COURT OF APPEAL FOR ONTARIO
CITATION: Jonas v. Pacitto, 2020 ONCA 727
DATE: 20201112
DOCKET: C66537
Hourigan, Trotter and Jamal JJ.A.
BETWEEN
Laszlone Jonas
Applicant (Appellant)
and
Carlo Pacitto
Respondent (Respondent)
Matthew Tubie, for the appellant
Brigitta Tseitlin, for the respondent
Heard: October 14, 2020 by videoconference
On appeal from the order entered on December 21, 2018 by Justice Ronald P. Kaufman of the Superior Court of Justice, with reasons reported at 2018 ONSC 7720.
Trotter J.A.:
Introduction
[1] Ms. Jonas and Mr. Pacitto married in 2003. They filed for divorce in 2016. Prior to their marriage, they executed a Marriage Contract; it provided that, upon dissolution of the marriage, neither party would be entitled to the property of the other, and Ms. Jonas waived any right to claim spousal support.
[2] The trial judge determined that the Marriage Contract was valid and binding as it applied to the division of property. However, he found that Ms. Jonas’ financial circumstances at the time of trial warranted some award of spousal support. He ordered Mr. Pacitto to pay Ms. Jonas a lump sum payment of $40,000. He also made a $25,738.34 costs award against Ms. Jonas.
[3] On appeal, Ms. Jonas argues that the trial judge erred by failing to invalidate the Marriage Contract in its entirety. She also appeals the quantum of the lump sum award.
[4] For the reasons that follow, I would allow the appeal in part. In my view, the trial judge erred in his assessment of the quantum of spousal support. He ordered minimal support based on Ms. Jonas’ annual income of $15,564, and Mr. Pacitto’s declared annual income of $24,226, but failed to attribute appropriate income from Mr. Pacitto’s residential real estate holdings, worth almost $5 million at the time of trial.
Background
[5] When they married, Ms. Jonas was 42 and Mr. Pacitto was 66. At trial they were 57 and 80, respectively.
[6] Ms. Jonas came to Canada from Hungary as a refugee claimant in 2001. She was married and had three adult children. Mr. Pacitto, who immigrated to Canada from Italy in 1958, was married to his first wife for 40 years, until she passed away in 2000.
[7] Mr. Pacitto acquired a number of properties while married to his first wife, including a number of houses on the street where he lived. He rented one of them to Ms. Jonas and her family. Mr. Pacitto also had a property in Bolton that he sold sometime before the trial.
[8] Eventually, Ms. Jonas’ first husband returned to Hungary in 2002 and they divorced. Ms. Jonas and Mr. Pacitto commenced a relationship. She moved into his home. The parties entered into a Cohabitation Agreement on January 15th, 2003, in which they waived any entitlement to each other’s property, owned either prior to, or purchased during, their cohabitation. This Agreement was silent on the issue of support.
The Marriage Contract
[9] The parties married on August 15th, 2003. The Marriage Contract was dated August 6th, 2003. The parties provided different versions of how the Marriage Contract came into existence.
[10] Ms. Jonas testified that, as the wedding day approached, she was still a refugee claimant, with an appeal outstanding. On August 3rd or 4th, 2003, Mr. Pacitto’s daughter, Clara, presented the Marriage Contract to Ms. Jonas. Ms. Jonas testified that she signed the Marriage Contract that day in front of Mr. Pacitto and Clara in the matrimonial home. Nobody else was with them. Ms. Jonas said that Mr. Pacitto and Clara told her that, if she did not sign the document, there would be no wedding. According to Ms. Jonas, Clara further implied that Ms. Jonas would have to return to Hungary if she did not sign.
[11] Ms. Jonas testified that, on August 16, 2003, the day after the wedding, she took the Marriage Contract to Ms. Judi Simms, a paralegal that she knew from her refugee proceedings. Ms. Simms explained the contents of the document and told Ms. Jonas that she should not have signed it because it was unfair, but it was too late to do anything about it.
[12] Mr. Pacitto and Clara gave different accounts. Mr. Pacitto could not recall signing the document, explaining that it was years ago. However, he recalled discussing the contract with Ms. Jonas and advising her to get it translated and signed.
[13] Clara testified that the Marriage Contract was not signed in the matrimonial home. Instead, on August 6th, 2003, she and her father went to see their lawyer, Mr. William A. Harrison. Mr. Pacitto signed the Marriage Contract and Mr. Harrison witnessed his signature. Mr. Harrison gave copies of the document to Clara to have Ms. Jonas sign, with explicit instructions to tell Ms. Jonas that she should get independent legal advice before signing the document. Clara subsequently gave four copies of the Marriage Contract to Ms. Jonas and told her to take them to a lawyer.
Marriage Contract Documentation
[14] The documents relating to the execution of the Marriage Contract support Mr. Pacitto’s position at trial. The Marriage Contract itself, dated August 6th, 2003, was signed by the parties and duly witnessed. Each page bears the initials of the parties and their respective witnesses.
[15] Four other documents are relevant to the execution of the Marriage Contract. The first document is the Certificate and Affidavit of a Solicitor, Mr. Harrison, sworn on August 6th, 2003, in which he certified that he provided independent legal advice to Mr. Pacitto and that he was a subscribing witness to the document.
[16] The second document is the “Affidavit of Laszlone Jonas”, sworn on August 11th, 2003, in which she states:
I am Laszlone Jonas named in the Marriage Contract and hereby decline independent legal advice.
I read over the Marriage Contract the contents of which were explained to me in the Hungarian Language with all the legal implications and ramifications and obligations and rights therein and I am satisfied that I fully understand the provisions of the said Marriage Contract and the implications therein.
Ms. Simms commissioned this affidavit.
[17] The third document is the “Affidavit of Irene Zusmanov”, sworn on August 11th, 2003. The affidavit states:
I, Irene Zusmanov, was personally present of (sic) the 11th day of August, 2003 as a subscribing witness and did see the annexed Marriage Contract executed by Laszlone Jonas and that it appeared to me that she was executing the said Marriage Contract of her own volition, without fear, threats, compulsion or influence from the man or any other person.
[18] The last document is a “Translator’s Declaration”, signed by Anna Maria Fekete and dated August 8th, 2003, which was annexed to the Marriage Contract. The document provides:
I, the undersigned Anna Maria Fekete, hereby attest and swear that to my best of knowledge and ability this is a true and accurate translation of the original document. I am well acquainted with both the English and the Hungarian languages.
[19] At her Questioning before the trial, Ms. Jonas acknowledged that she had met both Ms. Zusmanov and Ms. Fekete. However, in her trial testimony, Ms. Jonas denied any knowledge of the person who witnessed her signature, or the person who translated the document for her.
Subsequent Events
[20] After the parties married, Mr. Pacitto sponsored Ms. Jonas to become a permanent resident, which happened in 2006.
[21] Ms. Jonas contended that she was treated poorly during the marriage. She says Mr. Pacitto forced her to work for him, to prepare his meals, clean his house and the other houses he rented out, as well as to generally help him around his properties. Mr. Pacitto denied any such exploitation.
[22] The parties separated and reconciled three times during their marriage. The first time they reconciled, on December 10th, 2005, they entered into an agreement whereby Ms. Jonas would receive a monthly sum of money and a promise that, if Mr. Pacitto passed away while they were together, she would receive $50,000. After the next two reconciliations (which occurred on February 4th, 2012 and March 5th, 2015), the quantum of the bequest increased to $100,000, and then to $200,000. There were competing accounts of how Ms. Jonas and Mr. Pacitto reached these terms each time; however, these agreements increasingly accrued to Ms. Jonas’ benefit.
The Trial Judge’s Findings
[23] The trial judge provided Reasons for Decision in which he thoroughly examined the circumstances surrounding the execution of the Marriage Contract. Given the competing accounts between Ms. Jonas, on the one hand, and Mr. Pacitto and Clara, on the other, he was required to make credibility findings.
[24] The trial judge provided detailed reasons for rejecting Ms. Jonas’ evidence on major issues. He relied on: inconsistencies between Ms. Jonas’ trial evidence and her testimony at Questioning; the Marriage Contract and accompanying execution documents; and Ms. Jonas’ failure to call witnesses that were critical to her account (i.e., Ms. Simms, Ms. Zusamanov, and Ms. Fekete).
[25] The trial judge made the following critical findings. He found that Ms. Jonas signed the Marriage Contract at the lawyer’s office where Ms. Simms worked as a paralegal. Someone from the same law office translated the document for her and another person properly witnessed it. He rejected Ms. Jonas’ evidence that she signed the Marriage Contract at the family residence.
[26] The trial judge found that Ms. Jonas signed the Marriage Contract before the wedding, not afterwards. He accepted that Ms. Jonas was told that, if she did not sign the contract, there would be no wedding. However, based on Ms. Jonas’ own testimony, she was indifferent about returning to Hungary.
[27] In terms of the lack of independent legal advice, the trial judge made the following finding, at para. 118:
On an assessment of all of the evidence placed before this court, it is my finding that although the applicant did not see a lawyer that was a choice she chose to make… Judi Simms was an employee of a law firm. She was known to the applicant. Her advice, as a paralegal was that the contract should not be signed as it was unfair to the applicant. Based on my evidentiary findings, at that point in time, the applicant had options she chose not to pursue.
[28] The trial judge rejected Ms. Jonas’ claim that she received deficient legal advice from a paralegal because the matter was outside the scope of the paralegal’s expertise. As the trial judge said at para. 119: “There is no evidence that Ms. Simms offered any advice other than the contract should not be signed.” If anything, it should have impressed upon Ms. Jonas that she should seek independent legal advice from a lawyer. In any event, the trial judge noted that the absence of legal advice will not automatically vitiate a marriage contract: see Dougherty v. Dougherty, 2008 ONCA 302, 89 O.R. (3d) 760, at para. 11. The trial judge found that Ms. Jonas understood what she was agreeing to but nevertheless decided to sign the contract and proceed with the marriage.
[29] In deciding how much weight to give the Marriage Contract, the trial judge applied the framework from the leading case of Miglin v. Miglin, 2003 SCC 24, [2003] 1 S.C.R. 303. He made the following findings, at para. 123:
Despite the fact that neither party was proficient in English, I find that the conditions in which the contract was negotiated, while not perfect, pass the initial stage of inquire [sic] required by the Supreme Court in Miglin. In doing so I am mindful of all of the allegations of circumstances of oppression, pressure or other vulnerabilities argued before me as well as the absence of negotiations in the execution of the contract. [Emphasis added.]
[30] The trial judge found that, from a property perspective, the Marriage Contract was consistent with the objectives of the Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.). Mr. Pacitto wished to protect the property he acquired before Ms. Jonas came into his life, for the benefit of himself and his family. The trial judge found that: “It is evident that the respondent’s net wealth has grown solely due to the increase in the value of his property but not as a result of any efforts from the applicant.”
[31] The trial judge made an alternative finding. At para. 146 of his reasons, he said that, if he was wrong about the enforceability of the Marriage Contract as it relates to property, Mr. Pacitto would owe an equalization payment to Ms. Jonas of $2,466,258.17.
[32] However, applying the second stage of the Miglin analysis, the trial judge decided to award spousal support notwithstanding the waiver in the Marriage Contract, pursuant to s. 33(4) of the Family Law Act, R.S.O. 1990, c. F.3. He held that Ms. Jonas’ financial circumstances at the time of trial warranted an award of spousal support: Scheel v. Henkelman (2001), 2001 CanLII 24133 (ON CA), 52 O.R. (3d) 1 (C.A.). Although the agreement was fair and reasonable when entered into, the trial judge found that the circumstances changed such that it was no longer fair. Ms. Jonas was dependent upon Mr. Pacitto for her sustenance, as reflected in the reconciliation agreements referred to above.
[33] Based on the filings of the parties, the trial judge determined that Ms. Jonas’ annual income was $15,564, whereas Mr. Pacitto’s was $24,226. At trial, Ms. Jonas submitted that, for the purposes of support, the court should impute an annual income of $250,000 to Mr. Pacitto, entitling her to monthly support payments of $4,167. This submission was based on an assertion that a construction company once owned by Mr. Pacitto generated substantial revenue. The trial judge found, at para. 132: “There is no evidence, whatsoever, on which this court can accept that submission.”
[34] The trial judge also rejected Ms. Jonas’ submission that he should impute additional income to Mr. Pacitto from the properties he owned, explaining at para. 133:
The applicant’s income is $15,564.00 according to her financial disclosure submitted to the court. The respondent’s income is declared at $24,226.00. The court heard evidence of rental income received from the rental of 174 and 180 Weldrick as well as for a large portion of 176 where the respondent resides in the lower or two basements. This issue was not fully explored by the applicant in cross-examination of the respondent. It leaves the court in a difficult position of determining the respondent’s income. The court cannot speculate on what the precise income of the respondent is in the absence of evidence received at trial. The court also cannot speculate as to the expenses of maintaining the realty taxes and mortgages on the subject properties. [Emphasis added.]
[35] Based on the financial information before him, the trial judge calculated that support should be paid indefinitely in the range of $127-$170 per month. This resulted in the $40,000 lump sum award to Ms. Jonas.
Discussion
[36] At the oral hearing of the appeal, counsel for Ms. Jonas did not challenge the trial judge’s factual findings, including his credibility assessments. Instead, based on the facts as found, she submits that: (1) the Marriage Contract was invalid in its entirety; and (2) the quantum of support was inadequate.
(1) The Marriage Contract
[37] In terms of the validity of the Marriage Contract, Ms. Jonas submits that, on the facts before him, the trial judge should have found that she satisfied the requirements to set aside the contract in its entirety. She contends that the trial judge failed to give sufficient weight to all relevant considerations. In particular, a combination of factors – including her lack of proficiency in the English language, the lack of independent legal advice, her economic dependency on Mr. Pacitto, and the prospect of having to return to Hungary – created vulnerabilities that undermined the validity of the Marriage Contract. Ms. Jonas further submits that the trial judge failed to take into account the fact that the Marriage Contract was not negotiated; instead, it was imposed upon her. Lastly, she contends that the trial judge placed too much weight on the execution documents discussed above.
[38] Ms. Jonas’ position cannot succeed based on the trial judge’s findings. He addressed each of the issues raised on appeal. Ms. Jonas bore the burden of proof required to set aside the Marriage Contract and she failed to adduce sufficient evidence to satisfy that burden.
[39] As noted above, the trial judge did not find that Ms. Jonas was vulnerable to the extent that it undermined the agreement she entered into. He found that she made a number of choices, including not to seek legal advice from a lawyer.
[40] Although Ms. Jonas claims that the Marriage Agreement was imposed upon her, there was no evidence that she attempted to negotiate a more favourable arrangement. The reconciliation agreements that Ms. Jonas entered into with Mr. Pacitto are relevant to this issue. Although the validity of these agreements was never in issue in this litigation, they did have evidentiary value at trial. As already noted above, they were increasingly beneficial to Ms. Jonas. It is some evidence that she was capable of asserting her interests with Mr. Pacitto, albeit later on in their relationship.
[41] Ms. Jonas places great weight on the fact that she was vulnerable because of her refugee status. As noted above, she faced the prospect of deportation if she did not get married, and she could not get married without signing the Marriage Contract. However, her own evidence undercuts this proposition: she was indifferent about returning to Hungary.
[42] Ms. Jonas submits that the trial judge placed too much weight on the documents that pertained to the execution of the Marriage Contract. However, this amounts to a challenge to the trial judge’s factual findings. A trial judge’s findings of fact, including credibility assessments, are entitled to substantial deference on appeal, “especially in family law cases”: Rados v. Rados, 2019 ONCA 627, 30 R.F.L. (8th) 374, at para. 23. In any event, the trial judge relied on the documents as he did because Ms. Jonas failed to call (or attempt to call) the witnesses that were critical to her position – Ms. Simms, Ms. Zusmanov, and Ms. Fekete. As he said, at para. 101: “In the absence of any other credible evidence, the court must rely upon the documents themselves.”
[43] The trial judge was entitled to find that Ms. Jonas declined to obtain legal advice, even after Ms. Simms advised her not to sign the Marriage Contract. She had been put on notice that the agreement might be unfair but decided not to do anything about it. Moreover, the trial judge was entitled to find that the document had been translated properly. Indeed, Ms. Jonas acknowledged that she was “shocked” when she learned that she would receive nothing if the marriage ended, thereby demonstrating her knowledge of the contents of the document. Ms. Jonas said she realized this after the wedding, when it was too late. The trial judge rejected this evidence and found that the appellant knew ahead of time.
[44] The trial judge’s overall finding that Ms. Jonas made a series of choices around the time that she signed the Marriage Contract – choices that did not undermine the validity of the agreement – is supported by the evidence. I would decline to intervene.
(2) The Spousal Support Order
[45] Ms. Jonas challenges the trial judge’s award of spousal support as inadequate. She disputes the trial judge’s calculation of income. As part of his declared annual income, Mr. Pacitto included a modest sum for rental income. As he did at trial, counsel for Ms. Jonas contended that the trial judge ought to have imputed further income from Mr. Pacitto’s properties. As noted in para. 34 above, the trial judge addressed this issue, pointing to the paucity of evidence in support of this submission.
[46] Although appellate courts should afford deference to the support orders made by trial judges (see Ballanger v. Ballanger, 2020 ONCA 626, at paras. 22-23), the unique circumstances of this case require intervention by this court. The trial judge’s dissatisfaction with the record before him was understandable. However, both parties must share the responsibility for this state of affairs. Although Ms. Jonas had the onus of demonstrating why income should be imputed to Mr. Pacitto, and in what amount, Mr. Pacitto was required to make proper disclosure of all sources of income, but failed to do so.
[47] Section 6 of the Spousal Support Guidelines provides that the starting point for determining income for spousal support purposes is the definition of income under the Federal Child Support Guidelines, SOR/97-175: see Slongo v. Slongo, 2017 ONCA 272, 137 O.R. (3d) 654, at para. 130. Section 19(1)(e) of those Guidelines provide that the court may impute income where the "spouse’s property is not reasonably utilized to generate income". Although the imputation of income is discretionary, in my view, the facts of this case cry out for this to be considered.
[48] In his lengthy reasons, the trial judge devoted just a few paragraphs to the issue of quantum of spousal support. Quite rightly, he said, at para. 134: "The court should not be required to generate its own evidence upon which to determine a case. This is especially relevant when examining the large quantum of support being sought by the applicant." At the same time, the onus was on Mr. Pacitto, not Ms. Jonas, to provide complete information about his assets, as well as his income.
[49] In all of the circumstances, it was an error for the trial judge not to at least consider imputing additional income to Mr. Pacitto. After all, this was a fairly long marriage. Ms. Jonas worked hard on the home-front – cooking, cleaning, doing laundry, and cleaning the respondent's residential properties – while those properties increased significantly in value, to nearly $5 million at the time of trial.
[50] Mr. Pacitto is over 80 years old and may reasonably be able to generate significantly more income from his properties, beyond that included in his declared income of $24,226. Ms. Jonas, on the other hand, has no real employment prospects and an annual income that would appear to be below the poverty line: see Statistics Canada, Low income cut-offs (LICOs) before and after tax by community size and family size, in constant dollars" (Table 11-10-0195-01) (Ottawa: Statistics Canada, 2020), online: Statistics Canada https://doi.org/10.25318/1110019501-eng. Now aged 60, she will be in need of support for many years to come.
[51] Because of the time that has passed between the trial and the hearing of this appeal, which has been almost three years, this court is not well-positioned to decide this matter afresh. Accordingly, I would remit this case back to the Superior Court of Justice for a focused hearing on the imputation of income to Mr. Pacitto for the purposes of calculating the award of spousal support. Both parties must provide that court with current property evaluations as well as income statements. Given the passage of time, this hearing should take place on an expedited basis, subject to local judicial resources.
Conclusion and Disposition
[52] I would allow the appeal in part and remit the case to the Superior Court of Justice in accordance with these reasons. Given that success on appeal has been divided, I would make no order as to costs.
Released: “CWH” November 12, 2020
“Gary Trotter J.A.”
“I agree. C.W. Hourigan J.A.”
“I agree. M. Jamal J.A.”