“In order for the agreement to be a domestic contract, pursuant to section 55 of the Family Law Act, there must be an agreement, in writing, signed by the parties and witnessed. This is not one of those cases.
Before entering into a discussion about settlement agreements made in the course of litigation it is important to discuss a contractual agreement, generally. In order for there to be an agreement, there must be a meeting of the minds, on all essential elements, with an agreement that those terms be incorporated into a formal document.
In Geropolous v. Geropolous, 35 O.R. (2d) 763, 1982 CanLII 2020, the Court of Appeal was asked to decide whether an agreement contained in an exchange of correspondence between solicitors settling the claims in an action brought pursuant to the Family Law Reform Act, R.S.O. 1980, c. 152, was enforceable.
I share the view that settlement agreements concluded by solicitors or counsel resolving outstanding claims in pending litigation under the Act are beyond the reason and purview of s. 54(1). The formal requirements laid down by the section are intended to ensure that asserted domestic contracts, be they marriage contracts (s. 51), cohabitation agreements (s. 52) or separation agreements (s. 53), are reduced to writing and in fact agreed to by the parties as evidenced by their witnessed signatures; this in essence is a statute of frauds type provision made referable to domestic contracts by the Family Law Reform Act.
In my opinion, the section plainly is not aimed at or intended to apply to authorized settlement agreements like the present, made with legal advice during the pendency of court proceedings which, to be effective, require the intervention of the court. Such agreements derive their effect from an act of the court; their authenticity is assured by the court’s supervision and control over them; and ample protection is afforded the parties to these agreements, wholly independent of the section. The court’s jurisdiction to enforce settlements or refuse to do so, notwithstanding any agreement between solicitors or counsel, is well established; whether they should be enforced or not, in the final analysis, is a matter for the discretion of the court and, in litigation under the Family Law Reform Act, a matter that would be subject to the court’s overriding jurisdiction with respect to domestic contracts; Scherer v. Paletta, supra; 3 Halsbury’s Laws of England, (4th ed.), paras. 1182-3; and ss. 18(4) and 55 of the Act. [Emphasis added]
In Gallacher v. Friesen, 2014 ONCA 399, 371 D.L.R. (4th) 522, the Court of Appeal reviewed the law pertaining to s. 55(1). Although related to a different fact scenario (the issue was whether the witness was present when the appellant signed the domestic contract), the court’s comments at paras. 25-27 are instructive:
The appellant submits that the syntax of s. 55(1) supports a strict reading of the provision. He asserts that the general premise of the provision is that all domestic contracts are unenforceable, with an exception for domestic contracts that comply with the necessary formalities of execution.
The appellant’s approach to s. 55(1) of the FLA is inconsistent with this court’s observation in Bosch v. Bosch that the legislature intended to encourage rather than discourage domestic contracts. A strict reading of s. 55(1) would also be inconsistent with this court’s recent judgment in Virc v. Blair, 2014 ONCA 392. There, Pepall J.A. came to the conclusion that in comparison with s. 4(1) of the Succession Law Reform Act, R.S.O. 1990, c. S.26, the language of s. 55(1) of the FLA allows for a less strict application of the witnessing requirement.
Justice Pepall’s decision in Virc v. Blair is consistent with a substantial body of case law in Ontario, and in other provinces with similar legislation, holding that the strict requirements of s. 55(1) may be relaxed where the court is satisfied that the contract was in fact executed by the parties, where the terms are reasonable and where there was no oppression or unfairness in the circumstances surrounding the negotiation and execution of the contract.” [Emphasis added]”