Post-separation agreements can be an important step for parties to take when a relationship ends in separation or divorce. They can help establish what will happen if a significant change in circumstances occurs, or if there is a disagreement between the parties. However, a recent decision from the Ontario Superior Court of Justice shows us that now all separation agreements (or on this case, parenting agreements) can guarantee a future free from litigation.
The issue at trial was whether the parties had to abide by the terms of their parenting agreement as it relates to resolving disputes. It stated that they would first try to resolve disputes between themselves or through their lawyers. If they fail to reach a resolution following that, they were to engage with a specific arbitrator who would issue a binding decision. The agreement also states that the arbitrator’s decision would constitute a secondary arbitration under the Arbitration Act and Family Law Act. It specifically said,
“6.1 If (the husband and wige) disagree about any parenting issue or child support, they will first try to resolve the dispute through negotiation, either between themselves or with their respective counsel, on the following terms:
(a) The parties will jointly retain Julie Guindon to act as a mediator/arbitrator/Parenting Coordinator. The parties shall share the up-front costs of the process equally.
(b) Julie Guindon shall retain the right to apportion costs between the parties during any of these processes.
(c) Julie Guindon’s decision shall be binding on the parties.
(d) If Julie Guindon must conduct an arbitration, the parties waive section 35 of the Arbitration Act and will constitute a secondary arbitration under the Arbitration Act and the Family Law Act.”
The wife brought the motion seeking to take their dispute to court rather than following the arbitration process, stating that a parenting agreement does not specifically bar her from going to court.
The husband’s position vs the law
It was the husband’s position that the parenting agreement was binding, stating both parties entered into it with independent legal advice and shows “an intention” to execute a formal secondary arbitration agreement when necessary.
However, the court’s decision pointed out that an intention to execute a formal secondary arbitration agreement is not enough. Instead, the agreement must comply with the express term for family arbitration agreements. In this case, the Family Law Act states that family arbitration awards are only enforceable if a number of conditions are met, including compiling with regulations under the Arbitration Act.
The court cited a 2017 decision that dismissed a motion on the basis that the Minutes of Settlement did not comply with the mandatory requirements made under the Arbitration Act. The court found that since the parenting agreement, in this case, did not comply with the Arbitration Act, the wife did not have to follow the process outlined in it. The court said the “situation might be different if the parties had expressly undertaken in their agreement to execute an arbitration agreement that complies with the governing Act and Regulation”
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