COURT OF APPEAL FOR ONTARIO
Sossin, Favreau and Monahan JJ.A.
BETWEEN
Ivan Tsarynny
Applicant (Appellant)
and
Yelyzaveta Topchiy
Respondent (Respondent in Appeal)
Debora Lyons, for the appellant
Galina Pribytkova, for the respondent
Heard: February 28, 2025
On appeal from the order of Justice P. Tamara Sugunasiri of the Superior Court of Justice dated November 27, 2023, with reasons reported at 2023 ONSC 6157.
REASONS FOR DECISION
OVERVIEW
1This is an appeal from the order of the application judge, who set aside the separation agreement between the appellant, Mr. Tsarynny, and respondent, Ms. Topchiy, and fixed the separation date as July 31, 2018. The appellant argues the application judge made reversible errors both in setting aside the separation agreement and in fixing the date of separation. We see no error with the application judge’s analysis or conclusion on either issue, and dismiss the appeal for the reasons set out below.
BACKGROUND
2The parties married in Ukraine on May 10, 2003. After they married, the appellant sponsored the respondent to come to Canada. Subsequently, they had two children together.
3The parties signed a separation agreement on March 15, 2016, after the appellant discovered that the respondent had had an affair. The separation agreement had been downloaded from the internet and neither party received independent legal advice before they signed it. The separation agreement waived equalization, fixed nominal spousal support, and provided for zero or table child support from only the appellant, despite 50-50 parenting time. It also excluded the appellant’s company, PostBeyond, from equalization.
4Initially, the parties agreed that the separation date was March 15, 2016. However, the respondent subsequently submitted that the date of separation for the purposes of equalization was July 31, 2018.
DECISION BELOW
5The application judge set aside the separation agreement on the basis that the appellant had not made sufficient disclosure to the respondent to allow her to understand the effect of the agreement. In particular, the trial judge found that the appellant had failed to disclose the fact that his company, PostBeyond, was about to receive an investment of $4,000,000, and allowed the respondent to rely on prior information that the company was struggling and on the verge of bankruptcy. The application judge concluded that it would be unfair to the respondent to hold her to a bargain that she made without relevant information, relying on LeVan v. LeVan, 2008 ONCA 388, 90 O.R. (3d) 1, at para. 60, leave to appeal refused, [2008] S.C.C.A. No. 331. She observed in her reasons, at para. 8, “failing to provide that financial disclosure is fatal to the [separation agreement].”
6As for the date of separation, the application judge found the date of separation to be July 31, 2018, rather than the date of March 15, 2016, when the separation agreement was signed. She set out her conclusion as follows:
The Applicant contends that the date of separation was March 15, 2016, when they entered into a separation agreement. The Respondent argues that the date of separation was July 31, 2018, when they stopped being intimate and the Applicant moved out of their bedroom and soon after, out of the house. In considering these factors, a reasonable person would not believe that as of March 15, 2016, the parties had no prospect of reconciliation. Rather, a reasonable person would believe that the parties separated on July 31, 2018. It is more likely than not that the March 15, 2016, separation was the “beginning of the end” but not the end itself, with the Applicant reacting to the Respondent’s infidelity and wanting to protect his assets. Once the asset was protected by the [separation agreement], the parties lived a version of the life they had led before. Notwithstanding the Applicant’s stated intention that he was separated and did not want to reconcile with the Respondent, the evidence of their interactions would lead a reasonable person to conclude that the separation had not legally crystallized at that time and that there was a reasonable prospect that the parties might reconcile.
ANALYSIS
7The appellant challenges both the application judge’s decision to set aside the separation agreement and her determination that July 31, 2018, was the date of separation.
8The standard of review is not in dispute. The correctness standard applies to pure questions of law. The standard of palpable and overriding error applies to questions of fact and, absent an error in principle or extricable question of law, to questions of mixed fact and law: Housen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235, at paras. 1, 4–6, and 10.
The application judge did not err in setting aside the separation agreement
9The application judge set aside the separation agreement pursuant to s. 56(4) of the Family Law Act, R.S.O. 1990, c. F.3 (“FLA”), which provides that:
A court may, on application, set aside a domestic contract or a provision in it,
(a) if a party failed to disclose to the other significant assets, or significant debts or other liabilities, existing when the domestic contract was made;
(b) if a party did not understand the nature or consequences of the domestic contract; or
(c) otherwise in accordance with the law of contract.
10The appellant argues that, while failing to disclose a significant asset can be a “fundamental” or “crucial” factor in the analysis as to whether to set aside a separation agreement, the absence of disclosure on its own is not “fatal.”
11In deciding whether to set aside a domestic agreement, this court in LeVan set out a two-step process. First, a party seeking to set aside the agreement must satisfy the court that there was non-disclosure by the opposing party of a significant asset, and second, the court must consider whether it is appropriate to exercise its discretion to set the agreement aside.
12In her analysis, the application judge concluded both that the appellant’s company was a significant asset and that the exercise of her discretion to set aside the separation agreement was warranted on fairness grounds. In LeVan, this court confirmed that fairness is an appropriate consideration in the exercise of this discretion.
13In Dochuk v. Dochuk (1999), 1999 CanLII 14971 (ON SC), 44 R.F.L. (4th) 97 (Ont. S.C.), relied upon by the appellant, the Court found a significant asset had not been disclosed but that this had no effect on the parties entering into a domestic agreement. In this case, however, the application judge reached the opposite conclusion. She was not satisfied the respondent would have entered into the separation agreement had she known the value of the appellant’s company.
14The application judge stated that she was taking into account the non-exhaustive factors set out in Dochuk. These include: (a) whether there had been concealment of the asset or material misrepresentation; (b) whether there had been duress, or unconscionable circumstances; (c) whether the petitioning party neglected to pursue full legal disclosures; (d) whether he/she moved expeditiously to have the agreement set aside; (e) whether he/she received substantial benefits under the agreement; and (f) whether the other party had fulfilled his/her obligations under the agreement: Dochuk, at para. 18, relying on Demchuk v. Demchuk (1986), 1986 CanLII 6295 (ON SC), 1 R.F.L. (3d) 176 (Ont. H.C.).
15The application judge concluded, at para. 9, “At best, the [appellant], was negligent in his material misrepresentation about PostBeyond and, at worse, purposeful. Either way, I accept the [respondent’s] position that her approach to the negotiations would have been different had she thought that there was more to PostBeyond than the [appellant] had represented.” She added, at para. 10, “Given such circumstances, it would be unfair to the [respondent] to hold her to a bargain that she made without relevant information.”
16In our view, it was open to the application judge to set aside the separation agreement based on her conclusions with respect to the respondent’s failure to disclose information about his company, and with respect to the unfairness to the respondent in enforcing the agreement.
17Therefore, we reject this ground of appeal.
The application judge did not err in determining the date of separation
18Determining the date of separation is a question of fact and is entitled to deference.
19The application judge correctly instructed herself that the separation date may be established when there is an unequivocal act by the separating spouse indicating that he or she wishes to separate without possibility of reconciliation, relying on O’Brien v. O’Brien, 2013 ONSC 5750, at para. 52. The possibility of reconciliation, in turn, is determined by whether, in light of the intention of the parties, a reasonable person, knowing all the circumstances, would believe that the parties had a prospect of resuming cohabitation. The intention of the parties requires a consideration of a range of objective factors, in addition to the stated intentions of the parties. Drawing from O’Brien, at paras. 54, 61, and Warren v. Warren, 2019 ONSC 1751, at para. 7, the application judge included the following factors:
(a) Physical separation, including occupying separate bedrooms, maintaining separate residences and reasons for maintaining separate residences;
(b) Withdrawing from the matrimonial obligation with the intent of destroying the matrimonial consortium;
(c) Presence or absence of sexual intimacy, although acts of intercourse do not necessarily imply periods of cohabitation with reconciliation as their purpose;
(d) Communication between the spouses and discussion of family problems as well as planning for the future;
(e) Presence or absence of joint social activities, celebrating social occasions together, gifts, helping each other through difficult times, and vacations together;
(f) The relationship and conduct of each of them toward members of their respective families and their friends, and how the friends and families behaved towards the parties;
(g) The financial arrangements between the parties regarding the provision of or contribution toward the necessaries of life (food, clothing, shelter, recreation, etc.) and the sharing of assets;
(h) How the parties referred to themselves in documents, including income tax returns, and to friends and families;
(i) Steps taken towards the legal termination of their relationship;
(j) Meal patterns, including eating meals together and performance of household tasks, including washing clothes, cleaning, and shopping; and
(k) Efforts to resume cohabitation (mediation, counselling, property purchase or lease, “meaningful discussions … as to if, how or when their marriage might be put back together”).
20The appellant disagrees with how the application judge assessed the various factors. For example, the appellant claims that the parties carried on acting like spouses to shield their children from knowledge of the separation. The appellant claims the ongoing counselling was similarly aimed at developing appropriate parenting strategies rather than reconciling as spouses.
21It may be that some of the evidence in the record with respect to these factors was capable of more than one interpretation, but that is not the test for appellate intervention. We see no basis for the claim that the application judge misapprehended any of the evidence.
22The application judge found that the separation process may have begun with the signing of the separation agreement in March 2016, but it did not conclude until July 2018. The respondent reiterates that key aspects of the record supported this conclusion, such as the commencement of spousal support payments by the appellant in August of 2018.
23The application judge acknowledged that the respondent changed her position on the date of separation between the time of her initial pleadings filed on June 11, 2021, and her amended pleadings, filed on consent on March 30, 2022, after she had received financial disclosure. She considered the possibility that the change resulted from the respondent learning about the transaction that increased the value of the appellant’s company in April 2016. She concluded, at para. 17:
It is indeed tempting to accept the Applicant’s suspicion that the change of date was to be able to include the growth of PostBeyond in the calculation of the Applicant’s net family property. However, the most harmonious and sensible way to reconcile the Respondent’s initial pleading position with the evidence that shows strong factors against fixing March 15, 2016 as the valuation date is to recognize that there is a difference between separation as a lay term, and separation as a concept of law.
24Again, in our view, this finding was open to the application judge on the record before her, and we see no basis for appellate intervention.
DISPOSITION
25For these reasons, we dismiss the appeal.
26The respondent is entitled to costs of the appeal, in the amount of $18,000, all-inclusive.
“L. Sossin J.A.”
“L. Favreau J.A.”
“P.J. Monahan J.A.”
