Separation agreements are a cornerstone of family law. When spouses separate, a well-drafted agreement can provide certainty, reduce conflict, and allow both parties to move forward. But what happens when one party later wants to set the agreement aside?
The short answer is, sometimes, but only in limited circumstances. British Columbia courts place significant weight on the finality of negotiated agreements. However, the law also recognizes that not every agreement is made on a level playing field.
Courts Respect Negotiated Agreements
Courts begin from the principle that adults who negotiate and sign separation agreements should generally be held to their bargains. Both the Family Law Act and the Divorce Act contemplate that agreements between spouses carry significant weight, and courts will respect that intention where the agreement was fairly negotiated. That said, agreements are not immune from scrutiny, and the court retains the authority to set aside or vary an agreement where it is found to be significantly unfair.
What Courts Look At: Procedural and Substantive Fairness
When a party asks the court to set aside a separation agreement, the court examines two broad categories of fairness: how the agreement was made (procedural fairness) and what the agreement actually provides (substantive fairness).
On the procedural side, courts ask whether both parties had access to independent legal advice, whether there was full financial disclosure, whether either party was subjected to duress or coercion, and whether both parties had a reasonable opportunity to understand the terms before signing.
On the substantive side, courts consider whether the agreement substantially complies with the objectives of the legislation, whether the support provisions are grossly inadequate or excessive, and whether the agreement reflects the parties’ actual financial circumstances.
Key Factors the Court Will Consider
Independent Legal Advice is one of the most important factors. When a party has had the benefit of a lawyer reviewing the agreement on their behalf, it becomes significantly more difficult for that party to later argue they did not understand the terms or were pressured into signing. The absence of independent legal advice does not automatically invalidate an agreement, but it is a factor that weighs in favour of setting it aside.
Financial Disclosure is equally critical. Both parties must have a clear understanding of the other’s financial circumstances to make informed decisions about support and property division. Where a party has failed to disclose significant assets, income, or liabilities, the court may find the agreement was not fairly negotiated, even if the terms appear reasonable on their face.
Duress and Coercion will also undermine an agreement. In S.L.C. v. C.J.R.C., 2014 BCSC 1814, for example, the court found that the husband’s conduct coerced the wife into signing the separation agreement, and the court set the agreement aside entirely. However, the threshold is high. Mere unhappiness with the terms, or regret about having signed, will not be enough. The party must show their consent was genuinely compromised.
Finally, even a fair agreement may be revisited if circumstances have changed dramatically since it was signed, particularly with respect to child support, which is the right of the child and must reflect the payor’s actual income.
Protecting Yourself
The best way to ensure a separation agreement will withstand a future challenge is to obtain independent legal advice, make full financial disclosure, negotiate in good faith, and ensure the terms are reasonable. An agreement that is transparent, fair, and entered into voluntarily is one the courts will uphold.