DIY Separation Agreement

 SEPARATION AGREEMENTS EXPLAINED

A Separation Agreement is a written document drawn up by parties to a marriage that have decided to separate and live apart and who do not wish to use the Courts in ruling on their terms of settlement.

If any party decides to engage a solicitor and apply for Judicial Separation or Divorce that solicitor must first discuss with them the possibility of engaging in mediation to help effect a separation on an agreed basis with the estranged spouse and give to him/her the names and addresses of persons and organisations qualified to provide a mediation service. The solicitor must also discuss with the intended applicant or respondent the possibility of effecting a separation by the negotiation and conclusion of a separation deed or written separation agreement.

Therefore, by statue law, contained in the Judicial Separation and Family Law Reform Act, 1989 and in the Family Law (Divorce) Act, 1996 solicitors are duty bound to discuss the possibility of concluding a written separation agreement.

Parties are entitled to draw up their own written agreement. Whether they do so with the aid of the legal profession or the aid of our experts is a matter of choice. As stated elsewhere the Judiciary while bound to consider written agreements are not bound to accept the terms negotiated and any subsequent application for divorce will be determined by the provisions existing at the date for divorce.

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TERMS OF A SEPARATION AGREEMENT

The essential provision of every separation agreement is that the parties agree to separate and live apart and that the agreement is to be legally binding upon each of them. Other clauses in separation agreements are summarised.

General Provisions

To live apart free from marital control and not to annoy, disturb, molest or otherwise interfere with the other.

Guardianship, Custody and Access

Married spouses remain joint guardians of their dependent children. The parties may have joint custody or agree that either party have sole custody. Full details of the access arrangements can be inserted in the agreement.

Maintenance, Financial Payments and Support Provisions

A maintenance clause can be for the payment of maintenance for the spouse and/or the dependent children of the family by the other spouse. It may detail when and how the money is to be paid and whether it is to be indexed linked to the consumer price index and whether it is to be reviewed annually or on the happening of certain events like, unemployment, co-habiting of the receiving spouse etc. The conclusion of an agreement on maintenance will not prevent a spouse access to a court for a maintenance order for his/herself or for any of the dependent children. Other provisions could be in the nature of lump sum provision, health insurance, life insurance, education costs, orthodontic or optical treatment, school costs etc.

Property

The separation agreement may include the terms of settlement of any property including the family home. The property may be transferred to one spouse with or without consideration, sold and the proceeds divided or one party may reside there, to the exclusion of the other party, for a set period. A clause should also be inserted to contain a general consent to satisfy the requirements of the Family Home Protection Act, 1976 in regard to the future sale or disposal of the family home.

Contents of the Family Home

Normally these remain with the family home. Other items may be divided.

Income Tax

Normally each party wish to be singly assessed for income tax but they can remain or opt for joint assessment in certain circumstances. Maintenance for a spouse can be deducted from the gross income of the giver and added to the gross income of the receiver for income tax purposes. Maintenance for children is not taxable in the hands of the receiving spouse.

Responsibility for Debts

Indemnity clauses are normally inserted regarding mortgages and future debt liability to protect both spouses.

Succession Act Rights

Spouses may renounce their rights or retain their rights under the Succession Acts to a share in the estate of the other.

Pension Provision

Until recently clauses in separation agreements on pensions were accepted by the judiciary at the time of divorce. However, that is no longer the case and the courts now insist that anyone applying for a divorce must have pension adjustment orders made up. So, while parties can still have clauses on pensions inserted in separation agreements to waive their interest in the others pension or to award the other a share of the pension court orders will be needed to give effect to those decisions.

Miscellaneous Provisions 

Parties can add their own provisions to their agreement.

SEPARATION AGREEMENTS AND THE LAW

Separation Agreement or Judicial Separation?

Following the decision of the Supreme Court in P.O'D v A.O'D. (1998) it is not possible to obtain a Judicial Separation if the parties have already agreed to live apart and have a Separation Agreement in place. A couple who therefore enter into a separation agreement as mentioned above are prevented from seeking a judicial separation at a later date.

‘As will be clear from the earlier part of this judgement, the reasons for treating a separation agreement which takes the form of a binding contract as a bar to subsequent proceedings for a decree of judicial separation are twofold. First, where the agreement provides, as it invariably does, that the parties are to live separate and apart, the granting of such a decree would be superfluous. Secondly, where parties have entered into a binding contract to dispose of differences that have arisen between them as husband and wife, it would be unjust to allow one party unilaterally to repudiate that agreement'

Whether a consenting couple have a Separation Agreement drawn up and made legally binding by the ordinary principals of contract law, or, apply for a Judicial Separation and have their terms of agreement made a “Consent Order” of the Circuit Court through the application of Court Orders will depend on the nature of their agreement and the level of trust and co-operation between them. It may also depend on the length of time it may take to complete the process and the costs associated with and charged by the legal profession.

Separation Agreements and Divorce

In the High Court in the case of R.G. v C.G. 2005 the Court considered Section 20(3) of the Family Law (Divorce) Act, 1996 which obliges a Court in deciding whether to make ancillary orders or in determining their provisions to have regard to the terms of any separation agreement which is still in force. The Judge stated

“Proper provision for the parties and the dependent children must exist at the date of the hearing of the application for the decree of divorce. Further, it must be based upon the value of the assets of the parties at that date and the circumstances as they then exist”.

The Court dismissed clauses that were agreed upon to constitute a “full and final settlement” of all matters, that what was agreed constituted “proper provision” and that neither party should issue proceedings against each other save for a decree of divorce. The Court said any agreement not to apply for ancillary orders in any divorce proceedings is unenforceable.

The judiciary are obliged to consider the terms of any agreement and the full range of circumstances that are prevalent at the time of trial or which may ensue in the lifetime of the parties before granting a Decree of Divorce.
 
Separation Agreements and Future Provision

Couples who decide to live separate and apart may elect to have a written agreement as a legal binding contract. They may wish to have their agreement drawn up by way of a Separation Agreement and avoid costly litigation and the involvement of the Courts. The judiciary have stated that they will be reluctant to interfere with an agreement which takes the form of a binding contract and was entered into fairly and which made proper provision for the spouses and dependents. However, the judiciary have also indicated that they will not be bound by the terms of any separation agreement.

Therefore, whether the terms of an agreement will be accepted by a Court at some future date will depend on a number of factors. In the first instance it will depend on whether any of the parties wish to go behind the agreement and seek alternative or additional provision. Other factors that may influence the continued acceptance by the judiciary of the terms agreed may include the circumstances in which the agreement was negotiated and executed, the length of time since it was made, the legal advice sought and obtained by either party and whether circumstances have substantially changed since entering into the agreement.

For instance, despite clauses in agreements stating that each spouse shall be responsible for their own maintenance provision, a spouse is not prevented from seeking provision through the courts at some future date for a maintenance order or for an increase in maintenance for themselves or any dependent children. And the payment of a lump sum in lieu of future maintenance provision may not prevent the receiving spouse subsequently seeking a maintenance order under the law despite the lump sum payment.

Clauses in separation agreements on ‘full and final settlements' may not be accepted by the judiciary at some future date. An application for divorce is recognised as a fresh application before the courts and the circumstances prevailing at the time will influence the courts willingness to grant a decree of divorce.

Also, clauses regarding pensions inserted in separation agreements of themselves do not give the authority for a share of, or a bar to seeking a share, of any spouse's pension. A Pension Adjustment Order is required from the courts to compel or enable the trustees of any pension scheme to act in a certain manner.

SEPARATION AGREEMENTS – WHY BOTHER?

In view of the decision of the Court in R.G. v C.G 2005 (see page No. 5) one might ask what is the point in entering into a separation agreement if in three or four years time the courts may not accept it. In looking at recent case law mixed messages are coming from the Courts. On the one hand the Courts are saying that the judiciary will be loath to interfere with a legal binding contract that takes the form of a separation agreement and on the other hand the same Courts are saying that they will not be bound by them and that the circumstances that exist at the date of court (divorce) will determine the needs of the parties.

Therefore one has to ask why any couple would hire solicitors at a huge cost to each party for a service the outcome of which may not be certain at some future date.

Ultimately the success of any separation agreement will be dependant on the willingness of the parties to agree terms and abide by them.

Clauses can be inserted for review to cater for changing circumstances and thereby provide the flexibility needed to help make the agreement a lasting one.

Therefore, we say that if the success of a Separation Agreement hinges entirely on the willingness of the parties themselves to separate on agreed terms and abide by those terms then why not use our services, draw up your own agreement and save yourself €1,000’s. If you are satisfied it will hold and be honoured why pay thousands for solicitors to draw it up.

BREACH OF CONTRACT & STATUTORY REMEDIES

The law of contract applies to any such agreement. If one of the parties were not to comply with any part of the agreement then the other party would be entitled to sue for breach of contract. However, in the case of non-compliance a better and less costly approach might be to apply for a corresponding statutory remedy.

For instance, if there is a breach on the payment of maintenance under the separation agreement then the aggrieved party may apply for a Maintenance Order under Section 5 (1) (a) of the Family Law (Maintenance of Spouses and Children ) Act, 1976 and have a breach of the Order enforced through the District Court. Such a remedy can be heard in the District Court although the court is not bound to accept that the figure of maintenance agreed in the separation agreement will be the figure granted by court order.

If there were a breach of the clause that the spouses have agreed to live apart and free from the control and interference of each other again, it would be easier, quicker and less costly to seek a statutory remedy than to apply for a restrictive injunction to restrain a party. A spouse could apply to the District Court for a Safety, Protection or Barring order under the Domestic Violence Act, 1996.

Breaches of custody and access arrangements in a separation agreement can be addressed by an application under Section 11 of the Guardianship of Infants Act, 1964 through the District Court.

A failure to transfer property as part of a separation agreement can be enforced by an action for specific performance. This is a form of equitable relief whereby a court orders one party to a contract to act as they promised to do. Because it entails a new court action some legal writers believe it is a disadvantage compared to enforcement under a property adjustment order granted in a judicial separation.

CONTRACT – HISTORICAL BACKGROUND

In 1848 in the case of Wilson v Wilson it was established that a contract which provided for the immediate separation of spouses was a valid contract and enforceable if followed by immediate separation. The term contract can mean every description of agreement or obligation where one party is bound to the other or it can simply mean an agreement between two or more persons concerning something to be done.

In common law systems, like our own, the main requirements for the creation of a contract are:
There is an exchange of promises or an offer and acceptance of terms best described as an agreement.

There must be consideration. Each party must be ‘giving’ something in return for the others promise. However, this requirement for ‘consideration’ has been challenged on the grounds that the creation of legal relations by the parties fulfils this requirement under contract.

The intention of the parties is to be legally bound.

The contract is formed and obligations under it arise which may be in writing.

Many couples who decide to live apart are able to come to some agreement on issues like the custody and care of children, maintenance for the children and/or spouse, the family home, property etc. Whether they proceed to make their agreement a formal written agreement will depend on the level of trust and cooperation between them. There is no obligation to have a ‘legal separation', as it is sometime referred to, and many couples are able to survive without one.

Following the decision of the Supreme Court in P.O'D v A.O'D. (1998) it is not possible to obtain a Judicial Separation if the parties have already agreed to live apart and have a Separation Agreement in place. A couple who therefore enter into a separation agreement as mentioned above are prevented from seeking a judicial separation at a later date.

‘As will be clear from the earlier part of this judgement, the reasons for treating a separation agreement which takes the form of a binding contract as a bar to subsequent proceedings for a decree of judicial separation are twofold. First, where the agreement provides, as it invariably does, that the parties are to live separate and apart, the granting of such a decree would be superfluous. Secondly, where parties have entered into a binding contract to dispose of differences that have arisen between them as husband and wife, it would be unjust to allow one party unilaterally to repudiate that agreement'

Whether a consenting couple have a Separation Agreement drawn up and made legally binding by the ordinary principals of contract law, or, apply for a Judicial Separation and have their terms of agreement made a “Consent Order” of the Circuit Court through the application of Court Orders will depend on the nature of their agreement and the level of trust and co-operation between them. It may also depend on the length of time it may take to complete the process and the costs associated with and charged by the legal profession.

SOME RELEVANT CASE LAW ON SEPARATION AGREEMENTS

In a noted U.K. case, Wright v Wright [1970] where a wife having previously agreed a settlement and withdrew her claim for maintenance subsequently sued for maintenance the Judge, Sir Gordon Willmer said:

“I think….that the existence of this agreement, having regard to the circumstances in which it was arrived at, at least makes it necessary for the wife, if she wants to justify an award of maintenance, to offer prima facie proof that there have been unforeseen circumstances in the true sense, which make it impossible for her to work or otherwise maintain herself. If that be right, I think it quite plain that the wife here did not give such prima facie proof”

Factors which could affect the agreement being accepted at some future date were examined by the Canadian Supreme Court in Miglin v Miglin [2003]

“The first stage of the analysis requires the court to look at the circumstances in which the agreement was negotiated and executed, including taking into account whether there was any oppression, pressure or other vulnerabilities, and the negotiating conditions, such as the duration and whether or not there was professional legal assistance for the parties. Unless there is evidence of a fundamental flaw in the negotiation process, fairly negotiated separation agreements should be viewed as expressing the substantive intent of the parties and the courts should be loathe to interfere”

The Court went on to state that it should respect the wishes of the parties if the separation agreement was fairly negotiated and substantially complies with the factors and objectives set out in the Divorce Act ( Canada ).

The Court noted also that circumstances might change and that it should be a significant change in circumstances that could not have been reasonably foreseen at the time of the agreement that should merit judicial interference.

In a U K case Edgar v Edgar [1981] the wife decided to leave the marriage and take the children with her. She pressed for a separation agreement and accepted property worth £100,000 plus maintenance for herself and the children. She agreed that if she obtained a divorce she would not claim any further lump sum provision or property transfer orders. Two years later the wife filed for divorce and sought and was granted a lump sum of £670,000. The husband successfully appealed. The Court was obliged to consider a prior agreement as “conduct” of the parties that should be taken into account. The Judge stated:

“So, the circumstances surrounding the making of the agreement are relevant. Undue pressure by one side, exploitation of dominant position to secure an unreasonable advantage, inadequate knowledge, possibly bad legal advice, all important changes of circumstances, unforeseen or overlooked at the time of making the agreement, are all relevant to the question of justice between the parties”.

The husband had not exploited his position unfairly to induce the wife to act to her disadvantage.

“Important too is the general proposition that, formal agreements properly and fairly arrived at with competent legal advice should not be displaced unless there are good and substantial grounds for concluding that an injustice will be done by holding the parties to the terms of their agreement”

In the Irish High Court case W.A. v M.A . [Dec 2004] Mr. Justice Hardiman concluded that the wife was bound by the terms of the agreement negotiated in 1993 and refused her appeal against the husbands application for divorce and for a range of orders for her benefit including a property adjustment order. At the time of their agreement the parties, both farmers in their own right, were reckoned to have a net worth of €2m each at time of trial. After the separation the husband had prospered and his net holding was deemed to be worth around €7m. The wife on the other hand it was reckoned had poorly managed her holding and it was deemed to be worth €1.25m. The Court considered the terms of the agreement and found them to be fair, it considered the question of a ‘clean break' and the intention that the agreement was to be a final settlement, the length of time the parties were married and separated and the full range of considerations under Section 20 (2) of the Divorce Act, 1996 in regard to proper provision, their means, financial needs, standard of living, age, health, contribution to each others welfare, earning capacity, accommodation and conduct. In refusing to make a property adjustment order in favour of the wife the Judge said:

“I must in justice record my view that any difficulties which the wife now experiences are wholly of her own making and that the husband has contributed to them in no way whatever. Equally, the wife contributed to the husband's present state of prosperity in no way whatever”.

The judiciary are obliged to consider the terms of any agreement and the full range of circumstances that are prevalent at the time of trial or which may ensue in the lifetime of the parties before granting a Decree of Judicial Separation or a Decree of Divorce.

In the High Court in the case of R.G. v C.G. 2005 the Court considered Section 20(3) of the Family Law (Divorce) Act, 1996 which obliges a Court in deciding whether to make ancillary orders or in determining their provisions to have regard to the terms of any separation agreement which is still in force. The Judge stated “Proper provision for the parties and the dependent children must exist at the date of the hearing of the application for the decree of divorce. Further, it must be based upon the value of the assets of the parties at that date and the circumstances as they then exist”.

The Court dismissed clauses that were agreed upon to constitute a “full and final settlement” of all matters, that what was agreed constituted “proper provision” and that neither party should issue proceedings against each other save for a decree of divorce. The Court said any agreement not to apply for ancillary orders in any divorce proceedings is unenforceable.