Stevens v. Stevens et al.*

[Indexed as: Stevens v. Stevens]

Ontario Reports

Court of Appeal for Ontario,

Weiler, Sharpe and Rouleau JJ.A.

April 29, 2013

114 O.R. (3d) 721 | 2013 ONCA 267

Case Summary

• Vous trouverez la traduction française à la p. 725, post.

Family law — Domestic contracts — Trial judge finding that marriage contract was unenforceable as there was no meeting of minds as to essential terms and as contract was unconscionable — Trial judge finding that provision in contract that husband would receive entire value of matrimonial home if attempted reconciliation failed was drafting error and that husband and his lawyer should have sought clarification in view of discrepancy between that term and cover letter — Husband's appeal dismissed — Husband not entitled to seek remedy of rectification on appeal where he had resisted that remedy at trial — Trial judge's findings on issue of meeting of minds not resting upon any misuse of evidence of husband's matrimonial misconduct.

The parties entered into a marriage contract at a time when they were attempting to repair their 16-year marriage. In her cover letter, the solicitor stated that the agreement was that the husband would receive one-half of the value of the matrimonial home on separation. However, the appended written agreement provided that the husband would receive the entire value. The agreement was signed by the parties and, when the attempted reconciliation failed, the husband commenced a proceeding to enforce the signed marriage contract. The trial judge found that there was no enforceable agreement. He found that there was no meeting of the minds as to essential terms of the written agreement; that the contract was unconscionable; and that it should be set aside pursuant to s. 56(4) of the Family Law Act, R.S.O. 1990, c. F.3. He found that the provision in the written agreement that the husband was to receive the entire value of the matrimonial home was a drafting error; that the husband and his counsel were obliged to seek clarification in view of the discrepancy between the agreement and the cover letter; and that they failed to do so. The husband appealed.

Held, the appeal should be dismissed.

The remedy of rectification was not open to the husband on appeal in light the fact that he had resisted that remedy at trial and insisted that he was entitled to enforce the agreement as written. The trial judge's finding that there was no meeting of the minds did not rest upon any misuse of evidence of the husband's matrimonial misconduct.

Statutes referred to

Family Law Act, R.S.O. 1990, c. F.3, s. 56(4)

APPEAL from the judgment of Harper J. (2012), 109 O.R. (3d) 421, [2012] O.J. No. 511, 2012 ONSC 706 (S.C.J.) setting aside a marriage contract. [page722]

D. Smith, Lawrence E. Thacker and Yashoda Ranganathan, for appellant.

Stephen Grant and Gillian Kerr, for respondent Pamela Beverley Stevens.

W.E. Pepall, for respondent Epstein Cole LLP and Roslyn Tsao.

[1] BY THE COURT: -- This appeal arises from a matrimonial dispute as to the validity of a marriage contract. After a 16-year marriage that produced three children, the parties encountered difficulties when the respondent wife discovered that the appellant husband was having an affair. They attempted to reconcile and, in the process of reconciliation, a marriage contract was prepared by the solicitor for the respondent to provide for what would happen in the event that the reconciliation failed. The respondent had acquired substantial wealth from her father and had put a significant amount of money into the matrimonial home. In her covering letter, the solicitor stated that the agreement was that the appellant would receive one-half of the value of the matrimonial home. The appended written agreement provided that the appellant would receive 100 per cent of the value. The agreement was signed by the parties and, when the attempted reconciliation did not succeed, the appellant commenced this proceeding to enforce the written contract.

[2] The appellant insisted at trial that the written contract, which gave him the full value of the matrimonial home, reflected the agreement between the parties. That was disputed by the respondent.

[3] The central issue at trial was the validity of the written contract. In a lengthy judgment, the trial judge made detailed findings of fact leading him to conclude that there was no enforceable agreement. He reached that conclusion on a variety of grounds, including:

(1) there was no meeting of the minds as to essential terms of the written agreement;

(2) the contract was unconscionable; and

(3) the contract should be set aside pursuant to the Family Law Act, R.S.O. 1990, c. F.3, s. 56(4).

[4] On the "meeting of the minds" issue, the trial judge found that the provision in the written agreement providing that the appellant would get the entire value of the parties' matrimonial home was a drafting error. The trial judge found that there was no agreement that the appellant would receive the entire value. He further found that, in view of the discrepancy between the [page723] agreement and the cover letter, the appellant and his counsel had an obligation to seek clarification from the respondent as to her position before signing the agreement. They failed to do so.

[5] The trial judge also found that the parties were not ad idem as to the way the contract affected a loan of approximately $1 million that the respondent had made to the family trust. According to the respondent and the terms of the note, the loan was repayable on demand. According to the appellant, the respondent had agreed to forbear calling the loan until all of the children had finished school so that the loan could be used to fund the children's education.

Issues

[6] In oral argument, the appellant focused on two issues, namely, the remedy of rectification and the contention that the trial judge placed undue reliance on the appellant's matrimonial misconduct.

Analysis

Issue 1. Is the appellant entitled to rectification?

[7] Before this court, the appellant seeks rectification of the written contract. While the respondent advanced rectification as an alternative position at trial, the appellant resisted that remedy and insisted that he was entitled to enforce the agreement as written and to receive the entire value of the matrimonial home.

[8] In our view, on this record and in the light of the position he took at trial, the remedy of rectification is not open to the appellant on appeal. If accepted, it would permit the appellant to take a fundamentally different position on appeal, one that is completely inconsistent with the position he took and the evidence he led at trial. To do so would be fundamentally unfair to the respondent.

[9] We do not accept the appellant's submission that as the respondent was prepared to enter into the agreement on the basis that the value of the matrimonial home would be shared equally, and as the trial judge rejected his evidence as to the bargain between the parties, it must follow that had the written contract provided for an equal division of the value of the matrimonial home, it would accurately reflect the parties' agreement and that rectification is therefore the appropriate disposition. The trial judge found as fact that the appellant was aware of the drafting error and that he knew that it needed to be clarified. The appellant refused to take steps to make the clarification and continued to insist that the agreement should be enforced as [page724] written. Simply put, he cannot ask this court to rectify an agreement to reflect terms he swore he did not agree to.

[10] Nor is there any basis for interfering with the trial judge's findings regarding the appellant's loan to the family trust.

Issue 2. Did the trial judge place undue reliance on the appellant's matrimonial misconduct?

[11] We do not accept the submission that in coming to the conclusion that there was no meeting of the minds, the trial judge placed undue reliance upon the appellant's matrimonial misconduct. This case revolved around the fact that the marriage was falling apart and any discussion of the context and the process of the attempt to reconcile inevitably included some reference to the conduct of the parties and the prospects of achieving a reconciliation. However, in the end, the trial judge clearly stated, at para. 179 of his judgment, that he found that the appellant's conduct could not be connected to the issue of whether the marriage contract should be set aside. In our view, the trial judge's findings on the meeting of the minds point did not rest upon any misuse of evidence of matrimonial misconduct.

Other Issues

[12] Given our conclusion with respect to the meeting of the minds point, we do not find it necessary to address the issues raised with respect to the alternative grounds for refusing to enforce the marriage contract.

[13] We see no error in the trial judge's valuation of the matrimonial home or in his finding that the cottage and chalet are not matrimonial homes. These were factual determinations entitled to deference on appeal and there was ample evidence to support the findings.

[14] With respect to the issue of support, the trial judge made no error in principle and did not misapprehend the evidence. Specifically, he did not err in attributing PC Outlet's pre-tax earnings to the appellant. The appellant repeatedly misrepresented his income to limit his liability.

Costs

[15] While the costs awarded by the trial judge are certainly very high, we are not persuaded that the appellant has demonstrated grounds for appellate intervention. It is well established that appellate courts are reluctant to interfere with a trial judge's exercise of discretion concerning costs and, for the following reasons, we decline to intervene in this case. [page725]

[16] First, there can be no doubt that the high costs are largely attributable to the appellant's behaviour in this litigation. The trial judge was clearly entitled to consider the appellant's behaviour before and at trial with regard to disclosure and requests to admit and the fact that the appellant had refused a very reasonable offer of settlement.

[17] Second, neither before this court not before the trial judge was there any serious challenge to the hours spent and the rates claimed by counsel for the respondent and the added party.

[18] While this costs award pushes reasonableness and proportionality to their limits, in the end, we see no error in the trial judge's careful analysis and disposition of costs that would justify intervention.

Disposition

[19] Accordingly, the appeal is dismissed with costs to the respondent fixed at $25,000 and to the added party fixed at $3,500, both amounts inclusive of disbursements and applicable taxes.

Appeal dismissed.