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More on Do-It-Yourself Agreements: What Not To Do

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More on Do-It-Yourself Agreements: What Not To Do

Recently I wrote about the case of Cramer v. Cramer in The Dangers of “Kitchen Table” Separation Agreements – Court Does a Re-Write where a court essentially re-wrote parts of a divorcing couple’s “kitchen table” separation agreement. They had prepared it with the help of an office-supply store kit; unfortunately it not only overlooked some very key provisions, it also ran afoul of Ontario family law.

Another recent case, Demaine v. Racine, provides further illustration of how a couple’s attempt to minimize legal fees actually ended up with a costly day in court.

There, the couple had drafted their own cohabitation agreement in 2005, based on a sample they found on the Internet. Once again, the agreement was created without benefit of independent legal advice on either side. (This was an attempt to save money: They had both recently ended prior relationships, and had spent substantial funds to extricate themselves). The goal was to protect their respective pre-relationship assets in advance of their 2006 marriage, which consisted mainly of the wife’s cottage, and the husband’s military pension. It was signed at their Ottawa home in presence of the wife’s friend, who served as the witness.

But when they separated in 2011, the husband denied ever signing the agreement at all. He applied to the court to have it set aside, and claimed that even if he did sign it, it was not fair or reasonable. Not surprisingly, the wife asked to have it declared enforceable.

The court found in the wife’s favour: The agreement was a valid domestic contract.

For one thing, the court found the husband’s claim that he was even in town at the time to be unconvincing, and found his evidence lacking:

17 The [husband] testified that he may not have even been at home in Ottawa on the date the Cohabitation Agreement was allegedly signed as he had been away a lot in Petawawa, in Toronto and in other locations at that time on pre-deployment training. He stated that he could have requested proof of his travel expenses submitted to the military for that time period but that it would have taken considerable time to get them just as it apparently took 13 months to get his pension information. However, the [husband] testified that he did not request the travel expense information until 3 months ago even though the [husband] has been aware of this issue for over 18 months. The [husband] stated that he could have called people who were on course with him to testify regarding the dates but he didn’t want to put them in a difficult position as they also know the [wife]. In summary, the [husband] produced no proof that he was away from Ottawa at that time and I am unable to find that he was away from Ottawa at that time.

(In fact, the court concluded the signature matched certain sample documents that had been signed by the husband.)

Next, the court concluded that there were no legal grounds for setting aside the agreement at all: the couple had each adequately (though not perfectly) disclosed their financial information to the other prior to signing the agreement; there was no evidence of duress; and no misrepresentations on either side. It complied with all the legal formalities required by Ontario law (i.e. an agreement in writing, signed by both parties, and witnessed). Both parties benefited under the agreement; it was not tilted in anyone’s favour.

Finally, the court dismissed the husband’s claim that he did not understand the nature or consequences of the agreement because he did not have independent legal advice. This was the husband’s choice, as he was keen to save legal costs. (In any case, the court found that the husband understood the agreement and its ramifications even without a lawyer). This alone was not a reason to set aside the agreement, absent other factors. The agreement was fair, freely-negotiated, and valid.

For the full text of the decision, see
Demaine v. Racine, 2013 ONSC 2940 (CanLII) http://canlii.ca/t/fxj2f

At Russell Alexander, Family Lawyers our focus is exclusively family law, offering pre-separation legal advice and assisting clients with family related issues including: custody and access, separation agreements, child and spousal support, division of family property, paternity disputes, and enforcement of court orders. To learn more visit us at www.RussellAlexander.com