Father Loses Work, Refuses to Sign Negotiated Agreement – Now What?
Couples who have separation agreements in place sometimes have to make changes to reflect new and unforeseen circumstances. But what happens if one of them refuses to sign?
A recent case demonstrates this scenario, and what a court will do once it is asked to step in.
The couple had separated in 2008 after six years of marriage. They signed Minutes of Settlement at the time, which covered most of the legal issues between them including child support. When the husband’s income subsequently increased, it became necessary to vary that agreement. The parties commenced negotiations, set out the framework of a new deal, and were very close to settling on a new support amount. Minutes of Settlement that had been drafted by the wife’s lawyer were sent to the husband for his review.
Then, things took a turn for the worse. The husband was a home renovation contractor, but he lost his major ongoing contract. A partnership in which he was involved also failed. As a result, he was unable to pay child support at the level that had been discussed during negotiations. In fact, he was unable to pay even at the former level.
He refused to sign the draft Minutes of Settlement that had reflected their discussions up to that point.
The wife went to court, asking for an Order that reflected the terms of the Minutes of Settlement that had been most recently drafted and sent to the father. She claimed that she and the husband had reached an agreement on substantially all the issues in dispute, and that a court Order should be granted on the same terms.
The husband, meanwhile, argued that the two of them had not fully come to terms – a minor issue about one of their children’s allergies was still not settled. He also claimed that his present employment situation rendered him unable to pay child support as had been tentatively agreed.
The court described its task as follows: “The court must initially make a finding as to whether the parties had reached an agreement and if it finds that they had done so, it must decode whether to exercise its discretion to enforce the agreement.”
By the law, if the parties had reached an agreement, then it could still be enforced even if it was not signed. But the court was entitled to use its discretion in deciding whether or not to enforce it – and there were certain factors that had to be considered, namely:
1. The agreement’s terms were not improvident or unconscionable.
2. There was no inequality of bargaining power.
3. Neither party acted in bad faith.
4. Neither of their lawyers acted without authority.
5. The terms were sufficiently clear as to avoid further litigation.
6. The terms dealt with most of the issues in dispute.
Here, there were factors going both ways: On the one hand, the agreement was fair, and had been negotiated freely and in person. On the other hand, and the husband had waited 11 months to advise the wife’s lawyer that the last draft he received was unacceptable to him.
Overall, the court found in this case that the husband and wife did not reach a final agreement; it added, however, that even if that conclusion was wrong, the court would nonetheless exercise its discretion not to enforce it.
Instead, the court amended the agreement to the negotiated agreement, with variation to reflect the change in employment and other circumstances that took place since the tentative agreement was reached. The level of child support owed by the husband, both past and going-forward, was adjusted accordingly.
Kalverda v. Kalverda, 2013 ONSC 1795 (CanLII) http://canlii.ca/t/fwrts
