“Cases interpreting s. 56(4) of the FLA confirm that the analysis requires two steps. First, the party seeking to set aside the contract must demonstrate that one or more of the provisions in (a) – (c) has been engaged. If that hurdle is overcome, the court must consider whether it is appropriate to set aside the agreement (LeVan v. LeVan, 2008 ONCA 388 at para. 51; Toscano v. Toscano, 2015 ONSC 487 at para. 43; and Hashemi v. Alanimehr, 2021 ONSC 8569 at para. 14). The burden is on the party seeking to set aside the agreement to bring themselves within one of the paragraphs of s. 56(4) and then to persuade the court to exercise its discretion to set aside the agreement (Faiello v. Faiello, 2019 ONCA 710, 438 D.L.R. (4th) 91, at para. 20).
In general, the cases confirm that the court will respect the rights of individuals to enter into separation agreements and the associated expectation that the parties do so in order to achieve certainty and to avoid having their disputes adjudicated before the courts (Goulding v. Keck, 2014 ABCA 138, 572 A.R. 330, at paras. 26-27; Nisbett v. Nisbett, 2010 ONSC 4381, at para. 51; and Carvalho v. Couto, 2023 ONSC 4975 at para. 20).
The latest word on this topic, strongly reinforcing the respect to be given to agreements negotiated between parties, comes from the Supreme Court of Canada’s recent decision in Anderson v. Anderson, 2023 SCC 13, 481 D.L.R. (4th) 1. In that decision, in holding that an agreement resolving property issues which did not satisfy Saskatchewan’s statutory requirements for interspousal contracts was nonetheless enforceable, Karakatsanis J. said at para. 8 that “Given the respect for spousal autonomy reflected in both the legislation and the jurisprudence, unless the court is satisfied that the agreement arose from an unfair bargaining process, an agreement is entitled to serious consideration.”
In considering whether to uphold a domestic agreement or individual terms of such an agreement, it is reasonable for the court to rely on a plain reading of the contract (Peerenboom v. Peerenboom, 2020 ONCA 240, 446 D.L.R. (4th) 418 and Hartstein v. Ricottone, 2016 ONCA 913).”