Parents’ Settlement Agreement Falls Apart Due to Expert’s Input
The parents married in 1996, and separated in 2003. They had a child would always be a dependent, as she was born with various disabilities requiring lifelong care.
After several years of litigation, in 2015 they signed a settlement agreement that covered all issues, and barred them from claiming support from each other. Although they never took the steps to file it with the court and transform it into a final court order, they both abided by the agreement’s terms on a day-to-day basis.
While it accordingly seemed they had succeeded in fully resolving all matters between them, their accord fell apart due to one of the agreement’s clauses: It called for the input of an expert, who would be retained to assess the included support provisions to make sure their child’s eligibility for funding under the government-sponsored Ontario Disability Support Program (ODSP) was not compromised.
However when the time came, the parents disagreed over the expert’s recommended amendments to the settlement agreement. Ultimately, after negotiations failed, the mother took the position that the entire agreement was not binding at all, and this led them to appear before the court for its resolution.
A lower court judge agreed with the husband: The parents’ settlement agreement was a binding separation agreement that was fully enforceable, including the expert’s recommended changes as those were incorporated by the agreement’s specific wording. The parents had had a “meeting of the minds” on the essential terms, and their agreement was intended to settle all outstanding issues between them. There was no common mistake that would render their agreement void or voidable.
The mother appealed to the Ontario Court of Appeal, but was unsuccessful. That court noted that the parties had obtained legal advice on how to structure and word their settlement. The outcome of that legal advice was that they duly set aside significant funds for their child’s future care. None of this was impacted by the expert’s input.
Importantly, they honoured the agreement for several years, and acted as if it was in effect and enforceable even though it was never formalized into a court order.
Also from a legal/procedural standpoint, the Appeal Court reflected on the courts’ own ability to set aside an agreement that the parties themselves had reached: It pointed out that while Family Courts did have judicial discretion not to enforce a settlement between parents and spouses, it was only a limited one, given the importance of certainty in the resolution of family disputes.
Yet there was no basis to exercise that limited discretion in this case. On the evidence, there was nothing to support the conclusion that the agreement was not in the child’s best interests. Nor were there any grounds to find that the child’s best interests mandated that the agreement should be set aside, in favour of litigation to resolve the issues in light of the risk that ODSP benefits might be jeopardized. The lower court judge had not erred in this respect.
Finally, the mother offered no reason for a court to suppose that – again from the child’s best-interests perspective – any better result would be achieved to provide for the child’s support if the settlement agreement was set aside, and the matter proceeded to trial instead. The Court of Appeal confirmed the lower court judge’s ruling that the settlement agreement between these parents was valid.
For the full text of the decision, see:
Dembo v. Hannas, 2020 ONCA 564