Studerus v. Studerus: Valuation Date
This case deals with determining the valuation date, which becomes extremely important when claiming an equalization payment. The valuation date is based on the date that the parties separated and there was no reasonable prospect of resuming cohabitation. The contentious part of this case arose when the parties had to determine when they actually separated. The parties were married from July 3, 1987, and both parties were 48 years old at the time of the proceedings.
The Mother is claiming the parties separated on September 3, 2005. She argues that the above is their separation date because that is when she verified (e.g. drove to her best friend’s house to find the Father’s car parked there) that the Father was having an extra-martial affair with her best friend, despite his continual denial of such an affair. Subsequently, the Mother moved out of the matrimonial bedroom and moved to a bed in the den of the said home.
The Mother was devastated and unable to cope as a result of realizing that her best friend was having an affair with the Father. Also, the Mother stated that the parties acted in all respects as husband and wife until the purported separation date. For instance,
- they continued their share of work in maintaining the household,
- they continued to have joint accounts,
- they continued to socialize both in an outside of the home with friends and family, and
- they had voluntary sexual relations. It was only until September 3, 2005 that the parties confronted the children of the marriage to inform them that they were separating.
The Father is claiming that the parties separated on November 5, 2004. He argues that on the same day, the Mother moved out of the matrimonial bedroom. The Father stated that the parties had a Separation Agreement (“Agreement”) and the date contained within the Agreement was November 5, 2004. However, the Court was unwilling to use the separation date within the Agreement because they felt that the Mother signed the Agreement without appreciating the impact of such an Agreement. After all, she did not have any independent legal advice; there was no full financial disclosure between the parties; and the Father took advantage of her stress and vulnerability which compromises the integrity of the bargaining process.
The Court decided to set aside the Agreement as a result of the lack of material disclosure and unconscionability. Also, The Father unsuccessfully tried to use a family friend as a witness that would confirm the parties separated on the above noted date. However, the Court determined that the family friend posed serious creditability issues because of his inconsistent statements, and thus the Court did not give weight to the friend’s testimony.
Based on the circumstances of this case, the Court adopted the Mother’s date of separation as they found her account of events to be more plausible. Since the Court finalized the date of separation, the issue of calculating equalization and spousal support remained outstanding, and would proceed to trial.
The judge in this case was asked to determine two questions. First, whether the separation agreement that was signed would govern the parties rights; and second, what is the valuation date.
The husband argued the separation agreement was valid. The wife argued that it was not as she had just learned about her husband’s affair with her best friend and the husband threatened that he would quit his job and move if she did not agree with his settlement terms. Other tactics of the husband included presenting her with an agreement and telling her to attend a lawyer’s home to get it signed while he waited in the car. The wife did not understand the agreement, did not appreciate what signing it meant, did not receive any financial disclosure upon which she could make an informed decision nor did she receive any independent legal advice. She was vulnerable and the husband took advantage of her.
The circumstance under which an agreement is executed is a significant factor in determining whether an agreement will be upheld. There must be full financial disclosure and the agreement must be signed in an unimpeachable fashion. In this case, the judge understandably set aside the agreement.
Individuals entering into a separation agreement are surely planning to rely upon the agreement as they move on with their lives. This case should serve as a warning to individuals that if they do not do their agreements properly, with full financial disclosure and independent legal advice, they are accepting the risk that their agreement will be set aside at a later date.
Regarding the date of separation, the judge reviewed the facts and found that the parties continued their relationship past the date chosen by the husband in the separation agreement he proposed; the resulting being: the husband will not be receiving the benefits of his unfair tactics.