In a recent Ontario Court of Appeal decision, the court ruled that the common law principle that reconciliation terminates a separation agreement does not apply to cohabitation agreements.
Couple Signs Cohabitation Agreement
The couple began an “off-and-on-again” relationship in 2006 and separated numerous times over the ensuing few years.
In late 2012/early 2013, the couple decided to live together and entered into the cohabitation agreement. However, they broke up soon after.
The couple reconciled in the first half of 2014 and got married.
Ultimately, however, the relationship broke down for a final time in January 2019.
A motion was brought to court seeking an order that the couple’s cohabitation agreement was invalid, not binding and of no force or effect.
The main issue before the court was whether, as a matter of law, separation followed by reconciliation terminated a cohabitation agreement.
Lower Court Finds Agreement Not Binding on Couple
The motion judge concluded that the cohabitation agreement was of no force or effect.
Primarily, the judge cited the common law principle holding that reconciliation terminates a separation agreement and ruled that the same principle applies to cohabitation agreements.
The decision was appealed to the Ontario Court of Appeal.
Court of Appeal Reverses Lower Court Decision
At the outset, the Court of Appeal stated:
“I do not agree with the motion judge’s conclusion that a cohabitation agreement does not apply to the parties after a separation followed by reconciliation unless the agreement expressly provides to the contrary.
It is well-established that, at common law, a separation agreement becomes void upon reconciliation of the parties, subject to any clause in the separation agreement overriding the common law rule or which would imply that the intent of the parties was that terms of the separation agreement would be carried out notwithstanding any subsequent reconciliation….
I would not extend the common law rule to cohabitation agreements.”
The court explained that because the purpose of a separation agreement is the separation itself, reconciliation necessarily dissolves the foundation of the agreement. However, the court found that there was no basis to extend the same logic so as to void a cohabitation agreement following reconciliation of the parties because, in essence, the reconciled parties would have returned to the very state contemplated by the cohabitation agreement.
Finally, the court concluded by providing the following guidance in interpreting cohabitation agreements:
“[T]here is no presumption that reconciliation brings an end to cohabitation agreements. Each particular cohabitation agreement must be interpreted in accordance with contractual principles to ascertain the objective intentions of the parties.”
In the result, the court therefore allowed the appeal, set aside the lower court’s declaration that the cohabitation agreement was no longer of any force and effect, and substituted it with a declaration that the rights and obligations of the parties were governed by the cohabitation agreement.
At Feigenbaum Law, our goal is to help you move forward following the breakdown of a relationship while retaining as much financial stability as possible and ensuring your children are provided for. Mark Feigenbaum is able to counsel his clients on all potential risks that may result from a family law dispute, not just those related strictly to the breakdown of a marriage. Contact Mark online or call him at (905) 695-1269 or toll-free at (877) 275-4792 to book a consultation.