In family law it is permitted and encouraged that separating spouses through the use of separation agreements work out their own arrangements in relation to their separation or divorce. Such a method is desirable, advantageous and encouraged due to the fact that it promotes the ability of spouses to set their own affairs in order, it reduces the adversarial effect of divorce, reduces costs such as those of litigation, and may increase compliance of the spouses due to it being a mutually amicable arrangement. These factors in turn have a better effect on the child(ren) of the marriage (if any) and thus the ‘best interest of the child(ren)’ in many cases would probably be better preserved through the use of separation agreements.

Nevertheless, this may not always be the case; family law recognizes that in certain cases the separation agreement may not reflect the underlying objectives of Family law statutes such as the Divorce Act and the Family Law Act. Separation and/or divorce can be an emotionally and financially stressful ordeal for many, in such a state the parties may make certain decisions and agreements which reflect impaired judgement on the part of the spouses. In such a state it may be that certain decisions and agreements are made which undermine paramount and important objectives such as promoting the ‘best interests of the Child(ren)’. Therefore, the principles of contract law are not applied rigidly in relation to separation agreements in Family Law. The Divorce Act 1985 therefore by virtue of S.17 allows for the courts to vary, change, suspend or restrict, the terms agreed upon by the parties within the separation agreement, in relation to support and custody.

The Courts at times therefore are faced with a pre-existing separation agreement where the arrangement for support contradicts a claim for spousal support. As mentioned earlier the courts in such a case by virtue of S.17 still retain the ability to vary, change, suspend or restrict the terms regarding support. Where such an agreement exists the approach of the courts is set out in the defining 2003 case of Miglin v. Miglin. Miglin sets out a 2-stage process or test which the courts utilize to determine whether a contractual restriction on spousal support is to be upheld or struck out.

The Miglin Test

Stage One – Time of formation of Agreement;

This stage requires that the courts analyse and weigh the circumstances in which the agreement was negotiated and executed in order to decide whether a reason exists to discount it (the agreement). At this stage there is in-fact a 2-step determination; these are the (i) the circumstances of execution and (ii) the substance of the agreement.

1. The circumstances of execution:

It is not easy to provide a definitive or exhaustive list of factors which the courts may consider in order to decide whether the circumstances of execution of a separation agreement warrant that the agreement should be discounted. This is even more difficult to do in the family law context, as the agreement is not necessarily being viewed through the lens of the common law rules of contract. For instance, the courts may consider “unconscionability” more colloquially known as “unfairness” in the separation agreement, but the threshold of power imbalance is considerably lower in the family law context. Nevertheless, that is not to say that the mere existence of a power imbalance would automatically lead the courts to find ‘unconscionability’ in the separation agreement; there must be evidence to support a finding by the courts that there is a fundamental flaw in the negotiation process. In many cases the courts consider whether assistance of a legal counsel was obtained, in order to decide whether any power imbalance was overcome by the ‘weaker’ party. Where there is no evidence during this step that any party has been taken advantage of the Courts should consider the agreement as a genuine mutual desire to finalize the terms of the separation. An agreement where any power imbalance vitiates the negotiation or bargaining process that agreement however will hold little weight in the Courts.

2. The Substance Of The Agreement:

In this step of Stage 1 of the Miglin test or determination, the courts must consider, that despite the agreement reflecting the substantive intentions of the parties with no evidence of a vitiating bargaining or negotiating imbalance, whether the agreement takes into account and reflects the factors and objectives of the Divorce Act in relation to spousal support. Nevertheless, it is important to note that only a ‘significant’ deviation from the objectives of the act will warrant the agreement to be considered in non-compliance with the Divorce Act. This is known as ‘substantial compliance’ of the separation agreement with the Divorce Act 1985.  It is important to note however that where certain terms of a separation agreement are found to be in departure from ‘substantive compliance’ with the divorce act, this does not necessitate the courts to discount the entire agreement, but rather only that term may be varied or disqualified. For instance, where the time limit for spousal support is found in departure, the quantum of support may still be considered substantively compliant, and thus the courts may only need to extend, vary or disqualify the time-limit term.

Stage Two – Current Circumstances;

Stage two of the Miglin test, not unlike stage one, requires that the courts do a two-step determination in order to assess whether a separation agreement, wholly or partially, should be discounted. As mentioned earlier the common law standard applied to a commercial contract is not rigidly adhered to in a family law context. The two-step process in stage two of the Miglin test requires the courts to determine whether (i) a ‘change’ in the circumstance of the parties has occurred after the execution of the contract which no longer reflects the Intentions of the Parties when they entered into the separation agreement, and (ii) whether the terms of the separation agreement, wholly or partially, deviate from the objectives of the Divorce Act 1985.

1. ‘change’ In The Circumstance In Relation To The Intention Of The Parties:

This assessment is carried out by the courts by comparing the ‘intentions of the parties’ as reflected in the separation agreement with the circumstances of the parties at the time of making the application. The essence of this determination rests upon foreseeability of the ‘change in circumstance’ of the parties; that is to say that if the change was comprehended or foreseen in the original separation agreement it would lessen the chances of the court to grant the applied for relief. Nevertheless, it is important to note that in order for the change to qualify in this step of the consideration it does not need to be ‘radically unforeseen’ and neither does a causal connection with the separation, divorce or breakdown of the marriage need to be proven.

2. Step Two- Objectives Of The Act:

This step is very similar to the one mentioned in stage one of the Miglin test but is nevertheless a determination made in relation to the current circumstances of the parties rather than the intentions at the time of entering into the separation agreement. It must be found in this regard that the current circumstance and the terms of the pre-existing separation agreement are not in substantial compliance with the goals and policy objectives set out in S.15.2(6) of the Divorce Act 1985.

For more information on your rights please contact one of our experienced Family Law lawyers at MEHDI AU LLP.

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Use of the site and sending or receiving information through it does not establish a solicitor / client relationship. The views expressed and the content provided on this blog is for nonprofit educational purposes. It is not, and is not intended to be, legal advice on any specific set of facts. The use of this website does not create a solicitor-client (attorney-client) relationship. If you require legal advice, you should contact a lawyer directly.

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