Can a Separation Agreement Be Set Aside in Ontario? The Grounds

You signed a separation agreement, and now it feels unfair, incomplete or simply wrong. Maybe you later learned about an account you did not know existed, or you signed because you felt you had no choice. You may be wondering whether the agreement is the end of the story.

In Ontario it is not always final, but undoing it is hard. This article explains the checks a court makes, the grounds for setting an agreement aside, the separate rules for children and support, and what helps prevent the problem in the first place.

Start with the basics: is the agreement valid at all?

A separation agreement is a kind of domestic contract. It can be made by two people who lived together and are now living separate and apart, whether they were married or not.

A domestic contract is unenforceable unless it is in writing, signed by the parties and witnessed. A separation agreement that is not signed and witnessed as the Act requires may be unenforceable, and a court will relax the witness requirement only in limited circumstances. Family Law Act sections 54 to 56 set out the basic requirements for a court to recognize and enforce a separation agreement.

So the first question is simple: was your agreement written, signed by both of you and witnessed? If not, you may not need to set it aside at all, because it may not be enforceable in the first place. A lawyer can confirm how that applies to your document.

The three grounds in Family Law Act s. 56(4)

If the agreement meets the formal requirements, a court may still set aside the whole agreement or a provision in it in three situations:

• A party failed to disclose significant assets, or significant debts or other liabilities, that existed when the contract was made.
• A party did not understand the nature or consequences of the contract.
• Otherwise in accordance with the law of contract.

The third ground points to the ordinary law of contract, so how it applies depends on the facts. Ontario guidance says each person should understand the terms of a binding separation agreement and should not be pressured to sign, and that an agreement can be challenged in court if those conditions are not met. Whether pressure or a lack of understanding amounts to a legal ground in your situation is worth confirming with a lawyer.

The two-stage test and why disclosure matters

Proving one of the grounds does not automatically end the agreement. The Court of Appeal for Ontario applies a two-stage test. First, one of the listed circumstances must be engaged. Then the court decides whether it is appropriate to use its discretion to set the agreement, or a provision in it, aside, and fairness is a relevant consideration at that stage.

Disclosure carries a lot of weight. The Court of Appeal has said that financial disclosure is a paramount consideration under Ontario's regime, and that the spouse who holds the assets is responsible for disclosing and valuing them. In family court, financial disclosure means giving the other party and the court information and documents about income, expenses, assets and debts.

Not every case needs a formal financial statement. Some cases, such as certain child support cases where only the table amount is claimed, do not require one. Still, if your agreement divided property or set support, a gap in the other person's disclosure is worth raising early.

Ontario guidance warns that it can be difficult to get a court to set aside a separation agreement. Support waivers are treated separately, because a court may set aside a waiver of the right to support that results in unconscionable circumstances even if the contract says otherwise. In one case the Court of Appeal upheld a decision not to set aside a spousal support waiver in a cohabitation agreement, because there was no finding that the parties failed to understand or intend the waiver, which set it apart from the property clauses that were set aside.

Terms that can be challenged by a separate route

A court has extra power over children and support, even when the agreement says otherwise.

For spousal support waivers, the Court of Appeal treats the power to set aside an unconscionable waiver as part of a spousal support application, and has noted that the Family Law Act sets no limitation period for that relief.

If you divorce, the divorce court also looks at the agreement when making a spousal support order. An existing agreement about support is one factor the court considers, but it does not bind the court.

Preventing the problem and what to do next

If you have not signed yet, much of this can be avoided. Ontario guidance says you do not need a lawyer to make a separation agreement, but legal advice before signing is a good idea because it can be difficult to get a court to set an agreement aside. Each spouse should have their own lawyer review it, since the agreement cannot easily be changed later.

• Ask for full financial disclosure and review it before you sign, including assets, debts and income.
• Do not sign until you understand each term and what it means for you.
• Get your own legal advice rather than sharing a lawyer with your spouse.
• Do not sign under pressure; ask for time instead.
• Make sure the signing is in writing and witnessed.

If you have already signed, gather the agreement, any financial statements or documents exchanged, and anything showing what you knew when you signed. Note when and how you learned of any problem, and speak with a family lawyer promptly. Whether a ground applies, and whether a court would use its discretion, depends closely on your facts.

Frequently asked questions