What Does Significantly Unfair Mean for a BC Marriage Agreement?

You signed a marriage agreement, prenup or separation-type agreement, and now one of you thinks it no longer works. Maybe you want out of it. Maybe you are the one trying to hold your spouse to it. Either way, you have probably seen the phrase "significantly unfair" and wondered what it actually requires.

This article explains where that test sits in the British Columbia Family Law Act, which factors the Act lists, and how it differs from the more familiar grounds such as hidden assets. It is general information only. Whether a particular agreement would survive depends on the facts, so a lawyer should look at your documents.

This article covers the law of British Columbia.

Two doors to challenging an agreement

The Family Law Act gives the Supreme Court two different routes for reviewing a written property agreement that each spouse signed in front of a witness. The first route is a list of specific circumstances. The court may set aside or replace all or part of the agreement on a spouse's application only if one of those circumstances existed when the agreement was made.

• A spouse failed to disclose significant property or debts, or other information relevant to negotiating the agreement.
• A spouse took improper advantage of the other spouse's vulnerability, including ignorance, need or distress.
• A spouse did not understand the nature or consequences of the agreement.
• Other circumstances existed that would make all or part of a contract voidable under the common law.

The second route is the significantly unfair test. Even where none of those circumstances existed when the agreement was made, the Supreme Court may set aside or replace all or part of a property agreement if it is significantly unfair. This is the door people use when nothing improper happened at signing but the result, viewed later, is hard to defend.

The factors for a property agreement

For property agreements, the Act names three factors the court considers when it decides whether an agreement is significantly unfair.

• The length of time since the agreement was made.
• The spouses' intention, in making it, to achieve certainty.
• The degree to which the spouses relied on its terms.

In plain words, the Act points the court toward finality. A long-standing agreement that both people planned their lives around, and that was meant to settle things for good, is harder to undo than a recent one that nobody has acted on. The listed factors do not include a change in either spouse's circumstances; that factor appears only in the spousal support version of the test.

The factors for a spousal support agreement

Spousal support agreements have their own set-aside rules. If no listed circumstance existed at signing, the court may still set aside or replace all or part of a spousal support agreement, including a waiver, if it is significantly unfair. It considers five factors: the time that has passed, changes since the agreement in a spouse's condition, means, needs or other circumstances, the spouses' intention to achieve certainty, their reliance on its terms, and the degree to which the agreement meets the objectives of spousal support.

Those objectives are to recognize economic advantages or disadvantages to the spouses, apportion the financial consequences of child care, relieve economic hardship from the breakdown, and, as far as practicable, promote each spouse's economic self-sufficiency within a reasonable period.

Limits on what the court will do

Proving a problem does not automatically end an agreement. For property agreements, the court may decline to act, even where a listed circumstance is proven, if on all the evidence it would not replace the agreement with an order substantially different from the agreement's terms. Spousal support agreements have a similar safeguard.

Witnessing also matters. The set-aside regime applies to a written agreement with each spouse's signature witnessed by at least one other person, and the same person may witness both signatures. An unwitnessed signed agreement is not automatically void, because the court may apply the same rules to it if that is appropriate in all the circumstances, but it is not clearly within the protected regime. The same idea applies to spousal support agreements.

What to do next

Whether you want to challenge an agreement or defend one, start by pulling together the facts a court would look at. A lawyer can then tell you how the factors may apply to your situation.

• Find the signed agreement and check whether each signature was witnessed.
• Note the date it was signed and what has happened since.
• Write down what each of you knew about assets, debts and income when you signed.
• List how each of you has relied on its terms, such as buying property or changing careers.
• Record any changes in health, income or caregiving since the agreement was made.
• Keep in mind that the Province's guidance advises getting legal advice before making any final decisions about dividing property and debt.

Frequently asked questions