“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: see Ernikos v. Ernikos, 2017 ONCA 347, at para. 11; Sydor v. Sydor (2003), 2003 CanLII 17626 (ON CA), 178 O.A.C. 155 (C.A.), para. 22; Bailey v. Bailey (1982), 1982 CanLII 1760 (ON CA), 37 O.R. (2d) 117 (C.A); Bebenek v. Bebenek (1979), 1979 CanLII 1861 (ON CA), 24 O.R. (2d) 385 (C.A.).
I would not extend the common law rule to cohabitation agreements.
The common law rule is ancient. In Nicol v. Nicol (1885), 30 Ch. D. 143, at p. 145, North J. of the Chancery Division explained the rationale for the common law rule that reconciliation brings a separation agreement to an end:
I think it clearly established by numerous authorities (no case in any way conflicting with them), that where a separation arrangement is made pure and simple, that arrangement is for the term of the separation, and for no longer. It comes to an end when the separation ends, not because the fact of reconciliation or recohabitation makes it void, but it dies a natural death. The agreement was to provide for a state of things which has come to an end, the state of things being that the parties were living separate although married. When they live together again as man and wife the state of things is totally different, and the arrangement comes to an end.
The rule was not absolute and depended on an interpretation of the parties’ intentions, as evinced by the whole of the agreement. For example, where a separation agreement had separation for one of its objects but also other matters within its purview, such as settlement of property issues, those aspects of the agreement may continue despite a return to cohabitation. As described by Montague Lush and Walter Hussey Griffith in Law of Husband and Wife within the Jurisdiction of the King’s Bench & Chancery Divisions, 3rd ed. (London: Stevens and Sons, Limited, 1910), at pp. 461-463:
[I]t is a well-established principle of law that a separation deed properly so called—i.e., a separation deed whose only object is to provide for the parties living apart from one another—is ipso facto put an end to for all future purposes if the parties subsequently become reconciled and return to cohabitation.
This principle is too well known and too plain to require observation. For the very nature and object of the instrument is to provide for a state of circumstances which comes to an end on a cesser of the separation.
…
But a separation deed the primary object of which is to provide for the parties living apart may have also a secondary object—viz., that of effecting a permanent settlement of property to continue not only during the separation but in any event.
…
The question whether a deed is a separation deed which will be avoided upon a return to cohabitation or a post-nuptial settlement which will continue valid notwithstanding a return to cohabitation turns upon the intention of the parties to be gathered from the terms of the deed. [Emphasis added. Internal citations omitted.]
The common law rule dates from a time when views about marriage, cohabitation, separation, and divorce were very different. At one time, separation agreements were considered “contrary to public policy.” To cohabit without the benefit of marriage was “to live in sin.” The courts of equity would not enforce an executory separation agreement, i.e. one entered before the separation, though in contemplation of a future separation. Cohabitation for even a short time after execution of the agreement rendered the deed of separation void: see Law of Husband and Wife, at p. 457.
Today, marriage contracts, cohabitation agreements, and separation agreements are all part of the legislative landscape: Family Law Act, R.S.O. 1990, c. F.3, ss. 52–54. Parties should be encouraged to enter agreements to define their rights and obligations. Jurisprudential shoals upon which an agreement may founder unnecessarily do not advance that goal.
Notwithstanding the sea change in family law over the past century, the common law reconciliation rule remains a part of Canadian common law and continues to make some sense. Where the raison d’être of the agreement is separation and parties reconcile, the foundation for the separation agreement dissolves. I see no basis to extend this logic so as to void a cohabitation agreement following reconciliation of the parties. Under such circumstances, the reconciled parties have returned to the very state contemplated by the cohabitation agreement.
In Langdon v. Langdon, 2015 MBQB 153, 321 Man. R. (2d) 52, Little J. remarked, in obiter, that he was “far from certain” that reconciliation should affect a cohabitation agreement in the same manner as a separation agreement. He explained, at paras. 138-140:
I do not think it a proper inference or presumption to say that a resumption of cohabitation nullifies [a cohabitation agreement] concerning a property and support regime. Renewed cohabitation in that context is more reflective of an intention to return to a relationship where one’s rights were formerly delineated by the agreement. It does not seem to me to be at all reflective of an intention to enhance one party’s rights or to impose greater obligations on the other, something that will inevitably result when the cohabitation agreement no longer exists.
It seems to me that if there is to be an inference or a presumption at all it ought to be (barring other evidence of intention) that the resumption of cohabitation returns you to the position you held in the relationship to which you have now chosen to return. Presuming the termination of the cohabitation agreement on resumption of cohabitation could lead to strategic separations and reconciliations designed to nullify cohabitation agreements. It also results in a policy requiring redocumentation on resumption of cohabitation.
I do not regard the first as good policy; the second is impracticable and is not in keeping with the way people typically lead their lives.
I agree with the views expressed in these passages, although I would not go so far as to say there is a presumption in favour of the cohabitation agreement’s continued validity following reconciliation. The applicability of a cohabitation agreement to the circumstances of the parties will depend on the interpretation of that agreement and the light it sheds on the intentions of the parties.”