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The effect of reconciliation on a separation agreement

By Jennifer Krob

Most people, after having separated from their spouse, divided their property, and negotiated a separation agreement, would be happy to never see their former spouse again. But every so often the stars align, and two people who were just a few months shy of their divorce order have a change of heart and decide to reconcile. Some of them live happily ever after. Others realize that they made a mistake and are left having to navigate the murky waters of separation all over again; but this time they have the added obstacle of a separation agreement to contend with.

The question of what effect reconciliation has on the enforceability of spousal support and property equalization terms in a separation agreement is a little tricky to answer because decisions can be so fact-specific. Nevertheless, the general rule is that reconciliation usually terminates a prior separation agreement.

The legislation that deals with separation agreements is not very helpful when it comes to the matter of reconciliation. The Ontario Family Law Act addresses setting aside separation agreements (defined in the act as "domestic contracts") in s. 56(4), which reads:

Setting aside domestic contract

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

(a) if a party failed to disclose to the other significant assets, or significant debts or other liabilities, existing when the domestic contract was made;

(b) if a party did not understand the nature or consequences of the domestic contract; or

(c) otherwise in accordance with the law of contract. R.S.O. 1990, c. F.3, s. 56 (4).

Section 55(1) of the act deals with the enforceability of separation agreements, but like s. 56(4), no mention is made of reconciliation.

Form and capacity

Form of contract

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. R.S.O. 1990, c. F.3, s. 55 (1).

If one wants to focus specifically on support obligations in separation agreements, the relevant section is s. 33(4), but that section is likewise silent on the effect of reconciliation.

Setting aside domestic contract

33(4) The court may set aside a provision for support or a waiver of the right to support in a domestic contract and may determine and order support in an application under subsection (1) although the contract contains an express provision excluding the application of this section,

(a) if the provision for support or the waiver of the right to support results in unconscionable circumstances;

(b) if the provision for support is in favour of or the waiver is by or on behalf of a dependant who qualifies for an allowance for support out of public money; or

(c) if there is default in the payment of support under the contract at the time the application is made. R.S.O. 1990, c. F.3, s. 33 (4); 2006, c. 1, s. 5 (1).

Since the legislation does not provide sufficient guidance, if one wants to understand the effect of reconciliation on separation agreements, one must look to jurisprudence, commonly called "case law."

The overarching principle of law is that reconciliation terminates a prior separation agreement unless it is clear from the surrounding circumstances that the parties intended the agreement, or specific terms of it, to survive the resumption of cohabitation (Livermore v. Livermore (1992), 43 R.F.L. (3d) 163 (Ont. C.J. (Gen. Div.))). This overarching principle guides the way in which judges will exercise their discretion to find what effect a separation agreement has after reconciliation, but the courts take a different approach to property matters than they do to spousal support.

The courts appear more willing to uphold property division under a separation agreement than spousal support. For example, a court will likely uphold property conveyances made pursuant to a separation agreement if made prior to the reconciliation; meaning, if a term of a separation agreement directs the conveyance (transfer, sale) of property and the property is conveyed before the parties reconcile, then after the reconciliation and final separation the court will not likely alter that term of the agreement. Similarly, a court will also likely find that a specific release of an interest in property in a separation agreement will survive reconciliation. Such was the case in Emery v. Emery (2008), 51 R.F.L. (6th) 294 (Ont. S.C.J.).

In Emery v. Emery, the parties married in 1989 and separated in 2004. In 2004 they signed a separation agreement in which the wife received net proceeds totalling $24,665 from the sale of matrimonial home and, in exchange, released her claims to spousal support and the husband's pension.

The parties attempted reconciliation in mid-2004, and they separated for the final time in 2005. The wife then brought an application for the equalization of the husband's pension and for spousal support. When deciding whether terms of the separation agreement survived reconciliation, the Honourable Justice Gordon distinguished between "specific" and "general" releases. Any property interest dealt with by a general release would not survive reconciliation, but because the language of the separation agreement dealing with the husband's pension was so specific, it demonstrated that the parties intended that term to survive reconciliation.

As such, the husband's pension was not divided. The lesson to take from this case is that if a release addresses property interests at large, it is likely to be considered a general release, and consequently void, but if the release specifically identifies and describes a certain asset, for example a pension, it is much more likely that such a release will survive reconciliation.

The courts take a very different view with respect to spousal support. Regardless of whether a release is general or specific, a court will give great weight to the intentions of the parties and the public policy implications of allowing spousal support releases. In Emery v. Emery Justice Gordon discussed the approach to be taken when deciding whether a spousal support release in a Separation Agreement will survive reconciliation at paras. 71-76:

71 In the case at bar, the intention of the parties and public policy are important matters for consideration.

Form of contract

74 Intention of the parties, therefore, is determined by their conduct. No longer living separate and apart, as a result of the resumption of cohabitation, the parties clearly intended their finances to be managed as a family.

75 Public policy, likewise, leads to the same finding. A separation agreement is based upon the spouses living separate and apart. When that factual situation ends, the agreement, at least as to support, cannot stand. As well, spousal obligations ought not be defeated unless there is good reason to do so, such as a significant property transfer upon which corresponding calculations may be considered. 

76 Accordingly, I conclude the spousal release clauses in the separation agreement herein did not survive but, rather, terminated on reconciliation.

Even though Justice Gordon made it quite clear that spousal support releases will not survive reconciliation, a court may still take the provisions of a separation agreement into account when determining the quantum (amount) of a spousal support entitlement. This was the case in Campbell v. Campbell (2008), 55 R.F.L. (6th) 405 (Ont. S.C.J.), where the parties signed a separation agreement that stipulated that the husband would pay the wife $500/month in spousal support.

The parties subsequently reconciled, and separated again, and the wife sought enforcement of the separation agreement. The court held that the separation agreement was rendered void by the parties' reconciliation and that, based on the husband's income, the wife should be entitled to $89 to $118 per month under the Spousal Support Advisory Guidelines (SSAG).

The Honourable Justice Linhares de Sousa held that, notwithstanding the SSAG, the wife should be paid $500 per month in spousal support because the separation agreement had stipulated that amount and therefore, the parties must have thought that a fair and proper amount.

The law with respect to the survival of property and spousal support terms in separation agreements after reconciliation is not black-and-white; there is room for discretion and each case will turn on its unique facts. That said, case law is quite consistent in finding that reconciliation will usually terminate terms of a separation agreement, especially with respect to spousal support releases.

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