CITATION: Balsmeier v. Balsmeier, 2016 ONSC 950

NEWMARKET COURT FILE NO.: FC-12-40496

DATE: 20160205

ONTARIO

SUPERIOR COURT OF JUSTICE

FAMILY COURT

BETWEEN:

Herbert Ralf Balsmeier

Applicant

– and –

Najla Yono Balsmeier

Respondent

B. Siegel, for the Applicant

M. Polisuk, for the Respondent

HEARD: May 20, 21, 22, 25, 26 and August 13, 2015

REASONS

FRYER J.:

I. Introduction:

[1] This matter is the first part of a bifurcated trial. The preliminary issue before the court is whether the marriage contract entered into by the parties is valid. If the contract is found to be valid, this trial will also determine whether the spousal support provisions contained therein ought to be revised pursuant to the principles set out in Miglin v. Miglin, 2004 SCC 24, 224 D.L.R. (4^th) 193. If, per Miglin, I find that the support provisions in the contract should not be upheld, the following phase of the trial will be a determination of the equalization of net family property and spousal support under the Divorce Act, R.S.C. 1985, c. 3 (2^nd Supp) (DA).

[2] The Applicant, Herbert Balsmeier, and the Respondent, Najla Yono, are referred to herein as the Husband and the Wife although they are divorced. They had a relatively short and tumultuous courtship and marriage. The Husband who was 50 at the time that the parties met was and is wealthy. He had been married twice before; he has four children and at least one grandchild. The Wife who was 42 when the parties met was not wealthy and had never been married before. She has no children.

[3] The parties were engaged on July 23, 2010 and a wedding date was set shortly thereafter for September 11, 2010. The Husband made it known that he required a prenuptial agreement. The Wife made it known that she needed “security”. Upon the marriage, the Wife who was residing with her father in Novi, Michigan, was to move into the Husband’s home in Markham, Ontario.

[4] The Husband’s lawyer prepared a draft marriage contract. The initial draft of the contract provided for no division of property and graduated spousal support depending on the length of the marriage. The Wife reviewed the terms of the contract with her lawyer on August 27, 2010. She was not happy and indicated she would not sign. Her lawyer requested changes to the agreement. The Husband and the Wife also continued to negotiate. Some changes were made to the agreement following these negotiations including the Wife receiving an interest in the matrimonial home, increased graduated spousal support and $1,000,000 in RRSP’s in the event of the Husband’s death.

[5] The Wife was still not happy with the final agreement but executed it on September 1, 2010. The Husband executed the agreement on September 3, 2010.

[6] The parties separated within months of the date of marriage. They later reconciled but the marriage remained rocky and was marked by a number of separations and reconciliations.

[7] The parties separated for the last time in 2013 as early as June or as late as November of that year—the date of separation was an issue for this trial.

[8] The Wife seeks to set aside the marriage contract on various grounds including the lack of or misleading financial disclosure, misrepresentation and duress.

[9] The Husband seeks to uphold the contract and relies upon the fact that he has honoured the terms of the contract by paying spousal support to the Wife.

[10] The Husband purchased a condominium in Florida during the marriage. The Husband seeks certain relief with respect to this property including exclusive possession and occupation rent.

II. Credibility:

[11] I make some basic findings regarding the credibility of the parties from the outset.

[12] I found that the Husband gave his evidence in a straightforward and consistent manner. The Husband was prepared to acknowledge points that were not to his advantage.

[13] By contrast, I found that the Wife tried to tailor her evidence to fit what she may have learned about the law as it relates to marriage contracts and spousal support. As will be seen from the narrative below, her evidence in many important respects was contradictory or simply not credible.

[14] In my view the Wife is an intelligent and savvy person; she attempted to portray herself in a much different light which portrayal having regard to all of the facts, I did not accept.

III. Background:

[15] The Husband is now 56. The Wife is now 49.

[16] The Husband is an accountant by profession. He had his own accounting practice and he also had a number of businesses that by all accounts were very successful. The Husband retired from the practice of accounting late in 2012.

[17] The Wife is an American citizen who was born in Iraq. She grew up in or around the Detroit area of Michigan. She is the youngest of nine children. At the time the parties met she was living with her father (her mother was deceased) in a home in Novi, Michigan that was jointly owned by her and her father.

[18] The Wife went to college but it was not clear if she obtained a degree or diploma. She worked for American Express in the group travel area. Later, she worked for VW/Audi doing product launches throughout the U.S. and Caribbean. She returned to employment with American Express working on the Ford Motor Company account. The Wife was laid off from American Express and started a cellular business; she later sold this business to her nephew. She then started a business distributing specialized paper. This business had failed by April 2010 she was not working when the parties got engaged.

[19] The parties met through a dating website: www.millionairematch.com. Their first face-to-face meeting was in Las Vegas in November 2008. They were obviously attracted to each other and pursued a long-distance relationship. The Husband was living in Markham and the Wife was living in Detroit. They would speak on the phone frequently and the Husband took her on trips to various destinations including the Caribbean, Florida and New York City. However, even during this dating period, the parties had break-ups and both pursued relationships with other people. The Husband’s children were not happy about his relationship with the Wife and this impacted the parties’ relationship both during both courtship and marriage

[20] In July 2010, the Wife told the Husband that she had been offered a job with American Express and that, if she took the job, she would be moving to New York City or California. The Husband recognized that this would make even the existing long-distance relationship that much more difficult and he did not want to lose the Wife. On July 23, 2010 he drove to Michigan to ask the Wife to marry him; the parties were engaged that day.

[21] On the day of the engagement, the parties discussed the Husband’s desire for a pre-nuptial agreement.

[22] The parties intended for the Wife to move into the Husband’s home in Markham after the marriage.

Events leading up the Marriage Contract

[23] Within a week or two after the engagement, the parties had set a wedding date of September 11, 2010. Both parties wanted an early wedding date. The Husband wanted to avoid the time when his daughter was due to give birth in October. The Wife claimed that she could not introduce the Husband to her family unless they were engaged and family was very important to her. However, the Husband stated that she had been pressuring him to marry her for some time and she wanted to marry as soon as possible.

[24] The Wife immediately set about arranging for the wedding. She remained in Michigan. The Husband returned to Markham.

[25] The Husband was referred to Lawrence Sutton who is an experienced family law lawyer. On August 10, 2010 the Husband met with Mr. Sutton for the first time to discuss the marriage contract. The parties did not yet have even an informal agreement although they had discussed the fact the Husband wanted to protect his assets for the benefit of his children. The Husband told Mr. Sutton that the wedding had been set for September 11, 2010.

[26] The Husband provided Mr. Sutton with some of the following information at this first meeting:

• each of the parties would retain their own assets;

• the Wife’s net worth was $300,000 including $100,000 in gold and an interest in the home in Novi, Michigan;

• The Wife had been offered a job with American Express in New York City with a salary of $150,000;

• The Wife had been running a business but it had failed;

• The Wife was not currently working but wanted to work as soon as she was legally able to do so in Canada. She would likely be working for the Husband’s company doing marketing; and

• The Wife had been in business for herself and would be capable of negotiating terms. Negotiations with the Wife might not be easy. An e-mail from the Wife to the Husband in Mr. Sutton’s file appears to support this view; it contained the post script: “you and your attorney need to take it really easy on me, my love”.

[27] Mr. Sutton prepared the first draft of the agreement a few days after this meeting and provided a copy to the Husband about a week later. The Husband did not provide a copy of the draft agreement to the Wife at this time.

[28] The Husband and Mr. Sutton met again on August 25, 2010 to review the draft contract in detail. Mr. Sutton then gave the Husband names of lawyers who could assist the Wife, including the lawyer she ultimately retained: Dennis Starzynski.

[29] The Husband gave the Wife a copy of the agreement for the first time on August 26, 2010 when she drove up from Michigan. Upon first review, the Wife was surprised the contract provided her with ‘so little’ but opted to wait to meet with her lawyer to see if ‘maybe there was more’. The Wife professed to be ignorant about the nature of marriage contracts and she also said that she and the Husband ‘never talked about money’ yet later in her evidence she stated that she had expected this first draft contract to include the following:

• everything accrued during the marriage would be shared 50/50 as this is the norm in Michigan and in Florida

• she would get 25% of his home in Markham

• she would get 50% of a condominium in Florida

• there would be a reference to alimony

I accept that the Wife hoped the draft contract would be more generous to her; however, given the Husband’s stated position that he wanted to protect his assets, I do not accept that she genuinely expected the contract to fulfill this wish list.

[30] The Wife met with Mr. Starzynski on August 27, 2010. Mr. Starzynski is also a very experienced family law lawyer. He explained the terms of the agreement to her and recommended changes. Mr. Starzynski viewed it as significant that the Wife was moving to Markham after the marriage and giving up a job she had been offered by American Express. As it turned out there was no job offer. The Wife told Mr. Starzynski that she would not sign the agreement in its current form. She was very upset and she left the meeting intending to return home to speak with the Husband about amendments.

[31] Mr. Starzynski communicated some of his recommended changes in a voicemail to Mr. Sutton, which was received on August 27, 2010. These changes included the following:

• 25% interest in the matrimonial home right from the beginning with the FLA to apply after five years

• No ‘gauging’ of spousal support

• Full division of property

• Life insurance of $1,000,000

There is no mention of a Florida condominium.

[32] The Wife returned to the Husband’s home following this meeting and the parties discussed the contract further. In her words, the Wife wanted to ensure that ‘it would cost the Husband’ something to leave her; she wanted a financial disincentive for the Husband to trigger a separation. The Husband confirmed his position that unless the contract stated that there would be no equalization of property he was not prepared to go ahead with the wedding. The Wife said that she made preparations to cancel the wedding including sending out e-mails; however, she was unable to produce a copy of any of the e-mails. I find it more likely, as the Husband stated, that the Wife was anxious for the wedding to proceed. The parties continued to negotiate between themselves and agreed that spousal support would be increased to $6,000 per month, the Wife would get a 10% interest in the Husband’s home in Markham after a period of time and the Husband would immediately make her the beneficiary of $1,000,000 in RRSP’s in the event of his death prior to an event of separation.

[33] The Husband communicated his understanding of the agreed upon changes to Mr. Sutton. Mr. Sutton then revised the marriage contract and forwarded the revised draft to Mr. Starzynski.

[34] On or about August 30, 2010 Mr. Starzynksi called the Wife and told her about the changes to the marriage contract. According to the Wife Mr. Starzynksi told her that ‘they [the Husband and his lawyer] still did not provide the financial disclosure that he asked for including property appraisal or back up for salary/pay, they did not add a provision for the Florida condominium, nothing for the matrimonial home and nothing for being in the marriage in terms of division of property – none of the stipulations that we talked about….’ However, there was no evidence that Mr. Starzynski ever requested any financial disclosure let alone appraisals. There was no evidence that the Wife ever requested financial disclosure of any kind directly from the Husband. The Wife knew that the Husband was very wealthy and that he was adamantly opposed to any division of property.

[35] On September 1, 2010 the Wife met with Mr. Starzynski to review and execute the revised contract. The Wife was still not happy with the agreement and wanted a further chance to negotiate. Mr. Starzynski advised her that he did not think further negotiations would bear fruit and in any event, he was leaving for a holiday the next day and another lawyer would have to take over the matter.

[36] The Wife’s evidence is that the Husband told her that if she signed the agreement, he would ‘put her name’ on the condominium (to be purchased in the future as none existed until 2011). Mr. Starzynski’s notes of his meeting that day refer to a property in Florida but say nothing about this being tied to the execution of the agreement. If he understood this to be the case, I would have expected him to spend some time discussing this issue with the Wife. His notes of the meeting and his evidence suggest otherwise. The Wife indicated that she was willing to sign the agreement and did so that day.

[37] The Husband executed the contract on September 3, 2010. The Husband also executed a new will that day incorporating the bequest of $1,000,000 in RRSP’s to the Wife.

[38] The parties’ marriage took place in Michigan on September 11, 2010.

[39] By October 31, 2010 the parties had separated for the first time. The Husband felt that he had made a mistake; his children were not getting along with the Wife. He told the Wife he wanted a divorce. Although the Wife still had her house in Michigan, she did not move out. Rather, the parties remained living separate and apart in the Markham home.

[40] In December 2010 the Wife went to the police to press charges against the Husband’s youngest daughter Karli-Ann for assault; no charges were laid. On or about January 8, 2011 the Husband was charged with assaulting the Wife. He was required to vacate the home in Markham and live with his mother. The Wife also sought to have the Husband’s daughter Tanya charged with harassment regarding some text message exchanges. The Husband was very worried about the impact on his daughter who planned to go to Teachers’ College. No charges were laid against Tanya.

[41] With the Wife’s cooperation, the criminal charges against the Husband were resolved by way of a peace bond. The Husband moved back to the Markham home in February 2011 and the parties reconciled. This episode further damaged the Husband’s relationship with his children and they were estranged for a period of time.

[42] In the spring or summer of 2011 the parties started looking at vacation properties in Florida. They found a condominium in the Aquazul building in Lauderdale-by-the-Sea, Florida. The Husband purchased this condominium for $899,000 in December 2011. The Wife made no contribution to the purchase price and title was taken in the name of the Husband alone.

[43] The parties’ relationship continued to be turbulent and strained. In March 2012 the Husband again told the Wife that he wanted a divorce and the parties separated again. The parties each pursued relationships with other people. The Husband learned that the Wife had used his credit cards after they separated and he accused her of credit card fraud.

[44] The Husband went back to his lawyer, Mr. Sutton, and commenced this Application on April 11, 2012. The Wife retained a lawyer, Jennifer Long to represent her. The parties went as far as attending at a Case Conference in July 2012. They reconciled shortly thereafter and both described the relationship as relatively good for a period of time.

[45] The Husband followed through with his planned retirement in December 2012.

[46] The parties worked on renovating the Husband’s home in Markham. They continued to spend time at the condominium in Florida; the Wife spent more and more time there while the Husband returned to Markham.

[47] By June 2013 the parties’ relationship began to deteriorate again due in part to conflict between the Wife and the Husband’s children. The Husband states that on June 8, 2013 the Wife used his cell phone and impersonating him sent nasty text messages to his daughter Tanya. Tanya told her father that he was out of her life for good. According to the Husband, this was the last straw and the relationship ended at that point. On June 23, 2013, the Husband contacted Mr. Sutton and asked him to “reactivate” his file.

[48] The Husband moved into his daughter Tanya’s home and the Wife remained living in the Markham home. The parties went to Montreal for a weekend together in July 2013. In September 2013 they spent approximately three weeks together.

[49] The Wife states that they separated on a final basis on November 1, 2013.

[50] The Wife returned to the condominium in Florida where she has resided ever since.

Post-Separation Events

[51] On March 5, 2014 the Husband brought a motion for exclusive possession of his home in Markham and the condominium in Florida. He also sought an order bi-furcating the issue of the validity of the marriage contract. The Wife brought a cross-motion for exclusive possession of both the home in Markham and the condominium in Florida as well as for temporary spousal support.

[52] On March 21, 2014 Kaufman J. made an order on consent that the Husband would have temporary exclusive possession of the Markham home and the Wife would have temporary exclusive possession of the condominium in Florida.

[53] Despite and following this order, the Wife re-entered the home in Markham around 2 a.m. The Husband contacted the police who would not assist as the endorsement had not been issued and entered. The parties were required to attend before Kaufman J. on April 7, 2014 on an urgent basis to confirm the validity of the exclusive possession order.

[54] On September 12, 2014 Kaufman J. ordered that the issue of the validity of the marriage contract and the date of separation be bifurcated from the remaining relief. Kaufman, J also ordered the Husband to pay temporary spousal support of $6,000 per month commencing November 1, 2013.

[55] On January 7, 2015 the parties were divorced.

[56] On April 22, 2015 Kaufman, J. made an order, among other things, varying his previous exclusive possession order to permit the Husband to list the Florida condominium for sale provided that the closing date was not prior to a final trial decision in the matter set for May 20, 2015. The Wife was ordered to pay costs of $2,000.

[57] In the intervening period, the Wife took steps to sell her property in Novi, Michigan, as her father had passed away and she was now the sole owner of the property. The Wife would not provide details of the listing to the Husband. On May 15, 2015 McGee, J. made an order for security for costs against the Wife; the Wife was prohibited from listing, selling, transferring or encumbering the Michigan property until any costs decision made against her had been paid in full. The Wife was ordered to pay costs of $5,000.

[58] By the time of trial, the Husband had entered into a purchase and sale agreement for the condominium in Florida with a closing date of August 20, 2015.

[59] On May 28, 2015 the Husband brought an oral motion at the adjournment of the trial to terminate the temporary spousal support order in favour of the Wife. I ordered that the temporary spousal support should continue to be paid until the completion of the evidence in the trial, at which time the Husband could renew his request. On consent, I expanded McGee J.’s security order to encompass any overpayment of spousal support.

[60] The trial was not completed in the May 2015 sittings as Mr. Starzynski was unable to give evidence until August 13, 2015 for health reasons. On August 13, 2015 at the conclusion of the evidence in this matter, I heard a motion by the Husband to terminate the restriction on his ability to sell the condominium set out in Kaufman J’s order of April 15, 2015 which relief I granted.

[61] In her closing submissions, the Wife advised that she has consented to the sale of the Florida condominium.

IV. Issues:

1. Have any of the circumstances under s. 56(4) of the Family Law Act been engaged such that the marriage contract should be set aside?

(a) Did the Husband fail to provide financial disclosure pursuant to s. 56(4)(a) of the Family Law Act, R.S.O. 1990, c. F.3 (FLA);

(b) Did the Wife fail to understand the nature and consequences of the agreement (FLA s. 56(4)(b)); or

(c) Should the marriage contract be set aside for any other reason pursuant to the laws of contract (FLA s. 56(4)(c)):

(i) Unconscionability

(ii) Undue influence

(iii) Duress

(iv) Misrepresentation; and/or

(v) Lack of independent legal advice.

2. If one or more of the factors in s. 56(4) have been engaged, should this court exercise its discretion and set aside the contract?

3. If the marriage contract is upheld, should this court make an award of support different than that provided for in the contract having regard to the principles set out in Miglin?

4. What is the date of separation?

5. What, if any, occupation rent should be paid by the Wife to the Husband arising out of her occupation of the Florida condominium?

6. Does the court have the authority to order the relief sought by the Husband regarding the Florida condominium?

V. Analysis

[62] Part IV of the FLA sets out the provisions governing domestic contracts that include marriage contracts. Section 52(1) of the FLA states:

(1) Two persons who are married to each other or intend to marry may enter into an agreement in which they agree on their respective rights and obligations under the marriage or on separation, on the annulment or dissolution of the marriage or on death, including,

(a) ownership in or division of property;

(b) support obligations;

(c) the right to direct the education and moral training of their children, but not the right to custody of or access to their children; and

(d) any other matter in the settlement of their affairs.

(2) A provision in a marriage contract purporting to limit a spouse’s rights under Part II (Matrimonial Home) is unenforceable.

[63] Section 55(1) of the FLA provides that in order to qualify as a domestic contract under the Act, the agreement must be made in writing, signed by the parties and witnessed. The parties’ marriage contract meets these requirements.

[64] The basic structure of the parties’ marriage contract dated September 3, 2010, is as follows:

1. Support:

(a) If the parties are married for less than two years, the Husband will pay $6,000 per month to the Wife in spousal support for a period of 12 months;

(b) If the parties are married for two years but less than five years, the Husband will pay $6,000 per month to the Wife in spousal support for a period of 36 months;

(c) If the parties were married five years or more, the DA and FLA will apply to determine spousal support.

(d) The Wife is to receive $1,000,000 by way of RRSP rollover in the event of the Husband’s death provided there was no other prior breakdown of the marriage.

2. Equalization of Property: Each party will retain whatever assets are in his or her own name on the date of marriage in the event of a breakdown in the marriage, except as set out in #3 below. There will be no equalization of property.

3. Matrimonial Home: The Husband’s property, located at 17 Hawkridge Avenue, Markham, Ontario, would remain his separate property notwithstanding that the parties would be residing there upon marriage. After the fifth anniversary of their marriage, the Husband will transfer a 10% interest in the equity in this or any subsequent property purchased in substitution therefore and occupied by the parties as a matrimonial home.

[65] In the case of Hartshorne v. Hartshorne 2004 SCC 22, [2004] 1 S.C.R. 550, [2004] S.C.J. No. 20, the Supreme Court of Canada confirmed that the courts should respect private agreements reached between spouses particularly when the parties had independent legal advice. The Court further stated at paragraphs 36:

….Conversely, in a framework within which private parties are permitted to take personal responsibility for their financial well-being upon the dissolution of marriage, courts should be reluctant to second-guess the arrangement on which they reasonably expected to rely. Individuals may choose to structure their affairs in a number of different ways and it is their prerogative to do so…..

[66] The burden is on the Wife to demonstrate that there are grounds for setting the marriage contract aside: Dougherty v. Dougherty, 2008 ONCA 302, 89 O.R. (3d) 760 at para. 11.

[67] Section 56(4) of the FLA codifies the circumstances and conditions upon which a court can consider setting aside a domestic contract that was otherwise properly entered into:

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.

[68] In the Court of Appeal decision of LeVan v. LeVan, 2008 ONCA 388, 90 O.R. (3d) 1, leave to appeal to SCC refused, 3 S.C.R. viii (note), at para. 51, the court set out a two part test for determining whether a domestic contract should be set aside under s. 56(4) of the FLA:

First, the court must consider whether the party seeking to set aside the agreement can demonstrate that one or more of the circumstances set out within the provision have been engaged. Once that hurdle has been overcome, the court must then consider whether it is appropriate to exercise discretion in favour of setting aside the agreement.

1. Have any of the circumstances under s. 56(4) of the Family Law Act been engaged?

(a) Failure to provide financial disclosure pursuant to s. 56(4)(a) of the FLA:

[69] The Wife’s position is that although the Husband provided a Schedule setting out his assets, liabilities and income, he provided no back-up documents. She further asserts that his income as set out in this Schedule was not accurate and significantly lower than his income earned in 2010 the year the agreement was signed.

[70] The Husband’s position is that he has demonstrated through documents produced in this proceeding that his statement of assets and liabilities was accurate at the time of the marriage contract. The reference to his income in the Schedule was to ‘future anticipated income’ not income for 2010 – he felt this was more relevant as he planned to retire imminently.

[71] The Superior Court in Quinn v. Epstein Cole LLP, 2007 CanLII 45714 (ON SC), 87 O.R. (3d) 184, aff’d 2008 ONCA 662, 92 O.R. (3d) 1, at paras. 47 and 48 states:

[A] court should not narrowly construe the obligation of spouses to make full disclosure because the FLA imposes a positive duty on both parties to disclose.

….[F]ormal disclosure by way of sworn financial statements prior to executing an agreement is not necessary to meet the obligation to disclose. A general awareness of the assets of the other party may be sufficient to avoid setting aside an agreement. Parties are expected to use due diligence in ascertaining the facts underlying their agreements; a party cannot fail to ask the correct questions and then rely on a lack of disclosure. One must inquire whether the responding party withheld information or whether the information was available to the party seeking to set aside the agreement. [Footnotes omitted.]

[72] The court in Quinn also set out the framework for analyzing this issue that I have adopted below.

(i) Did the Husband fail to provide significant financial disclosure and/or provide misleading financial disclosure with respect to a significant aspect of his income, assets or debts:

[73] The Husband, who is an accountant, prepared his own statement setting out his income, assets and liabilities. This statement became Schedule “A” of the marriage contract.

[74] The Wife also filled in Schedule “B” to the marriage contract stating her income, assets and debts.

[75] Neither party produced sworn financial statements, back-up documents or any other disclosure prior to executing the marriage contract. The Wife stated in cross-examination that once her lawyer, Mr. Starzynski gave evidence he would confirm that all sorts of disclosure had been requested and not provided. However, Mr. Starzynski, whose evidence I prefer, confirmed that he had not requested disclosure nor had he been instructed to do so by the Wife. There was no evidence that the Wife requested disclosure directly from the Husband.

[76] The Husband produced disclosure as part of these proceedings to substantiate his assets and debts as of the date of marriage. These figures largely accord with the figures set out in Schedule “A” of the marriage contract and I find that the Husband did not fail to disclosure or misrepresent his assets or his debts

[77] The area upon which the Wife has focused to support her claim for non-disclosure is with respect to the Husband’s income. Schedule “A” provides the following information:

Income of HERBERT RALF BALSMEIER

Projected future annual gross income:

Actual eligible dividends $234,000

Actual ineligible dividends 50,000

Salary – estimated 16,000

Total Income (approximately) $300,000

Estimated pretax income to be retained by companies my share $500,000

[78] The Wife at first stated she knew that the Husband earned about $300,000 per year; later she stated she had no idea what the Husband earned. Neither the Wife nor Mr. Starzynski sought clarification of the Husband’s income figures in Schedule ‘A’.

[79] The Husband’s position was that Schedule “A” referred to “future estimated earnings” after his planned retirement as he had told the Wife that it was his plan to slow down and eventually retire. At the time the contract was signed, the Wife knew of the Husband’s plans to eventually retire, as he wanted her to be available to travel with him.

[80] Line 150 of the Husband’s 2010 income tax return showed income of $579,716 made up of the following:

• employment income: $74,272;

• taxable amount of dividends: $362,736; and

• net self-employment Income: $142,709.

[81] The Husband pointed out that to the extent that one was comparing the income in Schedule “A” to his 2010 income tax return, the amount of dividends in Line 120 of his income tax return includes the dividend gross-up; actual dividends would be closer to the figure referred to in Schedule “A”. He also pointed out the reference to his share of the pre-tax income of his corporations but he did not explain how this interrelated with the figure above.

[82] The Husband’s income in 2011 was $884,009, the majority of which ($721,995) was from taxable dividends from his own companies.

[83] The Husband’s income in 2012 was $558,185, of which the majority ($319,107), was again from taxable dividends from his own companies.

[84] With respect to his income, Schedule “A” does not refer to current income of the Husband. It refers to “projected future income”. To this extent it is not strictly a misrepresentation as it is a future estimate.

[85] The Wife also prepared Schedule “B” to the contract. She stated that her home in Michigan was valued at $340,000 USD• with a mortgage of $140,000 USD. She also had jewellery and artwork valued at $150,000 USD. She stated that her only other debts were a credit card with a balance of $15,000 USD.

[86] The Wife also told Mr. Starzynski that she had been offered a job earning $150,000 USD per year in network marketing with American Express and that she was turning the position down in order to move to Canada to be with the Husband. Mr. Starzynski testified that this was significant consideration in the advice that he provided the Wife. The Wife had not been offered a job with American Express.

[87] The Wife also misrepresented the extent of her debts in Schedule “B”. She had an additional bank loan of $70,000 USD that relative to her overall net worth as stated in Schedule “B” ($380,000 USD) was a significant omission.

(ii) if the Husband is found to have failed to disclose a significant aspect of his income, assets or debts, should I exercise my discretion to rescind/set aside the marriage contract having regard to the following:

[88] While the Husband did not technically misrepresent his financial position it would have been prudent for him to have voluntarily provided details of his current income such as providing copies of his last three years’ income tax returns. For this reason, I have considered the second stage of the inquiry.

a. whether the party who did not make full disclosure was asked or refused to do so; whether that party misrepresented or concealed financial facts; whether the other party had full financial information in any event; and, whether the other party would have signed the contract even if the disclosure had occurred;

[89] The Wife did not request any disclosure of the Husband either through Mr. Starzynski or herself. Mr. Starzynski confirmed in his evidence that he did not have instructions to request further financial disclosure and that when the Wife signed the contract she knew she was waiving financial disclosure.

[90] I do not accept the Wife’s evidence that she was waiting for disclosure including valuations and appraisals up to the time of the contract. Had Mr. Starzynski requested disclosure of this nature, there would have been the inevitable discussion about the associated cost and delay. In my view, the Wife attempted to tailor her evidence after the fact to bolster this aspect of her claim to set aside the agreement.

[91] At para. 32 of the marriage contract the Wife acknowledged that she was satisfied with the information and particulars received from the Husband with respect to financial disclosure and that there were no outstanding requests for disclosure.

[92] The Wife knew from Schedule “A” of the first draft of the contract that the Husband had assets valued at around $14,000,000. The Wife’s lawyer, Mr. Starzynski, summed up her attitude toward financial disclosure at the time the agreement was executed: she knew that the Husband was wealthy and it really did not matter to her how wealthy.

b. whether the party relied on the non-disclosure or misrepresentations in entering into the marriage contract in the sense that the party would not have entered the agreement had she known the true value of the assets or income;

[93] The Wife stated that if she had known that the Husband’s income was higher than $300,000 at the time that the marriage contract was signed, she might have sought a “better deal” but she could not say for sure. She did not say that she would have refused to sign the contract as drafted.

[94] In his voicemail left for Mr. Sutton, Mr. Starzynski suggested that there should be no “gauging” of spousal support but rather, that the Spousal Support Advisory Guidelines (SSAG) should be used from the start. The Wife ideally wanted no limits on spousal support and if there were going to be limits, she wanted the highest number possible to start in the shortest possible time. The Wife’s own requests for spousal support do not appear to be based on any independent criteria such as the SSAG. I note that the amount of support set out in the agreement is significantly more than she would have been awarded had the SSAG been used to calculate support.

[95] The Husband did not strictly misrepresent his income in Schedule “A”. Although he did not produce details of his current income to the Wife, this did not impact the negotiation of spousal support under the agreement or the Wife’s decision to execute the agreement.

c. whether a party consented to incomplete disclosure, or was otherwise aware of the asset or income and had the means to ascertain its value;

[96] The Wife implicitly consented to the incomplete disclosure. The Wife could have sought clarification of the income figures in the Husband’s Schedule ‘A”. She didn’t because, again, she knew the Husband was wealthy and the details were not important.

d. whether one party took benefits under the contract and then moved to set it aside; and

[97] The Wife made it known that she was seeking to set aside the contract and did not accept the benefits of the contract. The Husband has paid spousal support to the Wife in an amount equivalent to the contract amount but this was done pursuant to the order of Kaufman J. dated September 12, 2014 and my later order dated May 28, 2015.

e. whether there has been duress, or unconscionable circumstances; whether the petitioning party neglected to pursue full legal disclosure; whether she moved expeditiously to have the agreement set aside; and whether the other party had fulfilled his obligations under the agreement.

[98] The issue of alleged duress and/or unconscionable circumstances are set out in detail below.

[99] Neither party pursued further financial disclosure as part of the negotiation of the contract. The Wife knew that the Husband was very wealthy before she executed the contract. She could have sought specific financial disclosure and she did not.

[100] When the parties separated for the first time the Wife did not move or take steps to set aside the marriage contract. Even after the Husband purchased the condominium in Florida in his own name in December 2011, the Wife did move to set aside the contract. The Wife’s former friend, Louis Ferris said that the Wife wanted to ensure that she got the benefit of the additional spousal support she would be entitled to after the two-year threshold.

[101] When the parties separated a second time in 2012, it was the Husband who initiated court proceedings. The Wife advanced her claim at that time to set aside the agreement but the parties reconciled and the agreement stayed in place. When the parties separated on a final basis in 2013, the Wife moved expeditiously to set the marriage contract aside.

[102] The Wife pled in her Amended Answer that the Husband failed to comply with the terms of the contract in that he did not make a will naming her as beneficiary of $1,000,000 in RRSPs. The Husband produced a copy of his will executed September 3, 2010 containing the requisite term.

[103] The Husband attempted to fulfill his obligations under the contract upon the separation of the parties. On June 28, 2013, when the parties separated, the Husband again confirmed his intention to honour the terms of the marriage contract requiring the payment of spousal support upon the Wife entering into the separation agreement. The Wife refused to sign this separation agreement

[104] In summary, while it would have been prudent for the Husband to volunteer disclosure regarding his current income, his failure to do so is not sufficient to ground the Wife’s claim to set aside this marriage contract. The Wife was well aware that the Husband was wealthy and she did not rely upon the disclosure that the Husband made to her detriment if at all. Furthermore, the Wife made material misrepresentations regarding her own financial circumstances, particularly the non-existent job offer from American Express.

(b) Should the marriage contract be set aside due to the Wife’s failure to understand the nature and consequences of the agreement (FLA s. 56(4)(b)):

[105] It was not clear based on the pleadings whether the Wife was relying upon this section of the FLA in order to set aside the marriage contract. However, I have addressed it below.

[106] The Wife acknowledged that her lawyer reviewed the terms of the marriage contract with her at their first meeting and she “thanked him for educating her”. She was not happy with the terms of the agreement but she understood the terms.

[107] The Wife is an intelligent person who was not inexperienced with contracts. She had held responsible positions at large corporations (American Express and VW/Audi) and she had operated two businesses of her own. Her most recent business was a specialized paper distributorship through which she stated that she did business internationally with companies such as Jockey and Fruit of the Loom.

[108] At para. 31(c) of the marriage contract, the Wife acknowledges that she “understands [her]….rights and obligations under this Agreement, the nature of this Agreement and the consequences of this Agreement”.

[109] In the Certificate and Affidavit of Solicitor, the Wife’s lawyer, Mr. Starzynski swore that he believed that she was fully aware of the nature and effect of the agreement.

[110] I find that the Wife understood both the nature and the consequences of the marriage contract prior to executing it.

(c) Should the Marriage Contract be set aside otherwise in accordance with the law of contract (FLA s. 56(4)(c)):

(i) Unconscionability:

[111] Blishen J. in the case of Toscano v. Toscano, 2015 ONSC 487, 57 R.F.L. (7th) 234, clearly sets out the law in this area, at paras. 63-66:

[I]n general the doctrine of unconscionability with respect to domestic contracts focuses on whether or not there were unconscionable circumstances surrounding the formation of the contract. It is the circumstances at the time of the drafting and signing of the contract which must be examined, not the results, under this criterion. There is an exception for a spousal support waiver which can be set aside if it results in unconscionable circumstances, pursuant to s. 33(4) of the FLA.

Matrimonial negotiations occur in a unique environment and therefore unconscionability in the matrimonial context is not equivalent to unconscionability in a commercial context (Rick v. Brandsema, 2009 SCC 10, [2009] 1 S.C.R. 295, at para. 43 [Brandsema]). The question to be asked is whether 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” (ibid, at para. 44).

Examples of inequality in bargaining may include one party being intellectually weaker by reason of a disease of the mind, economically weaker or situationally weaker. Vulnerability may also arise due to a special relationship of trust and confidence (see Norberg v. Wynrib, 1992 CanLII 65 (SCC), [1992] 2 S.C.R. 226, at para. 33). However, the “mere presence of vulnerabilities will not, in and of itself, justify the court’s intervention. The degree of professional assistance received by the parties will often overcome any systemic imbalances between the parties” (Miglin v. Miglin, 2003 SCC 24, [2003] 1 S.C.R. 303, at para. 82, [Miglin]).

In Rosen v. Rosen (1994), 1994 CanLII 2769 (ON CA), 3 R.F.L. (4th) 267 at para. 12 (Ont. C.A.), the Ontario Court of Appeal states the question to be answered in determining unconscionability is whether there was inequality between the parties, or a preying of one upon the other, that placed an onus on the stronger party to act with scrupulous care for the welfare and interests of the vulnerable. At para. 13 the Court notes it is: “not the ability of one party to make a better bargain that counts. Seldom are contracting parties equal. It is the taking advantage of that ability to prey upon the other that produces the unconscionability”.

[112] According to her own evidence, the Wife had worked for many years in responsible roles earning, at times, in excess of $100,000 per year. She stated that she managed teams of up to 100 people. In the years leading up to the negotiation of this contract, the Wife had run two different businesses. The Wife described herself as having “excellent negotiation skills” and “sophisticated business acumen”. The Wife asserted that these skills only applied to her business life and not to her personal life—I do not agree. The Husband knew as much told his lawyer that the Wife was likely to drive a hard bargain. What the Wife found frustrating was that she felt that she had less leverage in terms of the negotiations; this does not mean that she was “vulnerable” nor that the Husband took advantage of her.

[113] When the parties got engaged on June 23, 2010, they discussed the fact that the Husband required a marriage contract. Knowing this, they both agreed on September 11, 2010 as the date of marriage. The Husband wanted to marry prior to the birth of his grandchild due in October that year. The Wife wanted to ensure that she solidified her relationship with the Husband as soon as possible. The Wife had been pressuring the Husband to marry her earlier and he had not been prepared to commit. It was only when the Husband thought that the Wife was moving away from the Detroit area to take a job with American Express that he was galvanized to take the plunge. The selection of the wedding date left minimal time to negotiate a contract.

[114] The Wife is an intelligent and capable person. The Wife received independent legal advice from an experienced family lawyer.

[115] The Wife’s position is that she had “no choice” but to sign the contract as she had invited 200 people who were flying in from all over the world and that she would be humiliated and embarrassed to have to call off the wedding. However, Blishen J. ‘s comment in Toscano, at para. 68 is applicable to this case:

In Miglin at para. 83 the Supreme Court of Canada notes that the emotional stress from separation or divorce does not give rise to the presumption that a party is incapable of assenting to a binding agreement. By extension, the emotional stress due to planning a large wedding which was to take place 11 days after the contract was signed, does not mean Ms. Toscano was incapable of understanding or assenting to a binding agreement.

[116] The Wife also suggested that she had ‘given up everything’ in order to move to Canada to be with the Husband and this contributed to her feeling pressured to sign the agreement. The Wife still owns her home in Novi, Michigan. The Wife did not give up a job – she was unemployed at this time nor did she give up a job offer. The Wife also said that she was giving up her family particularly her Father who was the ‘most important man in her life’ in order to move to Markham. Yet before they got engaged the Wife told the Husband that she intended to take a job much further away in New York City or California.

[117] Husband did not attend at any of the Wife’s meetings with Mr. Starzynski. There is no suggestion that he interfered with the Wife receiving independent legal advice from Mr. Starzynski. I do not find that the Husband took advantage of the Wife or preyed upon her in process of negotiating the agreement

[118] The Wife has not met the burden of demonstrating that there were unconscionable circumstances surrounding the negotiation of the agreement.

(ii) Undue Influence

[119] The Court in Toscano at para. 69 further sets out the test for undue influence:

…the court must inquire into whether there was: (i) an improvident bargain, and (ii) if so, whether there was inequality in bargaining power (see Hyldtoft v. Hyldtoft (1991), 1991 CanLII 12868 (ON SC), 33 R.F.L. (3d) 99 at paras. 26-28 (Ont. Gen. Div.)). To establish undue influence or inequality in bargaining power, “the plaintiff must prove the ability of one person to dominate the will of another, whether through manipulation, coercion, or outright but subtle abuse of power” (see Segal v. Qu (2001), 2001 CanLII 28201 (ON SC), 17 R.F.L. (5th) 152 at para. 59 (Ont. S.C.)).

[120] In my view the agreement was not improvident. Parties are entitled to reach their own agreements with respect to the division of property as these parties did. As I have already indicated, the spousal support terms accord with and may be superior to what would have been granted to the Wife if the SSAG’s had been used to determine support given the short marriage.

[121] The Wife, in executing the marriage contract, confirmed that she was not subject to coercion or undue influence (para. 31(f)). Mr. Starzynski also signed the marriage contract confirming that there was no undue influence.

[122] In her Answer/Claim the Wife also pled that the Husband “coerced” her into signing the marriage contract by promising to put her name on title to “the Florida home”. In so doing, according to the Wife, “he unduly pressured her [and] also misled her to get her to sign the contract.”

[123] “The Florida home” did not exist at the time the contract was negotiated. The Husband purchased the condominium in Lauderdale-by-the-Sea in December 2011.

[124] Despite the significance now placed by the Wife on the Husband’s promise to put her name on title to a property in Florida, this issue was barely referenced at the time the marriage contract was being negotiated. The Wife’s evidence at trial was that “more than anything else” she expected that she would be getting 50% of the future Florida property. However, her lawyer, Mr. Starzynski, did not mention a property in Florida at all in his notes from the initial meeting with the Wife, nor did he include it in his voicemail for Mr. Sutton from the same day, which outlined the requested changes to the draft agreement. If Mr. Starzynksi had been made aware that Wife expected an interest in a future condominium in Florida, I would have expected that to be included in the laundry list. Mr. Sutton advises and his notes support that he was not made aware about a future property in Florida as an issue.

[125] The issue of a property in Florida was raised in a subsequent call between Mr. Starzynksi and the Wife on or about August 30, 2010 but Mr. Starzynski’s brief note does not clarify what was discussed.

[126] The parties had discussed a vacation property in Florida even prior to their engagement and I think it is likely that this topic was discussed in their own negotiations around the marriage contract. However, I accept the Husband’s evidence that he made no specific promises to the Wife to give her an interest in the condominium in order to induce her to sign the contract or otherwise. The Husband acknowledged that after the marriage, he told the Wife that he might put her name on the condominium that he had purchased but only when their relationship was more secure.

[127] The marriage contract contains the fairly standard clause at para. 28 that states: “except as provided herein, there are no representations, collateral agreements, warranties or conditions affecting this agreement.”

[128] The marriage contract contains no reference to a property in Florida. The Wife acknowledged that Mr. Starzynski took her through the terms of the contract and she “thanked him for educating her”. The Wife signed the contract acknowledging that she understood its terms (para. 31(c)).

[129] The Wife is an experienced businessperson. While I accept that negotiating a marriage contract is different than negotiating a commercial contract, in my view, the Wife was able to look out for her own interests. She negotiated directly with the Husband for certain changes to the original draft contract including increased spousal support, an interest in his home in Markham and $1,000,000 in RRSP’s in the event of his death.

[130] The Wife has not demonstrated that the Husband exerted any undue influence on her or that he otherwise manipulated or coerced her into signing the agreement.

(iii) Duress:

[131] I again rely upon the decision in Toscano wherein the court at, para. 72, states:

Duress involves a coercion of the will of one party or directing pressure to one party so they have no realistic alternative but to submit to the party (see Berdette v. Berdette (1991), 81 D.L.R. (4) 194 at para. 22 (Ont. C.A.)). Equity recognizes a wider concept of duress including coercion, intimidation or the application of illegitimate pressure.

[132] The Wife’s position is that she was under duress as she had invited 200 guests to the wedding and they were flying in from “all over the world”. The Wife also deposed that in her culture in particular there would be intense shame and embarrassment should the wedding have to be cancelled. Many people of diverse faiths and cultures would find it embarrassing and possibly shameful to have to advise friends and family that a wedding was not going ahead. The Wife did not provide any details as to how her religion and/or culture is unique in this respect.

[133] Mr. Starzynski amended the Certificate and Affidavit of Solicitor attached to the agreement to strike out the wording that the Wife was signing the agreement voluntarily. Mr. Starzynski denied that it was his “usual practice” to strike out the reference to his client signing voluntarily when the wedding date was so close. Rather he stated that he felt that the Wife felt “trapped” given the impending wedding. However, Mr. Starzynski confirmed that once the further changes were made to the agreement following the parties’ own negotiations, the Wife was prepared “to go along with it”.

[134] Mr. Sutton stated that despite this amendment, he was comfortable having the Husband execute it. Mr. Sutton knew Mr. Starzynski to be an experienced family lawyer who would not have permitted the Wife to sign the agreement had he—Mr. Starzynski—been seriously concerned about duress or pressure.

[135] While the Wife might have felt pressured and “trapped” by the circumstances of the impending marriage, this does not mean that the Husband exerted undue pressure on the Wife or subjected her to duress.

[136] The Wife had realistic alternatives. One of those alternatives—which the Wife acknowledged was available to her—was not to sign the contract. The Husband had already advised that he would not marry her unless the contract was signed. He too had invited a significant number of guests to the wedding.

[137] I do not find that the Wife executed the marriage contract under duress or illegitimate pressure.

(iv) Misrepresentation

[138] The Wife claimed that the Husband misled her with respect to his income. As I set out above, I do not find that there was a material misrepresentation if any. The Wife knew the Husband was very wealthy. As her lawyer, Mr. Starzynski, deposed, it did not matter to her how wealthy he was.

[139] The Wife also alleged that the Husband misled her into signing the contract by promising to put her name on a future condominium in Florida. Again, there was no credible evidence that the Husband made promises to the Wife either before or after the execution of the marriage contract that were either clear or unequivocal in the sense that his failure to fulfill them would affect the validity of the agreement (see Engineered Homes Ltd. v. Mason et al., 1983 CanLII 142 (SCC), [1983] 1 SCR 641, at p. 646, citing Halsbury’s Laws of England (4th ed.), vol. 16, para. 1416).

[140] In Dougherty the court held at para. 13:

[I]n contract law, a misrepresentation must be material in the sense that a reasonable person would consider it relevant to the decision to enter the agreement in question. In addition, the material misrepresentation must have constituted an inducement to enter the agreement upon which the party relied: see e.g., Panzer v. Zeifman (1978), 1978 CanLII 1658 (ON CA), 20 O.R. (2d) 502, [1978] O.J. No. 3456 (C.A.) and Beer v. Townsgate I Ltd. (1997), 1997 CanLII 976 (ON CA), 36 O.R. (3d) 136, [1997] O.J. No. 4276 (C.A.).

[141] While the Wife may have hoped that the Husband would give her an interest in a future condominium in Florida, she was well aware that the final version of the contract contained no such reference. She was not happy about the omission but executed the contract anyway.

[142] I do not find that the Husband made any material misrepresentation upon which the Wife relied in executing the marriage contract.

(v) Lack of Independent Legal Advice

[143] Both parties received independent legal advice from experienced family law lawyers.

[144] The Wife did not suggest that she did not receive appropriate independent legal advice and I do not find otherwise.

2. If one or more of the factors in s. 56(4) have been engaged, should this court exercise its discretion and set aside the contract?

[145] The Wife has not met the burden of proving that any of the factors in s. 56(4) have been engaged.

[146] For all of the reasons set out above, I find that the Wife has not met the burden of demonstrating that the marriage contract should be set aside

3. Should I exercise my discretion under the principles set out in Miglin to award support different than that provided for in the contract?

[147] The Supreme Court of Canada in the decision of Miglin v. Miglin states, at paras. 4 and 46, that:

[A] fairly negotiated agreement that represents the intentions and expectations of the parties and that complies substantially with the objectives of the Divorce Act as a whole should receive considerable weight (at para. 4);

[A] court should be loathe to interfere with a pre-existing agreement unless it is convinced that the agreement does not comply substantially with the overall objectives of the Divorce Act.

[148] The Supreme Court in Miglin set out a framework for analyzing whether an agreement complies with the objectives of the DA.

(i) Miglin – Stage I: Was there procedural and substantive fairness at time of execution?

a. Were the negotiations surrounding the Marriage Contract fair?

[149] This stage of the Miglin test does not apply the same standard as is applied in determining whether unconscionability exists. Rather, the court states, at para. 82:

[T]here must be evidence to warrant the court’s finding that the agreement should not stand on the basis of a fundamental flaw in the negotiation process. Recognition of the emotional stress of separation or divorce should not be taken as giving rise to a presumption that parties in such circumstances are incapable of assenting to a binding agreement. If separating or divorcing parties were generally incapable of making agreements it would be fair to enforce, it would be difficult to see why Parliament included “agreement or arrangement” in s. 15.2(4)(c). Finally, we stress that the mere presence of vulnerabilities will not, in and of itself, justify the court’s intervention. The degree of professional assistance received by the parties will often overcome any systemic imbalances between the parties.

[150] There was emotional stress on both parties surrounding the negotiation of the marriage contract. They each contributed to this stress by selecting a wedding date so close to the date of their engagement.

[151] The Wife knew when she got engaged to the Husband that he required a contract to protect his wealth; the fact of the agreement would not have been a surprise to her. The Husband was the wealthy party; he loved the Wife and wanted to marry her. The Wife wanted, in her oft-repeated words, “financial security” from the Husband—a better financial deal; she too wanted to marry. This dynamic did not constitute a power imbalance that vitiated the bargaining process.

[152] If any significant vulnerability was present—and I do not so find—it would be mitigated by the fact that the Wife received independent legal advice from an experienced family law lawyer.

[153] The negotiations surrounding the marriage contract were not ideal but they were not fundamentally flawed.

b. Was the substance of the Marriage Contract fair having regard to the principles of spousal support set out in the Divorce Act?

[154] The Supreme Court of Canada in Miglin confirms, at paras. 56 and 84, that:

[W]hat is “fair” will depend not only on the objective circumstances of the parties, but also on how those parties conceive of themselves, their marriage and its dissolution, as well as their expectations and aspirations for the future.

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.

[155] Section 15.2(4) of the DA provides:

In making an order under subsection (1) or an interim order under subsection (2), the court shall take into consideration the condition, means, needs and other circumstances of each spouse, including

(a) the length of time the spouses cohabited;

(b) the functions performed by each spouse during cohabitation; and

(c) any order, agreement or arrangement relating to support of either spouse.

[156] Section 15.4(6) of the DA states:

An order made under subsection (1) or an interim order under subsection (2) that provides for the support of a spouse should

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

(b) apportion 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) relieve any economic hardship of the spouses arising from the breakdown of the marriage; and

(d) in so far as practicable, promote the economic self-sufficiency of each spouse within a reasonable period of time.

[157] The parties did not plan to have children.

[158] During the negotiation of the marriage contract the Husband told his lawyer, Mr. Sutton, that the Wife wanted to work and she would likely be working at one of his companies. The Wife stated that the Husband did not want her to work—he wanted her to be available to travel and otherwise accompany him during his retirement pursuits. I accept that the parties did not anticipate that the Wife would work on a full time basis after she moved to Markham.

[159] I note that the Husband, his lawyer and the Wife’s lawyer all understood that the Wife had turned down a job offer at American Express in order to marry the Husband and move to Markham. This would have impacted how both of the lawyers approached the spousal support provisions of the agreement. There was no job offer.

[160] The SSAG have been adopted as the starting point for determining the quantum and duration of support once entitlement has been found (see Fisher v. Fisher, 2008 ONCA 11, 88 O.R. (3d) 241, at para. 100).

[161] The parties’ marriage contract provides for a fixed quantum of support ($6,000/month) to be paid for periods of time depending on the length of the parties’ marriage. If the parties were married for five years or more, there was no contractual limit on support; the contract did not derogate from the Wife’s legal entitlement to spousal support after five years.

[162] The Wife was also entitled to receive $1,000,000 in RRSPs upon the death of the Husband at any time after marriage assuming no intervening event of separation.

[163] The parties’ agreement provides the Wife with more spousal support than she would have received in the event of separation in the first five years had the SSAG been strictly adopted. The Wife did not raise other factors that would take her out of the SSAG range. In my view, the parties’ marriage contract was fair having regard to the principles under the DA at the time the contract was executed.

(ii) Miglin – Stage II: Is there substantive fairness in light of changed circumstances?

[164] The parties did not cohabit prior to marriage. They were married for less than three years. The duration of marriage was marked by a number of separations, two of which were over three months long. During one or more of these periods of separation, both of the parties pursued intimate relationships with other people. During one of the periods of separation, the Husband initiated a court application.

[165] During the period that the parties lived together in the Husband’s home in Markham, the Wife did much of the cooking and upkeep on the home. However, after the Husband purchased the condominium in Florida in December 2011, the Wife spent more time there while the Husband returned to Markham for periods of time where his children and grandchildren lived.

[166] The Wife asserted that she was prevented from working after the marriage because the Husband delayed processing her application for permanent residence status in Canada. The Wife interviewed for a job at IBM in Markham but did not yet have permanent residence status. The Wife has had permanent residence status since April 2013 but has not applied for work in Canada.

[167] During the periods that the parties were together, there was little emphasis on the Wife working. The Husband wanted her to look after his home in Markham including renovations and he also wanted her to be available to travel with him. In other words, the Husband had little or no expectation that the Wife would work and he was content to support her.

[168] The Wife has hip dysplasia—a condition that she has suffered from since childhood. This was not raised as an issue at the time the marriage contract was negotiated. The Wife states that at some time during the marriage this condition worsened. The Wife states that she has difficulty sitting for longer periods of time.

[169] The Wife’s friend Joanne Shango said she has observed the Wife walking with a weird gait and that she seemed to be in pain. The Wife’s friend, Judy Lax – who happens to be the Husband’s ex-girlfriend - also observed that the Wife has a bad back and needs to sit on a heated seat.

[170] The Husband did not observe the Wife to have any significant physical limitations while they were a couple. He said that she was very active and that they often took long walks on the beach.

[171] The Wife’s former friend, Louis Ferris gave evidence on behalf of the Husband. Mr. Ferris stated that up until November 2014 when they had a falling out he observed that the Wife works out at the gym “more than most people he knows”, she is an avid walker and that she challenged him to races up the stairs in the condominium in Florida. I found Mr. Ferris’s evidence credible despite the fact that he was no longer friends with the Wife.

[172] The Wife did not put forward any independent expert medical evidence to support her claims that this condition prevents her from working in any capacity. Her reason for failing to adduce such evidence was that she could not afford to pay the experts to attend. I note, however, that she has retained counsel in Florida to advance a claim in the Florida court over the Husband’s condominium. Additionally, she retained counsel in Michigan to resist the Husband’s attempts to enforce McGee J.’s order for security for costs in that State.

[173] The Wife clearly has job experience and job skills. The Wife described herself as hardworking and resourceful. There was insufficient evidence to suggest that she could not return to the workforce and achieve financial self-sufficiency.

[174] The marriage contract provided, at para. 13(b), that the Wife would receive $6,000 per month in support for 36 months, as the parties separated after the second anniversary of the date of their marriage.

[175] The Supreme Court of Canada in Bracklow v. Bracklow, 1999 CanLII 715 (SCC), [1999] 1 SCR 420, stated at, para. 53:

[I]t is not the act of saying “I do”, but the marital relationship between the parties that may generate the obligation of non-compensatory support pursuant to the Act. It follows that diverse aspects of that marital relationship may be relevant to the quantum of such support. As stated in Moge, “[a]t the end of the day ..., courts have an overriding discretion and the exercise of such discretion will depend on the particular facts of each case, having regard to the factors and objectives designated in the Act”. [Citations omitted.]

[176] The terms of the marriage contract are substantively fair when viewed in light of the circumstances of the parties at the time of separation and at the time of trial. I would find this even if it appeared that the Wife’s physical disabilities prevented her from contributing to her own support.

[177] For all of the foregoing reasons, I find that the terms of the marriage contract completely address the Wife’s entitlement to spousal support. I decline to make an alternate award.

4. What is the date of separation?

[178] I was asked to make a finding in this matter as to the date of separation of the parties in the event that an equalization of property calculation was required. As I have found that the marriage contract should be upheld in its entirety, this calculation should not be necessary. However, I have set out below my factual findings regarding the parties’ date of separation.

[179] At s. 4(1), the FLA at defines the “valuation” date for the equalization of net family property as, among other things, the date upon which the parties “separate and there is no reasonable prospect that they will resume cohabitation.”

[180] The parties separated on June 8, 2013 when the Wife purporting to be the Husband sent a nasty text message from his phone to his daughter; this lead his daughter to threaten again to cut him out of her life and was almost the last straw for the Husband. The Husband moved out of his home in Markham and went to stay at his daughter’s condominium.

[181] The Husband proceeded to cancel the Wife’s secondary credit cards and her phone that he was paying for. He moved his car that the Wife had been driving so that she could not take it across the border. In July 2013 the Husband found out that the Wife had moved his Mercedes out of the garage of the condominium in Florida; he was able to locate it.

[182] Despite these circumstances, the parties went on a short trip to Montreal in August 2013. They continued to be intimate. The celebrated their anniversary together on September 11, 2013. The parties planned a trip to Europe together but the Husband cancelled his flight later in September.

[183] The parties continued to spend periods of time together and to be intimate through the month of October 2013.

[184] The Wife’s position is that the parties separated on November 2, 2013.

[185] The parties’ relationship from the beginning was tumultuous and marked by a number of separations. I find that it was only after the parties separated on November 2, 2013 that there was no reasonable prospect of reconciliation.

5. What, if any, occupation rent should be paid by the Wife to the Husband relative to her occupation of the Florida condominium?

[186] The Husband seeks occupation rent for the period in which the Wife has had possession of his condominium in Florida, which he says was from April-May 2014 and from February 2015 onwards. He is no longer advancing a claim for credit for the carrying costs of the property while the Wife was in exclusive possession.

[187] Kaufman J. made an order on consent on March 21, 2014 that the Wife would have temporary exclusive possession of the Florida “matrimonial home”. A question arose after this order as to whether a property located outside of Canada can constitute a matrimonial home (see Potter v. Boston, 2014 ONSC 2523, 2014 CarswellOnt 5414, leave to appeal to Div. Ct. granted, 2014 ONSC 2361, 43 R.F.L. (7th) 339).

[188] Occupation rent can be claimed following an order for exclusive possession under s. 24(1)(c) of the FLA. The claim can also be brought in equity.

[189] Quinn J. in Higgins v. Higgins, 2001 CanLII 28223 (ON SC), 19 R.F.L. (5th) 300, at paras. 53 and 54 sets out the factors to consider in an award of occupation rent as follows:

(a) the conduct of the non-occupying spouse, including the failure to pay support;

(b) the conduct of the occupying spouse, including the failure to pay support;

(c) delay in making the claim;

(d) the extent to which the non-occupying spouse has been prevented from having access to his or her equity in the home;

(e) whether the non-occupying spouse moved for the sale of the home and, if not, why not;

(f) whether the occupying spouse paid the mortgage and other carrying charges of the home;

(g) whether children resided with the occupying spouse and, if so, whether the non-occupying spouse paid, or was able to pay, child support;

(h) whether the occupying spouse has increased the selling value of the property;

(i) ouster is not required, as once was thought in some early decisions.

Put briefly, it seems to me that the courts are attempting to balance the equities when dealing with a claim for occupation rent. Thus, occupation rent is merely a tool used to achieve justice in the circumstances of each case. [Citations omitted.]

[190] There is no question that the Wife has benefited from her occupation of this condominium for almost two years; the Husband is only advancing an occupation rent claim for one year. The parties agreed that the market value rent for the condominium was $6,750 USD per month. The Husband has paid the carrying costs of the condominium throughout.

[191] The Husband found a purchaser for the condominium and entered into a purchase and sale agreement around the time that this trial commenced. He brought a motion at trial for the sale to be completed; the Wife resisted that motion and I ruled that the closing of the sale was no longer tied to the rendering of my decision in the trial. Based on my finding that the marriage contract is valid in all respects, the Wife has no proprietary or possessory claim to this property.

[192] The Husband is obliged to pay a total of $216,000 (36 months x $6,000) in spousal support to the Wife per the terms of the marriage contract. The spousal support is tax deductible to him and taxable in the hands of the Wife. As of the date of this decision the Husband has paid $168,000 (November 2013- February 2016 = 28 months x $6,000).

[193] The Wife has had the benefit of occupying the condominium the rental payment for which is $6,750 USD/month since February 2015 or 12 months = $81,000 USD. The Husband should be credited for this foregone rent against the remaining spousal support payment of $48,000.

6. Does the court have the authority to order the relief sought by the Husband regarding the Florida condominium?

[194] The Husband seeks an order for permanent exclusive possession with respect to the property solely owned by him in Markham. The Wife did not oppose this relief.

[195] The Husband also seeks an order for exclusive possession of his condominium in Florida. Were the Husband’s condominium located in Ontario and not in Florida, I would not hesitate to make this order. However, for the reasons set out by Healey J. in the Divisional Court ruling on the motion to appeal the trial decision of Potter v. Boston, particularly those at para. 20 of her decision, in my view, I do not have the authority to do this.

VI. Order:

[1] The marriage contract executed by the parties on September 1, 2010 is valid and binding in all respects.

[2] The date of separation of the parties is November 1, 2013.

[3] The order granting the Wife exclusive possession of the Husband’s property at 166 South Ocean Boulevard, Suite 1202, Lauderdale-by-the-Sea, Florida, U.S. is hereby terminated.

[4] The Husband shall have permanent exclusive possession of the property municipally known as 17 Hawkridge Avenue, Markham, Ontario.

[5] The Wife shall cooperate to remove her name from all insurance documents related to the property solely owned by the Husband located at 166 South Ocean Boulevard, Suite 1202, Lauderdale-by-the-Sea, Florida, U.S.

[6] The Husband has fully satisfied his spousal support obligations to the Wife pursuant to the terms of the marriage contract. There shall be no further spousal support payable by the Husband to the Wife.

[7] The Applicant (Husband) has no further obligation to maintain the Respondent (Wife) as beneficiary under his health plan.

[8] Any spousal support that may be paid by the Husband directly or through the Family Responsibility Office after the payment accruing on February 1, 2016 shall be re-paid to the Husband by the Wife.

[9] The parties shall make costs submissions in writing. The Applicant (Husband) shall deliver his costs submissions on or before February 27, 2016. The Respondent (Wife) shall deliver her costs submissions on before March 12, 2016. Any reply submissions by the Applicant (Husband) shall be delivered on or before March 19, 2016. Costs submissions may be e-mailed to my judicial assistant, Karen Hamilton (Karen.hamilton@ontario.ca)

Justice L.E. Fryer

Released: February 5, 2016

• All currencies are CAD unless otherwise stated.