Court File and Parties
COURT FILE NO.: FC-12-1304 DATE: 2014/01/07
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Helen Nasrallah, Applicant AND Esper Nasrallah, Respondent AND Heirs of the late George Nasrallah namely: Luccia Nasrallah Haifa Foessl Rhonda Ferrie Esper Nasrallah and Faye Nasrallah-Mahoney, Added Respondents
BEFORE: Mr. Justice Timothy Minnema
COUNSEL: Anaïs Labelle-Lussier for the Applicant Sabrina Herscovitch for the Respondent Esper Nasrallah William R. Hunter for the Added Respondents
HEARD: October 10 and November 8, 2013
ENDORSEMENT
[1] This hearing involved three motions. There was a motion by the applicant wife Helen Nasrallah to enforce the terms of final Minutes of Settlement entered into on March 28, 2013 between her and the respondent husband Esper Nasrallah. He brought a cross-motion to have those final Minutes of Settlement set aside and, if successful, for various heads relief in the continuing proceeding. Esper Nasrallah was also seeking occupation rent from the applicant. His mother and siblings along with him are the added respondents, as the legal title holders of the matrimonial home. They brought the third motion to dismiss the application as it relates to the home and they also made a request in their factum for occupation rent from the applicant.
Background Facts
[2] Helen Nasrallah and Esper Nasrallah were married on June 13, 1971. On April 23, 1989, Esper Nasrallah signed an Agreement of Purchase and Sale to buy 100 Huntersfield Drive, in Ottawa, Ontario, for $179,900. He paid a $20,000 deposit. There is a dispute as to the source of the deposit and where the balance of the purchase price came from. Esper Nasrallah claims it all came from his father. Helen Nasrallah claims the bulk of it came from Esper Nasrallah and part of it was a gift from his father. Esper Nasrallah signed all the documentation for the real estate transaction, and then gave a direction to the vendor on closing, October 12, 1989, to put title into Georges Nasrallah’s name. Esper Nasrallah signed a lease with his father on the same date requiring him to pay $500 per month rent. It appears rent was indeed paid, although it is not clear for how long. After the deal closed, Helen and Esper Nasrallah and their three children moved into the home.
[3] On March 3, 1993, the respondent’s father Georges Nasrallah died without a will. No rent has been paid since that date. Esper Nasrallah paid for all the upkeep, renovations, and expenses on the home. Helen Nasrallah paid for groceries for the family along with clothing and gifts.
[4] About nine years later on January 17, 2002, Esper and Helen Nasrallah, while still together and residing in the home, entered into a Marriage Contract. The contract was fairly limited and said:
3(a) The said home [100 Huntersfield Drive]
Although it is presently registered in the name of his late father, Georges Nasrallah, Esper intends to take steps so that it will be registered in his name.
Helen agrees to release all her rights and interest in regard to the said dwelling in the event of a break-down of co-habitation with Esper
(b) Their wills
The parties will enter into irrevocable wills leaving all their assets to each other, and when both are deceased to their children, upon the execution of this Agreement
(c) Esper’s RRSP
Upon the execution of this Agreement, Esper agrees to transfer $50,000 of his Registered Retirement Savings Plan investment to Helen for her own use and ownership in an RRSP
(d) Monthly allowance
Esper agrees to pay Helen a monthly allowance of $400.00 providing he is still working and receiving income.
[5] There are no other releases in that contract. It is not clear why it was entered into at that time. It was not done with independent legal advice. There is no evidence that any of the provisions were ever followed. Specifically, Esper Nasrallah did not have the home registered in his name, and Helen Nasrallah did not receive $50,000 from his RRSP.
[6] Nine years later Helen and Esper Nasrallah separated. She claimed the separation occurred on April 5, 2011; he claimed it occurred on September 1, 2011. Regardless, they had been married approximately forty years. The children were all older and no longer dependents.
[7] Over a year later, on May 22, 2012, Helen Nasrallah began this proceeding claiming among other things a divorce, spousal support, exclusive possession of the matrimonial home, a resulting trust such that the estate of Georges Nasrallah holds 100 Huntersfield Drive in trust for Esper Nasrallah, along with a constructive trust such that Esper Nasrallah in turn holds fifty percent of the home in trust for her, and, as an alternative to the trust claims, an unequal division of net family properties. She amended her application on June 6, 2012 to include the added respondents as parties.
[8] Esper Nasrallah filed his answer refuting her claims except for the divorce and seeking much of the same relief for himself: equalization, unequal division of net family property, exclusive possession of the matrimonial home, and spousal support.
[9] The added respondents together filed an answer simply seeking to have the applicant’s claim relating to 100 Huntersfield dismissed with costs. They denied the existence of a trust, asserted that Esper Nasrallah’s interest in the home for the purposes of his net family property was 9.91% of its value on separation, and maintained that Helen Nasrallah had already released her interest in the property relying on the Marriage Contract noted above.
[10] Two weeks after the application was amended, the added respondents took their first action as beneficiaries in the over nineteen years since Georges Nasrallah died. On June 21, 2012, they had the title of 100 Huntersfield transferred into their names, relying on a procedure in the Estates Administration Act, R.S.O., 1990, c. E.22.
[11] The parties exchanged disclosure and conducted examinations for discovery.
[12] On March 28, 2013, Helen and Esper Nasrallah along with their respective counsel attended a full-day mediation session conducted by a mediator that they mutually selected. Esper Nasrallah indicates that he asked his own counsel why the additional respondents were not advised of the mediation, and was told by her that their attendance was not necessary. There was no indication of any attempts by Esper Nasrallah or his counsel to include the other added respondents or their counsel in the mediation, or of any attempts to contact them during the mediation session itself. There is no suggestion that Helen Nasrallah or her counsel discouraged or stood in the way of any such involvement or communications.
[13] After the full-day of negotiation Esper Nasrallah and Helen Nasrallah signed a comprehensive document titled Minutes of Settlement/Domestic Contract. It purports to resolve all the issues between them. Both their legal counsel executed certificates confirming that the parties understood the agreement, that there was no undue influence, that it was fair, etc. The agreement included a net family property worksheet that the parties had considered.
[14] The main focus of the agreement was on spousal support and equalization, including the claims with respect to 100 Huntersfield Drive. Both parties waived any right to spousal support, and there are numerous very specific paragraphs dealing with their full releases. The other operative paragraphs of the agreement critical for these motions are as follows:
LUMP/SUM / EQUALIZATION
1 Within forty-five (45) days (on or before May 12, 2013), Esper will provide Helen with a certified cheque in the amount of One Hundred and Twenty-Five Thousand Dollars ($125,000) in full and final settlement of the equalization of the parties’ net family properties and Helen’s claim for a beneficial ownership interest in the matrimonial home known municipally as 100 Huntersfield Drive, Ottawa, Ontario. More specifically, Helen releases her rights under Part 1 of the Family Law Act.
PERMANENT EXCLUSIVE POSSESSION OF THE MATRIMONIAL HOME
2 Helen will vacate the matrimonial home by midnight on the date on which she receives the cheque described in paragraph 1, above. Thereafter, Esper will have permanent exclusive possession of the home.
COSTS
18 Each party will pay his / her own legal fees and disbursements associated with all negotiations and the litigation arising from their marriage and separation. Helen will immediately instruct her counsel to withdraw the claim against the Estate of George Nasrallah. In the event that the Estate of George Nasrallah seeks indemnification of any costs on account of the action brought against it being withdrawn, Esper will immediately fully reimburse Helen for any costs sought by the Estate, as well as any legal fees and disbursements that she incurs to enforce the terms of this paragraph.
[15] Two weeks later on April 17, 2013, Esper Nasrallah sent an email to the mediator advising that he was unhappy with the settlement. As the only man in the mediation process he suggested that his wife got the better of him as part of a female conspiracy, even though he acknowledged that “no body put a gun to my head.” He was particularly upset that he had given up his own right to spousal support. While claiming that he could not come up with the $125,000 payment, he said:
I agreed to pay her the sum out of compassion so she can start her life on her own BUT, but I was counting on getting support.
[16] Esper Nasrallah said to the mediator that even though he felt that she was biased, he did not blame her rather he blamed his own lawyer who he said failed to give him legal advice. The mediator in her reply email said she did not know what to tell him, except that he may choose to speak to another lawyer.
[17] On April 16, 2013, counsel for the added respondents wrote to Helen Nasrallah’s counsel referring to the Minutes of Settlement. He suggested that Esper Nasrallah, as one of his clients, had “no independent legal advice on the merits or likely outcome of your client’s claim against the property” and suggested another mediation session be conducted with a new mediator.
[18] On April 25, 2013, Esper Nasrallah served a Notice of Change in Representation having retained new counsel. He sent an email to his previous lawyer’s law firm on May 22, 2013, accusing his previous counsel of deceiving, betraying, and misinforming him. A main concern in that email still appeared to be the loss of entitlement to spousal support.
[19] Helen Nasrallah had found an apartment so that she could vacate the matrimonial home upon receiving the $125,000 settlement. She also put her belongings in storage. She indicated that she was unable to relocate without the equalization payment, and therefore had to cancel the apartment and remain in the matrimonial home. Helen and Esper Nasrallah’s counsel began exchanging correspondence about the validity of the agreement on May 24, 2013.
[20] On June 3, 2013, counsel for the added respondents sent another letter to Helen Nasrallah’s counsel. The previously noted request for further mediation was no longer being sought, rather the added respondents were content to rely on the Minutes of Settlement as the basis on which to seek a release from Helen Nasrallah regarding 100 Huntersfield Drive, a dismissal of the application as against them, and costs. A further letter dated June 7, 2013, was sent along the same lines. As the added respondents were not parties to the Minutes of Settlement, they also took the position that they would not attend on the contemplated motions between the spouses. A final letter from them dated June 14, 2013 made the same demands again, indicating that if there was no favourable response then they would move for judgment.
[21] On September 24, 2013, Helen Nasrallah served her motion. The cross motion by Esper Nasrallah and the motion by the added parties for judgment followed.
Main Issue
[22] The notices of motion raise many issues as noted. Which ones need to be decided depend on the resolution of the main issue on the hearing, namely whether Esper Nasrallah has grounds to set aside the Minutes of Settlement/Domestic Contract.
Analysis – Request to Set Aside the Domestic Contract
(a) Law
[23] The respondent Esper Nasrallah relies on subsection 56(4) of the Family Law Act, R.S.O. 1990, c. F.3, as amended:
56(4) A court may … set aside a domestic contact 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.
[24] Esper Nasrallah claims that the Minutes of Settlement should be set aside based on subsections 56(4)(a) and (c). Regarding 56(4)(c), he raises the common law grounds of unconscionability, undue influence, and duress.
(b) Failure to Disclose
[25] Prior to the mediation, Esper Nasrallah’s counsel sent a letter to the applicant’s counsel inquiring about the contents of her safety deposit box. The response indicated that the only items in the safety deposit box were jewelry that the applicant brought into the marriage.
[26] Esper Nasrallah in his October 7, 2013 affidavit says at paragraph 10:
I knew that we did not have full and complete disclosure from the Applicant as I knew that she was refusing to disclose contents of her safety deposit box, which contain cash and jewelry valued at approximately $100,000.
[27] I asked about the evidence to support this claim. I was told by his counsel that this is only Esper Nasrallah’s belief. There is no evidence to establish the value of any items supposedly in the safety deposit box. Despite what he believed or what he said he knew, Esper Nasrallah subsequently signed the Minutes of Settlement.
[28] Esper Nasrallah having made the agreement and having chosen to sign it without seeking to compel further disclosure, cannot resile from the consequences of such decision unless he demonstrates that the applicant’s financial disclosure in this regard was inaccurate, misleading or false: see Quinn v. Keiper (2008), 2008 ONCA 662, 55 R.F.L. (6th) 241 (Ont.C.A.). With no evidence provided to meet that test, I find that the Minutes of Settlement cannot be set aside on this ground.
(c) Unconscionability
[29] The common law test for unconscionability is often traced back to Miglin v. Miglin, 2003 SCC 24, [2003] 1 S.C.R. 303 (S.C.C.), which was a case dealing with a variation of spousal support. The test for our purposes regarding the request to set aside the Minutes of Settlement is summarized in Rick v. Brandsema, 2009 SCC 10, [2009] 1 S.C.R. 295 (S.C.C.) at para. 44, where the Supreme Court of Canada noted that parties should be generally free to decide for themselves what bargain they are prepared to make, however:
Where … “there were any circumstances of oppression, pressure, or other vulnerabilities”, and if one party’s exploitation of such vulnerabilities during the negotiation process resulted in a separation agreement that deviated substantially from the legislation, the Court in Miglin concluded that the agreement need not be enforced (paras. 81-83).
[30] Esper Hasrallah alleges that the mediation as it was conducted was unfair. However, it was conducted by an experienced mediator he chose and he had counsel throughout. The agreement reached was reviewed with his counsel, each page was initialed, and the Minutes of Settlement signed. The agreement acknowledges that both parties participated in its creation. The respondent’s counsel had twelve years’ experience. As one of the added respondents, Esper Nasrallah also had access to another retained counsel had he chosen to do so. As noted in Miglin, the degree of professional assistance received by the parties will often overcome any systemic imbalances between them.
[31] I find that there was no overwhelming imbalance in the power relationship between the parties to the Minutes of Settlement in Helen Nasrallah’s favour, and I can find no circumstances of oppression or pressure by her or of other vulnerabilities.
[32] If I am wrong, I am also unable to find that Helen Nasrallah exploited Esper Nasrallah’s alleged vulnerabilities during the negotiation process such that the agreement deviated substantially from the legislation.
[33] Regarding exploitation, Esper Nasrallah is not disputing that he willingly entered into the agreement. His argument is simply that the deal was fundamentally unfair because, per his factum, “[a] reasonable person would see that there was no way possible that the Respondent could pay the money that was agreed to.” Just because it was unknown how or where he was going to get the settlement funds, does not make the agreement unconscionable. He freely entered into the bargain knowing his own financial position at the time.
[34] As to whether the agreement deviated substantially from the legislation, as noted a Net Family Property Worksheet was attached to the Minutes of Settlement. It is clear from this document that the possibilities of the trust claims failing completely or being completely successful were considered by the spouses in the course of their negotiations. Looking at Helen Nasrallah’s best-case scenario, Esper Nasrallah would have had to pay her an equalization payment of $175,000 plus spousal support. Helen Nasrallah was also claiming that Esper Nasrallah had properties overseas that he had not disclosed. They settled everything for a lump sum payment by Esper Nasrallah of $125,000 with no spousal support. There were also advantages to both parties in settling at that stage as the legal costs of a trial were avoided. I do not accept Esper Nasrallah’s assertion that the agreement is unfair because he now believes that there is no doubt that had the issue of the trusts been tried the applicant would have lost. The Marriage Contract of 2001 provides some basis for Helen Nasrallah’s belief that the beneficial ownership of 100 Huntersfield rested with Esper Nasrallah.
[35] Given the above, I do not find that the agreement is unconscionable.
(d) Undue Influence/Duress
[36] Esper Nasrallah’s claims of undue influence and duress are unique. Such claims usually involve allegations that one party had an inequality of bargaining power over the other, took an unfair advantage of the other party, or abused, threatened, intimidated, coerced, etc. the other party. There is nothing in the evidence to suggest any of these. Esper Nasrallah’s argument here is that the agreement should be set aside because his own counsel, not the applicant or her counsel, unduly influenced him. As noted in Mantella v. Mantella, 2006 10526 (ON SC), [2006] O.J. No. 1337 (Ont. S.C.J.), “[i]f the solicitor fails to provide competent legal advice, that is an issue for … [his] own client.” I do not find that the difficulty he alleges with his own lawyer is a ground for setting aside the agreement.
(e) Summary
[37] While no single ground under section 56(4) to set aside the Minutes of Settlement was made out, Esper Nasrallah further argued that the cumulative effect of all these contentions should lead me to set aside the agreement because of the overall unfairness. In my view, the sum of all these zeros is still zero. If the court were to set aside these Minutes of Settlement which have been carefully drafted with an eye on both the procedural and substantive requirements of the legislative scheme, then few agreements would be safe where a party changes their mind. The objective and protection of finality would be lost.
[38] The motion by Esper Nasrallah to set aside the Minutes of Settlement/Domestic Contract is dismissed.
Other Issues
[39] The Minutes of Settlement/Domestic Contract has numerous paragraphs that address its interpretation, severability of terms, and enforcement. However, at the conclusion of the hearing counsel agreed that if I were to uphold the agreement then the obligations in paragraphs 1 (payment of the $125,000) and 2 (Helen Nasrallah to vacate 100 Huntersfield and provide Esper Nasrallah exclusive possession) could be treated as separate with the latter not dependent on the former. They also agreed that Helen Nasrallah could have sixty days from the date of my decision to vacate the home. I make those orders below. As the Minutes of Settlement concluded the proceedings between the spouses and the claim against the added parties, with these orders the proceedings are at an end.
[40] The remaining issue is that the respondents asked me to order occupation rent against Helen Nasrallah of $750 per month. They rely on Griffiths v. Zambosco (2001), 2001 24097 (ON CA), 54 O.R. (3d) 397 (C.A) below:
49 Since Griffiths and Sloan owned the matrimonial home jointly, and since Griffiths occupied it for over six years after he and Sloan separated, the trial judge clearly had jurisdiction to order Griffiths to pay occupation rent if it was reasonable and equitable to do so. See Irrsack v. Irrsack (1979), 1979 1647 (ON CA), 27 O.R. (2d) 478 (C.A.). The relevant factors to be considered when occupation rent is in issue will vary from case to case. However, in a family law context some factors are consistently taken into account. They include:
• The timing of the claim for occupation rent;
• The duration of the occupancy;
• The inability of the non-resident spouse to realize on her equity in the property;
• Any reasonable credits to be set off against occupation rent;
• Any other competing claims in the litigation.
50 The weight to be given to these and other relevant factors is a matter for the trial judge to determine. This court will not interfere with the exercise of the trial judge's discretion to order or to refuse to order occupation rent, unless the finding is unreasonable or the trial judge has erred in principle.
[41] Occupation rent was not pled by either respondent. It was first raised in the notices of motion. Esper Nasrallah’s motion says that he is seeking an order “that the Applicant pay occupation rent to the Heirs of the late Georges Nasrallah” with no amount or start date. In his affidavit he simply says “I and the rest of the heirs are asking that the Applicant pay occupation rent from September 1, 2011,” and he says nothing about the amount.
[42] The Notice of Motion by the heirs of Georges Nasrallah seeks “[a]n Order that the applicant pay monthly occupation rent to the Responding parties commencing on September 1, 2011 and for as long as the applicant continues to reside in the premises in the amount of $750.00 per month being one-half of the estimated monthly rent plus one-half of all the utilities for the same time as occupation rent is payable in an amount that the parties determine or this Honourable Court shall order.” However, the only affidavit in support of this is by one of the heirs, Rhonda Ferris, the sister of Esper Nasrallah. She simply says “I am informed by Esper and verily believe that the fair market value to rent Huntersfield is $1,500 per month plus the tenant would pay all the utilities.” As noted, Esper Nasrallah does not address this at all in his affidavit. As such there is no evidence as to comparable properties, or what rent is appropriate.
[43] Regarding the legal basis, the Griffiths case unlike here involved a jointly owned matrimonial home. The claim here is not being made under section 24(c) of the Family Law Act, as the applicant does not have an order for exclusive possession. It is not under section 122 of the Courts of Justice Act, R.S.O. 1990, c. C.43, as the applicant is not a joint tenant or tenant in common. As a non-owner, it is not clear whether Helen Nasrallah’s occupancy is a residential tenancy and subject to the jurisdiction of the Landlord and Tenant Board pursuant to the Residential Tenancies Act. S.O. 2006, c. 17. In summary, the legal basis for the claim is unclear. It is not my role to find a basis to assist a party absent obvious authority, particularly where all parties are represented.
[44] The equities in favour of the added parties are also questionable. As noted their claim was made late. They have never required rent of either Helen or Esper Nasrallah, who both still live in the home. There is no evidence that Helen Nasrallah was ever given notice that she was requested or required to pay rent until this motion. The heirs did not solidify their legal title until June 21, 2012, yet they are before me seeking rent back to September 2011.
[45] Considering all the above, I find that it is not reasonable or equitable for me to order Helen Nasrallah pay occupation rent to the added respondents in the circumstances of this case.
Decision
[46] In summary of the above,
(a) The motion by Esper Nasrallah to set aside the Minutes of Settlement is dismissed.
(b) The relief requested in paragraph 1 of Helen Nasrallah’s notice of motion at Volume 2, Tab, 1, is granted (affirming the property agreements in the Minutes of Settlement including the $125,000 payment).
(c) The relief requested in paragraph 1 of the added respondents’ notice of motion at Volume 3, Tab 1, is granted (dismissing the application as it affects 100 Huntersfield Drive as against the added respondents).
(d) Helen Nasrallah has 60 days from the release of this decision to vacate the property at 100 Huntersfield Drive, and deliver up possession to the added respondents.
(e) Helen Nasrallah has no further interest in the property at 100 Huntersfield Drive.
(f) The balance of the relief requested in the motions is dismissed.
[47] The cost issues are somewhat complicated given the added parties and the paragraph dealing with costs in the Minutes of Settlement. I will give the parties 30 days to see if they can come to an agreement, failing which I will receive brief written submissions on costs.
Mr. Justice Timothy Minnema
Date: January 7, 2014
COURT FILE NO.: FC-12-1304 DATE: 2014/01/07
ONTARIO SUPERIOR COURT OF JUSTICE
RE: Helen Nasrallah, Applicant AND Esper Nasrallah, Respondent AND Heirs of the late George Nasrallah namely: Luccia Nasrallah Haifa Foessl Rhonda Ferrie Esper Nasrallah and Faye Nasrallah-Mahoney, Added Respondents
BEFORE: Mr. Justice Timothy Minnema
COUNSEL: Anaïs Labelle-Lussier for the Applicant Sabrina Herscovitch for the Respondent Esper Nasrallah William R. Hunter for the Added Respondents
ENDORSEMENT
Mr. Justice Timothy Minnema
Released: January 7, 2014