record any negotiations which take place at that time. Each party should obtain independent legal advice when the review is being done and either a new Agreement should be signed or a one page Memorandum of Agreement should be signed to provide evidence of the review.

Another criteria is any changes since the agreement was made in the condition, means, needs or other circumstances of a spouse. If there is significant change in either spouse’s circumstances the agreement should be reviewed at that time, legal advice should be obtained and a Memorandum of Agreement should be signed which sets out the discussions or any changes to the agreement.