Family Law: Steine case shows pitfalls of incomplete agreements

Quite often during the course of a family law proceeding, the parties reach settlements at case or settlement conferences with handwritten minutes drawn up by the lawyers and the litigants in courthouse hallways. Most of the time, the dispute ends quickly once they become orders.

Sometimes, however, things don’t go smoothly. Such was the case in Steine v. Steine in a decision by Superior Court Justice Gregory Mulligan.

After the parties had been separated for some time, Lori Steine commenced an application. Following completion of pleadings and disclosure, they attended a case conference.

A 6 1/2-hour negotiation ensued at the courthouse that led to an agreement on all issues, including equalization and support, which both parties and their lawyers signed. One of the clauses in the agreement specified that formal minutes would include final releases and standard terms pursuant to the Law Society of Upper Canada’s “green book.”

Negotiations ended at 6:30 p.m. I surmise that facilities with photocopiers were by then unavailable and that only counsel for the husband, Terrance Daniel Steine, retained a copy of the minutes while promising to provide one to the opposing side the next day and prepare a draft final order. It seems simple enough, but that’s not what happened.

Two months went by without agreement as to the language of the final order. What’s most surprising is that Terrance’s counsel appears to not have provided a full copy of the courthouse minutes to the opposing side for quite some time, including after providing a draft order for review.

The unfortunate part of all of this is that the funds, including lump-sum spousal support payable to Lori, remained with the parties’ real estate lawyers pending agreement on the final terms.

Because the settlement involved lump-sum rather than monthly periodic support, Terrance also terminated his prior voluntary payments to Lori, who for various medical reasons was only able to earn an income of about $900 per month. Terrance’s income was more than 10 times that at just over $9,000 per month.

In the meantime, his lawyer denied requests for even partial distribution of the proceeds. Understandably, Lori became very upset. By this past April, three months after the case conference and still having no funds, she retained new counsel.

By then, she started a motion for summary judgment and simultaneously filed a cross motion to set aside the courthouse minutes and for interim support.

The basis for her motion to set aside the minutes included duress and a lack of comprehension of the implications of what she had agreed to that day, as well as allegations that her former husband had failed to disclose income and assets.

Mulligan made short work of those allegations primarily because neither she nor her counsel had made any claims about non-disclosure or that the minutes were somehow unconscionable prior to that, specifically as they related to lump-sum support and a subsequent release from Terrance.

In reading the case, what becomes very clear is that Lori, at the end of her rope at not having finality or any money in her hands, had changed her mind about the agreement. Ultimately, her husband was successful in obtaining summary judgment.

However, recognizing the serious impact the protracted negotiations of terms and lack of continued interim payments had on Lori, Mulligan made an order in her favour for arrears of spousal support retroactive to January of this year that totalled about $20,000. Of note are Mulligan’s comments on the issue of costs, which Terrance then sought.

Specifically, the judge ordered that his submissions were to include an explanation of why he didn’t continue his voluntary payments of spousal support during the continued negotiations of the terms of the final order and why he didn’t agree to the partial release of the proceeds of sale of the matrimonial home.

Based on these comments, it’s clear that Mulligan was less than impressed with the hardship that Lori suffered after the case conference.

Courthouse settlements, which both counsel and the judiciary encourage, are extremely common in family law. However, we as lawyers have to be careful as to how we craft those agreements.

I think that where this case really fell off the rails is with the earlier noted term that the formal minutes will include standard LSUC clauses.

As lawyers, our job is to be picky about what does and doesn’t go into agreements, and leaving certain things unsaid on the assumption that there will be little disagreement as to what’s appropriate and standard later on is simply a recipe for complications as it so clearly was in this case.

Marta Siemiarczuk is a lawyer practising family law litigation and collaborative family law at Kathleen Chapman & Associates in London, Ont. Marta can be reached at [email protected].

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