Court File and Parties

COURT FILE NO.: FS-07-FD332811-0001 DATE: 20240410

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

LOU-ANNE HAIER Applicant – and – BRIAN JOSEPH HAIER Respondent

Counsel: Richard Niman and Kaitlyn Zarcone-Beam, for the Applicant Erin Crawford and Zechariah Martin, for the Respondent

HEARD: October 24, 2023

VELLA J.

REASONS FOR DECISION – Motions for summary judgment and interim spousal support

Introduction

[1] The Applicant has commenced an application seeking, inter alia, an order setting aside a separation agreement dated December 5, 2006 which purported to resolve all matters arising from the marital breakdown. She has also brought a motion seeking interim spousal support of $34,913 per month on a temporary basis, in the face of this agreement.

[2] The Respondent has brought this motion for summary judgment seeking dismissal of the application.

[3] These motions are being heard together pursuant to Sharma J.’s endorsement dated May 8, 2023 (the “Sharma J. endorsement”).

[4] For the following reasons, I find that the Applicant has raised genuine issues of fact requiring a trial. However, I am not prepared to grant interim spousal support. Rather, I will schedule a joint settlement/trial management conference so that the parties can obtain a trial date on an expedited basis. Furthermore, the parties must now comply fully with their financial disclosure obligations.

Background (undisputed facts)

[5] The parties were married on June 14, 1986 and separated on August 31, 2006.

[6] The parties have three (now adult) children of the marriage.

[7] The parties met while they were both working part-time at TD Bank.

[8] They had their first child in or around 1990. The eldest is now 33 years old, and the twins are 30.

[9] The Applicant was a stay-at-home mother while the Respondent pursued his career at TD Bank. The Respondent’s career path required him to move to various parts of the country three times during the marriage. The Applicant and children moved with him each time. In fact, when the Applicant was five months pregnant with their first child, the Respondent was transferred to Halifax. The Applicant, who had also been working at TD Bank, quit her job to move with the Respondent.

[10] The Respondent’s career blossomed with consecutive promotions at TD Bank, and he became a senior executive. As a result, his income grew to over $1 million per year, with additional benefits such as stock options.

[11] The parties are Roman Catholic. They attended church as a family.

[12] The parties became accustomed to a lifestyle commensurate with the Respondent’s income.

[13] The Applicant advised the Respondent in August 2006 that she wished to end the marriage.

[14] Shortly thereafter, the Applicant and the Respondent discussed terms of separation. These discussions occurred, without lawyers, between approximately August 31 and October 2, 2006.

[15] The Respondent then retained Stephen Grant in or around mid-September 2006. Mr. Grant drafted a separation agreement.

[16] The Applicant retained Melanie Kraft.

[17] The parties made some changes to the draft separation agreement concerning the Applicant’s financial benefit, as proposed by Ms. Kraft.

[18] The parties executed the separation agreement on December 5, 2006 (the “Separation Agreement”).

[19] Mr. Grant signed a certificate of independent legal advice on December 21, 2006 (“Grant ILA”) and Ms. Kraft signed a certificate of independent legal advice on December 5, 2006 (“Kraft ILA”).

[20] The terms of the Separation Agreement have been fully discharged.

[21] The parties were divorced by Paisley J.’s order dated January 11, 2008.

Motion for Summary Judgment by Respondent

Summary Judgment Test

[22] Under r. 16(6) of the Family Law Rules, O. Reg. 114/99, the court “shall make a final order” if there is no genuine issue of a claim or defence requiring trial. Pursuant to r. 16(6.1), the court may exercise special fact-finding powers in determining whether there is a genuine issue requiring a trial unless it is in the interest of justice that these powers only be exercised at a trial. If the only genuine issue is a question of law, the court shall decide the issue and make a final order.

[23] Rule 16 is a codification of the summary judgment principles articulated by the Supreme Court of Canada in Hyrniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87; see also Phillion v. Phillion, 2015 ONSC 4255.

[24] In Hryniak, at para. 45, the Supreme Court of Canada confirmed that summary judgment is “a significant alternative model of adjudication.” The fact-finding rule provides judges the power to weigh evidence, evaluate credibility, and draw inferences to resolve claims without the need for a trial.

[25] The focus in a summary judgment motion is not on what further evidence could be adduced at trial, but rather, on whether a trial is required. A trial will not be required when the summary judgment process “(1) allows the judge to make the necessary findings of fact, (2) allows the judge to apply the law to the facts, and (3) is a proportionate, more expeditious and less expensive means to achieve a just result”: Hryniak, at para. 49.

[26] The determination of a motion for summary judgment involves a two-step approach. The judge should first determine whether there is a genuine issue requiring a trial based only on the evidence before her, without using the fact-finding powers. If there is no genuine issue requiring a trial, summary judgment must be granted. However, if there appears to be a genuine issue requiring a trial, the judge should then determine whether “the need for a trial can be avoided” by using the fact-finding powers to weigh evidence, evaluate credibility, and draw inferences: Hryniak, at paras. 66-68.

[27] On a motion for summary judgment, the moving party must establish a prima facie case that there is no genuine issue requiring a trial. Only then does the onus shift to the responding party. However, it is not sufficient for the responding party to simply rely on allegations in their pleadings. The responding party must set out, in affidavit material or other evidence, specific facts showing there is a genuine issue requiring a trial. Both parties must put their “best foot forward”, and the court is entitled to assume that the record contains all the evidence that the parties would present if the matter proceeded to trial.

[28] In this case, the Respondent must establish that there is no genuine issue requiring trial in relation to the Applicant’s claim that the Separation Agreement ought to be set aside in its entirety, or in part. If he does, then the onus shifts to the Applicant to demonstrate that there is a genuine issue requiring a trial based on competing evidence that throws material facts into dispute, the assessment of which should be deferred to a trier of fact because, for example, assessment of credibility is warranted.

[29] I have examined the evidence within the framework of r. 16 and the principles established in Hryniak. I have concluded that there is a genuine issue requiring a trial and my special fact-finding powers should only be exercised at trial.

[30] In addition, I have considered whether this matter is suitable for partial summary judgment. The test is set out in Butera v. Chown, Cairns LLP, 2017 ONCA 783, 137 O.R. (3d) 561. The Court of Appeal held that a motion for partial summary judgment is a rare procedure “reserved for an issue or issues that may be readily bifurcated from those in the main action and that may be dealt with expeditiously and in a cost-effective manner”: at para. 34.

[31] I have concluded that this case is not suitable for partial summary judgment.

Setting aside a Separation Agreement

[32] Section 56(4) of the Family Law Act, R.S.O. 1990, c. F.3 (the “FLA”) provides that:

(4) 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.

[33] Once a party establishes that there is a prima facie case for setting aside the domestic contract based on one or more of the elements of s. 56(4) of the FLA, the court must consider whether it ought to set aside the domestic contract in the circumstances of the case before it: LeVan v. LeVan, 2008 ONCA 388, 90 O.R. (3d) 1, at para. 51.

The Test for Setting Aside a Domestic Contract as Relates to Spousal Support

[34] In the seminal case Miglin, the Supreme Court of Canada set out a two-stage approach for determining whether to order spousal support in the face of a domestic contract that purported to waive entitlement, at paras. 81-84:

The Circumstances of Execution

[T]he court should be alive to the conditions of the parties, including whether there were any circumstances of oppression, pressure, or other vulnerabilities, taking into account all of the circumstances, including those set out in s. 15.2(a) and (b) and the conditions under which the negotiations were held, such as their duration and whether there was professional assistance.

There may be persuasive evidence brought before the court that one party took advantage of the vulnerability of the other party in separation or divorce negotiations that would fall short of evidence of the power imbalance necessary to demonstrate unconscionability in a commercial context between, say, a consumer and a large financial institution…. The degree of professional assistance received by the parties will often overcome any systemic imbalances between the parties.

[W]here the power imbalance did vitiate the bargaining process, the agreement should not be read as expressing the parties’ notion of equitable sharing in their circumstances and the agreement will merit little weight.

The Substance of the Agreement

The court must determine the extent to which the agreement takes into account the factors and objectives listed in the Act, thereby reflecting and equitable sharing of the economic consequences of marriage and its breakdown. Only a significant departure from the general objectives of the Act will warrant the court’s intervention on the basis that there is not substantial compliance with the Act. The court must not view spousal support arrangements in a vacuum, however; it must look at the agreement or arrangement in its totality, bearing in mind that all aspects of the agreement are inextricably linked and that the parties have a large discretion in establishing priorities and goals for themselves.

The greater the vulnerabilities present at the time of formation, the more searching the court’s review at this stage.

The Separation Agreement

[35] The Applicant challenges the equalization, child support, and spousal support provisions of the Separation Agreement on the basis that they are deficient and depart from the objectives of the Divorce Act.

[36] The Separation Agreement addresses all the issues arising from the breakdown of the marriage, including child and spousal support, certain s. 7 expenses, parenting, equalization, pensions, life insurance, and releases.

[37] The Separation Agreement contains a spousal support release which reads, in part, that “the parties release each other from all spousal support claims, now and forever, regardless of any change, foreseeable or unforeseeable, in their financial or other circumstances: clause 4(2). Clause 4(1) states that “the parties are, and will always be, financially independent”. Clause 4(3) states “the parties intend this Agreement to be final and non-variable, now and forever”. Clause 4(4) provides further stipulations consistent with a Miglin-style release: see Miglin v. Miglin, 2003 SCC 24, [2003] 1 S.C.R. 303. No spousal support was payable under this agreement.

[38] Clause 5 of the Separation Agreement also stipulated that the Respondent would pay “fixed-non-variable child support in the sum of $120,000” each year commencing January 1, 2007 for a fixed ten year “guaranteed period”. This was premised on shared parenting per clause 3.

[39] The Separation Agreement provided for equalization of the parties’ net family property, which resulted in a shortfall of approximately $1.6 million to the Applicant, according to her.

Issues

[40] With respect to the Respondent’s motion, the court must determine whether any of the following issues give rise to an issue requiring a trial that cannot be fairly resolved by resort to the special fact-finding powers under r. 16:

(a) Was there material non-disclosure of financial assets or false valuation of those assets by the Respondent?

(b) Are the terms of the Separation Agreement unconscionable having regard to the objectives of the Divorce Act, R.S.C., 1985, c. 3 (2nd Supp.), or otherwise?

(c) Did the Applicant sign the Separation Agreement while under duress and undue influence? Did she understand the terms?

(d) Are the Applicant’s claims barred by the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B, and/or s. 7(3)(a) of the FLA. If the latter, ought the court extend the time prescribed under the FLA pursuant to s. 2(8) of that Act?

[41] For the Applicant’s motion for interim spousal support, the primary issue is the impact of her significant delay in bringing this motion, as well as her ability to compensate the Respondent in the event the Separation Agreement’s spousal support provisions are upheld.

The Parties’ Respective Positions

[42] The Applicant seeks to set aside the Separation Agreement, in whole or in part, on the following grounds:

(a) The Separation Agreement as a whole subverted the fundamental principles of family law, including the objectives of spousal support under the Divorce Act;

(b) The Separation Agreement is unconscionable;

(c) The Separation Agreement was made without full and fair financial disclosure by the Respondent;

(d) The Respondent took advantage of the Applicant’s vulnerable psychological state and exerted undue influence over her at the time the parties entered into the Separation Agreement.

[43] Alternatively, the Appellant submits that the waiver of spousal support must be set aside on the same grounds.

[44] The Respondent submits that he made appropriate financial disclosure in advance of the parties’ signing the Separation Agreement. It was up to the Applicant to request further information if she was not content with his disclosure and valuation of assets. He denies that he coerced or in any way pressured the Applicant into signing the Separation Agreement and, in particular, waiving any entitlement to spousal support. He points out that the Applicant had competent legal counsel who successfully advocated on her behalf to make changes to the draft separation agreement in her favour.

[45] He places much weight on the fact that Ms. Kraft signed a certificate of independent legal advice in which she certified that:

(a) She acted solely for the Applicant;

(b) She explained fully the nature and consequences of the Agreement;

(c) The Applicant confirmed that she fully understood the nature and consequences of the Agreement;

(d) The Applicant executed the Separation Agreement in her presence; and

(e) The Applicant confirmed, and it appeared to Ms. Kraft, that she was executing the Separation Agreement of her own volition and without fear, threats, compulsion, or influence by the Respondent or any other person.

[46] The Respondent also asserted a limitation period defence under the Limitations Act regarding all claims, and under the FLA regarding the request to change the equalization set out in the Separation Agreement.

[47] The Applicant submits that there are significant issues requiring a trial, including the following:

(a) The circumstances in which the Separation Agreement was negotiated;

(b) Her claim that the substance of the Separation Agreement is unconscionable;

(c) The inadequacy of the Respondent’s disclosure, including valuation, at the time of the execution of the Separation Agreement; and

(d) Her claims of undue influence, or a lack of voluntariness in signing the Separation Agreement on her part.

Issue 1: Failure to Make Accurate and Complete Financial Disclosure

[48] In Virc v. Blair, 2014 ONCA 392, 119 O.R. (3d) 721, the Court of Appeal set out the analysis for examining whether the validity and enforceability of spousal support provisions within a domestic contract raise a genuine issue requiring a trial within the context of a summary judgment motion.

[49] The court directed that the measure is whether the spousal support provisions meet the objectives for spousal support set out under s. 15.2(6) of the Divorce Act:

(a) recognizes any economic advantages or disadvantages to the spouses arising from the marriage or its breakdown;

(b) apportions between the spouses any financial consequences arising from the care of any child of the marriage over and above any obligation for the support of any child of the marriage;

(c) relieves any economic hardship of the spouses arising from the breakdown of the marriage; and

(d) insofar as practicable, promotes the economic self-sufficiency of each spouse within a reasonable period of time.

[50] The Court of Appeal in Virc held that in the family law context, the onus of unearthing intentional material misrepresentations in the payor’s financial disclosure is not on the payee spouse. Rather, the burden is on the payor to demonstrate that the payee spouse had actual knowledge of the misrepresentation and signed the separation agreement notwithstanding that knowledge: “The respondent [payor spouse] could point to no authority for the proposition that the suggested duty of a spouse receiving financial disclosure in a matrimonial case, to investigate or test the veracity of the information provided, overtakes deliberate material non-disclosure by the other spouse”: at para. 58.

[51] Citing Rick v. Bandsema, 2009 SCC 10, [2009] 1 S.C.R. 295, the court affirmed that where a party has deliberately failed to make full and honest disclosure of all relevant financial information, the resulting domestic contract may be “vulnerable to judicial intervention where the result is a negotiated settlement that is at variance from the objectives of the governing legislation”: Virc, at para. 66. Furthermore, while demonstrating that the recipient spouse had actual knowledge of the inaccurate disclosure is a defence, “a mere suspicion of lack of veracity does not absolve a fraudster of responsibility”: at para. 69.

[52] On the issue of lack of financial disclosure, the court concluded the following, at para. 74:

[T]he court is required to take a holistic approach in determining whether there has been a failure to make disclosure under s. 56(4) of the FLA. This requires a careful balancing of the circumstances, including those set out in LeVan. In my view, in this case, that balancing required a detailed analysis of the intentions underlying the parties’ conduct. That analysis was not possible on this Rule 16 family law summary judgment motion.

[53] The court has followed this analysis within the context of a r. 16 summary judgment framework in many cases.

[54] In Turk v. Turk, 2015 ONSC 5845, 68 R.F.L. (7th) 106, Kiteley J. held that the alleged failure to disclose significant assets and their values at the time the parties entered the domestic contract raised a genuine issue requiring a trial with respect to the applicant’s request to set aside the contract.

[55] The court in Quinn v. Epstein Cole LLP (2007), 2007 ONSC 45714, 87 O.R. (3d) 184 (S.C.), at para. 47, aff’d, 2008 ONCA 662, 92 O.R. (3d) 1, also considered the lack of financial disclosure of material assets as a ground for setting aside a domestic contract waiving entitlement to spousal support:

First, the party seeking to set aside the agreement must demonstrate that the other party failed to discharge its duty to disclose significant assets.

If a court finds that a party has failed to disclose a significant asset, the court must determine, in light of the facts of each case, whether it should exercise its discretion to rescind the domestic contract. The burden of proof lies on the party seeking to set aside the contract to persuade the court to exercise its discretion in its favour. The court will take into account a variety of factors in exercising its discretion.

In considering these factors, courts should not narrowly construe the obligation of spouses to make full disclosure because the Family Law Act imposes a positive duty on both parties to disclose.

[56] In Quinn, the subject separation agreement was comprehensive, like the one in the case before me. It had been executed more than four years earlier. The plaintiff (former wife) was seeking to set aside the spousal support and property equalization terms of the agreement. Brown J. granted the defendant’s motion for summary judgment dismissing the plaintiff’s claims because the plaintiff had actual knowledge of the alleged deficiencies in the financial disclosure in question before she signed the separation agreement.

[57] The plaintiff’s claim of financial non-disclosure was grounded in the fact that the defendant refused to answer certain questions posed by her forensic accountant as a pre-trial step. Notwithstanding that failure, the plaintiff entered into the impugned separation agreement. Key in that case, according to the Respondent, was the court’s finding that the plaintiff’s failure to request valuation of certain assets in the face of this deficiency at the time of entering into the separation agreement, could not be relied upon as evidence of non-disclosure. Indeed, the plaintiff sent out the first draft agreement knowing that the answers posed by her forensic accountant and compelled by court order were outstanding: Quinn, at para. 55.

[58] Importantly, the court relied on the plaintiff’s admissions that she was not aware of any undisclosed assets, or the value thereof, by the defendant: Quinn, at paras. 62-64, 69. The court concluded the following, at para. 76: “This was not a circumstance of failure to disclose. Mr. Keiper made disclosure; Ms. Quinn and her advisors were not satisfied with its quality, and further details were sought. Ms. Quinn elected to settle the dispute without obtaining the remaining details.”

[59] In Shalaby v. Nafei, 2022 ONSC 5615, at para. 74, the court emphasized that in determining whether the subject domestic contract is unconscionable, the court should consider whether and to what degree the terms are consistent with the general objectives of the Divorce Act. The fact that the parties have received independent legal advice is not conclusive:

An assertion in an agreement, even one entered into with legal advice, that the agreement is fair and reasonable, and that the parties have had full financial disclosure and waive their right to further disclosure, is not conclusive as to the manner of execution. It is one fact for the court to consider and must be assessed, with all of the other terms, in the context of each party’s actual financial circumstances, the actual extent of their knowledge of those circumstances, the vulnerability of the weaker party in making those assertions, and how the substance of the financial terms compared to what the agreement provides.

[60] In Shalaby, the court denied the respondent’s motion for summary judgment, holding that it required the respondent’s financial disclosure to undertake the analysis under Miglin: at para. 107.

[61] The parties filed a number of affidavits but none from any witnesses other than themselves. Cross examinations were conducted by each of the parties, and so the court has the benefit of the cross-examination transcripts.

[62] On October 17, 2006, the Respondent made financial disclosure in the form of his sworn financial statement. According to the Applicant, the Respondent had already told her it was a “done deal” and she should be grateful to receive this “gift” from him in light of her immoral action of leaving him and breaking the marital vows.

[63] The financial statement stated that the Respondent was earning a monthly gross income of $97,002.00 or an annual income $1,164,024 in 2006. This is contrasted with the Applicant’s modest investment income.

[64] The Applicant asserts that the main aspect of the Respondent’s inaccurate financial disclosure is his alleged misrepresentation of his 2006 income. She argues that it lacked a professional income valuation and omitted certain components of his compensation structure as an executive at TD Bank.

[65] She notes that in 2005, the year prior to the date of separation, the Respondent earned a higher income of $1,423,419.

[66] She deposed that during the marriage, she had no knowledge about the Respondent’s earnings or pay structure other than the amount regularly deposited into their joint bank account. She had little involvement in the family’s finances and investments.

[67] She further deposed that she first learned of the Respondent’s deferred share unit plan (DSU) and his supplemental executive retirement plan (SERP) upon receipt of his Financial Statement.

[68] Furthermore, she alleges that he did not produce a proper income report valuing his income for support purposes, his stock options, and his DSU and SERP. However, given her lack of familiarity with these sophisticated vehicles, she accepted the values he assigned to them.

[69] The Applicant deposes that she has been depleting her liquid assets and is in desperate financial circumstances. This prompted her to review the Separation Agreement and question the related financial disclosure.

[70] On July 19, 2023, she requested that the Respondent conduct a valuation of his stock options either at the date of separation or of the Separation Agreement. Her request was refused pending disposition of this motion.

[71] When questioned, the Respondent confirmed that he did not retain a chartered business valuator to value his income prior to the Separation Agreement, and he would not do so now. He did not list his DSUs as an asset on his Financial Statement because he listed them under income.

[72] The Applicant also contends that the Respondent did not disclose the value of his annual grant stock options from TD Bank as income. According to his incentive compensation plan from TD Bank, he would have received grants every December as an executive vice president. The Respondent did not contest this in his affidavit. Rather, he explained in questioning that he did not list the stock options he was going to be awarded in December 2006 because, technically, they did not have a value in 2006. He characterized it as “theoretical income … not actual income” until and unless he cashed in those options. He confirmed, however, that he had control over when he could exercise his vested and unvested options. His strategy, however, was to hold onto the options as long as possible to maximize his return on the stock market.

[73] The Respondent could not verify what his actual 2006 income was. He estimated it at the time and did not have his income tax return with him when questioned. He provided an undertaking to obtain his actual income from TD Bank, but the undertaking was outstanding at the time of this motion.

[74] The Respondent counters that the Applicant understood more than she alludes to because of her early years working at TD Bank. However, he conceded that he was more sophisticated about financial matters than she was given his level of experience and expertise from his executive positions. The Applicant never reached the executive employee level at TD Bank.

[75] Furthermore, he deposes that the Applicant could have insisted on valuations of his income and assets before executing the Separation Agreement, and that she had counsel at the time to guide her. However, this implies that there was an obligation on the Applicant to “unearth” intentional material misrepresentations in the Respondent’s financial disclosure. As stated in Virc, this is not the Applicant’s burden.

[76] There are genuine issues requiring trial. The issues include determining whether the Respondent’s income was intentionally misrepresented by failing to properly disclose it and the proper values of his compensation vehicles (stock options, DSU, and SERP) at the date of separation, and, if so, whether the Applicant had knowledge of these intentional misrepresentations and inaccurate financial disclosure and values prior to executing the Separation Agreement, and also whether the Separation Agreement generally meets the objectives of the Divorce Act. This will involve an analysis of the parties’ underlying intentions in entering into the Separation Agreement and financial disclosure from the Respondent.

Issue 2: Unconscionability

[77] In Virc, the Court of Appeal held, at para. 76, that assessing whether the subject separation agreement complies with the objectives of the Divorce Act gave rise to a genuine issue requiring a trial. In particular, the allegations of undue influence, duress, and unconscionability required a full evidentiary record since these fact-driven claims require an assessment of credibility.

[78] The objectives of spousal support per s. 15.2(6) of the Divorce Act are the measure against which an assessment of unconscionability must be made.

[79] One way to conduct the unconscionability analysis is to review the Applicant’s alleged entitlement and compare it to the amount she would receive under the Separation Agreement. The Applicant prepared a chart to make this comparison. It is as follows:

(a) Entitlement: An equalization payment of over $2 million. Received: An equalization payment of $400,000 and the Respondent paid the joint visa and line of credit in the total amount of about $85,000.

(b) Entitlement: 50 percent of the joint investment accounts, her half being about $1 million. Received: The amount was retained by the Respondent

(c) Entitlement: One half share of the jointly owned properties, mortgage free, which was worth about $800,000. Received: 100 percent of the matrimonial home and chalet with the exception that the Respondent retain the preconstruction ski chalet interest ($77,000) worth at around $1.5 million net of disposition costs.

(d) Entitlement: Indefinite spousal support in the range of about $15,000 per month based on the Respondent’s estimated income of $1.16 million. Received: No spousal support.

(e) Entitlement: Child support in the range of $17,690 per month (primary residence with Applicant, as opposed to shared parenting). Received: Child support of $10,000 per month for 10 years and then terminating. The children’s education to be paid by the Respondent after depletion of the joint RESPs and education trust accounts.

[80] The undisputed facts are that the Applicant was a stay-at-home mother while the Respondent’s career blossomed. The Applicant had been out of the workforce for several years as of the date of separation. The evidentiary record reveals her efforts to become financially self-sufficient, albeit at a much more modest level than the standard she had become accustomed to during the marriage. The evidentiary record also reveals that the Respondent’s income continued to be at the level of an executive at TD Bank following the date of separation. Even in retirement, he is earning over $1 million a year from various sources. The evidentiary record suggests that his net worth is about 15 times that of the Applicant’s.

[81] Against this evidentiary record, there is a genuine issue requiring a trial; namely, whether the Separation Agreement as a whole substantially meets the objectives for spousal support under the Divorce Act, and whether the Separation Agreement, in part or as a whole, shocks the conscience of the court.

[82] The contrast between the alleged entitlement to spousal support and the result gives rise to a genuine issue requiring a trial that will assess the parties’ competing stories and credibility. This requires assessing the parties’ intentions and state of mind, which cannot be done on the written evidentiary record. The special fact-finding powers under r. 16 ought to be exercised only at trial with the benefit of viva voce evidence and a full factual record, and not at this motion.

Issue 3: Duress and Undue Influence

[83] The Applicant deposed that at the time of the negotiations and execution of the Separation Agreement, she was under the care of a psychologist, Dr. Begin, and the Respondent was aware of this. The reason for the treatment stemmed from the Respondent allegedly belittling and mistreating her. The Applicant sets out in detail her evidence for her allegation of duress. She describes the shame and guilt she felt as a Roman Catholic for choosing to end the marriage. She alleges that the Respondent used that shame and guilt against her. For example, he told her that anything she received from him from the marriage breakdown was a gift, and that he would never pay spousal support because she was entirely to blame for the separation. She also deposed that she was in an extremely vulnerable financial situation because the Respondent was the sole breadwinner. She had no knowledge of the details of his income or the structure of his compensation at TD Bank save for what he deposited into their joint bank account.

[84] The Respondent denies that he had knowledge of the Applicant’s medical treatment. He points to the fact that the Applicant did not adduce affidavit evidence from Dr. Begin, notwithstanding that Sharma J. permitted such evidence. [1] However, the Applicant deposed that Dr. Begin destroyed his clinical notes and records and has no independent recollection of the treatment.

[85] The Respondent also does not deny that he was the sole breadwinner and generally controlled the family finances. However, he says because of the Applicant’s early employment with TD Bank, she was not as naïve as she claims.

[86] The fact that the Applicant received independent legal advice and the benefit of legal counsel, which resulted in enhancements to the draft Separation Agreement, is not conclusive of whether she signed the Separation Agreement under duress. Counsel rely on what clients tell them about voluntariness in executing a contract. If the Applicant truly believed that she had no power to compel the Respondent to provide her with spousal support because she was responsible for the marital breakdown, then she may well have advised that she was not under duress in order to complete a deal that she felt powerless in.

[87] In Einstoss v. Starkman, 2010 ONSC 4126, 87 R.F.L. (6th) 346, at paras. 35-37, the court held that when a party alleges duress as a reason for setting aside minutes of settlement on a summary judgment motion, they bear the evidentiary onus. It is not enough to rely on self-serving evidence.

[88] However, the Applicant is not merely relying on her state of mind at the time she entered into the Separation Agreement. That may well require expert medical or psychological evidence not in the record. Rather, there is evidence that the Applicant was not on a level playing field with the Respondent when the main substance of the Separation Agreement was negotiated as between them, before the involvement of lawyers. For example, in questioning, the Respondent agreed that the parties were on “an un-level playing field” in terms of financial sophistication prior to retention of lawyers. The fundamental terms of the agreement were negotiated “directly” between them. He also testified he was unaware of “how much, if any” the proposed support amounts deviated from the relevant guidelines.

[89] There is a genuine issue requiring trial to determine the reason the Applicant waived entitlement to spousal support despite having been a stay-at-home mother and agreed to the representation that both parties were and always had been financially independent. She raised three children, was out of the work force for the majority of the marriage and had no ready means of employment income at the time of separation.

[90] Neither party adduced evidence from their former lawyers (such as correspondence) to shed light on this situation. Nor is there evidence addressing why the Respondent did not increase the child support amounts to basic table support once it was evident (as he admitted) that the children would be living primarily with the Applicant. The responsibility to provide support is owed to the children, not the other parent. A trial is required notwithstanding that about 17 years has lapsed since the execution of the Separation Agreement. The delay’s potential as a barrier to recovery will be discussed later in these Reasons.

[91] Accordingly, I find that the issue of duress and undue influence raises a genuine issue requiring a trial, when the court will have the benefit of a full factual record: Virc, at para. 76.

Issue 4: Limitation Period Defences

[92] The Respondent asserts that the Applicant’s claims are time barred under two statutes.

[93] First, the Respondent relies on s. 4 of the Limitations Act, which provides that claims in a proceeding may not be commenced “after the second anniversary of the day on which the claim was discovered.”

[94] Second, with respect to equalization, the Respondent relies on s. 7(3)(a) of the FLA, which provides that an application for division of net family property cannot be brought beyond two years after the parties’ divorce.

[95] The commencement of the two-year period under the Limitations Act does not commence until the party with the claim satisfies the test prescribed by s. 5(1), which is essentially a codification of the common law reasonable discoverability test:

5(1) A claim is discovered on the earlier of,

(a) The day on which the person with the claim first knew,

i. That the injury, loss or damage had occurred,

ii. That the injury, loss or damage was caused by or contributed by an act or omission,

iii. That the act or omission was that of the person against whom the claim is made, and

iv. That having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it; and

(b) The day on which a reasonable person with the abilities and in the circumstances of the person with the claim first ought to have known of the matters referred to in clause (a).

(2) A person with a claim shall be presumed to have known of the matters referred to in clause (1)(a) on the day the act or omission on which the claim is based took place, unless the contrary is proved.

[96] Furthermore, with respect to any time period prescribed under the FLA, pursuant to s. 2(8), the court has discretion to extend the timeframe if the following elements are satisfied:

(a) There are apparent grounds for relief;

(b) Relief is unavailable because of delay that has been incurred in good faith; and

(c) No person will suffer substantial prejudice by reason of that delay.

[97] The Respondent submits that the time periods under the two Acts have clearly expired and the Applicant’s claim should be dismissed. The Respondent states that the Applicant has failed to explain the delay and has not established “apparent grounds for relief” on the merits.

[98] The Respondent submits that he will suffer substantial prejudice if the timeframes are expanded because he has remarried and structured his finances on the assumption that the Separation Agreement reflected a final resolution. He reasonably relied upon the agreement given the passage of time.

[99] While the Respondent’s submissions have merit, summary judgment is not warranted in these circumstances. The Applicant has alleged deliberate concealment and misrepresentation of the very facts she seeks to establish in order to ground her claims. The claims must be heard on the merits to establish (a) when she reasonably discovered her claims within the framework of s. 5(1) of the Limitations Act; and (b) whether the court ought to extend the time period prescribed by the FLA under s. 2(8). There is sufficient evidence in the record giving rise to a genuine issue requiring a trial with respect to the Respondent’s limitation defences.

Partial Summary Judgment

[100] The Respondent did not request relief by partial summary judgment. The parties addressed this issue during argument at the request of the court.

[101] This is not an appropriate case for partial summary judgment. Given the holistic approach involved in analysing whether a separation agreement, or part thereof, ought to be set aside, granting partial summary judgment would risk duplicative or inconsistent findings at trial: Butera, at para. 28. The current record will not be as expansive as the trial record. In addition, granting partial summary judgment will not significantly reduce the cost at trial and, in light of the right of appeal, could cause delay and increased costs: Butera, at paras. 33-34.

[102] Furthermore, the Respondent did not seek partial summary judgment in his motion materials, and therefore it would be inappropriate to consider this relief at the stage of the hearing.

Motion for Interim Spousal Support by Applicant

[103] The Applicant seeks interim spousal support of $34,913.00 per month on a go forward basis without prejudice to her seeking support retroactive to the date of separation and/or an increased amount of support.

[104] Approximately 17 years has lapsed since separation (and the date of the Separation Agreement), and over 15 years since the divorce was granted (January 11, 2008).

[105] The court may make an award for interim spousal support that is contrary to the spousal support provisions contained in a domestic contract pursuant to s. 33(4)(a) of the FLA: see for example: Milne v. Milne, 2019 ONSC 459 and Lafrance v. Charbonneau, 2011 ONSC 6462.

[106] In Gordon v. Zuckerman, 2021 ONSC 4576, the court held that one of the considerations for determining whether interim spousal support should be paid in the face of a domestic contract is whether the payee spouse has assets against which to repay the amount awarded in the event that the domestic contract is upheld at trial.

[107] In considering the Applicant’s motion, the court must undertake the two-step test set out in Miglin and discussed earlier in these Reasons.

[108] The Applicant has raised a genuine issue requiring a trial regarding the alleged unconscionability of the Separation Agreement. This issue concerns the circumstances under which the spousal waiver was negotiated, the Respondent’s potential non-disclosure of proper valuations, and the achievement, or lack thereof, of the objectives of spousal support under the Divorce Act. However, I am concerned about the significant lapse of time that has transpired since the execution of the Separation Agreement and when the Applicant brought this motion (and notified the Respondent of her request).

[109] There is no fixed limitation period governing proceedings for spousal support, and I have also found that the limitation defences raise a genuine issue requiring a trial.

[110] That said, I have not been provided with a compelling reason for the delay in requesting interim spousal relief on a go forward basis at this point in time, and how that delay may affect quantum and duration: Karlovic v. Karlovic, 2018 ONSC 4233, at paras. 70, 72; Rosenberg v. Gold, 2016 ONCA 565, 132 O.R. (3d) 116, at para. 53. In Karlovic, the delay had been about 13 years after the date of separation, and there was a domestic contract in that case. The court cites several cases in which a delay of ten years or more is a significant factor in denying, or possibly limiting, the quantum and duration of spousal support.

[111] In Karlovic, the court noted the following, at para. 72:

Even if entitlement is found, a long delay can affect quantum. That was the result in Walker v. Greer, and with regard to retroactivity, van Rythoven. In Quackenbush v. Quakenbush, MacKinnon J. of this court granted spousal support after a ten-year delay but reduced the quantum by 52 - 64% because of the delay. In that case there was a long marriage and financial dependency. The applicant wife offered a compelling explanation for her delay. She suffered from depression following the death of a child. She then subsisted on social assistance.

[112] Furthermore, the Applicant has not persuaded me that she has satisfactory assets to compensate the Respondent in the event that the Separation Agreement is upheld: Chaitas v. Christopoulous (2004), 2004 ONSC 66352, 12 R.F.L. (6th) 43 (Ont. S.C.), at para. 21. The Applicant’s evidence and submissions are in fact the opposite – she is cash poor and depleting her capital assets.

[113] In any event, I was not provided with a sufficient evidentiary basis to assess the impact of the substantial delay on the quantum and/or duration of the requested interim spousal support (i.e. whether it would or should include contemporaneous spousal support), or whether a lump sum may be appropriate. Nor was I asked to undertake this analysis.

[114] Accordingly, I am denying the Applicant’s motion without prejudice to her renewing her request at trial. At that point the trial judge will determine entitlement, quantum and duration in the event that the Separation Agreement, or the spousal support provision, is set aside.

[115] However, in light of the apparent stark discrepancy in the respective financial circumstances of the parties and the Applicant’s financial challenges, I am prepared to facilitate a speedy conclusion to this matter. I will schedule a joint settlement conference/trial management conference for later this spring or summer, at which time a trial date can be fixed. The parties are to appear before me by virtual case conference to schedule this date within the next two weeks.

Disposition and Costs

[116] The Respondent’s motion for summary judgment is dismissed.

[117] The Applicant’s motion for interim spousal support is dismissed, without prejudice to renewing her request for spousal support at trial.

[118] The parties shall appear before me at a virtual case conference to fix a date for a joint settlement conference/trial management conference in the next two weeks.

[119] If the parties cannot settle costs, then the Applicant will provide her cost outline and written submissions within ten days from the release of this endorsement, and the Respondent will provide his cost outline and written submissions within five days thereafter. The written submissions will not exceed three pages double spaced from each party.

Justice S. Vella

Released: April 10, 2024

[1] Sharma J. ruled that the only evidence admissible on this motion was affidavit evidence of the parties and psychological evidence to support the Applicant’s claim of duress (including cross examinations on the affidavits). Sharma J. also ruled that the Respondent did not have to provide financial disclosure for 2013 and 2014 pending the outcome of the motion.