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Changing Family Law Agreements: Difference between revisions
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{{JP Boyd on Family Law TOC}} | {{JP Boyd on Family Law TOC}} | ||
After an family law agreement has been signed, four things can happen: the parties follow the agreement and everything continues as it should; the parties agree to do something other than what the agreement requires; circumstances change and the agreement must also change; or, someone refuses to follow the agreement and it must be enforced by the courts. | |||
This page will focus on separation agreements. It will discuss how agreements can be changed without going to court, how agreements can be changed with the intervention of the court, and how agreements can be enforced by the courts. | |||
==Changing Agreements by Agreement== | |||
There are always two ways of doing something, the hard way or the easy way. In family law, the easy way usually involves discussion and negotiation. The hard way usually results in a court battle. This segment will deal with the easy way; the hard way is dealt with in the following segment which will discuss changing agreements with the intervention of the court. | |||
Any family law agreement can be changed at any time, as long as the parties to the agreement consent to the change. If they can't agree on the change or on the terms of the change, the party who wants the change may have to go to court if the change is important enough. Changing an agreement is also called amending the agreement or varying the agreement. | |||
===Amending an Agreement by Consent=== | |||
Any agreement can be amended by a later agreement. If the parties to an agreement both believe that their original agreement needs to be amended, and both of the parties agree on exactly how it should be adjusted, the parties can draw up a second agreement variously called an amendment agreement, an amending agreement or an addendum agreement to the original agreement. | |||
An agreement amending an agreement must refer to the original agreement and is usually titled something like "Amendment to the Separation Agreement Executed on 1 April 2008." Amending agreements are usually very short as the idea is to change one particular part of an agreement rather than to rewrite the original agreement in its entirety. The amending agreement should specify which particular paragraph of the original agreement is being changed, and then set out the new text of that paragraph: | |||
2. The parties agree that Paragraph 23 of the Agreement executed on 1 April 2008 will be cancelled and replaced with the following: | |||
Sally will have parenting time with the children beginning on Tuesdays at 4:00pm or the end of school to the following Wednesday at 9:00am or the start of school, whichever is earlier. | |||
3. Sally's income is $45,000 per year as at the date of the execution of this Amending Agreement. The parties agree that Sally's child support obligation, set out at Paragraph 28 of the Agreement executed on 1 April 2008, will be $684 per month, commencing on the first day of the month followng the execution of this Amending Agreement. | |||
Just like the original agreement, the amending agreement must be formally executed by both parties. | |||
===Amending an Agreement through Negotiation=== | |||
A well-written agreement will usually set out a way that the parties will resolve disputes arising from the agreement. Sometimes this mechanism requires that the parties to go to court; sometimes this mechanism prescribes some other means of dispute resolution, such as mediation or arbitration. | |||
Mediation is, in general, the best option if simple negotiation doesn't get you anywhere. In mediation, the parties attempt to negotiate a resolution to their dispute with the help of a third party, the mediator, who is skilled in family law issues and works with the parties to get them to an agreement. | |||
Mediation is not always appropriate, particularly where the problem is limited to one particular term of the agreement and it seems that neither party is willing to bend on the matter. In such cases, arbitration limited to that one issue should be considered since an arbitrator's job is to impose a settlement on the parties, after listening to both sides, and it's cheaper to arbitrate rather than to litigate. | |||
Whatever method is chosen, it is usually better for the parties to arrive at a resolution of the problem themselves without having to go to court. This way the power remains in the hands of the people whose lives are affected by the agreement and who must live with it on a daily basis, rather than in the hands of someone else, a judge, who may very well make a decision no one is happy with. | |||
See the section Alternatives to Court for more information on mediation and arbitration. | |||
==Judicial Intervention== | |||
In general, the court will be reluctant to meddle with a reasonable separation agreement. In fact, the Court of Appeal for British Columbia has said that separation agreements should be treated by the courts with "great deference." This is because a separation agreement is a private contract between two parties which is the product of an often lengthy process of negotiation, and the courts are usually unwilling to disturb an agreement which two people freely entered into, without a very good reason for doing so. The courts will be especially reluctant to alter a final order that was the product of a separation agreement. | |||
The questions that the court will want answered are: What has changed between the date of the execution of the agreement such that the agreement should be changed despite the objections of the other party? Is there some aspect of the agreement or how the agreement was made that demands the intervention of the court? Was there some fundamental unfairness surrounding the negotiation of the agreement such that the whole agreement should be set aside? | |||
A party asking the court to interfere with an agreement must, in general, show that | |||
the agreement is fundamentally unfair or that it would be unfair to hold the party to the terms of the agreement, or | |||
circumstances have changed significantly since agreement was executed such that it is no longer appropriate | |||
before the court will consider making an order different than the terms set out in an agreement. | |||
The Supreme Court of Canada discussed the fairness issue in depth in a 2009 case called Rick v. Brandsema. In this case, the court talks about how family law agreements are different from commercial agreements because of the unique emotional circumstances surrounding the negotiation of family law agreements — when you're signing a car lease, you're not doing it when you've just ended a long cohabiting relationship with the dealer. In Rick, the court emphasized that fairness means: | |||
bargaining in the utmost good faith; | |||
being completely honest and forthcoming during negotiations; | |||
making full and complete financial disclosure, whether full financial disclosure has been requested or not; and, | |||
not taking advantage of someone at a time of emotional or psychological weakness or vulnerability. | |||
If an agreement wasn't fairly negotiated, it may be vulnerable to challenge later on down the road. | |||
===The Validity of Agreements=== | |||
Just like a commercial contract, the validity of a family agreement can be challenged on one or more of the following grounds: | |||
the agreement was not freely entered into, in other words if one or both of the parties were under duress or coercion when the agreement was negotiated or executed; | |||
the agreement is "unconscionable," in other words if the agreement is obviously and seriously unfair to one of the parties; | |||
one of the parties entered into the agreement without the benefit of independant legal advice and did not fully understand what the agreement meant; | |||
one of the parties entered into the agreement without full disclosure being made by the other party or based on incorrect information supplied by the other party; or, | |||
one of the parties entered into the agreement or a part of the agreement by mistake. | |||
====Duress, Coercion, Unconscionability and Mistake==== | |||
The courts won't enforce an agreement — that is, they won't compel the parties to abide by an agreement — where one of the parties was forced or pressured to enter into the agreement. An agreement must be entered into freely and voluntarily. | |||
The courts won't enforce an agreement where one of the parties used a position of power to achieve an unfair agreement. This can include threats and manipulation, as well as the execution of an agreement in circumstances of extreme emotional stress, such as just before a wedding, following a hospitalization, or during an emotional breakdown. | |||
Agreements that are hugely unfair can also be found to be unconscionable, as can agreements formed under a fundamental misunderstanding about the nature of the family finances or one party's assets. | |||
====Lack of Independent Legal Advice==== | |||
A spouse may be able to challenge the validity of an agreement where he or she did not receive independent legal advice before executing the agreement. Independent legal advice helps to ensure that both parties are on a more or less equal footing going into the agreement, and to ensure that one party doesn't unintentionally enter into an unfair agreement. | |||
There is, however, no requirement that independent legal advice be sought before an agreement is executed. In most situations, the absence of independent legal advice will not be enough to overturn an agreement by itself. | |||
====Fraud and the Failure to Make Full Disclosure==== | |||
When people enter into an agreement, they do so on the assumption that certain material facts are true, that each is earning as much money as they say thay are, that each has no more assets than they say they have, and so forth. These assumptions are the foundation on which the agreement is built. If one of the parties has failed to make full disclosure of these sorts of material facts, or if one party has lied about or misrepresented these facts, the courts may be willing to overturn an agreement. | |||
===Change of Circumstances: Reassessing Support=== | |||
The court can make an order for spousal or child support, despite the existence of a valid separation agreement which might already deal with these issues. The court will, however, be strongly influenced by what an agreement has to say about support and will give the agreement a great deal of weight in deciding whether to make an order any different than what the agreement sets out. | |||
====Child Support==== | |||
As in all matters concerning children, the courts' primary concern is with the best interests of the child. The courts will rarely vary an agreement that provides that child support will be paid in accordance with the federal Child Support Guidelines to some other amount of support. By the same token, the courts may be reluctant to reduce a child support provision which is higher than what the Guidelines provide where the higher level is reasonable, because it is logically in the best interests of the child to have the benefit of as much support as possible. The courts will almost always increase a provision which is less than what the Guidelines would mandate. | |||
The court will generally make an order for child support, including an order which is different than what an agreement requires, if: | |||
the payor's income has increased; | |||
the payor's income has decreased; | |||
one or more children is no longer living mostly with the parent receiving support; | |||
one or more children is now spending 40% or more of their time with the payor; or, | |||
one or more children is no longer entitled to receive support. | |||
See the chapter Child Support > Making Changes for more information. | |||
====Spousal Support: Agreements for the Payment of Support==== | |||
Both the Divorce Act and the Family Relations Act allow the court to make an order for spousal support contrary to the terms of an existing separation agreement. In making such an order, however, the court is required to bear the terms of the agreement in mind. This will affect the court's decision, as there may be a presumption that the amount agreed to is fair and reasonable. | |||
In Pelech v. Pelech, a 1987 case of the Supreme Court of Canada, the court had this to say about the matter: | |||
"Where the parties have negotiated their own agreement, freely and on the advice of independent legal counsel, as to how their financial affairs should be settled on the breakdown of their marriage, and the agreement is not unconscionable in the substantive law sense, it should be respected. People should be encouraged to take responsibility for their own lives and their own decisions." | |||
As a result, to vary an agreement for spousal support, the person seeking the change must show that there has been a change in circumstances that is "substantial, unforeseen and of a continuing nature" related to the marriage. While some courts have held that a failure to become self-sufficient and find gainful employment is enough of a change in circumstances to warrant changing an agreement, in general the applicant must demonstrate that there has been a serious and unexpected change in his or her circumstances. | |||
The "change of circumstances" which might justify the court making an order for spousal support different than what an agreement provides for include circumstances in which: | |||
the recipient's income has increased such that he or she requires less support; | |||
the recipient has remarried or entered into a new relationship such that he or she is being supported by someone else; | |||
the payor has retired; or, | |||
the payor's income has decreased and is expected to continue to remain at the lower level. | |||
Note that the publication of the Spousal Support Advisory Guidelines is not a change in circumstances that will result in the court making an order for spousal support. | |||
See the chapter Spousal Support > Making Changes for more information. | |||
====Spousal Support: Agreements Not Requiring Support==== | |||
It is a bit harder to challenge an agreement which says support won't be paid. In cases like this, the person claiming spousal support has to show why he or she shouldn't be held to the bargain that was struck. | |||
In a 2003 case from the Supreme Court of Canada, Miglin v. Miglin, the court described a test that should be used when someone wants to get spousal support after signing a separation agreement which says it shouldn't be paid: | |||
First, the court must decide whether the agreement was negotiated fairly. Was there an equality of bargaining power? Was someone pushed into the deal? | |||
Next, if the circumstances surrounding the agreement were reasonable, the the court consider whether the agreement as a whole met the objectives for spousal support set out in s. 15.2 of the Divorce Act at the time it was made. | |||
Finally, even if the agreement met the Divorce Act objectives then, the court must decide if it continues to meet them now, when the agreement is being challenged. Does the agreement still reflect the original intention of the parties and does it continue to meet the objectives for spousal support set out in the Divorce Act? | |||
If the person seeking spousal support is shown to be entitled to receive support and one or more parts of this test are met, then the court may decide that support should be paid regardless of what the parties agreed to in their separation agreement. | |||
===Unfairness: The Division of Property=== | |||
The provincial Family Relations Act deals with the division of family assets between spouses. The assets of unmarried couples are usually divided under the law of trusts or the Partition of Property Act, however the Family Relations Act will apply where a unmarried couple has made an agreement which deals with assets, under s. 120.1 of the act. | |||
There are three critical sections of this act which bear on the division of property under separation agreements: | |||
61 (1) This section defines marriage agreement for the purposes of this Part and this definition applies to marriages entered into, marriage agreements made and to property of a spouse acquired before or after March 31, 1979. | |||
(2) A marriage agreement is an agreement entered into by a man and a woman before or during their marriage to each other to take effect on the date of their marriage or on the execution of the agreement, whichever is later, for | |||
(a) management of family assets or other property during marriage, or | |||
(b) ownership in, or division of, family assets or other property during marriage, or on the making of an order for dissolution of marriage, judicial separation or a declaration of nullity of marriage. | |||
(3) A marriage agreement, or an amendment or rescission of a marriage agreement, must be in writing, signed by both spouses, and witnessed by one or more other persons. | |||
65 (1) If the provisions for division of property between spouses under section 56, Part 6 or their marriage agreement, as the case may be, would be unfair having regard to | |||
(a) the duration of the marriage, | |||
(b) the duration of the period during which the spouses have lived separate and apart, | |||
(c) the date when property was acquired or disposed of, | |||
(d) the extent to which property was acquired by one spouse through inheritance or gift, | |||
(e) the needs of each spouse to become or remain economically independent and self sufficient, or | |||
(f) any other circumstances relating to the acquisition, preservation, maintenance, improvement or use of property or the capacity or liabilities of a spouse, | |||
the Supreme Court, on application, may order that the property covered by section 56, Part 6 or the marriage agreement, as the case may be, be divided into shares fixed by the court. | |||
(2) Additionally or alternatively, the court may order that other property not covered by section 56, Part 6 or the marriage agreement, as the case may be, of one spouse be vested in the other spouse. | |||
68 (1) This section applies to an ante nuptial or post nuptial settlement that is not a marriage agreement under this Part. | |||
(2) The Supreme Court may, on application, not more than 2 years after an order for dissolution of marriage, for judicial separation or declaring a marriage null and void, inquire into an ante nuptial or post nuptial settlement affecting either spouse and, whether or not there are children, make any order that, in its opinion, should be made to provide for the application of all or part of the settled property for the benefit of either or both spouses or a child of a spouse or of the marriage. | |||
(3) The Supreme Court may, on application, if circumstances warrant, extend the period during which an application may be made or power exercised under this section. | |||
To simplify things a bit, s. 61 defines "marriage agreement" for the purposes of the parts of the act which deals with the division of assets, Parts 5 and 6. Section 65 allows the court to vary the division of property set out by an agreement where the division prescribed by the agreement is unfair. Section 68 applies to agreements that aren't "marriage agreements" as defined by s. 61, and allows the court to review such agreements. | |||
The effect of these sections is to allow the court to vary the parts of a separation agreement dealing with property where the agreement is unfair, so long as the agreement qualifies as a "marriage agreement" under s. 61. For the purposes of s. 61, a "marriage agreement" must: | |||
be between married spouses; | |||
concern family property, at least in part; | |||
be in writing; and, | |||
be signed by both spouses whose signatures are witnessed. | |||
In the case of Gold v. Gold, a 1993 case of the Court of Appeal for British Columbia, the court had this to say about fairness: | |||
"If the agreement is unfair within one or more of the [criteria listed in s. 65], then the Court has a wide discretion to reapportion the family property to achieve fairness. However, I find nothing in the Family Relations Act, nor in the authorities, which suggests that only equality or near-equality can be fair. ... Many divisions of family property must be unequal in order to be fair." | |||
See the sections Unmarried Couples and Family Assets for more information about the division of assets. | |||
==Further Reading in this Chapter== | ==Further Reading in this Chapter== | ||
