Couples entering marriage often sign agreements outlining how their assets and obligations will be managed during the marriage and in the event of separation. These marriage or domestic agreements frequently address the division of property, spousal support, and sometimes child support. But to what extent are these agreements enforceable, particularly if they override provincial or federal family law?
This blog examines how marriage agreements are treated under Canadian law, focusing specifically on their impact on the interim distribution of family property, especially when one party seeks funds to cover legal expenses during divorce proceedings.
Wife Seeks Interim Funds, Husband Relies on Marriage Agreement
A recent decision of the Supreme Court of British Columbia sheds light on this issue. In C.M.P. v. D.J.P., the wife applied for an interim distribution of family property to cover the costs of her ongoing divorce litigation. Her husband opposed the application, arguing that a pre-marital agreement between them explicitly barred any interim distribution of assets.
The couple had married in British Columbia in October 2016. However, they disagreed on their date of separation: the husband claimed the marriage ended on December 18, 2020, while the wife asserted it ended on July 1, 2023.
Terms of the Marriage Agreement
Before their marriage, the couple entered into a written agreement outlining how assets would be divided in the event of separation. The agreement stated that each party would retain assets they owned before the relationship and any gifts received during the marriage. It also provided for an equal division of the proceeds from the sale of the matrimonial home, excluding individual contributions made toward its purchase.
The husband’s father contributed $1 million towards purchasing the family home, which was later valued at $2.06 million. A mortgage of $687,450, also held by the husband’s father, remained on the property.
After the couple separated, the wife continued to live in the home with their two children, while the husband moved in with his parents. He continued to cover expenses related to the home and paid child support in accordance with his financial disclosures.
Understanding Interim Distribution Under the Family Law Act
The Family Law Act governs the division of family property in British Columbia. Section 89 of the Family Law Act allows for interim distribution of family property when necessary to support the fair resolution of a family dispute, including funding for litigation. Section 88 permits a party to apply for such a distribution at any time before a final settlement is reached.
When considering an application for interim distribution, the Court looks at several key factors:
- Whether the applicant is at an economic disadvantage compared to the other party;
- Whether the distribution is necessary for the applicant to effectively participate in the litigation;
- Whether the distribution would unfairly prejudice the other spouse;
- Whether the amount requested is proportionate and reasonable for the intended purpose; and
- Whether granting the distribution serves the interests of justice.
Legal Validity of Marriage Agreements
Under section 92 of the Family Law Act, spouses can enter into agreements, such as marriage or cohabitation agreements, that vary from the default property division rules set out in the legislation. Section 94(2) prohibits the Court from making property or debt division orders that conflict with an existing agreement, unless the agreement is set aside under section 93.
Section 93 outlines the criteria for setting aside a marriage agreement, including factors such as duress, unfairness, or lack of financial disclosure.
Husband Argued Marriage Agreement Bars Interim Distribution
In this case, the husband argued that section 94(2) of the Family Law Act barred the Court from ordering any interim distribution because the couple’s marriage agreement already addressed the division of property. Since the wife had not challenged or sought to invalidate the agreement under section 93, the husband claimed the Court lacked jurisdiction to order any distribution of property.
However, the Court found the husband’s argument failed to differentiate between interim and final distribution of property.
Interim vs. Final Orders
The Court emphasized the distinction between section 89, which concerns interim (temporary) measures during litigation, and section 94, which deals with final division of assets. Interim distributions are procedural tools designed to ensure both parties can fairly participate in the litigation process.
Because section 89 serves a different purpose than section 94, the court held that it “operates independently” and remains applicable even when a valid marriage agreement is in place. The key consideration is whether interim relief is necessary and fair, not whether the marriage agreement governs the final division of property.
Marriage Agreement Silent on Interim Distribution
The Court also observed that the couple’s agreement did not address the issue of interim distribution at all. While it covered final property division and retained each party’s right to certain assets, it contained no clause limiting interim access to funds.
Even though parties can agree to modify the statutory property division rules under section 92 of the Family Law Act, such agreements must clearly and explicitly displace any statutory protections. In this case, the marriage agreement failed to address or override section 89, so the Court retained full authority to make an interim distribution order.
Interim Distribution Granted Despite Agreement
After reviewing the facts, the Court concluded that all the criteria for interim distribution had been met:
- The wife was financially disadvantaged compared to the husband;
- The requested funds were necessary for her to participate in the legal proceedings;
- The husband would not suffer harm from the distribution;
- The amount requested ($100,000) was reasonable in the circumstances; and
- Granting the distribution was in the interest of justice.
Accordingly, the Court ordered the husband to pay $100,000 to the wife to enable her continued participation in the divorce litigation, despite the existence of the marriage agreement.
Takeaways for B.C. Family Property Division
C.M.P. v. D.J.P. illustrates that marriage agreements, while legally valid and enforceable under the Family Law Act, do not necessarily restrict the Court’s ability to order interim measures. If a marriage agreement is silent on interim distribution, section 89 remains a powerful tool for ensuring fairness and access to justice during family litigation.
Parties entering into marriage agreements should be aware that these documents must be carefully drafted to address both final and interim financial arrangements. Otherwise, the Court may retain authority to make orders that override the parties’ intentions, at least temporarily.
Meridian Law Group: Vancouver Family Lawyers Providing Trusted Advice on Domestic Agreements
Meridian Law Group is recognized for its outstanding, client-focused approach in family law matters. The firm crafts clear and reliable domestic agreements designed to safeguard each client’s unique family interests and future security. When a contract is already in place, our skilled family and divorce lawyers carefully review it to ensure it accurately reflects our client’s legal rights and evolving family circumstances. To book a confidential consultation, please call (604) 687-2277 or contact us online.
