CITATION: M.D. v. A.C., 2017 ONSC 6260
OTTAWA COURT FILE NO.: FC-13-1462
DATE: 2017/10/20
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
M.D.
Applicant
– and –
A.C.
Respondent
Self-represented
David Sinclair, for the Respondent
HEARD: September 22, 23, 26 and 27, 2017
REASONS FOR JUDGMENT
Justice Engelking
[1] This was a trial of the single, narrow issue of the validity or not of the parties’ marriage contract entered into on September 1, 2005. The Applicant husband, Mr. M.D. seeks to have the marriage contract, or portions of it, set aside pursuant to s. 56(4) of the Family Law Act. The Respondent wife, Ms. A.C. seeks to have it declared valid and of full force and effect.[^1] The parties agree that the contract in question is in compliance with the formal requirements of s. 55(1) of the Act in that it was in writing, signed by the parties and witnessed, and that it is, therefore, presumptively valid.
[2] Section 56(4) of the Family Law Act provides that a court may set aside a domestic contract or a provision in it on the basis that: a) a party failed to provide disclosure of significant assets or liabilities at the time the contract was made; b) a party did not understand the nature or consequence of the contract; or c) otherwise in accordance with the law of contracts.
[3] Mr. D. submits that the contract or portions of it should be set aside on the basis that: 1) there was insufficient financial disclosure at the time the contract was made; 2) he had inadequate legal advice; 3) he had a lack of understanding of the contract; and 4) he was under duress and the contract as it stands is unconscionable.
[4] I do not agree with Mr. D. For the reasons which follow, I find that the marriage contract entered into by the parties on September 1, 2005, to be valid in its entirety.
Issues
[5] Case law dictates that there is a two-step approach to applying s. 56(4) of the Family Law Act. The first step is that the party seeking to set aside the contract must demonstrate that one of the listed circumstances within the section has been engaged, and the second, if one of those circumstances is engaged, is that the court must decide whether it is appropriate to exercise its discretion to set aside the agreement or a provision in it. (LeVan v. LeVan, 2008 ONCA 388)
[6] There are thus two main issues in the case:
- Has Mr. D. been able to demonstrate that one of the listed circumstances of s. 56(4) of the Act has been engaged? Subsumed within this issue are the three sub-issues of that section:
(a) Did Ms. C. fail to disclose significant assets or liabilities existing at the time the domestic contract was made?
(b) Did Mr. D. not understand the nature or consequences of the domestic contract?
(c) Should the contract or some provision in it be set aside otherwise in accordance with the law of contract?
- If the answer to first question is yes, should the court exercise its discretion to set aside the agreement or a provision in it?
Background facts
[7] Mr. D. and Ms. C. met in or about December of 1999, and began to cohabitate in December of 2001 when they bought a home together on Manitoba Street in Stouffville, Ontario. At the time of the purchase, Ms. C. contributed $63,000 to the down payment for the home and the parties seem to have agreed that eventually Ms. C. would recoup her $63,000 in addition to receiving her share of the joint property.
[8] Both parties indicated that the first time that they discussed the efficacy of a domestic contract was on their first date. Mr. D. testified that Ms. C. brought up the subject of a “pre-nup”, and while he thought it was odd that she would do so, he indicated to her that he thought it was a good idea. When questioned why in cross-examination, Mr. D. said that it was because he thought it was the right thing to say if he wanted a second date, but also admitted that he thought it was a good idea. Ms. C., on the other hand, testified that Mr. D. was talking about his parents’ divorce and said he wouldn’t let the same thing happen to him. Mr. D. indicated that he would get a “pre-nup” and Ms. C agreed with that. Regardless of who raised the issue, Mr. D. and Ms. C. appeared to generally be on the same page very early on that a pre-nuptial agreement was a good idea.
[9] The next time the matter was discussed was at the time of the purchase of their Manitoba Street home. Ms. C. testified that because they were buying a home and moving in together, they thought that it was a good time to look at getting such an agreement done. She indicated that she wished to protect her future earnings, future inheritance and her RRSP. According to Ms. C., Mr. D. was more concerned about the issue of spousal support because he anticipated that he would be making very good money as an architect.
[10] Ms. C. indicated that they retained the services of the same lawyer who was doing their real estate transaction, Mr. Michael Deverett, whom they had found in the telephone book, to draft a cohabitation agreement for them. Mr. D. testified that he had nothing to do with retaining Mr. Deverett for that purpose.
[11] Ms. C. indicated that she and Mr. D had two meetings with Mr. Deverett, the first in late October or early November of 2001 in anticipation of the house purchase, and the second in December of 2001 when they went in to sign the documents for same. Ms. C. indicated that Mr. D. was present when the request to have the cohabitation agreement drafted was discussed, and that it was both of their idea. Mr. Deverett did indeed do a first draft of a cohabitation agreement in December of 2001 for the couple, which Ms. C. indicated she showed to Mr. D. and then put in a file. It did not get signed at the time as it was Christmas and the parties were moving into their new house.
[12] Mr. Deverett provided a second draft of a cohabitation agreement dated June 3, 2002 (Tab 25, Volume 3 of Exhibit #1), which Ms. C. indicated they also would have reviewed and filed. By that time a significant life event has overtaken them, which was that Mr. D. had been diagnosed with end stage renal failure in March of 2002, and was doing dialysis approximately three times per week. The couple was also not certain they wished to continue with Mr. Deverett’s retainer, and no cohabitation agreement prepared by him was ever signed. Mr. D.’s evidence was that he never saw any draft contract prepared by Mr. Deverett.
[13] Mr. D. had a kidney transplant in December of 2002, and the couple married in December of 2003, by which time Mr. D. was in good health, although he was required to take expensive medications that were covered by Ms. C’s insurance with her employer at the time.
[14] Ms. C. became pregnant with the couple’s first child, William, in March of 2004, and in July of 2004 she retained Ms. Jennifer Jolly in Ottawa to draft a marriage contract. Ms. C. testified that because she and Mr. D. were now married and having a child, they wanted to get their financial affairs in order, by which she meant they wanted to do wills, have powers of attorney for property and persons prepared, and complete the marriage contract. Ms. C.’s mother, Francesca, provided her with the name of firm she and her company, Calfra Management, used in Ottawa, Hamilton Appotive. Ms. C. provided her mother with a copy of the cohabitation agreement Mr. Deverett had drafted because Mrs. Francesca C. offered to send it to Hamilton Appotive. Upon receipt, Mrs. Fancesca C.’s lawyer, Peter Hamilton, referred the matter to Ms. Jolly, a family lawyer with the firm.
[15] In July of 2004, Ms. Jolly sent Ms. C. a draft marriage contract and blank financial statement. According to Ms. C. she reviewed them briefly and discussed them with Mr. D., but then put them in a “pre-nup” file she had created. Ms. C. and Mr. D. were busy with trying to place Mr. D’s father, who had had a series of strokes in the spring of 2004, in care, so they didn’t do much about the contract or financial statement at the time.
[16] The parties had another significant life event in August of 2004 in that Ms. C. went into premature labour, and a hospital bed was unavailable in Toronto. She was airlifted to Ottawa and William was born a few days later, on September 1. William remained in hospital for a couple of months, and during this time Mr. D. and Ms. C. decided to move to Ottawa to be closer to her family. Ms. C. was on maternity leave from her job at Astral Media and Mr. C. was working as an architectural interim with Allen & Sherriff. Mr. D. was able to secure a job with an architectural firm in Ottawa, Crane Architects, in November of 2004. The couple purchased a house together at 3146 Uplands Drive in Ottawa in December of 2004 and put their Manitoba Street house in Stouffville up for sale. During this period, the completion of the marriage contract was put on hold. All of Mr. D. and Ms. C.’s attention was on William, on Mr. D. finding a job in Ottawa and on the purchase of and move into their Ottawa home. Their Stouffville home sold in March of 2005, and the proceeds of the sale were put into the Uplands Drive home.
[17] Ms. C. met with Ms. Jolly for the first time on December 10, 2004. They discussed the draft marriage contract Ms. Jolly had sent in July, and Ms. Jolly advised her that Mr. D. would need to retain his own lawyer to obtain advice on the agreement. Ms. C. indicated that she didn’t think the completion of a financial statement was necessary because Mr. Deverett had advised her that they could just attach the statements of their assets and liabilities to the document. She thus provided Ms. Jolly with a number of statements outlining both her and Mr. D’s assets at the time. Subsequent to their meeting, Ms. Jolly provided Ms. C. with a revised draft of the contract and reiterated her advice that Mr. D. would have to obtain his own lawyer for independent legal advice.
[18] Ms. C. indicated that she would have spoken to Mr. D. about this, shown him a copy of the revised draft of the marriage contract and filed it. Ms. C. clearly recalled telling Mr. D. that he would need to get his own lawyer, which he subsequently did in the spring of 2005. Mr. D. retained Ms. Deanne Fowler and met with her for the first time April 14, 2005. Mr. D. met with Ms. Fowler two more times, on May 3, 2005, and again on September 1, 2005, when the marriage contract was signed, though he only recalled two meetings with her, the April 14 and September 1, 2005 meetings.
The Marriage Contract dated September 1, 2005
[19] The Marriage Contract was signed by Ms. C. on August 25, 2005 in the presence of Ms. Jolly, and by Mr. D. on September 1, 2005 in the presence of Ms. Fowler. Paragraph 4 of the contract acknowledges that it is entered into pursuant to s. 52 of the Family Law Act. In the contract, the parties agreed, inter alia, to the following:
• In the event of a sale of the matrimonial home, Ms. C. would be entitled to repayment of the $63,000 she originally invested in 126 Manitoba Street and 50 percent of any additional net proceeds from the sale (paragraph 5);
• The legal and beneficial ownership of property held in Ms. C’s name would belong to her exclusively, and any legal and beneficial ownership held in Mr. D.’s name would belong to him exclusively (paragraph 6);
• Each party waived all rights under the Family Law Act to equalization (paragraph 7);
• Each could deal with his or her own property as they pleased (paragraph 8);
• Each party waived any right to spousal support (paragraph 10).
[20] In regards to spousal support, Paragraph 10(b) of the agreement provided:
This Agreement has been negotiated in an unimpeachable fashion and fully represents the intentions and expectations of the parties. Both parties have had independent legal advice and all the disclosure they have asked for and need in order to understand the nature and consequences of this Agreement and to come to the conclusion, as they do, that the terms of this Agreement, including the release of all spousal support rights, constitutes an equitable sharing of both the economic consequences of their relationship and its breakdown.”
[21] The contract also stipulated at Paragraph 16 that each party participated in the preparation of the contract, along with their respective lawyers and that they should be construed at its joint authors.
[22] With respect to financial disclosure, in addition to what was expressed in Paragraph 10(b), Paragraph 18 provided that each party acknowledges that he or she:
(a) Has disclosed to the other her or his significant income, assets, debts or other liabilities exiting when this Agreement was made. Attached as Schedule “A” to this Agreement is Angela’s sworn Financial Statement dated August 25, 2005 and attached as Schedule “B” is Michael’s Financial Statement dated September 1st, 2005.
(b) Has had such investigation of the financial circumstances of the other as he or she considers reasonable and is satisfied with the information furnished and disclosure made.
[23] Paragraph 19 of the Agreement is in relation to the Independent Legal Advice obtained by the parties and provides as follows:
Angelina and Michael each acknowledge that she or he have obtained or have had the opportunity to obtain independent legal advice before signing this Agreement;
(a) Angelina and Michael acknowledge that Hamilton/Appotive LLP are the solicitors for Angelina only and have not advised Michael with respect to this Agreement;
(b) the parties acknowledge that:
(i.) each of them understands his or her rights and obligations under this Agreement and the nature and consequences of the Agreement;
(ii.) each of them is signing this Agreement voluntarily;
(iii.) the terms of the Agreement are fair and reasonable;
(iv.) each of them is entering into this Agreement without undue influence, fraud or coercion whatsoever.
[24] Ms. Jolly executed a Certificate and Affidavit of Solicitor for Ms. C. which is at page 11 of the Agreement and Ms. Fowler executed a Certificate and Affidavit of Solicitor for Mr. D. which is at page 12 of the Agreement, in which they each swore that their respective client was “fully aware of the nature and effect of the domestic contract and is signing it voluntarily.”
Issue #1(a) - Did Ms. C. fail to disclose significant assets or liabilities existing at the time the domestic contract was made?
[25] Mr. D. alleges that Ms. C. failed to provide adequate financial disclosure in that 1) the parties did not exchange income information in their financial statements sworn at the time the contract was made, and more significantly, 2) Ms. C. did not disclose in her sworn financial statement or accompanying information regarding her assets and debts the existence of a family trust of which she was a beneficiary.
[26] Mr. D. appeared to take issue with the fact that the financial statements that the parties swore at the time of the contract, Ms. C. on August 25, 2005 and he on September 1, 2005, were only completed from Part 7 onwards. This is despite the fact that he agreed with Ms. C. that it would not be necessary to provide income information in their respective financial statements, notwithstanding the advice of his own lawyer, because that information was redundant and unnecessary.
[27] Mr. D. first met with Ms. Fowler on April 14, 2005. Following that meeting, Ms. Fowler wrote Mr. D. a reporting letter dated April 25, 2005 (Tab 31, Volume 4 Exhibit 1). In it, Ms. Fowler stated the following:
• Upon my recent review of the draft Marriage Agreement, it is my advice to you that sworn financial statements be completed with supporting documentation. (page 1, paragraph 1)
• Without the exchange of financial statements, I am not in a position to advise you as to any potential spousal support claim arising in the future. I also confirm that the Family Law Act allows for agreements to [be] set aide, if no financial statements are provided, although the mutual waiver of same could prevent either party from attempting to do so. (page 1, paragraph 2)
• To waive financial disclosure, you would be signing the agreement at substantial risk to you and without the benefit of the following, which do affect your legal rights and interests: listing assets and liabilities of each party as at date of marriage; financial Statements, listing assets, liabilities, income, debts and the like, of each party. (page 1, paragraph 4)
• However, if your wife did not provide you with full financial disclosure on your consent, you may not be able to claim lack of financial disclosure to set aside the separation agreement in the future if you so wish to do so. (page 2, paragraph 2, emphasis original)
• Therefore, you are accepting the settlement proposal at substantial risk to you and without the benefit of full financial disclosure. We would advise that complete financial disclosure be made prior to the signing of any marriage agreement. (page 3, paragraph 1)
[28] Mr. D. testified that he did not receive or see this letter until after the file of Ms. Fowler was disclosed to his former lawyer in these proceedings, Mr. James Jeffcott, in February of 2016. He appeared to suggest that it was intercepted and kept from him by Ms. C. in 2005. However, this contention of Mr. D.’s completely lacks credibility, firstly because he was unable to point to any evidence to support it, or indeed to any motivation Ms. C. would possibly have to do so, and secondly because Ms. Fowler met with Mr. D. again on May 3, 2005, at which meeting she testified she went over the contents of her April 25, 2005 letter with Mr. D. Thirdly, in an email dated August 25, 2005 to Ms. Fowler from Mr. D. at 10:13 pm, he states in the second paragraph: “I have taken into account your advice as per your letter dated April 25, 2005 and feel satisfied with the signed marriage contract in those regards.” (page 1, Tab 36, Volume 4, Exhibit 1)
[29] Ms. C. testified, moreover, that she created a “prenup” file in which everything having to do with the production of the marriage contract was kept in the parties’ joint office in their home. Mr. D. had access to anything in it. Indeed, it appears that Ms. C. gave the file to Mr. D. prior to his first meeting with Ms. Fowler, because the latter had copies of correspondence between Ms. Jolly and Ms. C in her file when it was disclosed. The only way Ms. Fowler would have had those is if Mr. D. gave them to her. In any event, Ms. C. testified that the April 25, 2005 letter from Ms. Fowler would have also gone into the file after Mr. D. reviewed it, and he could have had access to it anytime he wished. I accept Ms. C.’s testimony in this regard, and conclude that Mr. D. was aware of the contents of Ms. Fowler’s April 25, 2005 letter from at least May 3, 2005 onwards, if not earlier.
[30] Ms. Fowler wrote to Mr. D. again on May 6, 2005, in which letter she stated the following at paragraph 2;
I advised you that I would contact Ms. Jolly to advise of my retainer and request that full financial disclosure be provided before any further discussions with respect to the Marriage Agreement. You advised that you would prefer to speak with Ms. [C.] yourself and have her contact her own lawyer directly.
[31] On August 18, 2005 at 10:19 pm, Mr. D. wrote an email to Ms. Fowler in which he indicated that he and Ms. C agreed to follow Ms. Jolly’s advice to the skip to Part 7 of the financial statement (p. 3 of Tab 36, Volume 4, Exhibit 1). In that email, Mr. D. advised Ms. Fowler that his draft financial statement would be sent to her the following day. Ms. Fowler responded to that message, stating: “Your current incomes should be included in the marriage contract.”
[32] On August 19, 2005, Mr. D.’s draft financial statement, which did not contain income information, was indeed faxed to Ms. Fowler at 4:12 pm from “Clafra Mgnt”. Notwithstanding that this was exactly what Mr. D. said he would be doing in his email the previous day, and that it contained entries regarding debts and liabilities in his own handwriting, Mr. D. seemed to think he did not send it.
[33] Indeed, Mr. D. maintained a vague conspiracy theory throughout the trial that consisted of Ms. C. intercepting his mail and keeping it from him, writing emails from his account in his name, or surreptitiously faxing things in his name from “Calfra Mgnt”. Mr. D. inevitably did not recall seeing things addressed to him, did not accept that emails written on his account to his own lawyer were written by him, and denied faxing anything to anyone, especially from a “Calfra Mgnt” fax number. Calfra Management is a company owned by Ms. C.’s mother, Francesca, and so Mr. D. included Mrs. Francesca C. in the conspiracy.
[34] Ms. C. testified, on the other hand, that her mother had given them an old company fax machine that they used from home, and it still had the “Calfra Mgnt” signage at the top. She indicated that either Mr. D. would have faxed things to his lawyer’s office or asked her to do it for him. She also testified that she never knew Mr. D.’s password to his email account, and she never sent an email in his name from his account. Again, I accept the evidence of Ms. C. in this regard, for the simple reason that Mr. D.’s version does not make any sense. First, according to both, their relationship was very good at the time the marriage contract was entered into. They had William, were expecting their second child and were in love. Second, Mr. D. stated many, many times in his testimony that he trusted Ms. C. and that she was really good at managing their financial affairs. Third, he also stated many times in both examination-in-chief and in cross-examination that he was happy with the contents of the marriage contract and he wanted to sign it, even before or without a lawyer. It is completely inconsistent that Ms. C. would be intercepting his mail, writing emails in his name or faxing things to his lawyer pretending to be him in these circumstances.
[35] As I have indicated above, the parties did exchange sworn financial statement that did not contain information with respect to their current incomes. They nevertheless signed the marriage contract. On September 6, 2005, Ms. Fowler wrote a closing letter to Mr. D. in which she stated:
Further to our last meeting, this will confirm my advice previously provided to you in correspondence dated August 25, 2005. In this correspondence and our last meeting I advised you with respect to Contracts and the circumstances in which a contract may be overturned. I further advised you of the importance of full financial disclosure as well as the potential risk of waiving spousal support as you did in this agreement. With this, you accepted the marriage contract as proposed, despite our advice and at potential risk to yourself.
[36] Mr. D.’s position that the omission of income information in the financial statements affects the validity of the contract based on inadequate financial disclosure is a non-starter. As outlined above, Mr. D. agreed to this omission, even in the face of his counsel’s consistent advice to the contrary. Additionally, nothing turns on it in any event, as the evidence makes it clear that Mr. D. was, or ought to have been, very well aware of Ms. C’s income throughout their relationship, including at the time the contract was entered into.
[37] The evidence of both Ms. C. and Mr. D revealed that when the parties began to cohabitate in December of 2001, they opened a joint bank account into which they deposited their paychecks and out of which they paid household expenses. Ms. C. was then working with Astral Media and Mr. D. was working at Allen & Sheriff. This practice continued after Ms. C. went on maternity leave for William and after Mr. D. went to work for Crane Architects. A copy of the parties joint Scotiabank statement for June of 2005 show deposits of $3009.66 on June 1 and June 30, being Mr. D’s pay, and deposits of $710 from “EI Canada” on June 7 and June 21, being Ms. C.’s maternity leave income.
[38] The parties also discussed their finances prior to purchasing their Manitoba Street home together and they jointly applied for a mortgage with Mortgage Intelligence on November 14, 2001 (Tab 93, Volume 5, Exhibit 1). On that statement, which Mr. D. signed on the same date as Ms. C, her annual income is listed as $41,000 and his annual income is listed as $35,000. Ms. C. incidentally also listed her assets as $2000 in the bank and $190,000 in other assets.
[39] The parties additionally did their income taxes together, or more accurately had their income taxes done together by their accountants at Logan Katz. Ms. C. testified that they gathered the necessary materials together to submit to their accountants. Mr. D. testified that Ms. C. gathered everything required for the completion of their income tax returns, and he simply signed or authorized Logan Katz to electronically submit the returns. Nevertheless, each had access to the other’s Income Tax Return for any given year, and each listed the other’s income in the appropriate spot on their own return. On Mr. D.’s T1 General for 2004, Ms. C.’s income is listed at $50,725.95 on page 1. In his 2005 T1, Ms. C.’s income is listed at $29,485.75. These returns were submitted by Mr. D. or by someone on his behalf to whom he would have had to provide authorization.
[40] Ms. C. additionally described that all of their documents pertaining to bank statements, bill payments, income taxes, wills, powers of attorney and general household management were kept in unlocked cabinets in an unlocked office in their home to which both she and Mr. D. had access. Although Mr. D. tried to suggest that he was somehow kept from these documents (by locks or otherwise) he admitted in cross-examination that he had the opportunity to review any of the above if he wanted to, although he rarely, if ever, took advantage of it. As I have already indicated, Mr. D. trusted Ms. C. to take care of the family’s finances.
[41] Mr. D.’s opposition to the validity of the marriage contract on this basis fails, as it also must on his second ground that Ms. C. failed to disclose a significant asset at the time of the making of the contract, namely the C. Family Trust.
[42] Ms. C. swore her financial statement in the presence of Ms. Jolly on August 25, 2005. She did not list the family trust on her statement for the simple reason that she did not know of its existence in 2005. Ms. C. testified, in fact, that she did not know of the existence of the C. Family Trust until sometime after she received her first distribution from it in December of 2008. She recalled receiving a “big” cheque ($10,000 or $15,000) in a Christmas card from her mother in the presence of Mr. D, the children, her mother and her mother’s husband. Ms. C. continued to received distributions in the following years, all of which were reported on her income tax returns for 2008, 2009, 2010, and 2011, until the trust was terminated in 2012.
[43] Mrs. Francesca C. testified that she and her late husband (who died in 1995) created the trust, which consisted of 100 common, non-voting shares of Calfra Management, in 1992 on the advice of their accountants and corporate lawyer. The Trust Deed is dated December 7, 1992. (Tab 80, Volume 5, Exhibit 1). According to definition 1. (a), ““Beneficiaries” means the children of Clogero [C.] and Francesca [C.] who are alive at the date of this Deed or who shall be born before the Distribution Date and the persons who at the time when such definition is relevant are the lawfully wedded spouses of such children.” The Distribution Date was the 20th anniversary of the date of execution of the deed. Pursuant to paragraph 2, the Trustees had an unfettered discretion to distribute income or capital “for the benefit of such one or more, to the exclusion of any other or others, of the Beneficiaries” as they pleased prior to the Distribution Date. Paragraph 3 provided that: “Upon the Distribution Date, the Trustees shall distribute the Trust Fund to such one or more, to the exclusion of any other or others, of the beneficiaries, and if more than one in such shares or proportions, as the Trustees in their unfettered discretion shall determine advisable or expedient.”
[44] Mrs. Francesca C. testified after the Trust Deed was created, it was placed in a drawer and forgotten about. She indicated that she did not tell any of her three children, Ms. C., her sister Julia or her brother Carmen, about the trust because she did not want them to be reliant upon it. She wanted them to make their own way in the world. Mrs. Francesca C. testified that in or about 2008 her company was doing well and she decided that she wanted to provide her children with some funds. When she consulted with her accountants regarding her stated intentions, Mrs. Francesca C. was reminded of the Trust Deed and advised that it was an appropriate way to distribute some income to her children. She thus took their advice and used the Trust Fund as a vehicle to provide all three children with monetary benefits commencing in December of 2008. When asked about the definition of beneficiaries, Mrs. Francesca C. indicated that she did not even realize that the definition included spouses, but in any event, she wanted to give money to her children, which, of course, was in her unfettered discretion to do according to the terms of the trust.
[45] Ms. C.’s sister, Julia, also testified, and she similarly did not know about the existence of the family trust until sometime after the first disbursement of funds in December of 2008.
[46] Mr. David Logan, a Chartered Professional Accountant with Logan Katz, testified that the first distribution from the trust occurred in 2008 and that prior to 2008 there were no financial statements or Income Tax Returns prepared for the trust account. Subsequent to 2008, tax returns were consistently prepared until the trust was collapsed in 2012. At the collapse of the trust, the 100 common shares were distributed equally to the three C. children.
[47] Mr. Jason Valente, another CPA from Logan Katz, also testified. He indicated that he became involved in 2008 to assist with tax planning and tax filing as a result of the distributions Mrs. Francesca C. had decided to make. Mr. Valente testified that Ms. C. had no involvement in the trust, other than receiving distributions from 2008 to 2011 and one third of the shares in 2012. He also testified that he remembered a meeting in June of 2009, at which Mr. D. was present, wherein the trust was described and discussed.
[48] Although Mr. D. attempted to suggest that the trust was known to Ms. C. and hidden from him, the evidence does not support this suggestion. Indeed, all of the evidence pointed to fact that Ms. C. did not have any knowledge of the C. Family Trust until shortly after she received the first disbursement in December of 2008.
[49] Additionally, if Ms. C. failed to disclose any interest she may have had in the trust in 2005, so too did Mr. D. I find that neither Ms. C. nor Mr. D. knew of the existence of the trust in 2005, nor of the fact that they were each potential beneficiaries to it. According to the terms of the trust, moreover, Ms. C. may have never received anything from it. Ms. C. cannot on these facts be found to have failed to disclose an asset to Mr. D. at the time the domestic contract was made.
[50] Mr. D. agreed that all of the other assets listed for Ms. C. were accurate as of June 30, 2005, according to the statements provided. The only other asset of Ms. C.’s which Mr. D. questioned at trial as being absent from her financial statement was the value of her jewellery in 2005. Ms. C. testified that she has no idea of the value of it, and that some was purchased by her and some was gifted to her. Ms. Jolly testified that unless there is a value to jewelry not gifted by a spouse which can turn into money, she does not typically advise a client to list it all. In any event, it does not seem to have been an issue in 2005, as Mr. D. neither made any inquiries about it nor asked his counsel to do so.
[51] In addition to Mr. D. knowing, or having the opportunity to know, Ms. C’s income, and to Ms. C. having listed all the assets of which she was aware in her financial statement (but for her jewellery), the Marriage Contract itself contained the provisions set out in paragraphs 20 and 22 above regarding financial disclosure. Mr. D. admitted in cross-examination that he had the opportunity to investigate the value of any asset listed or omitted, and that he chose not to do so. Indeed, he had no questions about the marriage contract or financial disclosure, for either Ms. Fowler or Ms. C.
[52] I find that Mr. D. has not been successful in engaging s.56(4)(a), and his assertion that the marriage contract must be set aside for failure to disclose significant assets when the domestic contract was made fails.
Issue #1(b) - Did Mr. D. not understand the nature or consequences of the domestic contract?
[53] Mr. D. submits variously that he didn’t understand the contract, that he had inadequate legal advice or that he signed the contract under duress.
[54] It was actually quite hard to follow Mr. D.’s logic with respect to the claims that he did not understand the contract, or that he received inadequate legal advice. Mr. D. stated many times during his evidence that he was satisfied with the terms of the draft agreement, that he did not have any questions for his lawyer, or through his lawyer for Ms. C.’s lawyer, and that he did not have any suggested or requested changes for the draft. Mr. D. indicated that he was prepared to sign the draft agreement without consulting a lawyer, but that it was Ms. C. who told him he had to get a lawyer. Mr. D. stated this in a way that suggested he thought Ms. C. was intentionally pre-emptively thwarting any chance he had at undoing the agreement. In fact, Ms. C. was following the advice of her own lawyer by telling him that he would need independent legal advice.
Understanding of the contract
[55] With respect to Mr. D.’s capacity to understand the agreement, he is a university-educated professional who runs his own architecture business. He graduated from Carleton University in 2000 with a Bachelor of Architecture. As part of program, Mr. D. was required to take a course in construction law. After graduation, he became an intern architect with the firm of Allen & Sheriff, in which position he was required to do precise drawings and know building codes. After he became employed by Crane Architects and moved to Ottawa, Mr. D. was responsible for doing more advanced tasks like managing tenders and dealing with specifications. Mr. D. was with Crane Architects at the time of the creation of the marriage contract and was earning approximately $50,000 per year. He later worked with a Jacques Witford where he did facility assessments and evaluated sustainable buildings. As I have elsewhere indicated, Mr. D. now has his own business, Echo 3 Group, which offers interior space planning, survey leasing and drafting services for clients who are primarily real estate companies. Mr. D. is, thus, not a particularly unsophisticated or vulnerable individual.
[56] In March of 2002, Mr. D. was diagnosed with end stage renal failure, and he required dialysis approximately three times per week. In December of 2002, Mr. D. was able to have a kidney transplant because his brother donated a kidney to him. Mr. D was off work for about a month, but then returned to work fulltime by the end of January 2003. He has since been required to take anti-rejection medication, which is relatively expensive. When Ms. C. was working at Astral Media, her insurance covered the cost of Mr. D.’s medication. Subsequently, Mr. D. was able to get some coverage from the Trillium Foundation. Mr. D.’s health was good at the time of the couples’ marriage in December of 2003, and remained good in 2004 and 2005. It does not appear to have been a factor in terms of Mr. D.’s ability to understand the marriage agreement. As Mr. D. stated in his testimony: “With full knowledge of my chronic disease and its cost, we got married”. So too, with full knowledge of his chronic disease and its costs, did he enter into the contract.
[57] Mr. D. agreed in cross-examination that he had reviewed the draft marriage contract thoroughly, “word for word”, prior to meeting with Ms. Fowler for the first time. He was satisfied with the terms and agreeable to entering into it.
[58] Mr. D. also agreed in cross-examination that he was aware that Ms. C. was likely to come into a significant inheritance at some point, and that she was trying to protect it with the marriage contract. This is consistent with the evidence that Mr. D. gave at questioning on September 16, 2016 wherein he responded to question 950 on page 174 of Tab 3B of Volume 3 of the Trial Record as follows:
- Q. And prior to the signing of the marriage contract, let’s just deal with the 2005 time period; did you think that Angelina might one day inherit a significant sum from her family?
A. I suspected it.
[59] Mr. D. also testified that he met with the accountants at Logan Katz, who were also the accountants for his business, from time to time, though he indicated he did so in the presence of Ms. C. As I have indicated above, Mr. Valente clearly recalled Mr. D. being present at a meeting in June of 2009 at which the C. Family Trust was discussed. Although Mr. D. never met privately with his accountants, he agreed with Ms. C.’s counsel in cross-examination that he could have requested to do so at any time.
[60] According to his financial statement sworn on September 1, 2005, Mr. D. had a net worth of $69,732. As I have indicated above, he was making approximated $50,000 per annum working with an architectural firm at that time. Mr. D. appears to have been an individual who was capable of understanding the contract into which he was entering. I have no evidentiary basis upon which to find that he was not.
Inadequate Legal Advice
[61] As was indicated above, Mr. D. first met with Ms. Fowler on April 14, 2005. Ms. Fowler testified that she was retained to review a draft marriage contract and provide Mr. D. with advice with respect to same. She indicated that Mr. D. provided her with a draft of the marriage contract (Tab 42, Volume 4, Exhibit 1), as well as three letters from Ms. Jolly to Ms. C. dated July 21, 2004, November 17, 2004 and December 13, 2004 (Tabs 27, 28 and 29, Volume 4, Exhibit 1 respectively).
[62] Ms. Fowler indicated that at their April 14, 2005 meeting she and Mr. D. discussed his date of marriage, that he had one child, that he had recently moved to and purchased a home in Ottawa, that he was an intern architect, that he had kidney disease and that his wife’s employment insurance covered the costs of his medication. They also discussed that he had a good relationship with his wife, and that she wanted to do a contract to protect an inheritance she was potentially going to receive from her family.
[63] Ms. Fowler indicated that they discussed spousal support and when it is typically ordered, and stated that Mr. D. was very clear that he had no interest in spousal support from Ms. C. and would not be pursuing such a claim. According to Ms. Fowler, she also did a general overview of property rights, including a typical division of net family property and the state of the law in this regard. Ms. Fowler talked to Mr. D. about the importance of full financial disclosure because none was provided with the initial draft of the agreement.
[64] Ms. Fowler’s advice was that there should be full financial disclosure including income, debts and assets exchanged. She indicated that notwithstanding what she was telling Mr. D., he stated that he was quite content with entering into the marriage contract.
[65] Subsequent to that meeting, Ms. Fowler wrote Mr. D. the reporting letter dated April 25, 2005 referred to in paragraph 26 above. The contents of Ms. Fowler’s letter are consistent with her testimony as to what was discussed at the April 14, 2005 meeting.
[66] Ms. Fowler again met with Mr. D. on May 3, 2005, at which meeting she indicated she reviewed the contents of her April 25, 2005 letter with him. While she did not recall whether she had the actual letter in front of her, she presumed she would have. She did not recall any surprize being expressed by Mr. D. about the letter, nor did he ever indicate to her that he had not received her letter of that date. In any event, Ms. Fowler reiterated to Mr. D. the importance of receiving full financial disclosure. Ms. Fowler stated that Mr. D. was still not interested in spousal support, but that he did agree to prepare a financial statement. Mr. D. told Ms. Fowler that he did not want her talking to Ms. Jolly, but that he would talk to Ms. C. directly about preparing financial statements. Mr. D. did not express any concern to her during this meeting about his own knowledge of Ms. C’s financial situation or about any pressure he was under to sign a marriage contract.
[67] On May 6, 2005, Ms. Fowler wrote again to Mr. D. confirming the importance of obtaining financial disclosure as well as her instructions regarding contact with Ms. Jolly. Although Mr. D. did not recall meeting with Ms. Fowler on May 3, 2005, in his testimony he did confirm the instructions she had not to talk directly to Ms. Jolly.
[68] When asked about these instructions by Ms. C.’s counsel, Mr. D. stated that he did not know how they were affording legal advice, and he felt that it would cost more to have Ms. Fowler in contact with Ms. Jolly when he could discuss matters directly with Ms. C. Mr. D. attempted, in fact, to demonstrate that he was under financial duress during the contract negotiations, however, this was not borne out by the evidence. First, the parties had a combined income in 2005 of approximately $94,000, and had made combined RRSP contributions of approximately $25,000 that year. Second, they had no major debt at the time. Third, the Manitoba Street house in Stouffville, which they had been carrying for several months in the late fall of 2004 and early winter of 2005, sold in March of 2005 and the proceeds were placed directly into their Uplands Drive home. While it is true that Mr. D. may not have been wanting to spend the family’s money on legal advice, I cannot find that he was under financial duress at the time. In any event, Mr. D. did discuss matters directly with Ms. C. and they decided that they would provide financial statements, but that on the advice of Ms. Jolly, provided to Ms. C., they would fill out the statements commencing at Part 7.
[69] When next Mr. D. communicated with Ms. Fowler, he advised her of this decision as per the August 18, 2005 email referred to in paragraph 30 above. Ms. Fowler, of course, responded to that email suggesting that current incomes, as well as debts and liabilities as of the date of marriage (or some other agreed upon date) should be included. On August 19, 2005, Mr. D.’s draft financial statement was sent to Ms. Fowler’s office (Tab 34, Volume 4, Exhibit 1) by facsimile transmission. Ms. Fowler did not notice nor did it cause her any concern that it was faxed from a “Calfra Mgnt” machine. Ms. Fowler had the information contained in the draft typed into a final version of a financial statement for Mr. D. to review when next they met.
[70] On August 29, 2005, Mr. D., or someone on his behalf, sent a 24 page fax, again from the “Calfr Mgnt” machine, to Ms. Fowler’s office which consisted of a copy of the Marriage Contract executed by Ms. C. in the presence of Ms. Jolly on August 25, 2005, a copy of Ms. C.’s financial statement sworn before Ms. Jolly on August 25, 2005, and a handwritten note from Mr. D. authorizing Plant, Quinn, Thiele (Ms. Fowler’s firm) to charge $500 to his Visa account. Ms. Fowler noted that there did not appear to be any changes in the marriage agreement from the draft she had reviewed with Mr. D. and there was still no income information in Ms. C.’s financial statement.
[71] Ms. Fowler then met with Mr. D. on September 1, 2005. They went through Ms. C.’s financial statement as well as Mr. D.’s draft financial statement. They discussed if anything was missing from the statements. Mr. D. confirmed that his statement was correct and swore it in front of Ms. Fowler. Ms. Fowler indicated that she discussed with Mr. D. that the income information was still missing from Ms. C.’s financial statement, and as a result she could not give him advice on spousal support. She advised Mr. D. that the risk that she had originally advised him about in April of 2005 remained. With respect to Ms. C.’s financial statement, Mr. D. indicated to Ms. Fowler that it appeared to represent her financial picture as he knew it. He did not wish to pursue obtaining any supporting documentation in regards to same.
[72] With respect to his own financial statement, Ms. Fowler stated that she did not have any concerns because although she had no documentation to confirm it, Mr. D. was swearing it to be true.
[73] Ms. Fowler stated that she reviewed the marriage contract in general terms, for example by explaining that paragraph 7 of the agreement meant that the parties would be separate as to property; “what’s hers is hers and what’s his is his.” Ms. Fowler indicated that she explained that there could be no claim against the other’s property, and that the only items that would ever be divided would be those jointly owned. Ms. Fowler stated that Mr. D. was okay with that and that he was not interested in anything of his wife’s.
[74] With respect to paragraph 10 of the agreement and the issue of spousal support, Ms. Fowler indicated that she spoke specifically to Mr. D. about his health concerns. She stated she did so because this agreement provided that there could never be a claim for spousal support no matter the situation. Ms. Fowler stated that she discussed the issue of spousal support in a general sense as she could not provide Mr. D. specific advice absent income information of the parties. Ms. Fowler indicated that, again, Mr. D. was not interested in spousal support. Ms. Fowler indicated that she and Mr. D. seemed to have the same conversation at each meeting, including about how difficult it is to change or set aside a domestic contract.
[75] Ms. Fowler stated that Mr. D. informed her of Ms. C.’s potential to receive a substantial inheritance, and that she explained to him the principle of exclusion from net family property of gifts or inheritances in any event.
[76] Ms. Fowler testified that Mr. D. appreciated what she had told him. She indicated that he never requested any changes to the agreement or that she request more financial disclosure from Ms. C. or her counsel. Mr. D. swore his Financial Statement and signed the agreement, and Ms. Fowler executed a Certificate and Affidavit of Solicitor which is at page 12 of the agreement. In paragraph 2 of the affidavit, she indicated that she believed that Mr. D. was “fully aware of the nature and effect of the domestic contract” and that he was signing it voluntarily. Ms. Fowler did not recall having any concerns that Mr. D. was under any pressure from Ms. C. or her family members to sign the contract.
[77] Ms. Fowler sent the closing letter dated September 6, 2005 referred to in paragraph 35 above to Mr. D. in which she wrote: “In this correspondence [her April 25, 2005 letter] and our last meeting, I advised you that you are signing this agreement at potential detriment to yourself.” (Emphasis added). Ms. Fowler appears to have taken great care to advise Mr. D. on the issues of spousal support and the division of matrimonial property, as well as with respect to the risk he was placing himself in by signing the agreement as proposed. Mr. D. stated in cross-examination that he did not recall Ms. Fowler telling him about the risk of waiving his right to spousal support; all he recalled was Ms. Fowler telling him that there was a risk to signing the agreement, but that she did not tell him not to sign it. Notwithstanding that Ms. Fowler advised Mr. D. both in writing and in person, that he was putting himself at risk, he signed the agreement.
[78] I find, based on the evidence before me, that Mr. D. received adequate legal advice to assist him in understanding the contract in which he was about to enter.
[79] As a result, I find that Mr. D. has not been successful in engaging s.56(4)(b), and his assertion that the marriage contract must be set aside due to his failure to understand the nature or consequences of the contract fails.
Issue #1(c) - Should the contract or some provision in it be set aside otherwise in accordance with the law of contract?
[80] As Justice Blishen stated in paragraph 62 of Toscano v. Toscano, 2015 ONSC 487, 2015 CarswellOnt 836: “At common law, a domestic contract, like other contracts, can be set aside for: unconscionability, undue influence, mistake, repudiation, duress and misrepresentation.” Mr. D. has claimed that this marriage contract should be set aside on the basis variously that it he was under duress or unduly influenced at the time of its making, or because it is unconscionable.
Duress
[81] Although it was Mr. D.’s position that he was under duress at the time the contract was created and signed, none of the evidence led before me supported that position. I have already dealt with the issue of financial duress in paragraph 68 above. I find that the parties were not under any duress financially in the spring/summer of 2005.
[82] With respect to duress overall, Blishen, J. found in paragraph 72 of Toscano, that:
Duress involves 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), 1991 CanLII 7061 (ON CA), 81 D.L.R. (4th) 194 (Ont. C.A.) at para.22). Equity recognizes a wider concept of duress including coercion, intimidation or the application of illegitimate pressure.
[83] Mr. D. perceived himself (at least retrospectively) to be under great pressure to enter into a marriage contract as a result of the importance Ms. C.’s family placed on same. He believed that his sister-in-law was somewhat ostracized by the family for either her refusal or delay in signing her own marriage contract. The extent of his evidence in this regard appeared to be centered on how the other family members, Ms. C. included, talked about the sister-in-law. My understanding of Mr. D.’s evidence was that he did not wish to be subject to the same treatment. However, Mr. D. neither provided examples of this treatment/ostracization nor did he call the sister-in-law to testify about her own experience. Rather, he seemed to rely upon his own perception of the family dynamics, which perceptions, even if accepted at face value, were nowhere near meeting the threshold set out in Toscano above.
[84] Ms. C. testified that she and Mr. D. were simply trying to put their financial house in order. At the same time that they were entering into the marriage contract, they completed powers of attorney for the person and for property that, incidentally, named each as the other’s attorney. They also completed wills. For her, the marriage contract was just one more piece of the estate planning/financial planning puzzle that needed to be completed. While Ms. C. did speak with Mr. D. about the marriage contract and what was required to get it completed, she indicated, and he admitted, that she did not tell him that he must do it, or speak to him of any consequences he would suffer if he did not do it.
[85] Mrs. Francesca C. testified to the fact that she spoke to all of her children all of their lives about having wills, powers of attorney and domestic contracts. To her too, it was part and parcel of good financial/estate planning. However, she indicated that she had never told her children they must have marriage or cohabitation contracts, nor that there would be consequences to them if they didn’t. Mrs. Francesca C. testified, and Mr. D. admitted, that she had never spoken to Mr. D. on the topic.
[86] Ms. Julia C. also testified, and Mr. D. admitted, that she had never had a conversation with Mr. D. on the topic of a marriage contract.
[87] Mr. D. also alleged that Ms. C. was looking to become employed by her mother’s company, and that the signing of the marriage contract was a possible pre-requisite to an offer of employment. However, Ms. C. testified, as did her mother, that she did not go and work for her mother’s company until sometime in or about 2007, and then it was only part-time or project based until the children became much older. In September of 2005, Ms. C. was six months pregnant with the couple’s second child, Lucas, and had one-year-old William. She was a stay-at-home mother who was not looking for employment at the time. Mr. D.’s vague theory that the existence of a signed marriage contract was linked to Ms. C.’s future prospects with Calfra Management was entirely without foundation.
[88] Finally, there also was no particular pressure regarding time being asserted upon Mr. D. According to both of their evidence, the parties first talked about a domestic contract on their first date. They began to actively take steps towards this goal in December of 2001. Although life events intervened between December of 2001 and the spring of 2005, they maintained the objective. From the correspondence reviewed, no one was requiring Mr. D. to anything within a certain timeframe. Indeed, he did not retain a lawyer to assist him until four months after Ms. C. advised him it would be necessary. He did not provide Ms. Fowler with a draft financial statement or instructions to proceed until three months after she inquired about them.
[89] Based on all of the above, I find that Mr. D. was under no duress from Ms. C. or her family at the time of the making of the contract.
Undue Influence
[90] Blishen, J. provided in paragraph 69 of Toscano:
In considering undue influence, the court must inquire into whether there was: (i) an improvident bargain, and (ii) if so, whether there was inequity in bargaining power (see Hyldtoft v. Hyldtoft (1991), 1991 CanLII 12868 (ON SC), 33 R. F. L. (3d) 99 (Ont. Gen. Div.) at paras. 26-28). 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 (Ont. S.C.J.) at para. 29).
[91] In retrospect, there is an improvident bargain. However, at the time the contract was entered into, Mr. D. was, in fact, in a superior bargaining position over Ms. C., at least with respect to the issue of spousal support. He was employed, making approximately $50,000 per year as an intern architect, and his future prospects to work in architecture appeared to be very good. Ms. C., on the other hand, had resigned from her position with Astral Media at the end of her maternity leave in August of 2005 as a result of the family having moved to Ottawa. As I have indicated above, she was a stay-at-home mother with one child and six months pregnant with the next. Her income was limited in the previous year to $710 bimonthly in EI payments, and she was officially unemployed as of September 1, 2005. She was at that point dependant on Mr. D. and the income he was generating for the family. She, nevertheless, entered into an agreement which saw her waive any future entitlement to spousal support.
[92] Mr. D. suggested that because Ms. C. had been the one to primarily manage the parties’ finances, and because she knew so much about them, she was in a superior bargaining position. Mr. D., however, had as much opportunity (and responsibility) as Ms. C. to know, control or manage the family’s affairs. He simply choose not to, because Ms. C. was better at it. Mr. D. cannot now rely on his own abdication to plead that he was unduly influenced by Ms. C.’s capacity or initiative in this regard.
[93] Mr. D. also appeared to believe that because Ms. C. was referred to Hamilton/Appotive, Calfra Management’s law firm for many years, she had some sort of advantage over him. He seemed to believe, moreover, that Mrs. Francesca C. was nefariously manipulating matters behind the scene. Once again, Mr. D.’s beliefs were not borne out in the evidence. While Mrs. Francesca C. did refer her daughter to the law firm she and her company used for many years, and may have initially sent Mr. Deveritt’s draft contract to the firm for her (though she did not recall this), Mrs. Francesca C. had no further involvement in the matter. The evidence was unequivocal that Ms. Jolly was referred the file by Mr. Hamilton, and she never had any dealings with anyone other than Ms. C. with respect to it.
[94] While Mr. D. alluded to Ms. C. being aggressive or even violent when challenged, he did not expand upon this allusion nor provide any external evidence to support it. Mr. D. gave no concrete examples of any such behaviour by Ms. C. The remainder of the evidence was that Mr. D. and Ms. C. were a normal, young, married couple who had started a family and who had a good relationship. I am, thus, unable to find that Mr. D. proved Ms. C. dominated him “whether through manipulation, coercion or outright but subtle abuse of power”.
[95] Finally, with respect to both duress and undue influence, in cross-examination Ms. C.’s counsel went over paragraph 19(b), (i) though (iv) of the signed Marriage Contract, reproduced in paragraph 23 above, with Mr. D. in great detail. Mr. D. indicated that he agreed with every statement contained in those subparagraphs on September 1, 2005, including that in 19(b) (iv) that he entered into the agreement “without undue influence, fraud or coercion whatsoever”.
Unconscionability
[96] In Toscanco, Blishen, J. noted at paragraph 63 that “in 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.” She went on to state that it is the circumstances at the time of the drafting and signing of the contract which need to be examined, not the result (with the exception of a court’s ability to set aside a spousal support waiver pursuant to s.33(4) of the Family Law Act, if the results are unconscionable).
[97] Mr. D. has asserted that the Marriage Contract dated September 1, 2005, or portions of it, should be set aside on the basis that it is unconscionable, but in reality, it is the result with which he takes objection. In 2005, Ms. C. had next to no income and a few liquid assets. However, at the distribution of the C. Family Trust in 2012, Ms. C. received one third of the 100 common shares of Calfra Management, which are now worth approximately $4.8 million. Additionally, Ms. C. is currently employed at Calfra and is making well over $120,000 per year. Mr. D., on the other hand, was making approximately $50,000 per annum in 2005, and subsequently left to start his own business. He now has an income of approximately $30,000 per year. His net worth, according to his Financial Statement sworn on November 17, 2016, is approximately $244,000. There is no doubt that Ms. C. is currently in a substantially better financial position that Mr. D. The question to be asked, however, is: Was there a preying upon Mr. D. by Ms. C. at the time of the making of the contract, such that it should be undone?
[98] An examination of the time the contract was entered into does not reveal any particular circumstances of oppression or exploitation of vulnerabilities. Mr. D. asserts that he was vulnerable because he did not manage the family’s finances or ever do his own income taxes. His position is that Ms. C. exploited those vulnerabilities. However, the evidence was clear that Mr. D. had as much access to the parties’ financial information as he may have wanted. Mr. D. also admitted that he had as much access to the accountants at Logan Katz as he would have wanted; he simply did not ask to see them independently. Ms. C. testified that she would discuss financial issues with Mr. D. as they arose, but both she indicated and he confirmed that he was not particularly interested in those discussions. Ms. C., therefore, did what she was required to do to ensure that the bills were being paid and the household was being managed.
[99] In the Ontario Court of Appeal decision of Rosen v. Rosen, 1994 CarswellOnt 390, Justice Grange stated at paragraph 12:
We must always remember that 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 party that produces the unconscionability. I can find nothing in the reasons for judgment quoted above to denote that advantage was taken.
[100] I too can find nothing in the evidence regarding the time the contract was entered into that would denote that advantage was taken. On the contrary, Mr. D. had as much time as he wanted to negotiate the agreement; he had the benefit of independent legal advice from competent counsel and he had access to all of the information he would have needed to make suitable decisions for himself. Mr. D.’s lawyer advised him that if he signed the contract, he would be doing so at considerable risk to himself. Notwithstanding that advice, he signed it. Absent advantage being taken, Mr. D. cannot now ask a Court of Equity, in the words of Granger, J. A. at paragraph 11 of Rosen, referring to Schroeder J.A. in Mudinger v. Mudinger (1968), 1968 CanLII 250 (ON CA), [1969] 1 O.R. 606 (C.A.), to protect him “against his own folly or carelessness.”
[101] This was a contract freely entered into by two competent, intelligent and professional adults, both of whom consulted competent counsel. As was indicated by the Ontario Court of Appeal in Butty v. Butty, 2009 ONCA 852, at paragraph 50, “courts should respect private arrangements that spouses make for the division of their property on the breakdown of their relationship, particularly where the agreement in question was negotiated with independent legal advice.”
[102] Mr. D. has not been successful in engaging s.56(4)(c), and his assertion that the marriage contract must be set aside due to duress, undue influence or unconscionability fails.
Issue #2 - If the answer to first question is yes, should the court exercise its discretion to set aside the agreement or a provision in it?
[103] Given that I have found that Mr. D. has not been successful in engaging any factor in s.56(4) of the Family Law Act, I am not required to address whether the court should exercise its discretion to set aside the agreement or a provision in it.
Order
[104] For all of the above reasons, I order as follows:
The Marriage Contract dated September 1, 2005 between Mr. D. and Ms. C. is a valid domestic contract and remains in full force and effect;
Mr. D’s application to set it aside pursuant to s. 56(4) of the Family Law Act is dismissed.
Costs
[105] If the parties cannot agree on costs then they may make written submissions not exceeding three pages together with a bill of costs and any offers to settle within 15 days of the release of this decision.
Madam Justice Tracy Engelking
Released: October 20, 2017
CITATION: M.D. v. A.C., 2017 ONSC 6260
OTTAWA COURT FILE NO.: FC-13-1462
DATE: 2017/10/20
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
M.D.
Applicant
– and –
A.C.
Respondent
REASONS FOR JUDGMENT
ENGELKING, J.
Released: October 20, 2017
[^1]: At the very end of the trial, Ms. C.’s counsel advised that Ms. C. wanted to bring a motion to “anonymize” the court’s decision by using the parties’ initials in the document. Mr. D. indicated his consent to the request. Had a motion been brought at the commencement of the trial, given there are no vulnerable children involved in the issue being addressed, I may not have found in Ms. C.’s favor. However, in order not to take up any more of the court’s time or delay the matter further, based on Mr. D.’s consent, I agreed to do so.