The precedent-setting court ruling that the agreement is not enforceable could open the door for a child to have three or four recognized parents in "known donor" situations.
At the same time, it may also have a chilling effect on lesbian couples seeking a specific donor and who want their child to know the identity of the father.
The legal dispute involves a lesbian couple in Toronto and a gay man who agreed to be their sperm donor and play an active role as a parent. (The parties cannot be identified because there is a ban on any information that could identify the child.)
The couple and the man signed a "donor contract" before the child was born in 2002, which set out his rights as a "co-parent" including regular access as well as full custody if both women were to die. The agreement included a promise to try for a "three-way" adoption, which would have required a court challenge under the Charter of Rights, although this was never followed through.
The two women and the man are all highly educated professionals and the couple wanted the child to know her father and intentionally sought out a gay man as the donor.
"Given their options to have children, what we were offering might be interesting to [gay men], might be attractive to them, I mean their options are in some ways much bleaker than ours," one of the women told the court.
The friendship has deteriorated and the two women have tried to reduce the father's access to the child.
Access was restored after the father went to court in 2007. The couple responded by suing the man for $250,000 and they also want him to post a $25,000 bond that would be forfeited if he seeks custody of the child.
In the latest legal action in a Toronto family court, the couple asked a family court judge to order the father to give his consent to have the non-birth mother named as an adoptive parent of the child. Presently, the father and the birth mother are the legal parents.
If the non-birth mother was permitted to adopt, the father would lose his legal status as a parent.
The father accused the women of trying to change his status from that of a co-parent to no more than a "friendly uncle." An adoption order "discriminates against gay fathers, because it says you're a second-class parent. You are little more than a sperm donor we control," the court heard.
Justice Marion Cohen ruled in favour of the father in a decision issued this week.
The best interests of the child must always take precedence to any "domestic contract," stressed the family court judge. "Time and experience have proven that [the man] is not a mere sperm donor and [the child] is no longer a theoretical proposition, nor is her relationship with her father," wrote Judge Cohen.
"The issue for the court is not what kind of family the parents want, but what is best for the child," the judge noted.
She concluded that the donor contract, which said the non-birth mother would become an adoptive parent if they were not granted a three-way adoption, is unenforceable.
The father, who is married to his partner, has been "actively and wholeheartedly" involved as a parent with the child, said Judge Cohen.
"This case is not about protecting nuclear families to reduce their anxieties," said the judge. "In this case I am considering the legal situation of a self-constructed, non-traditional family, the three-parent family created by these parties. For the sake of the child and in their own best interests, the parties will have to live with their choices," the judge concluded.
The ruling could have broader public policy implications, suggested family lawyer Jeffery Wilson, who represented the lesbian couple.
"The judge appears to suggest that the argument for a nuclear family is not especially persuasive. With a known donor, children can expect families that are made up of three or four parents," said Mr. Wilson. "An anonymous donor is more likely to ensure the autonomy of a two-parent family," he added.
The former head of the family law section of the Ontario Bar Association said yesterday the ruling is likely to have an impact on other same-sex couples seeking to have a child. "It could discourage lesbian couples from choosing a known donor in the future," said Kelly Jordan.
Paul Pellman, the lawyer who represented the father, was unavailable for comment yesterday.