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Family Law
 
Separation Agreements & Varying Orders
 

Separation Agreement

A separation agreement is a written document settling the issues between parties arising from the end of their relationship. Some of the issues include:

  1. Which party the child(ren) will live with and how decisions about the care and control of the child(ren) will be made (custody and guardianship);

  2. How the parents will compromise the child(ren) time (access);

  3. How the parents will cover the child(ren) financial needs (child support);

  4. Whether a spouse is entitled to financial assistance, and, if so, who should provide that assistance and in what amount (spousal support); and

  5. How the assets will be shared between the parties and how debts will be paid (property division)

Separation agreements are legal contracts that can be enforced by the court. It's also much cheaper and often quicker to resolve these issues by agreement than in court. Please note that the terms in a separation agreement in related to child support, custody and access, may or may not be enforceable, the Court will decide whether those terms are enforceable or not based on the best interests of the child(ren). However, there’s no limit as to what can put in the separation agreement in related to spousal support and property division.

Please note that as soon as the separation agreement is duly executed, especially if independent legal advice was being proffered before the agreement was signed, the parties are bounded by the agreement. It’s not easy to set aside a separation agreement at a later time even if circumstances changed.

Varying Separation Agreements or Court Orders

Having said that under some circumstances, a separation agreement can be set aside or varied on the following grounds:

1.      Miglin Challenge on spousal support

If the separation deals with a final resolution of spousal support (a waiver, a time limit for spousal support or a lump sum payment), and the two-point test is met:

Step 1 (At the time of agreement execution): Was the negotiation during the spousal support negotiation flawed? Was there any duress, or inequality in bargaining power? For instance, the negotiation would be considered flawed if one party was highly educated, represented by a lawyer, while the other party only has a high school education and was self-represented and the self-represented party was forced/ persuaded to sign the document “quickly” without time to consider or to consult with an independent third party.

Or Was the spousal support not substantively in compliance to the objectives of the Divorce Act at the time of negotiation? The Courts are clear that the fact that an agreement provides for less than the Spousal Support Advisory Guidelines is not in and of itself a reason to set aside the agreement and that the Advisory Guidelines result must be balanced with respect for the parties’ own assessment of a fair outcome as reflected in their agreement or the value they may have placed on reaching an agreement and not litigating.

Step 2 (At the time of the Application to set aside the spousal support terms): Was there significant departure from range of outcomes foreseeable by parties? It’s not an easy test to met. The Courts have held that even retirement, medical illnesses due to old ages, are not significant departure from the range of foreseeable outcomes!

Both Step 1 and Step 2 must be answered in the affirmative before a Miglin Challenge will be successful. Please note that in most scenario only one issue such as time limit is “final”, while the amount is not (i.e. the exact amount is to be agreed by the parties at a later time).

2.      Material Change of Circumstances on Custody Arrangement

Pursuant to the Family Law Act, you are allowed to set aside a separation agreement if there’s a material change of circumstance. It’s not an easy test to make. If the separation agreement was duly executed and both parties obtained independent legal representation or independent legal advice, unless the result is a significant departure from range of outcomes foreseeable by parties, the Courts would not set aside the separation agreement.

However, application to vary custody arrangement based on material change of circumstances are quite frequently sought after in custody & access cases.

The Supreme Court of Canada stated that for the Court to find that the material change threshold is met, the judge must be satisfied that there has been:

  1. A change in the condition, means, needs, or circumstances of the child or in the ability of the parents to meet the needs of the child;

  2. Which materially affects the child; and

  3. Which was either not foreseen or could not have been reasonably contemplated by the parties signing the separation agreement or by a judge who made the initial order.

All three parts mentioned above have to satisfied. The third part of the test, that the change was not foreseen or in the reasonable contemplation of the judge who made the initial order, is the most difficult aspect of the test to meet. For example, a parent who wants to move to be with a new partner may try to argue that the relationship constitutes a material change, but the court may find that, if that relationship was in existence (even in a very preliminary stage) at the time of the original order, it does not represent a change.

Even if a material change is established, the Court has discretion to vary the custody or not based on the best interests of the child, having regard to all the relevant circumstances relating to the child’s needs and the ability of the parents to satisfy them.

Each case turns on its own unique circumstances and the only issue is the best interest of the child in the particular circumstances of the case. In assessing the best interests of the child for varying the custody order or agreement, a judge will consider:

  • the existing custody arrangement and relationship between the child and the custodial parent;

  • the existing access arrangement and the relationship between the child and the access parent;

  • the desirability of maximizing contact between the child and both parents;

  • the views of the child if appropriate; and

  • disruption to the child of a change in custody;

It’s very fact specific, and for instance Material Change in Circumstances and Custody were found to exist when: (1) A parent becomes an alcoholic or a drug addict; (2) A parent moves with the child; (3) The Child does not wish to have contact with a parent any more; (4) A parent becomes mentally ill; (5) A parent starts alienating the child (see the discussion on parental alienation); (6) A parent starts abusing the child. And when the custody & access arrangement is varied, so will the child support payment obligations that comes with it.

 

3.      Significant non-disclosure of financial assets

Pursuant to the Family Law Act, significant non-disclosure of financial assets prior to the signing of the separation agreement is a ground to set aside a separation agreement.

Usually a full and frank financial disclosure by both parties is required to allow both parties to make an informed decision before signing the separation agreement. The discovery at a later time that insufficient financial disclosure was disclosed to the other party prior to the signing of the separation agreement is a ground to set aside the separation agreement.

However, even if one of the parties concealed some financial disclosure, if the other party knew about it or ought to know about it, or consented to incomplete financial disclosure, it still would not be successful in challenging the separation agreement. In addition, the Court tends to use a suggestive test, so if the party would have signed the agreement anyway even if the concealed financial information was disclosed, the challenge also would not be successful. More importantly, the non-disclosure of financial assets must be significant. It has to be so significant that but for the non-disclosure of such financial assets the agreement would never have been signed.

4.      Common law Unconscionability Challenge

It’s extremely difficult to establish a case of unconscionability, so such relief is only granted sparingly. A contract may be found to be unconscionable based on:

Undue Influence - where one party exercises unreasonable pressure in order to get the other party to sign the contract.

Duress - where one party uses threats in order to get the other to agree to the contract terms (physical threats, financial threats, or other types of threats).

Unequal Bargaining Power - where one party has an unreasonable advantage of the other, especially if the party with superior bargaining power was aware of the vulnerable party’s lack of understanding of the contract terms.

Usually the outcome of enforcing it would be so extremely unjust, or overwhelmingly one-sided in favor of the party who has the superior bargaining power, that it shocks the conscience of the Court.

It’s not easy to set aside a separation agreement, and that’s why it’s of utmost important that you have a well-drafted separation agreement to protect your rights and obligations.

HTW Law can help. Call us now at 647-849-6582 or send us a message if you have some legal questions / inquiries or want to schedule an appointment with HTW Law.