It is an unhappy fact that divorce is common in our society. Statistics show us that close to one out of every two new marriages will fail.
Horror stories abound about bitter divorces, multi-year and multi thousand-dollar court battles and damaged children. However, many people are able to deal with the legal issues of their marital breakdown in a mature, civilized fashion by sitting down and coming to an agreement.
Sometimes they use the assistance of a counsellor, mediator or lawyer. Sometimes it’s done just between themselves. In any case, to be binding, each party must take the agreement to a lawyer and independent legal advice must be obtained.
Read Also
Stock dogs show off herding skills at Ag in Motion
Stock dogs draw a crowd at Ag in Motion. Border collies and other herding breeds are well known for the work they do on the farm.
This is clearly a better way to handle separation issues than using lawyers to beat each other over the head in court, but are these agreements upheld? When is an agreement not really an agreement?
The Supreme Court of Canada dealt with these questions in 2009. The decision provides insight into the modern legal view on ethics within negotiations.
The case concerned a couple who married in 1973 and separated in early 2000. They reached a separation agreement late in 2001 and made the divorce final two months later.
However, issues eventually arose as to whether the agreement was valid.
The wife had mental health issues and was unstable during the separation. The husband knew this.
During negotiations, the husband wrote himself an $80,000 cheque and gave $154,000 to his wife’s brother, who was his close friend. He didn’t tell his wife. He also exaggerated debts and undervalued assets.
In short, the financial picture he presented resulted in her obtaining substantially less than half of the couple’s true net worth – about $650,000 less than she should have received.
The wife won at trial, lost at appeal and won again at the Supreme Court, which said that even though she had a lawyer working for her, she was still mentally and emotionally vulnerable and the husband knew this and took advantage of it.
The court noted that matrimonial matters are highly emotional and cautions must be heeded to ensure fairness when couples negotiate, even through lawyers. It said such negotiations must be free from “information and psychological exploitation.”
The Supreme Court also noted that different rules apply to divorce negotiations because of the emotional elements. If one spouse suffers as a result of the other using sneaky business tactics, courts are free to set aside a signed agreement and substitute something more fair.
In this case, the agreement was overturned and the wife obtained the amount to which she was entitled.
So while agreements between spouses are frequently upheld, one must make sure they have been reached in the utmost of good faith.
Rick Danyliuk is a lawyer with McDougall Gauley LLP in Saskatoon.
