SPOUSAL SUPPORT, SEPARATION AGREEMENT AND A MENTALLY ILL SPOUSE?

Gene C. Colman Note, 17 February 2020: You have found your way to this page on my blog presumably because you are interested in whether or not you can make a legally enforceable Separation Agreement with a mentally ill spouse. Below you can read one of my first blog posts dated 8 July 2012. I thought that it might be time to update that blog post’s information.

First of all, feel free to have a read through a short article where I am interviewed by journalist, Peter Russell of Legal Matters Canada. His article is entitled, “Don’t make a separation agreement with a mentally ill spouse”. It’s about a three to four minute read. I warn the reader about the dangers inherent in signing agreements with someone that might lack adequate capacity.

I have done some further legal research on this topic. TThere was not a heck of a lot new in the caselaw, but I did uncover some more cases that came out after my 2012 blog post and in some cases, they were affirmed on appeal one or two years after 2012.

Let me sum it up for you. But first, let me reiterate that my admonition to avoid a Separation Agreement with a mentally ill spouse applies even more so now after I have thought further on this topic.

Here’s some quick points from my review of the cases:

Agreements have been overturned because the wife did not understand English sufficiently well. How much more so is one at risk where mental challenges might prevent the wife from understanding fully what she was signing:

Stupka v. Stupka, 2012 ONSC 1133, 2012 CarswellOnt 2028 (Ont. S.C.J.); affirmed 2013 ONCA 365, 2013 CarswellOnt 7173 (Ont. C.A.). Uncontradicted evidence provided by the wife demonstrated that, although she had received legal advice as arranged by the husband, she did not understand the consequences of what she was signing. The wife had a grade nine education and English was not her mother tongue. The contract was set aside.

Another case where limited English skills contributed to the cancelling of a domestic contract was Petruzziello v. Albert, 2011 ONSC 4182, 2011 CarswellOnt 8929 (Ont. S.C.J.); affirmed on other grounds: 2014 ONCA 393, 2014 CarswellOnt 6118 (Ont. C.A.)

Where one party is vulnerable because of mental illness, and this vulnerability is not overcome by representation, a domestic contract will not be valid: ​ Donnelly v. Descoteaux, 2011 ONSC 5796, 2011 CarswellOnt 12648 (Ont. S.C.J.) The wife suffered from bipolar disorder. The judge found that the agreement should be set aside because the wife was vulnerable because of her bipolar disorder, which flared up at stressful times such that she had to be hospitalized. I would add that although the case seems to imply that legal representation can overcome mental illness, I would not be comfortable to rely on that caveat. There are plenty of cases out there where independent legal advice and independent legal representation did not save a contract that was otherwise tainted.

Where a party suffers from mental illness during the time of the negotiation of a domestic contract to the extent that she is unable to understand the nature or consequences of the agreement, it will be set aside: Stevens v. Stevens, 2012 ONSC 706, 2012 CarswellOnt 1063, 109 O.R. (3d) 421, 18 R.F.L. (7th) 182 (Ont. S.C.J.); additional reasons 2012 ONSC 6881, 2012 CarswellOnt 15385 (Ont. S.C.J.); affirmed ​ 2013 ONCA 267, 2013 CarswellOnt 5024, 114 O.R. (3d) 721, 114 O.R. (3d) 725 (Ont. C.A.). Medical evidence established that the wife suffered from bipolar disorder during the time the marriage contract was negotiated such that she was unable to understand the nature and the consequences of the agreement. Three months after the agreement was signed, she was hospitalized with severe depression.

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If you are facing the challenge of negotiating a contract with a spouse who either has mental challenges or does not understand English perfectly, you would be well served to consider having an in-depth consultation with Gene C. Colman.

Now here is my 2012 blog post on this topic:

It is a challenge at the best of times to achieve a legally enforceable spousal support separation agreement with a former partner/spouse.  Is it legally possible to achieve an enforceable “air tight deal” when the former partner/spouse is mentally ill?  We say: “unfortunately – no”.

The Supreme Court of Canada’s decision in Miglin applied to support cases under the Divorce Act.  Thrust of Miglin? – If you make too good of a spousal support deal, if you go beyond the broad parameters of the principles inherent within the philosophy of the Divorce Act, then a later court might over turn your Separation Agreement.

The Supreme Court of Canada case – Rick v. Brandsema – says that the Miglin analysis applies to the common law as well. In other words, even if you are not formally married and you make an agreement that applies the family law of Ontario, then the Miglin analysis still applies.  If you make too good of deal whether under the Divorce Act or not, then a later court might set it aside.

Certainly, a failure to make financial disclosure or making inaccurate disclosure will constitute grounds to set aside any type of Separation Agreement or Marriage Contract.  Miglin and Rick v. Brandsema go even beyond that principle. Even where your financial disclosure is perfect in terms of completeness and accuracy, if you achieve a result that is beyond the pale in terms of reasonableness under the applicable legislation and case law under that legislation, then you stand at the mercy of the court should your former partner/spouse have a change of heart years down the line.

In Rick v. Brandsema, the wife apparently had mental health issues that the husband knew about. Even though the wife had two successive lawyers, professional accounting advice and had participated in two mediations, the SCC nonetheless would not permit the deal to stand.

We conclude from Rick v. Brandsema that it is not possible in Ontario (and in Canada) to make an enforceable separation agreement with a wife who has mental health issues that are known to the husband. If such an agreement is made, the husband must be prepared to face litigation later should the wife decide to return to court. Where there are mental health issues plus some element of nondisclosure or inaccurate disclosure, then our concern for the agreement’s enforceability is magnified.

Financial disclosure must be pristine in its accuracy and completeness. Anything less exposes the husband (or ex-husband) to further litigation down the road.

The bottom line implication for family law practice is that Separation Agreements with mentally challenged spouses are to be avoided.  It is preferable to formalize the financial arrangements within a court order (on the consent of both sides who are independently represented) where a judge signs that order.