Both Parties to a Separation Agreement Fail to Meet its Obligations

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When parties to an agreement, such as in divorce or separation, make a deal, they are expected to abide by its terms. Suppose two people experiencing the breakdown of a marriage arrive at a post-separation agreement. In that case, the agreement may contain details about what will happen to the parties’ property and what they will have to pay in child or spousal support. Failure to meet these obligations can result in litigation and a court order that might come with additional financial penalties.

However, a recent decision from the Court of Appeal of Ontario shows that one should know their obligations before complaining that another has not met theirs.

Parents fail to live up to details of divorce agreement

The mother and father involved in the dispute were divorced in 2003. While they were married, they had two children. While going through their divorce, they agreed on several items, including child support, the transfer of the matrimonial home, and more. The key aspects of the agreement were:

• The father would pay child support to the mother of $950 per month for each child “according to the child support guideline”;

• The amount of child support could be changed based on future changes in the husband’s income, based on 17% of the husband’s gross income for each child to be paid monthly until each child reached the age of 18;

• If the wife remarried, the amount of child support would be reduced from 17% to 12.5% of the husband’s taxable income; and

• The matrimonial home would be transferred to the wife in exchange for a payment of $79,000 (later decreased to $74,600) in monthly instalments equivalent to the monthly child support commencing May 1, 2006, but to be repaid immediately upon the wife remarrying.

The matrimonial home was transferred to the wife in accordance with the agreement. However, she remarried in 2006 and did not advise the father of this development. This is critical because the agreement stated that the father’s child support payments would reduce in the event of remarriage. In addition, the mother did not pay the balance of the $74,600 in exchange for the home upon remarriage, as detailed in the agreement. At the same time, the father failed to provide his annual income information which was necessary to calculate child support. He had been living overseas from 2003-2011, at which time he moved to the United States.

After requests for financial disclosure went unanswered, the mother initiated an application for retroactive child support.

Judge finds both parties failed to live up to obligations

The matter was before the Court of Appeal because the mother argued the judge made three errors in the original decision. The first was that the application judge should not have dismissed her application for retroactive child support for 2006-2013 (the judge did grant retroactive support from 2013 onwards). She also assumed that the application judge must correctly calculate her share of s. 7 expenses, and that the application judge should not have determined child support should end when the children reach the age of 25.

The court first looked at the application judge’s ruling on retroactive child support, in which they found that child support not paid during that period should be offset by the mother’s failure to pay the outstanding balance on the equalization of the parties’ home. The application judge found that ordering child support for that period would be unfair and inequitable within the Family Law Act.

The application judge found that the agreement, which stated the father would be responsible for paying $950 per month, was likely an error. While this finding was speculative, the court found that it had no error in the application judge’s actual ruling, which stated that since the mother remarried in 2006, the amount of payable child support dropped from 17 per cent of his income to 12.5 per cent. While the father did not ultimately pay what he owed in either case, the court agreed with the application judge that the money the mother still owed on the matrimonial home could be offset entirely.

The mother’s argument on appeal was that the application judge could not establish what was owed by the father without his providing financial disclosure. However, the court wrote that the application judge was not required to order such as assessment, writing,

“The parties’ property agreement was intertwined with the father’s child support obligations. Accordingly, the application judge made no error in considering it when determining what weight to assign to the father’s failure to notify the mother of changes in his income between 2006 and 2013.”

The mother also argued that the terms of the agreement were now invalid or unenforceable. However, the court wrote that there are strong and well-known policy reasons for respecting agreements between the parties of a divorce or separation. The court wrote that many families cannot afford proper legal representation, and agreements reached outside of the court increase the availability of the courts for other cases. In addition, this agreement allowed the children and the mother to remain in the matrimonial home without any immediate obligation to pay out the father.

The court also sided with the application judge’s ruling that the termination date for the age at which the children would no longer qualify for child support (25) was reasonable and agreed to by the parties. Even though the children’s education might continue past age 25, the court did not want to override the agreement between the parties.

Johnson Miller Family Lawyers In Windsor Can Help You Draft And Enforce Post-Separation Agreements

Entering into a post-separation agreement is not something that should be taken lightly. Even though the process can help you avoid court, ensuring you have experienced legal representation when agreeing to anything is important. To speak with an experienced Windsor family lawyer about decision-making responsibility and support modifications, call 519.973.1500, or contact us online.

 

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