Let me paint a scenario from the case in Sydor v. Sydor. In this case, the husband and wife agree to separate on their own volitions. Upon this premise, they sign a Separation Agreement and stick to the terms of the agreement for a while. However, after some years, they decided to reconcile, but the reconciliation does not hold and they decided to separate for a final time.
The question that begged to be answered is this: does the substantive separation agreement still good? Does the fact that the parties reconciled after making it affect the legal validity of the separation agreement even though this is the second time?
The answers will depend on each circumstance, and to understand the import of this case, it is important to delineate the legal effect of reconciliation on a Separation Agreement.
The general rule is that if the husband and wife have agreed for reconciliation, the Separation Agreement notwithstanding is null and void. This position has been recently reiterated by the Ontario Court of Appeal in the case of Sydor v. Sydor, the Court of Appeal held that a separation agreement is not enforceable once the parties to the Marriage reconcile.
There is an exception to the general principle that a separation agreement does not survive a conciliation. Thus, in Sydor v. Sydor the Court held that if the agreement contains a clause that overrides that general rule, or if such a clause can be reasonably implied, then the exempted part of the agreement will still be valid, and the spouses' clear intention will be given effect. We shall further consider two cases decided by the courts pursuant to the original Family Law Reform Act of 1978 (Ont.) Bailey v. Bailey (1982), 1982 CanLII 1760 (ON CA), 37 OR (2d) 117 (CA), and Bebenek v. Bebenek (1979), 1979 CanLII 1861 (ON CA), 24 OR (2d) 385 (CA).
In Bailey, the Court held that "where the agreement does not contain a clause that addresses the effect of reconciliation on the separation agreement, the issue whether the parties intended that they would be precluded from "attracting the operation of the Family Law Reform Act just because the parties entered into a separation agreement during the crisis period without contemplating the possibility of reconciliation" was a triable issue". While in Bebenek, the Common law principle was applied to the effect that "the resumption of cohabitation terminates a separation agreement but does not necessarily affect conveyances made pursuant to the agreement prior to the reconciliation."
It is clear from this decision that the Court has to discern the intention of the parties to the separation agreement and that the reconciliation of the parties does not affect the transfer of property made under the agreement prior to reconciliation.
Here is another example that explains the effect of reconciliation on a separation agreement; a husband and wife married in 2012, and spilt in 2017, the two spouses executed Conveyance in favour of the wife transferring his SUV Toyota 4Runner 2017, this clause was later incorporated in the separation agreement, and they use language to suggest that they consider this a final disposition. The parties reconcile in 2020; can it be said that the husband can still lay claim to the Toyota 4Runner?
Legally speaking, the Separation agreement is totally void because of the fact that the parties have reconciled in 2020, but the Court may view the car-related wording to mean that they considered the wife's rights to the vehicle are final and binding, notwithstanding what might happen to the parties' marriage in the future. This illustration could be the ground for the Court's decision for a divorce proceeding when it comes to the formal division of the estate/property of a husband and wife.
It is safe to conclude that parties to a separation agreement must draft the clauses in plain language to avoid ambiguity. Spouses should be able to delineate the effect of a property transferred in a separation agreement preceding the divorce immediately. The rights and liabilities of the spouses be properly spelt out, should a reconciliation happen in the future.