SOMETIMES SETTLEMENT AGREEMENTS DON’T SETTLE ANYTHING
In the case of Bond v. Bond 2012 ONSC 4374 the Honourable Mr. Justice Boswell analysed the Wife’s request to set aside a Separation Agreement. The Wife claimed that she was pressured into signing it.
First, the Wife claimed that the amount of spousal support prescribed in the Separation Agreement was grossly unfair. The Husband worked in pest control and earned approximately $60 000.00 per year. The Wife operated a daycare from her home and provided after-school care for a daughter with special needs. The Separation Agreement gave the Wife monthly spousal support of $443 per month for 18 months.
The Wife asserted that her income as approximately $20000.00 per year. The Husband claimed that the Wife understated her yearly income. He argued that the Wife recorded her yearly income as $25 000.00 per year on loan applications and that she also claimed normal household expenses as business expenses on her income tax returns. Justice Boswell responded that it was common for individuals to be “generous” on these types of forms. He felt that the Wife’s stated income of $20 000.00 was consistent with other individuals operating a daycare.
The Honourable Mr. Justice Boswell ultimately agreed to the Wife’s request to set aside the spousal support provisions of the Separation. The Honourable Mr. Justice Boswell held that the spousal support was vastly different than the amount suggested as per the Spousal Support Advisory Guidelines. He ordered that the spousal support amount of $443 per month would continue as long as the Husband had to pay child support. Once child support was no longer payable, the spousal support would increase to $1 250.00 per month for an indefinite period of time.
The Wife also requested that the court increase the amount that she was to receive for the equalization of net family property. First, the Wife argued that the Husband understated the worth of a cottage jointly owned by both parties. The Honourable Mr. Justice Boswell affirmed the rule that the party asserting the value of an asset that is in his or her control must adduce credible evidence supporting asserted value. The Husband had Wife had an equal obligation to accurately determine the value of the cottage.
The Wife asserted that she was signed the separation agreement because the Husband intimidated her. The Wife denied physical or mental abuse. She alleged that the Husband became enraged when she considered backing out on previous verbal agreements, however. The Honourable Justice Boswell made a finding of fact that the Husband made intemperate outbursts, but denied that they were sufficient to set aside the Separation Agreement.
Ultimately the Honourable Mr. Justice Boswell held that the court will compare the figures contained in the Separation Agreement with those obtained using statutory methods and figures. In this case, the figure for an equalization payment obtained using Divorce Act procedures were sufficiently similar to the figure contained in the Separation Agreement. The equalization payment amount was upheld.
This decision is very interesting when examining it from the perspective of law and economics. The government wants to save time and money by having parties divide martial assets without using government resources. The courts easily setting aside these agreements would be a disincentive for parties to enter out-of-court agreements.
The courts, however, will be more careful to ensure that spousal support is fair. The courts will want to ensure that the party that received an economic benefit from the marriage properly compensate the other spouse. The alternative is that one spouse will more likely need government assistance. Greater court intervention will therefore save the government time and money.