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Posts from the ‘Separation Agreements’ Category

Were Negotiations Contingent on the Husband Ending His Affair?

Were Negotiations Contingent on the Husband Ending His Affair?

In an case I had reported on a few weeks ago, the marriage contract between the husband and wife – drafted by the wife’s lawyer – had contained an inadvertent drafting error, giving the husband the full value of the matrimonial home, when the actual intent was to give him only half. The relationship irrevocably broke down shortly after the agreement was signed. In examining whether the flawed agreement should nonetheless be enforced, the court concluded that the proper solution was to overturn the part containing the error; all the more so because the husband was aware of the drafting mistake and was trying to take advantage of it. This conclusion was confirmed on appeal.

One of the many issues that had to be examined in the case, was the effect on the husband’s extramarital affair on the negotiation process. An earlier judge at trial had been accused of placing undue emphasis on the husband’s cheating, when deciding some of the other issues in the wife’s favour.

That same judge had addressed the impact of the wife’s insistence that if they were to reconcile, he would have to end the affair and get tested for sexually-transmitted diseases. It was against this background, over a brief 3-week period, that the defective marriage contract had been negotiated. As the trial judge explained:

[The wife] had three preconditions to reconciliation. The centrepiece of these conditions was that [the husband] stop his affair immediately and commit to the reconciliation process. [The husband] represented to [the wife] that he terminated his affair. He told her that he was in the wrong and that the most important thing to him was the survival of their marriage and family. On that representation, [the wife] went out of town to consider reconciling with [the husband].

The problem was, that the husband had not actually ended his contact with the woman, even though he told the wife otherwise. Even as one of the last drafts of the marriage contract was being exchanged between the lawyers, he had seen his affair partner only days earlier, while on a business trip to California.

The trial judge had to examine the effect of this revelation on the validity of the contract.

The husband’s promise that he would be committed to reconciliation, and his devoting to making the marriage work, imposed a heightened obligation of good faith on him, the judge found.   Marriage contracts, unlike separation agreements, are subject to an utmost duty of good faith and fair dealing between the spouses. The judge disagreed with prior rulings that suggested that an extramarital affair need not be disclosed because the Family Law Act and the Family Law Rules deal only with financial disclosure by spouses. Instead, the judge found that an affair could be relevant particularly if the couple was negotiating a marriage contract in circumstances of attempted reconciliation.

With that said, the trial judge applied the principles to these facts:

In this case, [the husband] told [the wife] that he had ended the affair and that his total dedication was to seeing the marriage work. This fact alone was a prerequisite for [the wife] to entertain the idea of entering into a process of reconciliation and, eventually, give this process priority over her involvement in the negotiation process of the Marriage Contract, which dealt with her most substantial assets.

I find that the perception created in [the wife’s] mind that [the husband] was committed to the marriage due to the termination of his affair renders evidence that he continued to see this woman during the negotiation process of the Marriage Contract relevant.

However, the trial judge went on to make an important distinction on these facts: The husband had admitted to continuing to see his affair partner in California, but he did not admit that he was actually continuing the affair with her. As he explained:

Having said that, I cannot find on the evidence in this case that [the husband] continued to have an affair with this other woman during the negotiation process. In this regard, I find the following:

(1) [The husband] admitted to [the wife] that he was having an affair and that he wanted out of the marriage at the end of March 2006.

(2) Although he stated in his evidence that he ended the affair when he committed to reconciliation, he admitted that he continued to see this same woman during the negotiation period. The woman with whom [the husband] was having an affair lived in California and he admitted to travelling through California in July 2006 in the midst of the Marriage Contract negotiations. Admitting to continuing to see her does not allow me to conclude that he was continuing the affair.

I do not find that [the husband’s] affair with this other woman impacted on the negotiation process. Although [the husband’s] resumption of his affair, at the time that his wife was in the extreme vulnerable state that she was, is reprehensible, such conduct cannot be connected to the issue of whether this Marriage Contract should be set aside.

The matter went on to later appeal, with the court focusing on other grounds. But it was an interesting, and rather thinly-sliced, legal issue and conclusion.

What are your thoughts on the trial judge’s reasoning?

For the full text of the decisions, see:

Stevens v. Stevens, 2012 ONSC 706 (CanLII)

Related Appeal and Costs decisions:

Stevens v. Stevens, 2013 ONCA 267 (CanLII)

Stevens v. Stevens, 2012 ONSC 6881 (CanLII)

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. For more information, visit us at RussellAlexander.com

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Separation Agreement Drafting Error: Can a Spouse Take Advantage?


Separation Agreement Drafting Error: Can a Spouse Take Advantage?

In Stevens v. Stevens, the couple had been married for 16 years when the wife discovered that the husband had been having an affair. As part of their attempts to reconcile, they crafted a marriage contract, freely negotiated with the help of separate lawyers.

Because the matrimonial home had been purchased using a significant amount of the wife’s own funds (which she had received through gifts and an inheritance), she was keenly interested in having those funds recouped in the event of divorce. To this end the terms of the marriage contract stipulated that the husband should have one-half of the value of the matrimonial home if the marriage broke down completely … which it did shortly after the agreement was signed.

Unfortunately, the draft contract prepared by the wife’s lawyer contained a significant error: it stated that the husband was to receive the whole value of the matrimonial home, not merely half.   The cover letter accompanying the draft adverted to the intended one-half value, so the two documents were inconsistent. Still, the husband and his lawyer did not ask for clarification on the discrepancy; both were well aware that the draft contained a mistake.

After the split, the husband wanted to have the contract enforced as-written, which meant that he would get $2.5 million in the divorce rather than $500,000. The wife applied to have it set aside.

The court found in the wife’s favour.

From a legal standpoint, there had been no “meeting of the minds” between the spouses as to the portion of the home’s value that was to be given to the husband; the evidence was clear that – regardless of what the contract actually said, the wife intended to give only half. Her own lawyer did not realize the mistake until after the couple had separated.

The husband was well aware that there was an error in the draft and he took advantage of it, which was condemnable. The court had harsh criticism for the husband’s lawyer, whose evidence as to her understanding of the cover letter and draft was “concerning”. The court rejected the lawyer’s evidence, having concluded that she was “attempting to hide behind a selective memory by testifying in this vague and uncertain manner.”

In short: The mistake in the marriage contract was not intended by the wife, but was known to the husband and his lawyer, neither of whom obtained clarification. The court said,

A simple phone call followed by a confirmation in writing is all that was necessary. I find that without that simple clarifying act, [the husband’s lawyer] and her client took advantage of the mistake and allowed the process to conclude, while knowing that there was no meeting of the minds on this very material issue.

The court accordingly found that the marriage contract was void and unenforceable.

Incidentally, the husband later appealed that ruling, and in doing so he took a new approach: He asked that, rather than declare the contract void from the outset, the Appeal Court should merely rectify it, so that it was worded in accord with what the parties intended in the first place.

The court rejected this also, pointing out that the husband was trying to advance a fundamentally new argument on appeal, i.e. one that he had not bothered to raise at the trial and which was completely inconsistent with the position he took at trial. This was unfair to the wife, and was not permitted under family trial procedure.

For the full text of the decision, see:

Stevens v. Stevens, 2012 ONSC 706 (CanLII)

Appeal:

Stevens v. Stevens, 2013 ONCA 267 (CanLII),

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. For more information, visit us at RussellAlexander.com

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Busted! Court Relies on Sworn Financial Statements from First Divorce to Value Assets During Second One

Busted! Court Relies on Sworn Financial Statements from First Divorce to Value Assets During Second One

The husband was a 46-year-old, recently-separated businessman who met the 26-year-old wife when she was a junior at the law firm he used for his business matters and litigation. After they moved in together and he got a divorce from his first marriage, the wife left her job at the law firm to take care of the husband’s litigation and related corporate affairs.

They were married for 14 years before they separated, and had three children.

When they split up, the husband forwarded a newly-prepared separation agreement for the wife’s signature. She signed without obtaining independent legal representation.  She was comfortable doing so because she believed that the husband had provided full disclosure, and she trusted his assessment since he had considerable experience valuing businesses.

Using the business valuation information provided by the husband, the separation agreement would have called for the wife to pay the husband just under $1 million as an equalization payment; however, it also provided that the husband would agree to forgo her having to pay that amount.

Sounds like a good deal, right?

However, the wife slowly realized afterwards that the husband had misled her. Rather than her owe him money in equalization (which he waived), the proper calculation was entirely different because he had greatly overstated the value of the corporate assets that he brought into the relationship, most notably the value of his company at the date of marriage. This would inflate the amount she was adjudged to owe him way of an equalization.

She successfully applied to the court to set aside the separation agreement, on the basis that the husband had not given full financial disclosure.  The trial judge adjusted the calculation accordingly.

The husband appealed.  In support of his business valuation figures, he put forth the evidence of an expert, who attested to the fact that the value of the business on the marriage date was over $7 million.  However, the Appeal Court concluded that the expert was partial to the husband and lacked independence, and had given an inflated figure that could not be trusted.

Instead, the court relied on some “smoking gun” evidence:  the sworn financial statements the husband had filed in his first divorce, which showed that he had essentially brought no assets of value into this second marriage to the wife.  The trial judge had relied on this evidence as well in setting the separation agreement aside, and the Appeal Court confirmed that there was nothing improper about the trial judge having done so, even if it was to the husband’s detriment.

In the end, the husband was found to have intentionally misrepresented the value of his corporate assets, by claiming that they were worth $6 million more than their actual (court-determined) value.

The Appeal Court upheld the trial judge’s decision to set aside the separation agreement, and went on to calculate the proper equalization amounts using the true valuation of the husband’s assets.

For the full text of the decision, see:

       Virc v. Blair

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.  For more information, visit us at RussellAlexander.com

If Spouses Reach a Separation Agreement But Later Reconcile, Is the Agreement Still Good?

separation-agreement

If Spouses Reach a Separation Agreement But Later Reconcile, Is the Agreement Still Good?

Here’s an interesting legal question arising from a not-uncommon scenario:

Two spouses decide mutually to separate. They negotiate and sign a separation agreement, and duly abide by its terms for a while. They later decide to reconcile, but the reconciliation doesn’t “stick” and they separate for a final time.

The question is this: Is their original separation agreement still good? Does the fact that they reconciled after making it affect its legal validity once they have separated a second time?

It turns out this is yet another “it depends” answer.

The basic rule is that a separation agreement is void once there has been a reconciliation. The Ontario Court of Appeal established this in an older case called Sydor v. Sydor, and it was very recently confirmed in another Ontario case called Ernikos v. Ernikos.

Of course, every rule has its exceptions. The Court in Sydor v. Sydor added that if the agreement contains a clause that overrides that general rule, or if such a clause can be reasonably implied, then the exempted part of the agreement will still be valid and the spouses’ clear intention will be given effect.

Here is an example: Let’s say a couple decides to split up. They agree in their separation agreement that the wife releases her rights in their newly-purchased car to the husband, and they use language to suggest that they consider this a final disposition. They reconcile, then split again. Although legally the whole agreement is technically void because of the reconciliation, the court may view its car-related wording to mean that they considered the husband’s rights to the vehicle are final and binding, regardless of what happens to their relationship in the future. This could form the basis of the court’s divorce order in the upcoming legal proceedings, when it comes time to formally divide the couple’s assets.

The other way to circumvent the general legal rule is to build in express and careful language saying so. Specifically, the separation agreement may define what constitutes a true reconciliation (e.g. requiring at least 60 or 90 days of uninterrupted cohabitation), or it may clarify that the agreement becomes void upon reconciliation except for any transfers, payments or other dispositions made up to that time.

For the full text of the decisions, see:

Sydor v. Sydor, 2003 CanLII 17626 (ON CA)

Ernikos v. Ernikos, 2016 ONSC 6752 (CanLII)

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. For more information, visit us at RussellAlexander.com

The Difference Between Separation and Divorce in Ontario – video

Wednesday’s Video Clip: The Difference Between Separation and Divorce in Ontario

A separation occurs when one or both spouses decide to live apart with the intention of not living together again. Once you are separated, you may need to discuss custody, access and child support with your spouse. You may also need to work out issues dealing with spousal support and property. You can resolve these issues in different ways:

• You can negotiate a separation agreement. A separation agreement is a legal document signed by both spouses which details the arrangements on which you have agreed. In some jurisdictions, independent legal advice is required to make the document legally binding.

• You can make an application to the court to set up custody, access, support and property arrangements under the provincial or territorial laws that apply to you.

• You can come to an informal agreement with your spouse. However, if one party decides not to honour the agreement, you will have no legal protection.

To legally end your marriage, you need a divorce, which is an order signed by a judge under the federal law called the Divorce Act.

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. For more information, visit us at RussellAlexander.com

Did Wedding Planning Make Bride Vulnerable to Signing a Bad Separation Agreement?

wedding planner

Did Wedding Planning Make Bride Vulnerable to Signing a Bad Separation Agreement?

Did the fact that a bride-to-be was absorbed in wedding-planning details make her vulnerable and prone to signing an improvident separation agreement with her future husband? Did this give rise to a situation of “unconscionability”?

That was the essence of the issue in a recent Ontario case called Toscano v. Toscano, where the court reflected on what constitutes “unconscionability” in the particular context of two spouses who had negotiated a separation agreement just before their wedding.

The threshold test is an important one, because under section 56(4) of the Ontario Family Law Act, a court can set aside and invalidate even the most earnestly-negotiated, mutually-acceptable separation agreement if it finds that the situation and circumstances under which it was negotiated was nonetheless “unconscionable”.

(And it’s important to note that the unconscionability test that governs whether a separation agreement can be set aside refers to the circumstances at the time of drafting and signing the agreement – not the results of the agreement).

With that in mind, the court in Toscano started its examination with this comment:

Matrimonial negotiations occur in a unique environment and therefore unconscionability in the matrimonial context is not equivalent to unconscionability in a commercial context.

Drawing next from prior family decisions – including one called Rick v. Brandsema that went all the way to the Supreme Court of Canada – the court in Toscano observed that the relevant question is whether there were “any circumstances of oppression, pressure, or other vulnerabilities, and if one party’s exploitation of such vulnerabilities during the negotiation process resulted in a separation agreement that deviated substantially from the legislation”.

The court then gave some examples:

• There may be a situation of inequality of bargaining power – i.e. one party might be intellectually weaker than the other. This may encompass an economical weakness, a situational weakness, or a disease of the mind.

• Or, one spouse may be more vulnerable than the other, due to a special relationship of trust and confidence.

But that does not necessarily determine the matter, either. The court in Toscano referred to another decision called Rosen v. Rosen where the Ontario Court of Appeal said:

However, just because one party is vulnerable it does not mean that – without more – a court will intervene. Sometimes the inherent inequality of bargaining power can be negated by outside factors – such as professional assistance [e.g. legal advice].

The primary question to be answered in determining “unconscionability” is whether there was inequality between the parties, or a preying of one upon the other, that placed an onus on the stronger party to act with scrupulous care for the welfare and interests of the vulnerable. As the Court in Rosen pointed out, it is “not the ability of one party to make a better bargain that counts. Seldom are contracting parties equal. It is the taking advantage of that ability to prey upon the other party that produces the unconscionability.”

Returning to the facts in Toscano, the court concluded that there had been no unconscionability in the circumstances leading up to the marriage contract as signed. The court said:

In this case, the marriage contract was a freely negotiated agreement between two educated and knowledgeable adults. Although Ms. Toscano was in a somewhat vulnerable position given the pressure of planning a large wedding which was to take place very soon, I do not find that pressure resulted in an overwhelming imbalance in the power relationship between the parties nor do I find Mr. Toscano took advantage of Ms. Toscano’s vulnerability to the extent necessary to demonstrate unconscionability in this context. Ms. Toscano was not under pressure or subject to other vulnerabilities that were not effectively compensated for by the ongoing involvement and presence of her independent legal counsel.

The court therefore declined to set the separation agreement aside on this particular ground.

For the full text of the decisions, see:

Toscano v. Toscano, 2015 ONSC 487 (CanLII)

Rick v. Brandsema, 2009 SCC 10 (CanLII), [2009] 1 S.C.R. 295

Rosen v. Rosen (1994), 1994 CanLII 2769 (ON CA), 3 R.F.L. (4th) 267 at para. 12 (Ont. C.A.)

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. For more information, visit us at www.RussellAlexander.com

Two Things I’ve Learned in 2015 About Ontario Family Proceedings

2015

Two Things I’ve Learned in 2015 About Ontario Family Proceedings

The past year has seen the usual stream of Family Law cases coming out of the Ontario courts. Not atypically, they feature acrimony, bitterly-disputed issues, and an undertone of intense human emotion running through it all.

Nothing new there.

But in reading the cases I have noticed two strong trends in the jurisprudence in 2015:

1) Self Representation is Still Not a Good Idea

Forgive the pun: But self-represented family litigants simply don’t do themselves justice. Although Ontario courts strain to assist such parties – by providing on-the-spot assistance, giving them leeway, and exercising patience at their inadvertent ignorance of legal procedure – the end result is almost always a proceeding that is longer, costlier, and feels less fair and just than if there had been experienced legal representation helping one or both parties along.

As in years past, the family cases are replete with instances in which courts comment on the upsurge in self-represented litigants, but at the same time express judicial impatience at the lack of knowledge and organization of these individuals, and the resulting delay and extra cost of the proceedings.

In one 2014 case called Martin v. Sansome for example, the case went all the way to the Ontario Court of Appeal because one of the parties, who was self-represented, felt that the judge was biased against him and that he did not receive a fair hearing as a result. (Among the complaints was that the judge had been clearly impatient and annoyed with him, and at one point indicated that he was an “idiot”).

The same trend continues unabated throughout 2015. A good example is found in a case I wrote about previously called De Cruz-Lee v. Lee, where the court went on at length to lament all the disadvantage and hidden costs of one litigant’s unwise choice to represent herself in relatively simple proceedings.

2) Judges are Becoming More Candid

In this Blog over the past year(s) I have chronicled some of the more surprising comments and opinions offered by judges in the context of their rulings in Ontario family law cases. Gone is some of the judicial reluctance to offer sheer opinion, to express frustration, or to convey dissatisfaction – whether it’s with delays in the judicial process, with the backlog of court cases, or with the conduct of litigants. Some judges have been more candid about these kinds of flaws in the system, or have been more openly disapproving about litigants’ strategic tactics.

Maybe judges are seeing a deterioration of conduct and due process, or maybe they are simply less reticent to speak up. Either way, it has made for some interesting – and sometimes very surprising reading this year.

Your thoughts?

For the full text of the cited decisions, see:

Martin v. Sansome (2014), 118 O.R. (3d) 522, 2014 ONCA 14

De Cruz-Lee v. Lee, 2015 ONSC 1900 (CanLII)

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. For more information, visit us at www.RussellAlexander.com

The 16 Ways to Know You are Separated

separated

The 16 Ways to Know You are Separated

Many separated couples will have no trouble identifying the precise moment at which the relationship was fully and finally over. (“That IT! I can’t take seeing your socks on the floor even ONE MOMENT LONGER!”).

But when the separation process involves many unsuccessful attempts at reconciliation, or a post-separation “friends with benefits” arrangement, the legal situation gets a little muddy.
The exact date of separation was the key issue in a case called Rosseter v. Rosseter. There, the married couple had separated for short periods of time on many occasions (due largely to the husband’s alcoholism), but each time had reconciled a little later. But finally in May or June of 2001, the wife went to live with her parents for a few months, and then rented her own apartment. After that time, the husband and wife always kept separate residences, but there were subsequent attempts at reconciliation even as late as 2009.

The court was asked to determine a narrow question that would affect the couple’s “valuation date”, which is defined under the Family Law Act by reference to “the dates the spouses separate and there is no reasonable prospect that they will resume cohabitation”. By extension, this affected the manner in which the former couple’s property would be divided.

The court scrutinized the many facets of the couple’s relationship, in doing so, it came up with a list of 16 factors that it considered in detail. They were:

1. Maintaining Separate Residences. Here, the couple had lived separately since 2001. But the court pointed out that “[j]ust as parties can live separate and apart under the same roof, they can cohabit under different roofs”.

2. Reasons for Maintaining Separate Residences. In this case, the wife had moved out because of the husband’s alcoholism. But this can include consideration of other reasons, such as whether the spouses have formed new relationships.

3. Eating Meals Together. This includes consideration of not only whether meals are eaten together, but also where, i.e. at home or at restaurants.

4. Other Services Performed For One Another. This involves whether household services are provided (washing clothes, cleaning, and shopping).

5. Presence of Personal Items at the Other Party’s Residence. In this case, the wife bought pajamas and underwear for the husband to use while he was at her new residence; the wife also left some clothes at the former matrimonial home.

6. Attending Social Functions Together. These include attending social functions, entertainment outings (such as attending films and theatre together), and recreational activities.

7. Celebrating Special Occasions Together. The court considered that the husband still bought the wife a birthday gift each year, and bought her flowers on one occasion more than 5 years after she got her own apartment.

8. Helping Each Other During Difficult Times. The court heard evidence that the husband stayed with her for almost a week when her father died. They also attended a few family funerals together.

9. Vacations Together. Here, the couple had travelled to Florida on four occasions long after the wife had left the matrimonial home in 2001, and slept in the same room. However, later vacations together did not go well.

10. Sexual Intercourse. The degree to which the parties remained intimate was a significant factor in determining the date of their separation. In this case, the spouses continued to have sex about half-dozen times each year after 2001.

11. Fidelity to One Another. This was another very significant factor. As the court put it: “When determining whether a couple are cohabiting, the frequency of sexual intercourse matters less, in my opinion, than the identity of the person with whom it occurred.”

12. Financial Support. This involved examination of whether the spouses took steps to separate their financial affairs.

13. Shared Use of Assets. This included items such as vehicles. In this case, the couple also shared a safety deposit box.

14. The Parties’ Behaviour Towards One Another in the Presence of Third Parties. The court examined how the couple portrayed themselves in public, whether they sat together at family or formal functions, and whether they were physically affectionate.

15. How the Parties Referred to Themselves in Documents. The court looked at whether the couple refer to themselves as “married” rather than “separated” when filing income tax returns, for example.

16. Steps Taken Towards the Legal Termination of their Relationship. The court looked at the concrete steps that each of the spouses may have taken to formally end their union. This included consulting lawyers, filing a petition for divorce, etc.

Overall, the court found that there was no reasonable prospect of the resumption of cohabitation for this couple. Some half-hearted suggestions by each to attend counselling during the separation periods were not acted upon, which the court described this way: “both parties demonstrated a willingness to attend counselling by making the request, and the presence of a stubborn streak by refusing it”

This list from Rosseter v. Rosseter is quite useful. When taken together, it shows the factors that a court will take in to account as indication of whether there is a “reasonable prospect of the resumption of cohabitation” within the meaning of the Family Law Act. If enough of the factors are not present, then it can safely be said the parties are legally “separated” and the date of that event is what is used as the valuation date for the property division exercise.

For the full text of the decision, see:

Rosseter v. Rosseter, 2013 ONSC 7779 (CanLII)

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. For more information, visit us at www.RussellAlexander.com

The Difference Between Separation and Divorce in Ontario – video

 

Wednesday’s Video Clip: The Difference Between Separation and Divorce in Ontario

In this video we examine how a separation occurs when one or both spouses decide to live apart with the intention of not living together again. Once you are separated, you may need to discuss custody, access and child support with your spouse. You may also need to work out issues dealing with spousal support and property.

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. For more information, visit us at www.RussellAlexander.com.

Is 15-Minute Meeting With Real Estate Lawyer Enough for Family Law ILA?

Legal Advice Button In Blue Showing Attorney Guidance

Is 15-Minute Meeting With Real Estate Lawyer Enough for Family Law ILA?
Legally speaking, domestic contracts are no different from other types of contracts, and require certain elements and prerequisites before they are considered valid. The question in a recent case was whether a separation agreement between a couple could be valid even if one of them had not taken the steps to truly understand its terms.

There, the spouses entered into a cohabitation agreement that provided they would receive back the equity they each invested in a home they purchased as an “impulse buy” back in 2002 while they were still dating. The home had been put in the husband’s name, and it was agreed he would get 70 percent of any increase in that equity. They also agreed that there would be no claims for spousal support or equalization of property.

Later, when the couple split up, they disagreed on whether the cohabitation agreement was effective. The stakes were high – if the wife succeeded in getting the agreement set aside, then the husband would owe her an additional $250,000 as part of the equalization process.

In assessing whether the agreement was valid, the court looked at the overall picture at the time it was signed. It was true that the wife had received independent legal advice, but the circumstances in which it was given had not been ideal: She had brief meeting with the real estate lawyer that was doing their house deal. He did not have her sign a separate retainer in connection with the family law part, did not open a separate file for her, and did not give her a reporting letter afterwards. Moreover, he warned that he did not practice family law and encouraged her to retain a family law colleague who had an office in the same building.

Still, the lawyer testified he and the wife chatted for (at most) about 15 minutes without the husband present, and they did discuss the agreement and he told her about the family law provisions that governed the situation, and he provided a certificate of independent legal advice (“ILA”) as required.

In reviewing this evidence, the court said:

I do not find credible his assertion that he performed all the described ILA functions within the 15 minutes in which he met with [the wife]. His testimony at trial of his advice to her took the better part of an hour. … In short, there was little if any service provided to [the wife] in the 30 minutes [the lawyer] met with her … 15 minutes of which was most likely with [the husband] present to sign the documents.

The court added that a lawyer’s role in giving ILA is to be satisfied that the person understands the nature and contents of the agreement, and consents to its terms.

Despite these shortcomings with the ILA, the court nonetheless found that this was not a case for the court to use its discretion to set aside the agreement. This was not the usual situation where one party had preyed upon the other; this was merely a case where the wife had failed to “self-protect.” Nor was this a scenario where the wording was unclear or that she did not understand its nature and consequences; the wife admitted that she had not really read it at all until after she and the husband had separated.

In short, the wife had no excuse for failing to get proper independent legal advice or read the agreement before she signed it. The agreement was therefore valid.

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. For more information, visit us at www.RussellAlexander.com.