COURT OF APPEAL FOR ONTARIO
Roberts, Coroza and Pomerance JJ.A.
BETWEEN
Catherine Yin Ping Scott
Applicant (Respondent)
and
Yiu Wah Kwong a.k.a. Kermit Yiu-Wah Kwong
Respondent (Appellant)
Michael J. Stangarone and Aria MacEachern, for the appellant
Charles Baker, for the respondent
Martha McCarthy and Nicole Burrows, for the interveners, Nathan Kwong and Edith Kwong
Heard and rendered orally: June 24, 2026
On appeal from the order of Justice John A. Finlayson of the Superior Court of Justice, dated May 30, 2024.
REASONS FOR DECISION
1The appellant appeals from the May 30, 2024 order setting aside the parties’ April 15, 2006 separation agreement and the provisions of the July 5, 2006 order respecting the disposition of the parties’ matrimonial home (the “divorce order”).
2The parties separated on January 1, 2004. At that time, their children were minors. The respondent moved out of the matrimonial home.
3Over roughly a nine-month period, the parties negotiated a separation agreement that disposed of the parties’ respective interests in the matrimonial home, the respondent’s responsibilities for child support and other expenses, and other issues. Key provisions of the agreement in issue on this appeal provided that: 1) the matrimonial home would not be sold until the parties’ youngest child turned 18 years of age; 2) the respondent’s interest in the matrimonial home would be valued as at the date of separation on January 1, 2004; and 3) the respondent agreed to gift her share of the net family properties with no conditions to the parties’ children and to transfer her title to the matrimonial home to the parties’ children at any time upon request. There is no dispute that the parties’ principal asset was the matrimonial home.
4At the same time the parties signed the separation agreement, they also agreed to the consent divorce application and divorce order, which repeated the respondent’s agreement to transfer her remaining “net share value” of the matrimonial home to the parties’ children at the time of the sale of the matrimonial home.
5On March 2, 2022, the respondent brought an application to set aside the separation agreement and divorce order and to obtain her share of the value of the matrimonial home. The sale of the matrimonial home closed on September 1, 2022, and the net proceeds are being held in the trust account of the real estate lawyer who acted on the sale.
6The trial judge allowed the application, set aside the separation agreement and divorce order on the basis that the respondent did not understand the terms of the separation agreement, had inadequate financial disclosure, and received no independent legal advice. He granted a 50% share of the net proceeds from the sale of the matrimonial home to the respondent, less certain adjustments to account for the payment of taxes, mortgage, and other household expenses by the appellant since 2004. With respect to the respondent’s gift of her share of the house to the parties’ children, the trial judge specifically observed that “the children are now adults. They are not parties and they are not making the claim.” He found that, if there was a gift, it was not delivered and therefore not perfected.
7On the first return date of this appeal, the panel ordered that the appeal be adjourned so that the parties’ now adult children could be given notice of the appeal and an opportunity to make submissions concerning their interests. The adult children were not served with any notice of the application, nor did they participate in the hearing before the trial judge. We have admitted the fresh evidence submitted by the parties and the adult children.
8In our view, the adult children should have been given notice and full participation rights because they had a clear interest in the outcome of the application and this appeal. If the gift provisions in the separation agreement and divorce order are found to be valid, the adult children have a right to share in the net sale proceeds from the matrimonial home.
9The adult children’s proffered fresh evidence includes that the respondent told them in around 2006 after she moved out of the matrimonial home that she was gifting them her share of the matrimonial home so that they would be taken care of. The respondent denies having this conversation. However, if accepted, the adult children’s fresh evidence could potentially serve to undermine the respondent’s evidence that she did not understand the separation agreement and did not agree to gift her share of the value of the matrimonial home to the parties’ children. This evidence and other evidence on these issues, as well as submissions that the adult children could have made, which the trial judge noted were absent, could have affected the outcome.
10As a result, the trial judge’s orders, including the costs order, cannot stand. We set them aside and, as requested by the appellant and the adult children, as interveners, direct a new trial before a different judge of the Superior Court of Justice. The parties, including the adult children, should seek case management to address the manner in which the new proceedings will be conducted. The net proceeds from the sale of the matrimonial home will remain in the real estate lawyer’s trust account pending the disposition of this matter or further order of the Superior Court.
Disposition
11The appeal is therefore allowed. The orders of the trial judge, including the costs order, are set aside, and a new trial is ordered before a different judge of the Superior Court.
12In the circumstances of this case, where this court raised on its own initiative the issue of the adult children’s participation and interest in these proceedings, we make no order as to costs of the appeal. We leave the costs of the trial below to the discretion of the trial judge at the new trial.
“L.B. Roberts J.A.”
“S. Coroza J.A.”
“R. Pomerance J.A.”