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Formalities in an Informal Age

woman discussing collaborative law divorce options with ADR lawyer

The impact of Covid has facilitated the lives of family law practitioners. We dress casually if and when we go to the office, only putting a jacket and tie on for court zoom appearances. No longer do we have to engage process servers to wait in endless court lines to file court materials, this is now done electronically through case lines. Often we do not meet our clients in person, preferring the flexibility and informality of office meetings via internet.  The transition in practice over the past four years have been remarkable.

The Court of Appeal of Ontario reminds family law lawyers in El Rassi-Wight v. Arnold 2024 ONCA 2 that notwithstanding our newfound flexibilities, it is still necessary for counsel and parties to follow the rules in order to ensure the enforceability of domestic contracts.

This case involved two parties who concluded on their own a separation agreement after their common law separation without the assistance of counsel (“Separation Agreement”). Pursuant to the Separation Agreement, the Respondent signed away his share of the family home to the Applicant for $10,000 and a motorcycle that belonged to the Appellant’s father. There were no third party witnesses to the agreement. The respondent did not dispute that he signed the agreement and the appellant had video recorded the respondent’s execution of the Agreement. The respondent did not receive independent legal advice prior to execution of the Separation Agreement.

The Respondent disputed the enforcement of the Separation Agreement and argued it is not enforceable, as the necessary formal requirements for the formation of a domestic contract had not been met. The Applicant in turn claimed the Separation Agreement is binding and ought to be enforced.

The trial judge in her findings relied on section 55 (1) and 56(4) of the Family Law Act (FLA).

55(1) “ A domestic contract and an agreement to amend or rescind a domestic contract are unenforceable unless made in writing, signed by the parties, and witnessed”

56(4) “ A court may, on application, set aside a domestic contract or a provision in it,

  • If a party failed to disclose to the other significant assets, or significant debts or other liabilities, existing when the contract was made.
  • If a party did not understand the nature or consequences of the domestic contract.
  • Otherwise in accordance with the law of contact.”

Citing the Ontario Court of Appeal decision in Gallagher v. Friesen, 2014 ONCA, 399 the trial judge stated that:

“The strict requirements of section 55(1) (of the FLA) may be relaxed when the court is satisfied that the contract was in fact executed by the parties, where the terms are reasonable, and where there was no oppression or unfairness in the circumstances surrounding the negotiation and execution of the contract.”

The trial judge determined the Separation Agreement to be unenforceable. The trial judge found that the Separation was not properly witnessed, the respondent did not have independent legal advice prior to execution of the agreement, and portions of the documents were themselves vague and imprecise, such that it was not possible to give effect to the reasonable expectations of the parties. The trial judge held that this was not an appropriate situation for the requirement of section 55 of the FLA to be relaxed and even if she were to find Separation Agreement to be valid, the trial judge would set aside the Separation Agreement under section 56(4) of the FLA.

The Ontario Court of Appeal upheld the trial judge’s decision. The Court of Appeal noted the importance of the factors listed in section 55(1) to discourage parties to enter into “kitchen table” agreements that they themselves negotiate without proper knowledge of the law and proper financial disclosure. The importance of the agreement being witnessed is required not just for proof of a party signing a document but “to ensure a measure of formality in the execution of the domestic contract” to provide some assurance that the parties were deliberate in reaching their agreement and understood the obligations imposed.

Further, relying on section 56(4) of the FLA, the Ontario Court of Appeal agreed with the trial judge that the respondent did not understand what he was giving up, there was no financial disclosure exchanged and the respondent did not understand important points in the agreement, such as the term “equity”.

Turning back to the importance of this decision to family law lawyers, the Ontario Court of Appeal makes clear that counsel must not relax the following requirements in the drafting and execution of Separation Agreements with clients:

  1. Full Financial Disclosure is a necessity;
  2. Agreements must be concise and understood by all with no vague terms that cannot be enforced;
  3. Counsel should take the time via in person meeting or zoom, to review fully the terms of the Agreement with the client, rather than going back and forth via email with them, to ensure the client’s complete understanding of the Agreement; and
  4. Counsel must take the time to personally witness the execution of agreements, if not in person, than via electronic means, in order to avoid possible litigation regarding the enforceability of an agreement pursuant to section 55 of the FLA.

Notwithstanding our current zoom age and counsel’s new found freedoms, counsel must take precautions and take the time to ensure the formalities of the FLA are met during the negotiations and execution of domestic contracts and that clients are completely aware of the terms of the agreement to which they will be bound.

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About the Author

Ken Nathens is the founding partner of Nathens Siegel and he was called to the Ontario Bar in 1994. Ken’s background is in all areas of Ontario family law and has written extensively on family law issues, including articles published in Divorce Magazine and interviewed by AdvocateDaily. He regularly contributes to the Lawyer’s Daily and has lectured on family law through Riverdale Mediation, and guest lectured to law students at the University of Windsor, Ottawa University and Osgoode Hall Law School.