Did Reconciliation Undo All of Couple’s Separation Agreement – or Only Part?
In a recent case called Miaskowski v. MacIntyre the Ontario Court of Appeal had to solve what felt a bit like a logic puzzle, e.g. “The next sentence is true. The previous sentence is false.”
The couple had married in 1999. When they separated for the first time about 2.5 years later in 2002, they entered into a Separation Agreement. It contained a “reconciliation clause” with two scenarios:
- If the couple reconciled for more than 90 days, the Separation Agreement would be voided.
- If their reconciliation lasted for fewer than 90 days, the Separation Agreement was preserved.
Importantly, the Agreement also provided that the wife released any claims to the husband’s Canada Post pension (the “Release”).
There was also an Exception to this voiding provision, by which “any payment, conveyance or act” made under the Separation Agreement would not be invalidated. In other words, even if the Agreement was rendered void, completed payments made under it did not have to be undone.
After that first separation in 2002, both parties went on to form new relationships, but remained married to each other. In 2006 – about four years signing the Agreement – they reconciled, then stayed together for almost nine more years before separating the second time.
That second separation paved the way for their divorce, but they could not agree about the value of the wife’s share of the husband’s pension. The husband did not refute the wife’s entitlement; he merely objected to her sharing in its value for the roughly 7-year period during which they were living separately and with their respective new spouses. He pointed to the wife’s Release of her rights under the Agreement. The matter went to court.
In essence, the resolution hinged on how to properly interpret the Separation Agreement, the Exception, and the Release. As for the latter, it drastically impacted how much of the husband’s pension share the wife would get, namely:
- If the Release was indeed voided in law, then the 1997 marriage date was the proper pension valuation date for calculating the wife’s entitlement. In that case, her share would be almost $275,000.
- If the Release was not voided upon reconciliation, and instead survived it, then the pension valuation would be calculated using the reconciliation date in 2006, in which case her share would be closer to $140,000.
At trial, the judge held that the pension Release was not voided when the couple reconciled. On appeal, the Ontario Court of Appeal held otherwise: It found the trial judge had erred by not giving full effect to the 90-day reconciliation clause, and that he Release was void and did not preclude the wife from claiming a share of the husband’s pension.
First, the Appeal Court dealt quickly with the Exception to the voiding clause, finding it did not apply to these facts. The equalization payment the wife received did not contain any Pension component nor was there any other related “payment” that fell within the Exception’s wording. However, the fact that this Exception clause existed at all was a clue that the parties intended that completed conveyance or transfers did not have to be undone if they reconciled, and that the Separation Agreement was void after a longer reconciliation.
Next, the Court considered the effect of the 90-day reconciliation clause itself. It pointed out that under common law, once separated spouses reconcile any Separation Agreement they had reached becomes void unless it contains: 1) a clause to the contrary; or 2) a clause that indicates the parties’ intention that transactions carried out under the agreement will remain in place.
Here, the Separation Agreement clearly provided for what would happen if the couple reconciled: A short-lived reconciliation would preserve the Separation Agreement, but a longer reunion would not. Completed payments and conveyances to each other would be preserved either way.
In interpreting this Agreement, it was important for the court to strive to discern the parties’ intention. As the court said:
The language of the voiding clause in the separation agreement in this appeal clearly demonstrates the intent on reconciliation to return the parties to the position they were in prior to separation. The bargain they made on separation, whereby they released each other from future rights and obligations, is set aside and becomes void. The parties are meant to regain all the rights they had as spouses that were bargained away in the separation agreement.
With all this in mind, the Appeal Court concluded that in light of the 9-year reconciliation period, the Separation Agreement was void and so was the included Release of the wife’s right to share in the pension. She was entitled to the share from the date of marriage to the date of the second separation, being the larger amount of almost $275,000.
For the full text of the decision, see:
Miaskowski v. MacIntyre, 2020 ONCA 178