Changing Family Law Agreements

After a family law agreement has been signed, three things can happen: the parties can follow the agreement and everything continues as it should; the circumstances of the parties or a child change and their agreement must also change; or, one of the parties refuses to follow the agreement and it must be enforced by the courts.

This page focusses on separation agreements and talks how agreements can be changed without going to court and when the agreements can be set aside by the court. You can learn about how family law agreements are enforced in the ____ page.

DRAFT

Changing Agreements by Agreement

There are always two ways of doing something, the hard way or the easy way. In family law, the easy way usually involves discussion and negotiation. The hard way usually involves a court proceeding, and is generally a fair bit more expensive and time-consuming than the easy way.

Any family law agreement can be changed at any time, as long as the parties to the agreement agree to the change. If the parties can't agree on the change or on the terms of the change, the party who wants the change may have to go to court if the problem is important enough. Since the court doesn't have the power to vary an agreement, the best the court can do is to cancel the party of the order that has to change and then make an order in place of the part that was cancelled.

Amending an Agreement

A family law agreement can be changed by a later agreement. If the parties to an agreement both agree that the original agreement should be changed and on how it should be changed, the parties can sign a second agreement called an amendment agreement, an amending agreement or an addendum agreement to the original agreement.

An agreement changing an agreement must refer to the original agreement and is usually titled something like "Amendment to the Separation Agreement Executed on 1 April 2010." Amending agreements are usually very short as the idea is to change just one particular part of an agreement rather than to rewrite the original agreement in its entirety. The amending agreement should specify which particular paragraph of the original agreement is being changed, and then set out the new text of that paragraph:

2. The parties agree that Paragraph 23 of the Agreement executed on 1 April 2010 will be cancelled and be replaced with the following:

Sally will also have parenting time with the children beginning on Tuesdays at 4:00pm or the end of school to the following Wednesday at 9:00am or the start of school, whichever is earlier.

3. Sally's income is $45,000 per year as at the date of the execution of this Amending Agreement. The parties agree that Sally's child support obligation, set out at Paragraph 28 of the Agreement executed on 1 April 2010, will be $684 per month, commencing on the first day of the month following the execution of this Amending Agreement.

Just like the original agreement, the amending agreement must be signed by both parties in the presence of a witness, who watches each party sign the agreement and then signs the agreement him- or herself.

Amending an Agreement through Negotiation

A well-written agreement will usually provide a way for the parties to resolve disputes arising from the agreement. Sometimes this mechanism requires that the parties go to court; sometimes this mechanism prescribes some other means of dispute resolution like mediation or arbitration.

Mediation is, in general, the best option if simple negotiation doesn't get you anywhere. In mediation, the parties attempt to negotiate a resolution to their dispute with the help of a third party, the mediator, who is skilled in family law issues and works with the parties to get them to a new agreement.

Mediation is not always appropriate, particularly where the problem is limited to one particular term of the agreement and it seems that neither party is willing to bend on the matter. In such cases, arbitration limited to that one issue should be considered. The job of an arbitrator is to listen to the evidence and the arguments and then make a decision, called an award, that resolves the dispute and is binding on the parties. It is always faster to arbitrate than to litigate, and when both parties have lawyers it's usually cheaper to arbitrate as well.

Whatever method is chosen, it's always better for people to reach a resolution of the problem themselves without having to go to court. This way the power remains in the hands of the people whose lives are affected by the agreement and who must live with it on a daily basis, rather than in the hands of someone else, a judge, who may make a decision that no one is entirely happy with.

See the chapter ____ for more information on mediation and arbitration.

Intervention by the Courts

If a party to an agreement becomes unhappy with an agreement, there are two ways to proceed. First, the party could ask the court to throw out the entire agreement because it is unfair, because the agreement is invalid or because of some other fatal problem with the contract. Second, the party could apply under the Family Law Act to set aside just part of the agreement.

In general, the court will be reluctant to meddle with a reasonable separation agreement. In fact, the Court of Appeal for British Columbia has said that separation agreements should be treated by the courts with "great deference." This is because a separation agreement is a private contract between two parties which is the product of an often lengthy process of negotiation, and the courts are usually unwilling to disturb an agreement without a very good reason for doing so. The courts will be similarly reluctant to change a final order that was the product of a separation agreement.

Setting Aside Agreements Under the Law of Contracts

Just like a commercial contract, the validity of a family law agreement can be challenged for a number of reasons based on the common law of contracts:

1. the agreement was not freely signed, in other words, a party was under duress when the agreement was negotiated or executed;
2. the agreement is unconscionable, in other words, the agreement is obviously and seriously unfair to a party;
3. a party signed the agreement without independent legal advice, did not fully understand what the agreement meant and signed it by mistake;
4. the agreement was signed without full disclosure having been made; or
5. a party signed the agreement because misleading information had been provided.

Duress, Coercion, Unconscionability and Mistake

The courts won't enforce an agreement — that is, they won't compel the parties to abide by an agreement — where one of the parties was forced or pressured to enter into the agreement. An agreement must be entered into freely and voluntarily.

Likewise, the courts won't enforce an agreement where one of the parties used a position of power to achieve an unfair agreement. This can include threats and manipulation, as well as signing an agreement in circumstances of extreme emotional stress, such as just before a wedding, following a hospitalization, or during an emotional breakdown.

Agreements that are hugely unfair can also be found to be unconscionable, as can agreements formed under a fundamental misunderstanding about the nature of the family finances or one party's assets.

Lack of Independent Legal Advice

A spouse may be able to challenge the validity of an agreement where he or she did not receive independent legal advice before executing the agreement. Independent legal advice helps to ensure that both parties are on a more or less equal footing going into the agreement, and to ensure that one party doesn't unintentionally enter into an unfair agreement.

There is, however, no requirement that independent legal advice be sought before an agreement is executed. In most situations, the absence of independent legal advice alone will not be enough to overturn an agreement by itself.

Fraud and the Failure to Make Full Disclosure

When people enter into an agreement, they do so on the assumption that certain material facts are true, that each is earning as much money as they say they are, that each has no more assets than they say they have, and so forth. These assumptions are the foundation on which the agreement is built. If one of the parties has failed to make full disclosure of these sorts of material facts, or if one party has lied about or misrepresented these facts, the courts may be willing to overturn an agreement.

Setting Aside Agreements Under the Family Law Act

Under the provincial Family Law Act, the court cannot vary or amend a valid agreement. When the court is convinced that an agreement must change, the court will set aside the parts of the agreement that are causing the problem and make an order in place of the parts set aside. Section 214 of the act says this:

(1) If an order is made to set aside part of an agreement, the part is deemed to be severed from the remainder of the agreement.

(2) A court may incorporate into an order all or part of a written agreement respecting a family law dispute made by the parties to the proceeding and, unless the court orders otherwise,

(a) the order replaces that part of the agreement that is incorporated, and

(b) the remainder of the agreement remains effective.

(3) Unless the court orders otherwise, if an agreement and an order made after the agreement provide differently for the same subject matter,

(a) the order replaces the part of the agreement that provides differently for the same subject matter, and

(b) the remainder of the agreement remains effective.

The legal test that the court must apply to set aside part of an agreement changes depending on the subject of the of the part in question.

Guardianship

The Family Law Act does not provide a specific test to vary an agreement appointing a parent as the guardian of a child. However, under s. 214(3), the court can make an order on different terms than an agreement.

Under s. 37(1), when the court is making an order about guardianship, it must do so considering only the best interests of the child. The factors the court must think about to decide what is in the best interests of a child are listed at s. 37(2) of the act, and, when family violence is a factor, also at s. 38.

Parental Responsibilities, Parenting Time and Contact

Under s. 44(4) of the Family Law Act says this about agreements for parental responsibilities and parenting time:

On application by a party, the court must set aside or replace with an order made under this Division all or part of an agreement respecting parenting arrangements if satisfied that the agreement is not in the best interests of the child.

Section 58(4) says almost exactly the same about agreements for contact.

The factors the court must think about to decide what is in the best interests of a child are listed at s. 37(2) of the act, and, when family violence is a factor, also at s. 38.

Child Support

As in all matters concerning children, the courts' only concern is the best interests of the child. The courts will rarely interfere with an agreement that provides for child support in accordance with the federal Child Support Guidelines. The courts will also be reluctant to reduce a child support provision which is higher than what the Guidelines require, because it is logically in the best interests of the child to have the benefit of as much support as possible. The courts will much more inclined to interfere with a provision of an agreement that calls for a lesser amount of support than what the Guidelines require.

Section 148(3) of the Family Law Act says this:

On application by a party, the court may set aside or replace with an order made under this Division all or part of an agreement respecting child support if the court would make a different order on consideration of the matters set out in section 150.

Section 150 is the section that says how child support is to be calculated, namely that it is to be calculated according to the Guidelines. As a result, the court will set aside the part of an agreement dealing with child support if:

1. the payor's income has increased;
2. the payor's income has decreased;
3. one or more children are no longer living mostly with the parent receiving support;
4. one or more children are now splitting their time almost equally between the homes of the payor and the recipient;
5. one or more children are no longer entitled to receive support; or,
6. the agreement otherwise provides for an inadequate amount of child support.

Spousal Support

Section 164 of the Family Law Act talks about when the parts of an agreement about spousal support should be set aside. Under s. 163(2), an agreement about spousal support includes an agreement that spousal support won't be paid as well as an agreement that spousal support will be paid.

Section 164 provides two legal tests to help the court decide whether an agreement should be set aside. The first test requires the court to look at what happened when the agreement was being negotiated and signed:

(3) On application by a spouse, the court may set aside or replace with an order made under this Division all or part of an agreement described in subsection (1) only if satisfied that one or more of the following circumstances existed when the parties entered into the agreement:

(a) a spouse failed to disclose income, significant property or debts, or other information relevant to the negotiation of the agreement;

(b) a spouse took improper advantage of the other spouse's vulnerability, including the other party's ignorance, need or distress;

(c) a spouse did not understand the nature or consequences of the agreement;

(d) other circumstances that would under the common law cause all or part of a contract to be voidable.

That last part, at s. 164(3)(d), is about the common law of contracts, discussed above.

Even if there are no problems with the circumstances when the agreement was being negotiated and signed, the court can still set aside the agreement if it considers the agreement to be "significantly unfair" considering five factors:

(5) Despite subsection (3), the court may set aside or replace with an order made under this Division all or part of an agreement if satisfied that none of the circumstances described in that subsection existed when the parties entered into the agreement but that the agreement is significantly unfair on consideration of the following:

(a) the length of time that has passed since the agreement was made;

(b) any changes, since the agreement was made, in the condition, means, needs or other circumstances of a spouse;

(c) the intention of the spouses, in making the agreement, to achieve certainty;

(d) the degree to which the spouses relied on the terms of the agreement;

(e) the degree to which the agreement meets the objectives set out in section 161.

Section 161 is the section that says why spousal support should be awarded.

Property and Debt

Section 93 of the Family Law Act talks about when the parts of an agreement about dividing property and dividing debt should be set aside. Like s. 164, s. 93 provides two legal tests to help the court decide whether an agreement should be set aside. The first test requires the court to look at what happened when the agreement was being negotiated and signed and is exactly the same as the test at s. 164(3). The second test allows the court set aside the agreement, even if there are no problems with the circumstances when the agreement was being negotiated and signed, if the agreement is "significantly unfair". However, to determine significant unfairness under s. 93(5), looks at three factors not five:

(5) Despite subsection (3), the Supreme Court may set aside or replace with an order made under this Part all or part of an agreement if satisfied that none of the circumstances described in that subsection existed when the parties entered into the agreement but that the agreement is significantly unfair on consideration of the following:

(a) the length of time that has passed since the agreement was made;

(b) the intention of the spouses, in making the agreement, to achieve certainty;

(c) the degree to which the spouses relied on the terms of the agreement.

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The questions that the court will want answered are: What has changed between the date of the execution of the agreement such that the agreement should be changed despite the objections of the other party? Is there some aspect of the agreement or how the agreement was made that demands the intervention of the court? Was there some fundamental unfairness surrounding the negotiation of the agreement such that the whole agreement should be set aside?

A party asking the court to interfere with an agreement must, in general, show that

the agreement is fundamentally unfair or that it would be unfair to hold the party to the terms of the agreement, or circumstances have changed significantly since agreement was executed such that it is no longer appropriate before the court will consider making an order different than the terms set out in an agreement.

The Supreme Court of Canada discussed the fairness issue in depth in a 2009 case called Rick v. Brandsema. In this case, the court talks about how family law agreements are different from commercial agreements because of the unique emotional circumstances surrounding the negotiation of family law agreements — when you're signing a car lease, you're not doing it when you've just ended a long cohabiting relationship with the dealer. In Rick, the court emphasized that fairness means:

bargaining in the utmost good faith; being completely honest and forthcoming during negotiations; making full and complete financial disclosure, whether full financial disclosure has been requested or not; and, not taking advantage of someone at a time of emotional or psychological weakness or vulnerability. If an agreement wasn't fairly negotiated, it may be vulnerable to challenge later on down the road.