While the Family Law Act allows domestic contracts to be enforceable within the confines of the legislation, whether an agreement to agree constitutes a domestic contract is subject to judicial interpretation.
In the recent decision of Ward v. Ward,* the Ontario Court of Appeal examined the issue of whether a Memorandum of Agreement (MOA) is considered a valid domestic contract and therefore enforceable in law.
At separation the parties decided to resolve their matrimonial issues through the collaborative law practice. Neither party provided sworn financial statements. Rather, the parties relied on the information provided by the husband as well as financial information provided by their accountant.
After eight meetings the parties agreed to a potential settlement, and their lawyers wrote out items of resolution in a MOA. The MOA incorporated the resolutions of nine issues, including the equalization process and child and spousal support.
Pursuant to the MOA, the husband paid the wife $250,000 one week after the agreement was reached. In the meantime the lawyers were trying to finalize the agreement.
The agreement was never finalized. The parties commenced a proceeding before the court seeking a trial to determine whether the MOA was a settlement and a domestic contract in accordance with the Family Law Act.
The Court of Appeal set aside the trial judge’s declaration that the MOA was only an “agreement to agree” and therefore not binding. The trial judge had been of the view that, to reach a final settlement, more information was required.
In contrast, the Court of Appeal held that (i) the wife had been assisted by an experienced family law lawyer and therefore understood the nature of the settlement (i.e., to be binding on the parties), and (ii) there was no evidence that the husband had failed to disclose significant assets.
In particular the Court of Appeal relied on the parties’ awareness of the husband’s potential fluctuation in his income and on their familiarity with the equalization and held that the evidence did not support the trial judge’s conclusion that “more information is required.”
In essence, the Court of Appeal took the programmatic approach to find whether the MOA was indeed considered a domestic contract under the law. In particular the Court of Appeal ruled the following:
At common law, an agreement is binding if the parties consider that it contains all essential terms, even if the parties also agree that those terms will subsequently be recorded in a more formal document together with the usual terms ancillary to that type of agreement. However, an agreement is not final or binding if it is merely an agreement to later agree on essential provisions or to defer the binding nature of the agreement until the execution of the proposed subsequent formal contract. …
As well, to be binding, it is not necessary that the original contract include all the ancillary terms that are already implicit in its content.
In the end the Court of Appeal ruled that, based on the preamble of the MOA, the terms of the MOA, and the conduct of the parties, the MOA was binding as a separation agreement and therefore legally enforceable under the Family Law Act.
*2011 ONCA 178; 104 O.R. (3d) 401
This blog is provided for your reference only and is not a substitute for the law. The law may have changed since the publication of this article. This article is not legal advice and should not be regarded as such.
The Office of the Children’s Lawyer (OCL) Not Compellable to Provide Services… for Now
The Ontario Court of Appeal has ruled that the courts ought not to compel the Office of the Children’s Lawyer to provide service without giving the OCL an opportunity to decide whether it would become involved.*
Under the Courts of Justice Act,^ at the request of a court the Children’s Lawyer “may” act as the legal representative of a minor who is not a party to the proceeding.
On the one hand, historically the Superior Court has “parens patriae” jurisdiction (the public power to intervene against negligent parents) to protect minors who are otherwise unable to fend for themselves. On the other, the statutory language is merely permissible and not mandatory. Whether the OCL is compellable to provide services by orders of the court has been subject to debate.
As a matter of policy, the OCL are involved in child protection proceedings. Therefore, the residual parens patriae jurisdiction will only be invoked in matters involving custody and access.
Although the Court of Appeal declined to rule on the very point of whether the OCL is compellable to provide services under the court’s parens patriae jurisdiction, the Court of Appeal reasoned that given the limited resources available to the OCL, it is improper to order the OCL to provide services prior to making a request as contemplated by the legislation.
The judge of the first instance ought to have made the requests first, without intervening in the OCL’s discretion to provide services. If the OCL declines to act, the court may further request that the OCL reconsider its decision. Only after all available remedies are exhausted should the courts consider exercising their parens patriae jurisdiction.
*Bhajan v. Bhajan, [2010] ONCA 714, (2011) 104 O.R. (3d) 168
^R.S.O. 1990, c. C43, as am. ss. 89(3.1)
This blog is provided for your reference only and is not a substitute for the law. The law may have changed since the publication of this article. This article is not legal advice and should not be regarded as such.