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DOMESTIC CONTRACTS AND SEPARATION AGREEMENTS - Types - Cohabitation agreements

Friday, July 30, 2021 @ 5:42 AM  


Lexis Advance® Quicklaw®
Appeal by the husband from a decision of a motion judge declaring that a cohabitation agreement with the respondent was of no force and effect. The parties began an off-and-on-again relationship in 2006, with numerous separations. In 2013 they entered into the cohabitation agreement. Shortly thereafter, the respondent moved out of the appellant’s home. The appellant paid her $5,000, pursuant to the agreement, for vacant possession of his home. In 2014, they married, and the respondent moved back into the appellant’s home. The relationship broke down for the final time in January 2019. The motion judge held that the common law principle holding that reconciliation terminated a separation agreement applied to cohabitation agreements. He noted that nothing in the agreed facts supported an intention that the agreement would be applicable if there was a reconciliation, and nothing in the agreement expressly dealt with the effects of a separation and reconciliation. The motion judge held that the consideration for the $5,000 payment was the respondent’s relocation from the matrimonial home and that, since that triggering event had occurred, and payment made, the terms of the cohabitation agreement were exhausted.

HELD: Appeal allowed. The motion judge erred in finding that a cohabitation agreement did not apply to the parties after a separation followed by reconciliation unless the agreement expressly provided to the contrary. The common law rule that reconciliation brought a separation agreement to an end did not apply to cohabitation agreements. The motion judge made extricable errors of law in his interpretation of the cohabitation agreement. He did not analyze the intentions of the parties at the time they entered into the agreement nor the contractual language itself. The cohabitation agreement envisaged cohabitation, marriage, divorce, separation, and death of a party. There was nothing in this language that temporally restricted the application of the terms to cohabitation at a defined time or restricted the broad language to cohabitation before separation followed by reconciliation. An ordinary person reading this agreement would consider that if the parties cohabited under any circumstances, the agreement applied. The broad language of the cohabitation agreement evinced an objective intention to have the agreement apply in general to cohabitation, including that which followed a separation and reconciliation.

Krebs v. Cote, [2021] O.J. No. 3486, Ontario Court of Appeal, M.H. Tulloch, G.I. Pardu and L.B. Roberts JJ.A., June 25, 2021. Digest No. TLD-July262021010