Entitlement to $8 Million in Quebec Contract, Nonetheless Legitimate in Ontario?

Within the case of Torgersrud v. Lightstone the questions for the Ontario court docket had been comparatively easy:  Have been two marriage contracts, signed by a pair in Quebec, nonetheless efficient after they moved to Ontario? And did these contracts function to oust the spouse’s entitlement to about $8 million in equalization beneath the Ontario Household Legislation Act?

In 1987, the couple had been residing in Quebec. They eloped partly to benefit from a piece alternative for the spouse, who was from one other nation and didn’t have a piece visa. 

When the husband’s household came upon in regards to the elopement a few 12 months later, they insisted he enter right into a separation settlement that may defend the household enterprise.  In 1988 he and the spouse signed such a doc, titled “Modification of Matrimonial Property Regime.”  The settlement stipulated that they had been “separate as to property”, wouldn’t be responsible for one another’s money owed, and renounced their property rights to “partition of acquests” (the latter being the time period used beneath Quebec regulation to seek advice from the property amassed throughout marriage).  They signed a second comparable settlement in 1990, opting out of Quebec’s patrimony-based household regulation regime that had been lately enacted.  

On the time of these 1988 and 1990 Quebec agreements, the spouse had stopped working so she may maintain their youngsters. Neither of them was conscious of the appreciable inheritances the husband would finally be receiving over time, from numerous relations. When among the preliminary funds began rolling in, the couple used them to purchase a house collectively and for residing bills. 

The couple moved to Ottawa in 1993, and had been nonetheless residing there after they separated after almost 30 years. At that time the spouse had $1.6 million in investments, whereas the husband – who did present full monetary disclosure – was estimated to have a number of hundreds of thousands at his disposal.

The spouse utilized for a court docket order, declaring that these Quebec agreements from the early days of their marriage didn’t function to oust her proper to an equalization beneath the Ontario Household Legislation Act (FLA).  That laws would give her the suitable to share within the husband’s belongings, and yield her an equalization fee estimated to be round $8 million. 

The court docket thought of the spouse’s argument. It thought of the 1988 Quebec agreements, and located they had been in had been in full compliance the validity necessities in that province.  Had they continued residing there, the agreements would have operated to maintain their property separate as supposed. 

However since they’d moved to Ontario, the court docket had to have a look at whether or not they had been additionally adequate to kind legitimate “home contracts” beneath Ontario regulation.  The court docket concluded they did: They had been in writing, signed by the events, and witnessed.  Additionally they handled elements of property division. 

Importantly, nonetheless, the Quebec agreements didn’t function to oust the spouse’s proper to equalization in Ontario, the court docket dominated.  They didn’t include direct, clear language that may oust the FLA’s equalization regime in Ontario.   Because the court docket defined, “there’s a excessive threshold that have to be met earlier than discovering that an out-of-jurisdiction marriage contract prevails over the [Ontario] equalization provisions.” A mere assertion that the spouses had been “separate as to property”, wouldn’t suffice. 

There needed to be clear language as to what the couple wished to occur upon marriage breakdown, and a transparent renunciation of their respecting rights in that occasion.  In all of the circumstances, the court docket determined it may train the discretion to put aside the Quebec agreements; this meant the spouse may proceed with equalization.  That course of would happen at a separate listening to, but it surely was estimated that her internet equalization fee can be within the vary of about $8 million.

The necessary lesson from this uncommon case, is {that a} marriage contract signed by a pair in a single jurisdiction won’t have the supposed authorized impact after they transfer to a brand new jurisdiction. For many who are contemplating a wedding contract, or who have already got one, it’s necessary to get skilled authorized recommendation on this slim level.

Full textual content of the choice: Torgersrud v. Lightstone, 2022 ONSC 7084 (CanLII)