The Exceptional Circumstance of Enforcement of an Agreement in Family Law Without the Formalities   

The overarching goal of Family Law matters are to resolve such matters in a cost-effective and efficient manner.  This can be achieved through the successful negotiation of the terms of a Separation Agreement which may then, in turn, be signed by each party before a witness.  However, what happens where two parties agree but before they are able to sign a properly drafted Separation Agreement, one of the parties backs out of the deal and refuses to sign a written Separation Agreement.  Can an agreement between the parties be enforced even without a fully signed and witnessed Separation Agreement?     In certain circumstances, the law may uphold a family agreement even though it is not a properly signed and witnessed Separation Agreement. 

Section 55(1) of the Family Law Act, R.S.O. 1990, c. F.3, provides that a domestic contract in Ontario is unenforceable unless it is in writing, signed by the parties, and witnessed. However, despite the clear wording of s. 55(1), some cases in Ontario have held that, in certain circumstances, courts can enforce family law agreements that do not comply with the requirements that a Domestic Contract be in writing, signed by both parties, and properly witnessed.   

The primary exception to section 55(1) originates from the Ontario Court of Appeal’s 1982 decision in Geropoulos v. Geropoulos (1982), 26 R.F.L. (2d) 225 (Ont. C.A.). Despite that GEROPOULOS was decided under the former legislation being the Family Law Reform Act, the reasoning in GEROPOULOS has been repeated by Ontario law today.

The Geropoulos exception provides that a family law settlement reached during the course of litigation is enforceable provided, among other things, both parties had legal advice.  The rationale for the  decision is that parties who are represented by Counsel should stand by their compromises and understandings through their lawyers.  This promotes the overarching objective that family law matters need to be resolved in a timely and expeditious manner.

It is, however, unclear whether the Geropoulos rule applies to pre-litigation family law matters.  There have been mixed decisions of the Superior Court of Justice on this point.  In Pastoor v. Pastoor (2007), 48 R.F.L. (6th) 94 (Ont. S.C.J.) the distinguished Justice Perell reasoned with the GEROPOULOS principles to uphold a settlement reached without a formally signed Domestic Contract.  On the other hand, there have been other decisions of the Superior Court of Justice that decline to apply the GEROPOULOS principles to pre-litigation settlements (For example, the decision of Greve v. Shaw (2022), 71 R.F.L. (8th) 293 (Ont. S.C.J.)).

 The exceptions to Section 55(1) of the Family Law Act is a developing area of the law.  The question still remains to what extent the GEROPOULOS principles apply and, in particular, whether those principles apply at all to pre-litigation settlements.

To avoid any confusion, it is always best to have settlements documented by a properly drafted Separation Agreement that is signed by both parties and where both parties have had independent legal advice from a qualified family lawyer.

Unequal Division of Net Family Property & the Threshold Question of Unconscionability

In Ontario, married spouses are subject to the equalization of net family property legislation set forth in Section 5 of the Family Law Act.  In effect, married spouses share in the other spouses net family property to help ameliorate any economic disadvantage resulting from the breakdown in the marriage.  The spouse with the greater net family property owes the spouse with the lesser net family property 50 per cent of the difference in their respective net family property resulting in each spouse having a similar asset base upon a breakdown in the marriage.  However, in specific circumstances, the family law may provide for an unequal division of net family property. 

Section 5(6) of the Family Law Act sets out the factors that must be examined in assessing whether an unequal division of net family property is appropriate.  An unequal division of net family property will only be appropriate if the Court finds that an equalization payment would be “unconscionable” in the circumstances after examining the factors provided in Section 5(6) of the Family Law Act.  An unequal division of net family property is the exception rather than the rule.

In Booth v. Bilek, [2021], 2021CarswellOnt2607 (Ont. C.A.), the Ontario Court of Appeal provided some clarity on the legal threshold question as to what constitutes “unconscionable” in deciding whether to Order an unequal division of property between two married spouses.  In Booth, the parties were married for 4.5 years.  They did not have any children of their marriage.  The Trial Judge ruled in favour of unequal division of net family property.  The Trial Judge’s decision was based on the following factors:

• The degree to which the wife’s net family property originated from gifts made by the husband;

• That a standard equalization payment would be disproportionate given that the parties cohabited for less than the five year threshold;

• The contributions of the husband and the wife during their relationship. It was found by the lower Court that the majority of the parties’ respective net family property resulted from the husband’s contributions.

In analyzing the S. 5(6) factors, the Trial Judge found that the wife had disproportionately benefitted from the short marriage.  The wife had received nearly $200,000 from the sale of the matrimonial home, an asset to which the wife made no direct financial contributions.  The Trial Judge further found that that the difference in each party’s net family property was almost solely attributed to the growth in the husband’s investments.  There was an age difference between the parties of 23 years with the husband solely living from the investment income, while the wife was found to be self supporting.

At Trial, the husband was Ordered to pay an unequal payment to his wife in the amount of $10,627 which represented only 10 per cent of the full equalization payment of approximately $106,000.  The wife appealed the decision of the Trial Judge and argued that a full equalization payment would not be unconscionable and, in the alternative, that she should be awarded 87 per cent of the full equalization payment because they cohabited for 52 months out of the 60 month (5 year threshold).

In deciding whether to overturn the Trial Judge’s decision, the Court of Appeal noted that the threshold of unconscionability is a high one and that more than mere unfairness is required: Serra v. Serra, [2009], 61 RFL (6^th) 1, (Ont. C.A.).

Section 5.6 (e) of the FLA specifies that an equalization payment may be found to be unconscionable if the payment is disproportionately large relative to a cohabitation of the spouses of less than five years.

In the Booth decision, the Court of Appeal agreed with the Trial Judge that a standard equalization payment would be “unconscionable”.  The Court of Appeal rejected the argument that the unequal payment should be proportionate to the length of cohabitation.

The correct approach in unequal division cases is to first calculate the full equalization payment.  The legal question then then becomes:  is the full equalization payment unconscionable having regard to the factors set out in S. 5(6) (a) through (h)?  While cases of unequal division are the exception rather than the rule, the Booth decision serves as a reminder that the high threshold of unconscionability may be met in certain circumstances.

Change in Residence or Relocation of a Child:  The Legislative Scheme and Written Notice Requirements

There have been comprehensive and sweeping legislative reforms that now require all parents to give written notice of any change in residence or if they wish to relocate with their child(ren).  The requirements for non-married parents are set forth in Sections 39.1, 39.2, 39.3, and 39.4 of the Children’s Law Reform Act, R.S.O. 1990, c. C-12.  Sections 16.8 and 16.9 to 16.96 of the Divorce Act, R.S.C. 1985, provides the legislative notice requirements for parents who are changing residences or seeking to relocate with their child)ren) for those parents who were married and not yet divorced.  In effect, the requirements set forth in the Childrens’ Law Reform Act and the Divorce Act are similar, yet there are subtle differences.

If a parent seeks to relocate with their child(ren), then the relocating parent must provide the non-relocating parent with at least 60 days written notice of the relocation and the written notice must contain the information required by the applicable legislation including but not limited to the address of the intended relocation, the date of the expected relocation, the relocating parents new contact information, and a proposed plan for parental decision-making and parenting time.  The non-relocating parent will then have 30 days to object to the proposed relocation.  If a non-relocating parent does not agree wit with the proposed relocation of the child)ren), then it is imperative that the objection is served within the time limits set out in the legislation (i.e., 30 days from being served with the relocating parents written notice).

However, Sections 16.8(3) and (4) and Sections 16.9(3) and (4) of the Divorce Act authorize the court to dispense with the notice requirement in certain circumstances “including if there is a risk of family violence.  Similarly, Section 39.3 (3) of the Children’s Law Reform Act also provides the Court the ability to dispense with the relocation notice requirement in appropriate circumstances including if there is family violence.  

One such case where the Court exercised its jurisdiction to dispense with the written notice requirements was in the case of A. J. K. v. J. P. B., [2022], , 2022 CarswellMan 74 [Q.B.].  In that case, the father and mother separated in 2015.  They had two (2) children of their marriage.  The mother had primary care of the children.  Post separation, the father engaged in threatening behaviour towards the mother.  The mother successfully applied for a restraining order in 2017.  The restraining order was extended for 3 years in 2019.  Despite the restraining orders, the father’s threats and frightening behaviour towards the mother continued.  In August 2021, the mother brought an emergency motion without notice to the father.  As such, this was a case where the relocating party did not comply with the requirement of written notice.  The Court was, therefore, forced to determine whether it was appropriate to dispense with the written notice requirements in these circumstances.

Before getting to the outcome of the decision, it is worth noting that the mother was the primary care parent to the children.  This is significant because, under the relocation legislation, if the relocating parent is the primary care parent, then the onus shifts to the non-relocating parent  to prove that the relocation is not in the best interests of the children.  However, the A. J. K. case was peculiar in that it was heard as a without notice motion.  The Court exercised its discretion to decide that the mother would have to prove that the move was in the best interests of the children, thereby placing the onus on her.

Despite the onus being on the mother to prove that the move was in the best interests of the children, the Court ruled in favour of the mother’s relocation.

In relocation cases, the stakes are high and the legal issues are complex.

If you find yourself on either side of a relocation issue, you are well advised to seek legal advice from a qualified family lawyer.