Should I sign my separation agreement without financial disclosure?
October 12, 2022
The short answer to this question is – absolutely not! The husband in the following case learned his lesson the hard way.
In the recent case of Shalaby v Nafei 2022 ONSC 5615, the Honourable Justice Price refuses a husband’s request to summarily dismiss the wife’s claim that the separation agreement should be set aside, despite the following facts:
- There were substantial negotiations between the parties prior to the signing of the final separation agreement;
- The wife signed a document acknowledging that: (1) She was aware of the husband’s financial affairs during the marriage and after the marriage both in and outside of Canada, (2) She had the opportunity to obtain the financial disclosure she wished, (3) She was satisfied with the financial disclosure that she obtained from the husband, (4) She irrevocably waived any right to obtain further financial disclosure from the husband, and (5) A lack of financial disclosure would not constitute a ground for setting aside the separation agreement,
- The wife also signed a document acknowledging that the agreement was fair and reasonable and that she was not under any undue influence or duress and was signing the agreement voluntarily; and
- The wife had legal representation and her lawyer signed a Certificate of Independent Legal Advice confirming she was not under any undue influence or duress, and was signing the agreement voluntarily.
Notwithstanding these acknowledgments, the wife brought a claim seeking to set aside the Separation Agreement, in part, for the following reasons:
- The economic inequality of the parties/unequal bargaining power; and
- Failure to disclose material information.
The main reasons for the Judge’s refusal to summarily dismiss the wife’s claims were: (1) the husband’s initial refusal to provide financial disclosure, and (2) his continued refusal to provide financial disclosure. This prevented the judge from being able to assess whether, in part, there was a material failure to provide disclosure and whether the terms of the agreement were unconscionable because of the economic inequality or unequal bargaining power of the parties.
Had the parties in this case exchanged full financial disclosure prior to executing their separation agreement, they could have potentially saved thousands in legal fees, and avoided the emotional burden of going to court.
Our experienced lawyers can assist you with any questions you may have about financial disclosure or whether or not your separation agreement can be set aside. Contact us now to schedule a free consultation.
This article is authored by Erika MacLeod, an experienced Family Lawyer who is ready to assist you with any question you may have regarding your separation.
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