Canadian Supreme Court Rescinds Separation Agreement as Unconsionable Due to Wife’s Temporary Mental Infirmity and Husband’s Material Nondisclosure of Assets

Husband and Wife of twenty-seven year marriage split up.

Each gets a lawyer.

Against Wife’s counsel’s advice, they enter a separation or postnuptial agreement.

The couple owns a home, a dairy farm, land and vehicles, among other things.

Wife apparently settles for substantially less (to the tune of $650,000) than she is “entitled to” under the law.

When she “wakes up”, Wife seeks to challenge the agreement. She argues that she was too upset after the breakup to have the proper mental capacity to make a good deal and also that her husband misrepresented the value of his assets.

The trial court sides with the Wife, holding the agreement unconscionable.

The intermediate appellate court reverses, upholding the agreement.

The Canadian Supreme Court reverses yet again, citing Husband’s failure to fully disclose the value of his assets and the Wife’s mental state at the time of making the agreement.

The high court cautions that its ruling is based on the specific facts of the particular case, clarifying that it will not lightly void freely entered settlement agreements.

This ruling tweaks a 2003 ruling in another case.

Husbands and wives owe each other a fiduciary duty under Florida law as well. Failure to make full and fair disclosure for purposes of a marital settlement can definitely return later to haunt a spouse in Florida too.

Read more in this CanWest News Service article: Court reinforces rule separation agreements can be rescinded.