Kimberly Jane Golton v. David William Golton

COURT FILE NO.: 10579/15

DATE: 20181022

CORRECTED RELEASED: 20181023

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Kimberly Jane Golton Applicant

– and –

David William Golton Respondent

COUNSEL:

B. Thomas Granger Q.C., for the Applicant

William D. Watson, for the Respondent

HEARD: April 9, 10, 11, 12 and 13, 2018

BEFORE: Raikes J.

Overview

[1] The applicant seeks to set aside a domestic contract that she signed in February 1996 while the parties were living together but before they married. If successful on that issue, she seeks equalization of their net family property and spousal support, both retroactive and prospective. Even if she is unsuccessful in setting aside the domestic contract, she seeks spousal support despite the terms of the domestic contract.

[2] The respondent opposes the applicant’s claims. He maintains that the domestic contract they signed is binding and enforceable. Pursuant to that agreement, division of property is to be in accordance with ownership only and the division on that basis has already occurred.

[3] The agreement also provides that each side will be responsible for their own support and will make no claim for spousal support from the other. Accordingly, the respondent argues that the applicant’s claim for spousal support is barred by the agreement she willingly signed. There are no special circumstances that would engage the principles in Miglin for the payment of spousal support despite the terms of their agreement. In any event, he has already amply provided for her notwithstanding their agreement.

[4] The evidence in this trial took four days. Closing submissions were made in writing.

[5] Both parties called friends and family to testify. In general, each of those witnesses was credible and reliable. I have taken into account all of their evidence but this decision will contain only reference to those parts that I found necessary to my decision.

[6] Both parties testified. There are significant differences in their evidence on material points. There are aspects of each parties’ evidence that I find to be not credible or reliable. I have made findings of fact adverse to each of them in this decision. In doing so, I have tried to apply common sense and looked at the evidence as a whole.

[7] In this decision, I will first introduce the parties. I will then set out the history of their relationship. In doing so, I will deal with the agreement that they signed, the circumstances surrounding it and the terms of that agreement. I also set out their financial circumstances since their final separation. Finally, I set out the issues and then address each issue by reference to the legal principles and my analysis of the application of those principles to the facts as I have found them.

[8] In this case, I was aided significantly by experienced counsel who were thorough, well-prepared and focused.

The Parties

a. Kimberly Golton

[9] The applicant, Kimberly Golton (hereafter “Kim”), is 53 years old. She first met the respondent, David Golton (hereafter “Dave”) in the late 1980s while she was working as a waitress and bartender at the Southside Hotel, a local watering hole in Woodstock, Ontario. She was then a single mother.

[10] Kim’s daughter, Kaelyn, was born in July 1987. The biological father had regular access pursuant to a court order; however, Kaelyn’s primary residence was always with Kim.

[11] When she first met Dave, Kim had a high school education. She had lived briefly in Western Canada before returning to Woodstock where she worked first at Canadian Tire and then at the Southside Hotel.

[12] While she was working at the Southside Hotel, Kim suffered some mental health problems for which she sought treatment. She testified that she was admitted to Woodstock General Hospital for a period of time for mental health issues. She received counselling to help her deal with a physically abusive relationship and to build her self-esteem. Kim was prescribed medication for depression.

[13] In the mid-1980’s, Kim attended an adult job retraining program through a local high school to upgrade in computers. For approximately a year, she worked on a contract basis at Big Brothers in Woodstock while still working at the Southside Hotel.

b. David Golton

[14] The respondent, Dave, is 64 years old. He bought a truck when he was 20 years old and was an owner operator for roughly ten years until he joined Floyd Dunford Limited working in the office. In the late 1980’s and early 1990’s, Mr. Dunford acquired Laidlaw through a reverse takeover. Dave stayed with Dunford through the transition.

[15] Following the takeover, Dave was initially in the Laidlaw tank division as a general manager. Eventually he became a VP and an employee of Contrans, a holding company for 17 different trucking companies of which Laidlaw was part.

[16] Scott Talbot, a VP with Contrans, confirmed Dave’s evidence that:

1. Laidlaw had four divisions: dump (or bulk), tank, van and flatbed.
2. Each division was an independent entity with its own bank account, controller, operations etc.

[17] Dave retired on December 29, 2017 from his position as VP of Contrans.

[18] When Dave met Kim, he was married to Susan. They had one daughter, Lauren, born in March 1989. He and Susan separated October 1992. They engaged in contested family law proceedings that included property and support issues. That litigation resolved in 1994.

a. The Affair

[19] Kim and Dave first met at the Southside Hotel where he was a patron and she was a waitress/bartender. In the late 1980’s and early 1990’s, the Southside Hotel was a popular gathering place for several Laidlaw employees including Bill Capes, then head of the safety department in the Laidlaw tank division.

[20] In 1991, Mr. Capes approached Kim and asked if she would like to do some work for his department at Laidlaw. Kim agreed. She worked alone in a trailer on the Laidlaw tank property for the first month or so. At that point, Dave saw her on the property and asked what she was doing there. She explained that she was doing work for Mr. Capes who came in and spoke with Dave. She was then formally hired and started her employment with Laidlaw in June 1991.

[21] Kim testified that Dave was the general manager; Mr. Capes reported to Dave. She indicated that it was Dave who authorized her initial employment at Laidlaw.

[22] Shortly after she was hired, Dave asked Kim to go with him to a baseball game in Toronto. He told her it was for business with a client, and that he could not take his wife. Their extramarital relationship began soon after. She started seeing Dave on a regular basis. She testified that it was “an affair”; he was still married and she knew he was married.

[23] Kim met Dave’s wife, Susan, at the Southside Hotel. It was Susan, not Dave, who later invited Kim to come up for a weekend at a cottage they owned near Bancroft. By then, unbeknownst to Susan, Kim and Dave were involved. Kim received a letter from Susan soon after that weekend telling Kim that she was no longer welcome at the cottage.

[24] According to Kim, Dave kept telling her that he was going to leave Susan but did not. As a result, Kim decided to quit her job at Laidlaw. She enrolled in a trade and technology course offered by Fanshawe College in Woodstock. The relationship with Dave was briefly suspended.

b. Cohabitation

[25] In October 1992, Dave and Susan separated. Dave moved to a friend’s place on Mill St.. He and Kim resumed their relationship. She was then living in an upstairs apartment on Peel St. with Kaelyn.

[26] Kim testified that soon after his separation from Susan, Dave moved into the Peel St. apartment.

[27] Dave testified that he continued to see Kim at the Peel St. apartment but did not start living with Kim until the purchase of the house at 90 Bee St. in Woodstock in September 1993. Dave’s long-time friend, Randy Ritchie, testified that Dave lived on Mill St. after he separated from Susan.

[28] I find that while they were seeing each other regularly between October 1992 and September 1993 including some overnights, they were not residing together until they moved into the 90 Bee St. property.

c. Purchase of 90 Bee St.

[29] In 1993, Dave made an offer to purchase the property at 90 Bee St., in Woodstock. The property was intended as a residence for Kim, Dave and Kaelyn. In addition, Dave’s daughter, Lauren, stayed with Dave on her access visits.

[30] After the offer to purchase was accepted, Dave was unable to secure the necessary financing because his family litigation with Susan was unresolved. Dave then approached his boss, Stan Dunford, who agreed to purchase the house for him.

[31] Dave paid approximately $10,000 as a down-payment and Dunford paid the balance in cash. Dunford took title. Under their arrangement, Dave paid the municipal taxes and paid Dunford monthly rent. Dave was to buy the property from Dunford once his divorce from Susan was completed which he did.

[32] Kim testified that the property was purchased through Dunford to hide assets from Susan. Dave made clear to her that he did not want Susan to know how he had purchased the property.

[33] In any event, Dave was fully responsible for all carrying costs for that property before and after he acquired it from Dunford. Title was put in his name alone, as was the mortgage.

[34] Dave and Kim moved into the home at 90 Bee St. in September 1993 and continued to reside there until they moved to the Innerkip property in 1997.

d. Circumstances Surrounding Cohabitation Agreement

[35] By February 1995, Kim and Dave had been living together for less than two years. Both worked for Laidlaw although not in the same division. Dave was employed in the tank division.

[36] Kim returned to Laidlaw in 1994. She worked in the bulk division until April 15, 2016.

[37] I accept Dave’s evidence that he had no direct say or control over Kim’s employment at Laidlaw in 1995-96 prior to the execution of the Cohabitation Agreement. The Laidlaw divisions operated as separate silos.

[38] In early 1995, Dave was unhappy that he had paid Susan a substantial sum for property division and for spousal support. He was determined not to find himself in that predicament again.

[39] As a result, he obtained advice from his family law counsel, David Beatty, and had a Cohabitation Agreement prepared. The final signed agreement is Exhibit 1.

[40] Dave testified that he and Kim talked and agreed that they should each have whatever was in their names if they ever split up and neither should pay support to the other. According to him, the Cohabitation Agreement reflected their mutual wishes.

[41] Kim tells a very different story. She testified that Dave presented the agreement to her and told her that she needed to see a lawyer (Carol Hornick) whose name he provided. He would pay for the lawyer which he did. He told her that if she was unwilling to sign the agreement, then she and Kaelyn would be “out on the streets”.

[42] Kim testified that she did not want to sign the Cohabitation Agreement; that she believed that Dave would indeed put her and her daughter out of the house; that they would have had nowhere to live; and that Dave would get her fired from Laidlaw. Although she did not want to sign the agreement, she did so, in part, because she did not want to lose him; she loved him.

[43] Dave denied any threat to throw Kim and her daughter out on the streets. In cross-examination, he agreed that he did make clear to Kim that if she refused to sign the agreement, their relationship would be over and she would have to leave the house at 90 Bee St.. He asserted that he would never see Kim and Kaelyn be destitute; he is not that kind of person. Dave also denied any threat to her employment or that he could have influenced her continued employment as she was in a different division.

[44] I find as follows:

1. The Cohabitation Agreement was entirely Dave’s idea. He wanted no financial obligations to Kim if their relationship broke down.
2. Dave presented a draft Cohabitation Agreement to Kim - one drafted by his lawyer.
3. When he gave her the draft Cohabitation Agreement, there had been no previous discussions with Kim about such an agreement. She was caught by surprize.
4. Dave made it clear to Kim that if she was not prepared to sign a Cohabitation Agreement, their relationship would be over and, as a consequence, she and Kaelyn would have to move out of the Bee St. home.
5. Dave did not tell Kim that he would throw her and Kaelyn “out on the streets”.
6. Dave made no threat, direct or indirect, to Kim’s employment at Laidlaw.
7. Kim did not fear that she would lose her job if she refused to sign the agreement.

[45] After the draft agreement was given to her, Kim met with Ms. Hornick on at least three occasions. Ms. Hornick told her the agreement was unfair.

[46] On August 1, 1995, Ms. Hornick wrote to Kim confirming that Ms. Hornick had read the agreement. Ms. Hornick reiterated a series of questions she had posed to Kim at their meeting on June 15, 1995.

[47] Kim met again with Ms. Hornick at her office on January 31, 1996.

[48] Kim recalled a visit where Ms. Hornick called Dave on the telephone and he agreed to a change that she requested. It is likely that call was with David Beatty, Dave’s lawyer, not Dave.

[49] It is undisputed that other changes were made to the agreement as a result of discussions between the lawyers. Ms. Hornick’s account indicates that she drafted revisions to the agreement. I note that neither lawyer was called to testify.

[50] Dave and Kim had infrequent discussions about the agreement in 1995 and early 1996. It is not the case that Dave was pestering Kim or imposing arbitrary deadlines for execution of the agreement. To the contrary, I find that process of negotiating and finalizing the terms of the agreement took place at a relatively pedestrian pace.

[51] Kim signed the Cohabitation Agreement on February 7, 1996. Dave signed the agreement more than three months later on May 21, 1996. He paid Ms. Hornick’s account for her services for Kim in July 1996.

[52] Attached to the Cohabitation Agreement is a certificate of legal advice signed by Ms. Hornick in which she certified that:

…I fully explain the nature of the Agreement and the effect on her rights of signing it. She stated to me and I am satisfied, that she fully understands the nature and effect of the document and that she executed it freely and voluntarily and not under any undue influence exercised by any other person.

[53] On the same page, Kim signed the following acknowledgement:

I hereby acknowledge that Carol J. Hornick fully explained the nature of the Agreement and the effect of my signing it. I confirm that I understand the nature and effect of the document and that I have executed it freely and voluntarily.

[54] Kim testified that Ms. Hornick explained the terms of the agreement to her and Kim understood what she was signing. She did not tell Ms. Hornick of any threat by Dave or that she did not want to sign the agreement.

[55] Other witnesses called by the parties testified as to what Kim told them about the Cohabitation Agreement both before and shortly after she signed it.

[56] Cathy Patterson is an old friend and co-worker from the Southside Hotel. Kim told Ms. Patterson that Dave told her to sign the prenuptial agreement or she and Kaelyn would have to move out. She also told Ms. Patterson that, “I’m just going to sign it. I am not going to lose him. I love him too much.”

[57] Kim’s brother, Grant Nutt, also testified that he spoke with Kim about the prenuptial agreement both before and after she signed it. He testified that:

• He looked at the agreement and told her that she was “crazy” to sign it.
• In response, she said that she had to sign it because if she did not, she would lose Dave.
• She later informed him that she had seen a lawyer in town and had signed the agreement. She told him: “I guess love does crazy things.”

[58] Kim’s grandmother, Theresa Cornish, was called as a witness by Dave. She is now in her 90’s but struck me as sharp and cogent. Kim spoke to her about the agreement a week after she signed it. Kim told her that she had gone into a lawyer’s office to sign the agreement. Kim indicated that under the agreement, if anything happened, “what’s mine is mine, what’s Dave’s is Dave’s”.

Financial Disclosure

[59] Kim and Dave did not provide financial statements detailing their assets and liabilities at any time before the Cohabitation Agreement was signed. Neither made any direct or indirect request for financial disclosure from the other.

[60] Kim testified that she did not make inquiries of Dave’s finances because “they were his business, not mine”. She indicated that Dave kept money and certain issues very private. Even asking that kind of question was likely to be met with hostility or she simply would not be answered. She did not want to cause issues in their relationship by asking.

[61] Kim also indicated that in any event, she did not think Dave would tell her the truth if she had asked. Dave was angry about the family litigation with Susan. He had the house purchased by Mr. Dunford to hide it from Susan. He also had a friend give a value for the cottage that was undervalued. As Kim put it, “Dave was fucking her” and said he was not going to give his stuff to Susan.

[62] Dave indicated in his evidence that Kim sat in on meetings that he had with his financial advisor at the house. He maintained that she was aware of his finances through the documents he had to complete as part of the family litigation with Susan. She was fully aware of his assets and liabilities.

[63] Kim agreed that she and Dave shared the same investment advisor. Kim began making RRSP deductions when she returned to Laidlaw in 1994. According to Kim, Dave would sit in on the meeting with the advisor for her investments, but she was required to leave the room when it came time to discuss his portfolio.

[64] I prefer Kim’s evidence and do not accept Dave’s evidence on this point. As a later note written to Kim evidences, he kept his personal financial information closely guarded. I find that Dave did not share with Kim the full details of his financial holdings. He kept his personal business private.

[65] Nevertheless, I find that at the time the Cohabitation Agreement was signed, Kim and Dave were generally familiar with the financial circumstances of the other even if the full extent of their respective incomes and net worth were not known.

[66] For example, Kim knew that Dave was employed in a senior management position at Laidlaw. She knew that he had a cottage in Bancroft with all the toys and furnishings there. She knew of the vehicles purchased. She was aware that he had purchased the house at 90 Bee St.. She was also aware that he had a company.

[67] I do not accept the suggestion in Kim’s evidence that she did not make any inquiries or requests for financial disclosure because she feared Dave’s reaction. I also reject her evidence that she did not make an inquiry because she did not think that he would tell her the truth anyway. That evidence struck me as disingenuous.

[68] I find that Kim did not make any request for disclosure or any inquiries as to Dave’s finances because she was satisfied with the information she already had and she believed that their relationship would last. She loved Dave. She respected his privacy. She simply wanted their relationship to continue.

Terms of Cohabitation Agreement

[69] The Cohabitation Agreement contains the following material terms:

1. The purpose of the agreement is to avoid any rights and obligations relating to property that arise from their cohabitation, and to affirm that any property of either party will be divided between them only according to ownership.
2. The agreement takes effect on the date the parties commenced cohabitation.
3. The agreement is a domestic contract under section 53 of the Family Law Act and, if they marry, becomes a marriage contract under section 52 of the Family Law Act.
4. With respect to spousal support, each party will be responsible at all times for his or her own support and not to any degree for the support of the other.
5. Neither party will assert a claim to financial support from the other at any time in the future.
6. Dave is not and will not be responsible for support of Kaelyn.
7. The net family property of either party will never include any property owned at any time by either of them, or together, nor any income from such property.
8. Each party waives all rights under Part 1 of the Family Law Act. The division of property will be governed solely by ownership of property.
9. Each party releases and discharges the other from any claims on the effective date of the agreement or which they may acquire later as to the division of property, equalization or property rights.
10. The law of resulting trust will not apply.
11. Each party may dispose of or encumber or otherwise deal with his or her property as he or she deems fit, free of any claim by the other.
12. The residence in which they cohabit is owned solely by David and will remain the separate property of David free and clear of any claims for possession or ownership by either party. It shall not be a family residence as defined under the Family Law Act.
13. The value of that residence at the effective date is $96,000 and any appreciation in value shall accrue to the equal benefit of Kim and Dave. If they separate, the property will be appraised and Dave will pay Kim her share of the appreciation within 60 days at which date she will vacate the property.
14. The contents of the residence will be distributed between the parties according to ownership whether the ownership arises by way of purchase or gift, including gifts from one to the other.
15. If Kim and Dave separate, Dave will pay Kim an amount equal to the value of a 1983 Chevrolet Chevette as of the date they started cohabitation.
16. They waive any claims as against the estate of the other. If they are still together when Dave dies, the family residence will be transferred to Kim.
17. Any amendments to the contract are unenforceable unless made in writing and signed by each party before a witness.
18. If any provision in the agreement is found to be unenforceable or invalid, that provision will be severable and the remainder of the agreement will continue.

[70] Article 20 deals with financial disclosure. It states:

Each party: (a) has given all information and particulars about his or her assets and liabilities that have been requested by the other, (b) he is satisfied with the information and particulars received from the other, and (c) acknowledges that there are no requests for further information or particulars that have not been met to his or her complete satisfaction.

e. Innerkip House

[71] After the Cohabitation Agreement was signed in 1996, Kim and Dave continued residing at 90 Bee St..

[72] In 1997, Dave purchased a three bedroom ranch home at 84 Oakridge Ave. in Innerkip. Kim testified that she did not care for the style of the Innerkip house as she preferred older homes like the Bee St. house. After they had visited the house five or six times, Kim told Dave that it was his choice whether or not to purchase.

[73] Title to the Innerkip property was taken in Dave’s name alone. He paid the purchase price from his savings, the equity he received on sale of the Bee St. property and a mortgage he obtained from the Bank of Montreal.

[74] They moved to the Innerkip house in the Spring of 1997.

[75] About the same time, Dave sold the 90 Bee St. property to Kim’s brother, Grant, for $109,000. Grant was unable to come up with the monies needed for the down payment so Dave reworked the purchase price.

f. Marriage

[76] On July 18, 1998, Kim and Dave were married at the Innerkip property. A large contingent of family and friends attended.

g. Roles During Marriage

[77] It is undisputed that during their cohabitation and marriage, Kim assumed primary responsibility for domestic chores including meal preparation, housecleaning and some yard work. Kim also helped with minor repairs and maintenance including painting at the house. That is not to say that Dave did nothing in that regard. There was a sharing of these duties although Dave’s work schedule meant that most of those responsibilities fell on Kim.

[78] Kim had primary responsibility for Kaelyn’s care as she grew up. In addition, Kim assisted in the care of Lauren when she was with them for access visits and when she came to live with them full-time.

[79] Kim and Dave were socially active. They hosted dinners and parties at their home and at the cottage. Typically, Kim ensured that the house/cottage was clean, rooms were ready for guests and food was prepared.

[80] There was considerable evidence that within the relationship, Dave was the dominant personality. Things had to be done to his satisfaction. Kim was always anxious to please Dave, perhaps overly so.

[81] There is no question that Dave was the main income earner. He took the lead in dealing with their finances; in fact, he continued to assist Kim with financial matters even after they separated.

[82] Dave frequently travelled for work. He also had business commitments that required him to be out later. His was not a 9 to 5 job.

[83] Kim worked in various positions at Laidlaw until 2005 when she was injured. She was hard-working both at home and at Laidlaw.

h. The Cottage

[84] As part of the resolution of the family litigation with Susan, Dave retained ownership of the cottage near Bancroft, Ontario. Kim and Dave regularly went to the cottage while they were a couple.

[85] Over the years, numerous changes and improvements were made to the cottage. Kim assisted in some of that work including painting, picking out furnishings and decor, and gardening.

[86] Dave occasionally used the cottage for business meetings or teambuilding for work. Kim was present for some of those events. In addition, Kim and Dave hosted friends and family at the cottage.

[87] They shared in the work necessary for a second residence. Kim did cooking and cleaning and some of the yard-work. Time at the cottage was not without considerable work but it was something they both enjoyed.

[88] There were times before their separation when Kim went to the cottage with Kaelyn and friends without Dave. Sam Ritchie testified that she and her daughter went to the cottage with Kim and Kaelyn every summer for a week.

[89] Even after their separation in 2010, Kim continued to have access and use of the cottage for a week or two each year. That stopped when this litigation commenced.

i. Separation #1

[90] By the Spring of 2002, the marriage was in trouble. Kim suspected Dave of being unfaithful with a co-worker named Julia. She accused him of having an affair which he denied. They were arguing and bickering.

[91] According to Kim, in April 2002, Dave asked her to move out. He told her that he did not love her.

[92] Kim began looking for a house to move to. She found a place on Maple St. in Woodstock but before she could purchase it, Dave told her that he wanted her to stay. She stayed until July 2002, when once again, Dave asked her to leave.

[93] Kim entered into an agreement to purchase a home on Graham St. in Woodstock. Dave provided the down-payment. The house needed work. She continued to reside in the Innerkip home for the roughly three months it took for that work to be done. Once completed, she moved into the Graham St. property in October or November 2002.

[94] At that time, Kim was still employed by Laidlaw. She was receiving child tax credits and some child support for Kaelyn.

[95] When they separated, Kim had a pick-up truck that she took with her. Dave helped her by paying for things that she could not afford for Graham St..

[96] After she moved out of the matrimonial home, Kim and Dave talked about seeing each other but she understood that Dave was still seeing Julia. After a month, Dave informed her that he wanted nothing to do with her. As she put it, they had “separate lives” for nine or 10 months.

[97] Kim testified that she waited to see if Dave would change his mind but he kept dating. She then met a man that she was considering dating so she went to see Dave to let him know. She did not want him to be blindsided.

[98] According to Kim, Dave became very angry when she informed him. He later called and demanded that she return to see him so she did, returning from Toronto to arrive at his home at 3 or 4 AM. They had an unpleasant conversation but, in the end, he asked her to try again. She indicated that they went back to being husband and wife albeit with three homes: the Innerkip house, the Graham St. property and the cottage.

[99] Kim testified that from approximately July, 2003 until July 2007, she and Dave were a couple. She stayed overnight at times at the Innerkip and Graham St. houses. They regularly had dinners together. They entertained friends and family both at the Innerkip house and at the cottage. She helped out with cleaning of the Innerkip house.

[100] Dave tells a different story of their separation and reconciliation.

[101] According to Dave, he was busy at work in 2001-02 purchasing new companies. He was working closely with Julia M. but there was no affair. At the same time, there were problems on the home front between Lauren (his daughter) and Kim.

[102] Dave testified that relations between Lauren and Kim were very strained. He described Kim as Draconian. It was her way or no way.

[103] Lauren had lived primarily with Susan but came to live with Dave after Susan lost her licence following an impaired driving charge. It was Dave’s understanding that at Susan’s home, there were no rules for Lauren. That contrast with Kim’s strict approach produced lots of conflict.

[104] Dave spoke with Kim and asked her to be less rigid and forceful to no avail.

[105] In December 2001, Kim and Dave were at a house party at Samantha (Sam) and Randy Ritchie’s home. While there, Kim had a knife and was threatening to cut her wrists. She was taken by ambulance to hospital. Kim was admitted and stayed in the hospital for a few weeks while she recovered.

[106] Shortly after she was released from hospital, they agreed to separate. She began to look for properties to move to. She purchased the Graham St. home with the money Dave provided for the down-payment, monies she inherited from her father and a mortgage she obtained.

[107] Dave testified that they did not get back together until July or August 2007. That is when they resumed living together at the Innerkip home. During the period 2002 – 2007, Dave was fully responsible for paying all property costs for the Innerkip home and Kim paid all costs associated with the Graham St. property.

[108] Before they resumed living together, Kim reached out to Lauren and befriended her. Their relationship became amicable.

[109] Dave and Kim began seeing each other and going on dates. He agreed that he would spend the night at her place or she would spend the night at his place as dating couples do. She sold the Graham St. property when she moved back to Innerkip.

[110] Other witnesses testified that they socialized with Kim and Dave at the Innerkip home and elsewhere between 2003 and 2007. For example,

1. Graham Nutt separated from his spouse and lived for a period in the basement of the Graham St. property. Although she had her own house, Kim and Dave were still seeing each other. She used to stop in for a shower before going to the cottage with Dave or to the Innerkip home for a couple of days.
2. Tammy Martin first met Kim and Dave in 2006 through her now husband. She saw them socially a few times a year. She thought they were a couple and did not realize that Kim had her own house until her husband, Vern, told her. They appeared to her like any other married couple. They did things together as couples do. She and her husband visited Kim and Dave at the Innerkip home.
3. Sam Ritchie testified that she was aware that Kim visited Dave at the Innerkip house between 2003 and 2007. She did not recall seeing Kim at any gatherings at that house in that timeframe; however, she did see them together socially at other places. They went out for dinner with Kim and Dave.

[111] I find that Kim and Dave separated in April 2002. That is when she began looking for a house to purchase. She acquired the Graham St. property in July, 2002 but did not move into it until the repairs and work was done in October, 2002. Although she continued to reside in the same house as Dave, they were living separate and apart between April and October, 2002.

[112] I do not believe Kim’s story as to how the separation came about. She virtually ignored the incident where she was threatening to cut her wrists and was hospitalized, and her conflicted relationship with Lauren leading up to the separation.

[113] I do not doubt that Kim harboured suspicions that Dave was having an extramarital affair with someone at Laidlaw. He was working lots of hours. He was away from home. She knew from personal experience that he was not immune to such conduct.

[114] I find that Kim became overwhelmed. She accused Dave of cheating on her and did not believe him when he denied same. She was fighting regularly with Lauren. Her father had passed away recently. All of this and probably more contributed to her unfortunate threats of self-harm at the Ritchies’ party.

[115] Whether Dave was having an affair is irrelevant and I make no finding in that regard. Suffice to say, Kim thought that he was. At the same time, Dave was very protective of Lauren. He did not like Kim’s approach to Lauren. She seemed to him incapable of moderating her demands so Dave told Kim that he wished her to move out.

[116] It is unclear from the evidence when Kim and Dave began seeing each other again after their separation. Clearly, they began going out socially. Each stayed overnight at the other’s house. They went to the cottage together. They socialized with friends and did so as a couple. They were working on their relationship to see where it might lead.

[117] I do not accept Kim’s evidence that approximately 10 months after they separated and after an early morning conversation, they became as husband and wife albeit living in two separate residences. Kim’s evidence ignores the significant problem she had with Lauren which was one of the underlying reasons for their separation.

[118] I find the evidence given by Dave that Kim reached out to Lauren and befriended Lauren makes more sense as a building block to restoration of their relationship. Dave was extremely protective of Lauren. Absent good reason to believe that Kim and Lauren could get along, Dave was not going to reconcile.

[119] There were, of course, other issues that bedeviled their relationship including trust issues. Those issues could not be instantly resolved. They required time and effort on both their parts to determine whether there was a foundation for moving forward as a couple. The fact that they socialized and hosted get-togethers with others and did so as an apparent couple does not, in itself, mean that they were indeed reconciled.

[120] Accordingly, I find that Kim and Dave reconciled in the Spring of 2007. Prior to that time, they worked to rebuild their relationship. They spent time together including overnights. They engaged in sexual relations. They travelled together. However, during that period they were living separate and apart.

j. Separation #2

[121] Kim sold the Graham St. property and moved back into the Innerkip home in July 2007. She used the proceeds of sale from that property to invest in company stock and purchase a vehicle. She subsequently had to sell that stock and retained those funds. She did not repay Dave the monies that he had advanced to her to purchase that property or for moving costs etc.

[122] Soon after she moved back, there was a tension once again between Kim and Lauren. Dave testified that Kim returned to her old approach. Lauren rebelled. The arguing became more heated and more frequent.

[123] Lauren testified that she and Kim got along famously when Dave and Kim were living separate and apart. As soon as Kim returned, she obsessed over everything Lauren did wrong and would tell Dave. To Lauren, Kim seemed angry all the time.

[124] In February 2008, the conflict between Lauren and Kim came to a head in a physical altercation. Lauren and Kim came to blows in the living room of the Innerkip home.

[125] Dave testified that he came home from work to find Lauren and Kim in an altercation. Kim was throwing punches. They were on the floor and he had to drag Kim off of Lauren. He recalled sitting on the couch after and crying. He called his friend, Randy Ritchie, who came over. Dave told Kim “this is done. I can’t do this again.”

[126] Randy Ritchie testified that Dave called him the evening of the altercation between Kim and Lauren. He came over to the house and spoke with Dave. Dave told him that he was done with the marriage. He is not sure of the exact words used by Dave, but he understood that Dave was finished working on the relationship with Kim.

[127] Dave indicated that from that moment, he went his way and Kim went hers. They continued living in the same house but were living separate and apart. He looked for other accommodation for Lauren until she announced that she was going to live with her boyfriend. He had already purchased a property on Lorraine Street that he intended Lauren and he would move to.

[128] Lauren testified that after that fight, she and her dad decided that they needed to go – to move on. They began looking for apartments or houses to rent. They met with realtors and landlords. They found an apartment that they liked but in the end, she decided to go and live with her boyfriend’s parents.

[129] Randy Ritchie indicated in his testimony that he noticed a change in direction by Dave after the altercation. It seemed that he was moving on with his life. He went with Dave to a couple of places that Dave was considering moving to. Lauren was with them on one of single occasions.

[130] Dave began dating Jackie Veenstra in March or April 2008. He denied any sexual relations with Kim after February 2008 although he agreed they continued to share a bed. He denied any social activity with her after that date. Instead, he went to concerts, on a fishing trip to B.C. and on cross country motorcycle rides with Jackie. He did not tell Kim about Jackie to spare her feelings.

[131] He also did not tell Kim that he had purchased the Lorraine St. house and that Jackie Veenstra was staying there. She was paying him rent.

[132] I pause to observe that the exhibits include cards given by Dave to Kim in 2009 for Valentine’s Day, Mother’s Day and her birthday. Each of the cards is to Jayne, his pet name for her, and signed by him “Love Dave”, usually followed by XO’s for hugs and kisses. These cards reflect expressions of devotion, love and caring for Kim as his wife. They are at odds with his evidence that their marital relationship was done for all intents and purposes.

[133] Once again, there is a significant discrepancy between the picture painted by Kim and that of Dave. Kim agreed that after she returned to the Innerkip property in 2007, she continued to have conflict with Lauren. She maintains that she was not allowed to tell Lauren what to do. She acknowledges that she and Lauren did get into a physical fight.

[134] Nevertheless, she testified that she and Dave continued to live as husband and wife after the physical altercation with Lauren. They continued to have sexual relations until 2010. They did not separate until May 2010 when she asked Dave to leave.

[135] Kim testified that in February 2010, she learned through a phone message that he was on vacation with another woman. When he came back, they talked. She was upset and confronted him. He indicated that he did not wish to leave her. She tried to pretend that everything was okay even though she did not trust him whenever he went out.

[136] By May 2010, she described herself as a “basket case of emotions”. She asked him to leave but thought he would come back to her. He left and never returned.

[137] Randy’s wife, Sam, was a friend of Kim’s during this period. That friendship ended in 2010 as a result of an incident at the Innerkip home. According to Sam, Kim told her that she had received a call about Dave. Kim was very upset. She was hurt and angry. There was a gun and she pointed it at Sam.

[138] Sam testified that she learned of Dave and Jackie before Kim. She told Kim in the summer of 2009 that Dave was seeing someone.

[139] Tammy Martin testified that she called Kim in March 2010 to tell her that Dave had been on a motorcycle trip in the U.S. with Jackie. She had just returned from that trip. She learned from her husband as they were driving to Georgia that Jackie was coming with Dave.

[140] Tammy indicated that Kim had previously called to say that she thought Dave was having an affair. Tammy told her at that time that she did not believe that was the case. When Tammy called to tell her about the trip, Kim said that she already knew; she had received a call. She was very upset.

[141] In cross-examination, Kim admitted that she went to Las Vegas in August 2009 with a friend to watch her son wrestle. While there, Kim kissed a different wrestler. She denied having an affair or that it went any further than kissing.

[142] I find that:

1. Dave told Randy Ritchie but did not tell Kim that their relationship was over following the fight between Kim and Lauren;
2. While Dave may have decided to move on, he did not communicate that to Kim; in fact, his actions like sleeping in the same bed, letting her know he was going to be late for dinner and the cards he gave to her reflect otherwise;
3. Dave began his affair with Jackie because he was unhappy in his marriage, not because the marriage was over;
4. Dave lied to Kim when he denied that he was seeing someone else;
5. Dave could have left after the fight between Kim and Lauren. He purchased a property for that purpose but did not move out. Instead, he used that property for Jackie;
6. In the past, Dave had no hesitation telling Kim to leave. He could have done so in February 2008 or at any time before May 2010 but did not;
7. Kim’s actions in Las Vegas do not signal that she recognized her marriage was over and she was moving on; and
8. Kim and Dave separated with no prospect of reconciliation on May 5, 2010 when Kim asked Dave to leave the matrimonial home after she found out that he was having an affair.

Post-Separation Events

[143] During their first period of separation (2002-2007), Kim made no claim for payment of spousal support or equalization of property.

[144] As for their final separation, Kim remained in the Innerkip home after Dave moved out. She moved in February or March 2012 to 93 Bee St. near where she previously lived. She still resides in that home.

[145] The purchase price for 93 Bee St. was $187,000. Dave paid the full purchase price. Title was taken in Kim’s name. In addition, renovations and repairs were made to which Dave contributed approximately $25-30,000.

[146] Dave continued to show his marital status as “married” on his tax returns between 2008 and 2012. Until 2015, Dave continued to help her with management of her investments and tax return preparation. That stopped when this proceeding started.

[147] This proceeding was commenced by Kim on October 29, 2015.

Kim’s Back Injury

[148] In 2005, Kim injured her back while pulling out a weed in the garden at the cottage. She was in excruciating pain that was eventually diagnosed as a herniated disc that ruptured. She had surgery at University Hospital in London in September 2005.

[149] Since her surgery, Kim has worked only part-time jobs. She worked in a high school cafeteria and for a caterer in the cafeteria at an automotive plant. She tried becoming a crossing guard but was unable to do that work. She lasted barely 6 weeks. The pain became too much so she gave her notice. She has not worked since her last part-time job in 2013.

[150] Kim indicated that she is able to do some housework. She hires someone for the majority of her yard-work and driveway. She gets help for bigger jobs around the house.

[151] Kim receives a disability payment. When she was first off work, she was on short-term disability. Eventually she went on long-term disability through London Life (now Great West Life). She has been receiving disability payments since 2005. When she was working part-time, she sent her pay stubs and the amount earned was deducted from the disability payment.

[152] Kim’s current sources of income are the disability benefit, the Ontario Trillium benefit and HST credit.

[153] Kim was on Dave’s health benefit plan. Under that plan, she paid $10 per prescription. Her coverage stopped when she started this proceeding. She received a letter from Dave’s counsel advising that she was being removed from the drug plan and that she probably had coverage through disability which she does not.

[154] Kim testified that before she started this proceeding, Dave helped her financially. He told her that he would look after her as long as he was able to. He helped her get her glasses. There were times when he helped her with the house. On occasion, if she needed something, she would ask him. Other times, he simply put money in her account with a little note to her saying “just because” or “I thought you could use it”.

[155] Exhibit 5 is a brief containing emails between Kim and Dave starting in 2009 through to 2015. The emails post-separation reflect an ongoing fondness and concern for the other.

[156] Because she does not have access to his drug plan, she cannot afford to pay for all of the medications prescribed from her income. She has to use money from a line of credit. The cost fluctuates from month to month. She has discontinued some medications because they are too costly.

Incomes

[157] Exhibit 3 contains copies of the tax returns and/or notices of assessment for Kim for the period 1993 through 2017.

[158] Exhibit 4 contains the income tax returns for Dave for the years 2010, and 2012 through 2017. There is a huge difference in their respective incomes particularly since 2010.

[159] Kim’s line 150 reported or assessed income between 2010 - 2017 was:

2010 - $3,220 2011 - $2,135 2012 - $2,833 2013 - $3,938 2014 - $19,051 2015 - $2,232 2016 - $895 2017 - $0

[160] Dave’s reported or assessed line 150 income in 2010 was $224,279. His line 150 income for 2012- 2017 was:

2012 - $462,596 2013 - $462,423 2014 - $1,830,517 2015 - $314,581 2016 - $629,177 2017 - $430,709

[161] No tax return or assessment has been provided by Dave for 2011; however, at tab 4 of exhibit 4, there is a summary compensation table for executives at Contrans for the period 2011-2013. It shows Dave’s total compensation for 2011 was $556,412.

[162] According to her financial statement sworn March 19, 2018, Kim’s monthly income from all sources is $2,346. That is $28,153 on an annualized basis. That amount includes her disability payment which is not taxable.

[163] Dave’s financial statement sworn April 3, 2018 shows his monthly income is $9,026. That amounts to $108,312 for the year.

[164] Dave indicated that he has previously offered to pay for or contribute to the cost for Kim to obtain her real estate license. He maintains that she is capable of working more than she does.

Expenses

[165] According to her financial statement, Kim’s monthly expenses are $3,986. Her monthly expenses exceed her monthly income by approximately $1,600.

[166] Her expenses are unremarkable given that she has to pay for assistance with yard-work and maintenance, and that she has drug costs not covered by a drug plan.

[167] Dave’s financial statement indicates monthly expenses of $8,930. That figure includes a monthly RRSP/RESP deduction of $2,000 and payments for a tractor of $343. His expenses include the carrying costs for his condominium and the cottage.

Net Family Property

[168] Both parties filed Net Family Property statements. Dave admitted in cross-examination that some of the figures he provided are wrong, outdated or unsubstantiated.

[169] I will address the property issues, as necessary, later in this decision.

Issues

[170] The following issues arise in this case:

1. Is the Cohabitation Agreement a valid and binding domestic contract? Put another way, should that agreement be set aside? That issue requires consideration of the following: a) Did Dave comply with his financial disclosure obligations and, if not, what consequences should follow? b) Did Kim enter into the Cohabitation Agreement as a result of duress or undue influence? c) Is the Cohabitation Agreement unconscionable in the circumstances at the time it was entered into? d) If the answer to any of a), b) or c) is yes, should I exercise my discretion to set aside the Cohabitation Agreement?
2. If the Cohabitation Agreement is valid and binding, is Kim entitled nevertheless to spousal support? If so, in what amount and for how long?
3. If the Cohabitation Agreement is not valid and binding, what amounts, if any, are payable by Dave to Kim for equalization and/or spousal support, and for how long?

Law – Validity of Cohabitation Agreement

[171] It is undisputed that the Cohabitation Agreement in this case meets the technical requirements for a domestic contract; that is, the agreement is in writing, signed by the parties and witnessed: s. 55(1) Family Law Act, R.S.O. 1990, c.F.3.

[172] The Cohabitation Agreement addresses three issues:

1. Division of property;
2. Spousal support; and
3. Child support for Kaelyn.

Child support is not in dispute in this litigation.

[173] The Cohabitation Agreement provided, and s. 53(2) of the Family Law Act confirms, that upon marriage, the Cohabitation Agreement became a marriage contract. In either case, the agreement is a “domestic contract” as defined in s. 51.

[174] Public policy underpinning family law legislation supports the making of domestic contracts. Such contracts will not be lightly interfered with: Deroon v. Deroon (1980), 1980 CanLII 1831 (ON CA), 115 D.L.R. (3d) 182 (ON CA); LeVan v. LeVan, 2006 CanLII 31020 (ON SC), 2006 CarswellOnt 5393 (S.C.J.) at para. 199, aff’d 2008 ONCA 388.

[175] Courts should respect private arrangements made by spouses for division of their property on breakdown of their relationship, particularly where the agreement was negotiated with independent legal advice: Hartshorne v. Hartshorne, 2004 SCC 22 at para. 9.

[176] There is no presumption that courts will be hesitant to enforce a pre-nuptial agreement: Dougherty v. Dougherty, 2008 ONCA 302. By the same token, there is no “hard and fast“ rule that marriage contracts will be afforded greater deference than separation agreements: Hartshorne.

[177] Section 56(4) of the Family Law Act permits a court to set aside a domestic contract, or a provision in it, (1) if a party failed to disclose significant assets or liabilities existing when the contract was made, (2) if a party did not understand the nature or consequences of the contract, or (3) otherwise, in accordance with the law of contract.

[178] The onus rests on the party seeking to invalidate the domestic contract to satisfy one or more of the criteria in s. 56(4). Even where that threshold is met, the court has a discretion whether or not to set aside the agreement: LeVan v. LeVan (ON CA) at para. 33. A two-stage analysis is required.

[179] In Virc v. Blair, 2014 ONCA 392, the Court of Appeal framed the analysis as follows:

1. Can the party seeking to set aside the agreement demonstrate that one or more of the s. 56(4) circumstances is engaged?
2. If so, is it appropriate for the court to exercise its discretion to set aside the agreement?

[180] In addition to s. 56(4), s. 33(4) of the Family Law Act permits the court to set aside a provision for support or a waiver of a right to support in a domestic contract if (1) the provision for support or waiver of the right to support results in unconscionable circumstances, (2) the provision or waiver is by or on behalf of a dependent who qualifies for an allowance out of public monies, or (3) there is default in the payment of support under the contract when the application is made.

[181] Section 56(4) differs from s. 33(4) Family Law Act in that s. 33(4) operates even when there is a valid and subsisting domestic contract but the provision respecting support results in unconscionable circumstances: Scheel v. Henkelman, 2001 CanLII 24133 (ON CA), [2001] O.J. No. 55 (C.A.).

[182] In general, the doctrine of unconscionability with respect to domestic contracts under s. 56(4)(c) Family Law Act focuses on whether or not there were unconscionable circumstances surrounding the formation of the contract. Under s. 33(4), the focus is on the results of the waiver of support: does that waiver result in unconscionable circumstances when the agreement is triggered by separation: Toscano v. Toscano, 2015 ONSC 487.

[183] Section 33(4) applies only where the application for support is made under s. 33 of the Family Law Act: Scheel. Here, the parties married and the claim for spousal support is made pursuant to s. 15.2 of the Divorce Act. The extent to which an agreement waiving spousal support results in unconscionable circumstances is a relevant consideration on an application pursuant to s. 15.2 of the Divorce Act.

[184] Section 15.2 of the Divorce Act, R.S.C. 1985, c.3 (2nd Supp.), as am. gives the court jurisdiction to award periodic or lump sum spousal support upon marriage breakdown. In making an order for support, the court must consider the condition, means, needs and circumstances of each spouse including,

(a) The length of time the spouses cohabited; (b) The functions each performed during cohabitation; and (c) Any order, agreement or arrangement relating to the support of either spouse: s. 15.2(4). [Emphasis added]

[185] The presence of an agreement addressing or waiving spousal support is a relevant but not necessarily determinative consideration on a claim for spousal support.

[186] In the seminal case of Miglin v. Miglin, 2003 SCC 24, the Supreme Court of Canada addressed the proper approach to a claim for spousal support where the parties have executed an agreement that includes a release of any future claim for spousal support. At para. 4, Justices Bastarache and Arbour, for the majority, outline the approach to be taken:

As we explain below, we believe 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. In an originating application for spousal support, where the parties have executed a pre-existing agreement, the court should look first to the circumstances of negotiation and execution to determine whether the applicant has established a reason to discount the agreement. The court would inquire whether one party was vulnerable and the other party took advantage of that vulnerability. The court also examines whether the substance of the agreement, at formation, complied substantially with the general objectives of the Act. As we elaborate later, these general objectives include not only an equitable sharing of the consequences of the marriage breakdown under s. 15.2, but also certainty, finality and autonomy. Second, the court would ask whether, viewed from the time the application is made, the applicant has established that the agreement no longer reflects the original intention of the parties and whether the agreement is still in substantial compliance with the objectives of the Act.

[187] The objectives of spousal support are found in s. 15.2(6) which 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 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.

[188] Kim seeks to set aside the Cohabitation Agreement in its entirety pursuant to s. 56(4) Family Law Act. Specifically, she urges me to find that:

1. Dave failed to provide financial disclosure as required;
2. She signed the Cohabitation Agreement under duress or undue influence;
3. The Cohabitation Agreement was signed in unconscionable circumstances; and
4. I should exercise my discretion to set aside the agreement.

[189] In the alternative, she argues that the agreement should be given little weight as it does not comply with the objectives of the Divorce Act, is an agreement that took advantage of her vulnerability at the time, and no longer reflects the original intentions of the parties or the objectives of the Divorce Act given her ongoing health issues since 2005.

[190] Dave argues that the Cohabitation Agreement was negotiated at arm’s length with the involvement of independent legal counsel. It was and is procedurally and substantively in compliance with applicable legislation. The Cohabitation Agreement is valid and binding both as it relates to property division and spousal support.

[191] I will deal first with financial disclosure, then examine the Cohabitation Agreement in relation to common law principles of duress, undue influence and unconscionable transaction. Finally, I will consider the issue of spousal support claim in light of the waiver contained in the Cohabitation Agreement.

Financial Disclosure

[192] As noted, s. 56(4)(a) Family Law Act permits the court to set aside a domestic contract where a party failed to disclose significant assets or liabilities to the other when the contract was made. The obligation to make financial disclosure applies regardless of any agreement to the contrary: s. 56(7) Family Law Act.

[193] In Patrick v. Patrick, 2002 CarswellOnt 593, Justice Mesbur wrote at para. 52:

Marriage contracts are a device by which parties can opt out of most or part of the Family Law Act, its property provisions, its support provisions or both. Fundamental to a choice to opt out of the legislative scheme is a clear understanding of what one’s rights and obligations might be if there were no marriage contract. It is in this context that financial disclosure is critical.

[194] The obligation to make full disclosure before the contract is entered into is a positive obligation on both parties and is not to be construed narrowly: LeVan v. LeVan, 2006 CanLII 31020 (ON SC), 2006 CarswellOnt 5393 (S.C.J.) at para. 181 citing Hicks v. Hicks (2002), 2002 CanLII 49566 (ON SC), 26 R.F.L. (5th) 370 (Ont. S.C.J.) at para. 44. See also Quinn v. Keiper, 2007 CanLII 45714 (ON SC), [2007] O.J. No. 4169 (S.C.J.) affirmed 2008 ONCA 662.

[195] In Virc, the Ontario Court of Appeal held that the court is required to take a holistic approach to determining whether there has been a failure to make financial disclosure. This requires a careful balancing of the circumstances, and an analysis of the intentions underlying the parties’ conduct (see para. 74).

[196] The deliberate failure to make full and honest disclosure of all relevant financial information makes the domestic contract vulnerable to judicial intervention, especially where the resultant agreement is at substantial variance from the objectives of the legislation: Rick v. Brandsema, 2009 SCC 10 at para. 49.

[197] In Virc, Justice Pepall wrote at paras. 68 and 69:

68. It is one thing to disclose assets and liabilities and their values believing the disclosure to be true. It is quite another to deliberately misrepresent the values of assets and liabilities knowing them to be untrue. The law does not entitle a liar to succeed just because the recipient of the falsehoods has not ferreted them out.

69. Furthermore, a clear finding of actual knowledge of the misrepresentation is required. While, as noted in Cheshire and Fifoot, actual knowledge of the falsehood may constitute a defence, a mere suspicion of lack of veracity does not absolve the fraudster of responsibility….

[198] Proper disclosure requires both parties to disclose values. It is not enough to simply provide a list of assets, debts and other liabilities: LeVan at para. 182. The parties must also disclose their respective incomes from all sources.

[199] However, a party to a marriage contract cannot enter into it knowing of shortcomings in disclosure and then rely on those shortcomings as the basis to have the contract set aside: Butty v. Butty, 2009 ONCA 852. Parties are expected to use due diligence in ascertaining the facts underlying their agreements; a party cannot fail to ask obvious questions and then rely on a lack of disclosure: Quinn at para. 48.

[200] The first question to be asked is whether or not there was proper financial disclosure. If so, the court must then consider whether to exercise its discretion to set aside the agreement. In exercising that discretion, the court should consider the following non-exhaustive list of factors enumerated in LeVan:

a) Was there concealment of an asset or material misrepresentation? b) Was there duress or unconscionable circumstances? c) Did the party seeking to set aside the agreement neglect to pursue full disclosure? d) Has the party seeking to set aside the agreement moved expeditiously for that relief? e) Did the party seeking to set aside the agreement receive substantial benefits under the agreement? f) Did the responding party fulfill his or her obligations under the agreement? g) Was the non-disclosure material to the aggrieved party entering into the agreement?

[201] In Quinn, Brown J. included the following additional factors:

a) Whether the party who did not make full disclosure was asked or refused to do so; b) Whether that party misrepresented or concealed financial facts; c) Whether the other party had full financial information in any event; d) Whether the other party would have signed the contract in any event; and e) Whether the party moving to set aside the agreement was otherwise aware of the asset and had the means to ascertain its value.

Analysis

[202] This is not a case where the parties exchanged financial information that was misleading or incomplete in the sense that one side misrepresented or omitted some information. Here, no formal financial statements were provided, nor was there an exchange of even a rudimentary list of assets, debts and other liabilities. There was no financial disclosure beyond what each knew of the other’s income, assets and debts from living together.

[203] The Cohabitation Agreement does not attach financial information as a schedule; in fact, it is silent as to the parties’ incomes and assets/debts.

[204] The financial disclosure provision in Cohabitation Agreement is set out in full at para. 70 above. That provision focuses on what requests for information have been made, and satisfaction with what information has been received from the other party. In short, the terms of the agreement do not purport to contract out of financial disclosure (which they cannot do) but acknowledge satisfaction with information received.

[205] Despite that provision, neither party made any request of the other for financial disclosure of any kind. They did not even sit down at the kitchen table, for example, to show the other a pay stub, an investment statement, the mortgage statement for 93 Bee St., an estimate of value for the cottage etc. They also never sat down together to provide financial disclosure orally.

[206] Simply put, there was no financial disclosure by either of them to the other beyond what they already knew of each other’s finances. She did not ask and he did not volunteer the information.

[207] I find that Kim has satisfied me that Dave did not provide financial disclosure of his assets and debts or other liabilities including estimates of value or amount.

[208] Dave’s failure to provide financial disclosure to Kim was deliberate in the sense that it was an intentional omission. However, I find that it was not done to hide assets from Kim. Rather, I find that he was of the view that it was irrelevant because they were each going to hold onto whatever they owned then and in the future; if not, there was no future to their relationship.

[209] Dave wanted an agreement with Kim so that what was his, was his and what was hers, was hers. If they broke up, he kept his stuff and she kept hers. There was no “ours”. If she was not willing to agree to that arrangement, he was prepared to terminate their relationship. He was direct and clear as to what he wanted and what he was prepared to do if she did not agree.

[210] The failure to provide financial disclosure in that context is perhaps understandable but does not comply with the requirements of the Family Law Act.

[211] I turn now to whether I should exercise my discretion and set aside the Cohabitation Agreement for failure to provide financial disclosure.

[212] Having regard to the factors set out at paras. 200 and 201 above, I find that:

a) There was no concealment in the sense of hiding assets nor any misrepresentation as to value. There was simply no disclosure. Kim already knew of Dave’s company, his cottage, and that the house was in his name and there was a mortgage. She knew that he had investments because she left the room when Dave met with his advisor. She knew he had a good paying job at Laidlaw. She did not know nor did Dave provide any estimates of value for any assets.

b) For reasons that will be discussed below, there was no duress, undue influence or unconscionable circumstances. I reject any suggestion that Kim failed to seek financial disclosure from Dave because she feared what he might do if asked.

c) Kim made no effort to seek disclosure from Dave. There was nothing preventing Kim or her lawyer from asking for financial disclosure. As above, I do not accept her explanations for not asking Dave for information.

Kim had independent legal counsel. She read and understood the Cohabitation Agreement, which she confirmed in her signed Acknowledgement and in her evidence at trial. It is clear from the wording of the Financial Disclosure provision that she could have asked for financial disclosure. Simply put, Kim knew she could ask for disclosure from Dave and did not do so.

d) Kim did not move expeditiously to set aside the Cohabitation Agreement. She did not initiate a claim to set aside the agreement until this proceeding was commenced on October 29, 2015. I note that Kim did not seek to set aside the Cohabitation Agreement during their five year separation between April 2002 and the Spring of 2007. During that period, she did not receive spousal support nor did she seek equalization.

e) According to the Cohabitation Agreement, Kim was to receive one-half of the increase in value to the property at 90 Bee St. upon separation. That property was sold before they separated when they moved to the Innerkip property in 1997. The Cohabitation Agreement specified the starting value for the Bee St. property as $96,000. It was sold to Kim’s brother for $109,000, an increase of $13,000. No evidence was provided by either party as to the value of the Bee St. property as of the date of separation in 2002 or 2010.

When the parties separated in 2002, Dave paid the down-payment on the Graham St. property together with renovations and moving costs. He paid significantly more than $6,500 (one half of $13,000). Kim retained those monies when they reconciled and the Graham St. property was sold. He also purchased the property at 93 Bee St. in 2010 for Kim. Thus, Kim received her share and more of the increase in value of the property at 90 Bee St. as contemplated by the Cohabitation Agreement.

f) As indicated, Dave fulfilled his obligations under the Cohabitation Agreement; in fact, he went well beyond what he was required to do by that agreement.

g) Dave’s non-disclosure was immaterial to Kim’s decision to enter into the Cohabitation Agreement. There is absolutely no evidence that Kim would have refused to enter into the agreement if she had known the full details of Dave’s financial affairs. To the contrary, Kim executed the agreement which expressly provided that she was content with the financial disclosure she had. She made no inquiries of Dave whatsoever. As she indicated to others, she signed the agreement because she loved Dave and did not want to lose him.

h) Kim would have signed the Cohabitation Agreement on the same terms in any event.

[213] The financial disclosure provided by Dave was wholly inadequate; in fact, there was no disclosure per se. At the same time, Kim knew that she could ask for disclosure but did nothing. She knew generally what Dave owned but not everything. She was content to enter into the agreement without that disclosure. She clearly understood what the agreement meant as it relates to property division. That is corroborated by her grandmother’s testimony.

[214] With the benefit of hindsight, Kim’s decisions not to seek disclosure and to sign the Cohabitation Agreement are imprudent. Hindsight is always 20-20. However, at the time, she knew what she was agreeing to. She knew what she could ask for by way of disclosure. She chose not to ask and to execute the agreement.

[215] I decline to exercise my discretion to set aside the Cohabitation Agreement for failure to provide proper financial disclosure. As in Butty, it seems to me unfair to permit Kim to now rely upon non-disclosure when she knew at the time that she was entitled to ask for financial disclosure and did not. Further, I am not satisfied that if proper disclosure had been made, Kim would have refused to enter into the agreement or the terms of that agreement would have been any different than they are. Finally, I am troubled by Kim’s failure to move expeditiously to set aside the agreement and by the fact that she has done so only after she has reaped the benefits of the agreement albeit limited as they are.

Duress and Undue Influence

[216] With respect to s. 56(4)(c) Family Law Act, all of the common law rules that govern the validity of contracts in general apply to domestic contracts: Dochuk v. Dochuk, 1999 CarswellOnt 353 (S.C.J.) at para. 3 citing Rosen v. Rosen (1994), 1994 CanLII 2769 (ON CA), 3 R.F.L. (4th) 267.

[217] Whether a domestic contract is valid depends, in part, on whether the agreement was entered into under duress or as a result of undue influence or other unconscionable conduct: Deroon; Rosen.

[218] The presence and involvement of legal counsel is a factor to be considered but it is not determinative of the issue of validity per se: Ashmore v. Ashmore, 1996 CarswellOnt 3676 (S.C.J.) at para. 41; Gammon v. Gammon, 2008 CarswellOnt 802 (S.C.J.) at para. 70.

[219] In Berdette v. Berdette, 1991 CanLII 7061 (ON CA), 1991 CarswellOnt 280 (ON CA), Galligan J. A. set out the test for undue influence and duress at paras. 21 and 22:

21. I adopt the definition of undue influence found in the judgment of Henry J. in Brooks v. Alker (1975), 1975 CanLII 423 (ON SC), 22 R.F.L. 260, 9 O.R. (2d) 409, 60 D.L.R. (3d) 577 (H.C.), at p. 416 [O.R., p. 266 R.F.L.]. There undue influence was defined as the “unconscientious use by one person of power possessed by him over another in order to induce the other to” do something.

22. Finlayson J.A., speaking for the majority of this Court in Stott v. Merit Investment Corp. (1988), 1988 CanLII 192 (ON CA), 19 C.C.E.L. 68, 25 O.A.C. 174, 63 O.R. (2d) 545, 48 D.L.R. (4th) 288 (C.A.), leave to appeal to S.C.C. refused (1988), 63 O.R. (2d) x (note), 49 D.L.R. (4th) viii (note) (S.C.C.), at pp. 561-562 [63 O.R.], said that in order for pressure to amount to duress it must be “’a coercion of the will’, or it must place the party to whom the pressure is directed in such a position as to have ‘no realistic alternative’” but to submit to it. [Italics added]

[220] Duress need not be actual or threatened violence, but merely the deliberate actions by one party sufficient to pressure the will of the other to such an extent as to leave no realistic ability to freely decide: Aly v. Nader Halal Meat Inc., 2013 ONSC 1313 at para. 368.

[221] In Turk v. Turk, 2005 CarswellOnt 14939, Justice Kitely set out the following definition of duress:

Duress is said to occur where there is such pressure placed on one of the parties that any consent by that party is not sufficient to uphold the agreement. There exists an absence of choice which in effect vitiates any ability to lawfully consent. However, duress sufficient to void an agreement does not arise based only upon a lack of will to proceed but rather it must be based upon a resolution on the part of the submitting party that there is no other practical choice but to perform the act in question. Duress can be established based upon actual or threatened violence or upon economic consideration.

Analysis

[222] Kim argues that she did not want to sign the agreement and only did so because Dave threatened to throw her and Kaelyn out on the street. She also feared that he would cause her to be fired by Laidlaw where they both worked. She and Kaelyn would be destitute. She submits that it is her subjectively held perception that governs.

[223] She also contends that Dave was the dominant personality in their relationship. She always tried to please him. Other witnesses testified that they observed Kim trying to do what Dave wanted and how he wanted it. In sum, she says that she was submissive to his wishes to the point where she had no free will.

[224] I am not satisfied that Kim signed the Cohabitation Agreement because of duress. To the contrary, I find that she signed the agreement freely and voluntarily as she confirmed in the Acknowledgement witnessed by Ms. Hornick, her lawyer.

[225] In coming to this conclusion, I note the following:

1. Dave first presented a draft Cohabitation Agreement to Kim a year or more before she signed it.
2. Kim met with her counsel three times over the course of that year.
3. Kim never indicated to Ms. Hornick that she felt compelled or pressured to sign the agreement and her Acknowledgement says otherwise.
4. The draft agreement Dave provided was amended as a result of changes requested by Ms. Hornick.
5. Dave was not present on any of the occasions when Kim met with her lawyer.
6. Although they spoke of the agreement from time to time, Dave did not exert any pressure on Kim to get the agreement finalized and signed.
7. Kim had independent legal advice from a well-known local family lawyer.
8. Dave’s advice that their relationship was over and she would have to move out if they did not have a Cohabitation Agreement does not constitute a threat. It simply reflects frankly his willingness to end the relationship if they did not sign a Cohabitation Agreement, and the natural consequence of that end.
9. Dave did not threaten to throw her and Kaelyn out on the street.
10. There is no evidence that Dave threatened to have her employment at Laidlaw terminated if she did not sign; in fact, he was in a separate division and had no ability to do so. Her evidence that she believed he would do so strikes me as entirely convenient at this stage. She never even hinted at such a concern when speaking with friends or family at the time.
11. Kim had lived on her own with Kaelyn relatively recently. She had family in the area. She had a job. She had work skills.
12. The evidence that Kim tried to please Dave – that things had be done as he wanted them – again strikes me as an exaggeration. I have no doubt that Kim tried to please Dave by doing things he liked. He undoubtedly did the same for her. The power dynamic of this relationship was unremarkable. She was not lacking in free will when she signed the agreement or at any point in their relationship.
13. When she signed the agreement she knew exactly what she was signing and what it meant. She signed it because she loved Dave and did not want to lose him. She may have preferred not to have an agreement but signing the agreement so that their relationship would continue does not amount to duress.

[226] I also find that there was no undue influence by Dave with respect to the Cohabitation Agreement. I find that he did not hold any “power” over Kim nor did he exert any power unconscientiously to induce her to sign the Cohabitation Agreement. The reasoning set out in the preceding paragraph applies equally to the assertion of undue influence.

Unconscionable Conduct

[227] To succeed on a claim for unconscionable conduct, Kim must establish:

1. Inequality between the parties;
2. A preying by Dave upon her;
3. Improvidence by Kim; and
4. A failure by Dave to act with scrupulous care for the welfare and interests of Kim: Rosen, paras. 10-12.

[228] In Rosen, Grange J.A. wrote at para. 13:

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….

[229] The degree of power imbalance necessary in a family law context is less than that required for an ordinary commercial contract; however, there is no presumption of a power imbalance, nor should the court presume that one party took advantage of the other’s vulnerability: Miglin, at para. 82.

Analysis

[230] I am not satisfied that there was an inequality between the parties that was material to the negotiations and discussions surrounding the Cohabitation Agreement.

[231] First, there is no evidence that Kim’s mental health issues was then in play.

[232] Second, as between them, Dave came into the relationship with more assets and the better paying job. Both had a child for whom they had financial responsibilities. He clearly stood on firmer financial footing, but Kim was by no means economically dependent upon Dave.

[233] She was employed and was receiving child support and the child tax benefit for Kaelyn. She and Kaelyn had lived independently before and could no doubt do so again if need be.

[234] If the disparity in their incomes and assets does give rise to an inequality in bargaining power or vulnerability on Kim’s part, I find that was compensated for adequately as Kim had independent legal advice for which she was paying nothing.

[235] Finally, I find that Dave did not prey upon Kim. The provision of independent legal advice in these circumstances negates that inference. That the agreement is more beneficial in the long term to Dave than Kim, that he pays less than what would be required for equalization under the Family Law Act or for spousal support under the Divorce Act many years later does not mean the agreement was unconscionable at the time it was formed.

[236] I note that at the time the agreement was negotiated and signed, Kim and Dave’s period of cohabitation was relatively modest. They were not yet married. The house they were residing in was purchased by him. He was paying the mortgage on it. The cottage was also in his name alone and he brought it into the relationship. If they had terminated their relationship the day after they signed the Cohabitation Agreement, the terms of that agreement would be within the range of reasonable outcomes. Neither of them knew how long the relationship would last.

[237] Whether on a commercial standard or the more lenient family law standard, the facts here do not warrant a finding of unconscionable transaction.

Validity of Cohabitation Agreement - Conclusion

[238] I conclude that the Cohabitation Agreement is a valid and binding domestic contract. It should not be set aside pursuant to s. 56(4) of the Family Law Act. Accordingly, there will be no equalization of net family property and the parties’ property rights will be as set out in the Cohabitation Agreement.

[239] The analysis is not complete, however, on the issue of the spousal support claim.

Spousal Support

[240] As indicated above, the Supreme Court of Canada in Miglin set out a two stage analytical framework where a party seeks spousal support under s. 15.2 in the face of a pre-existing agreement.

[241] Stage one focuses on the circumstances in which the agreement was negotiated and executed. The trial judge is to first consider the conditions of the parties at the time, and whether there were any circumstances of oppression, pressure or other vulnerabilities.

[242] Where vulnerabilities do not exist or have been effectively compensated for by the involvement of legal counsel, or where those vulnerabilities have not been taken advantage of, the court should consider the agreement to be a genuine reflection of their intentions: Miglin, para. 83. If that is the case, the court should be very hesitant to interfere.

[243] The reverse is equally true: viz. an agreement that arises from a power imbalance that vitiates the bargaining process should be given little weight when determining what the parties regarded as an equitable sharing of the consequences of the marriage breakdown at the time the agreement was made: Miglin, para. 83.

[244] At stage one of the analysis, the trial judge must also determine the extent to which the agreement at the time it was made takes into account the factors and objectives listed in the Divorce Act which are aimed at an equitable sharing of the economic consequences of marriage and its breakdown.

[245] When looking at the substance of the agreement, the trial judge must assess whether the agreement is in “substantial compliance” with the Divorce Act; specifically, the trial judge must determine whether the agreement read as a whole represents a significant departure from the general objectives of the Act (para. 84).

[246] The objectives of the Act include the spousal support considerations in s. 15.2(6), as well as finality, certainty and the right of parties to determine their own affairs including latitude for parties to establish their own goals and priorities (para. 85).

[247] Closer scrutiny is required where there are vulnerabilities at the time the agreement was formed. The degree of scrutiny will reflect the degree of vulnerability (para. 85).

[248] At stage two, the trial judge must consider the extent to which enforcement of the agreement still reflects the intentions of the parties and the extent to which it is still in substantial compliance with the objectives of the Act (para. 87). A finding of a “change” is not a pre-condition that, if present, allows the court to disregard the agreement (para. 90).

[249] Rather, the trial judge must be persuaded that intervention is required and only to the extent necessary (para. 90).

[250] The parties’ intentions provide the backdrop against which the trial judge must consider the situation at the time the application is made. Changed circumstances may justify a deviation from the terms of the agreement. The onus rests on the party seeking relief under s. 15.2 to satisfy the court that in light of new circumstances, the terms of the agreement no longer reflect the parties’ intentions at the time they signed the agreement (para. 88).

[251] The degree of change need not be “radical”. The test is not one of strict foreseeability – for example, that the parties could not reasonably foresee the change. The issue is the extent to which the agreement can be said to have contemplated the situation before the court at the time of the application (para. 89).

Analysis

a. Stage One Analysis

[252] Turning to stage one of the analysis, I have already considered the circumstances in which the agreement was negotiated and executed. I need not repeat that analysis here. I am satisfied that there were no vulnerabilities or, if present, they were amply compensated for by the involvement of legal counsel. There is nothing in the manner in which the agreement came about that causes me to discount it.

[253] The next step in the stage one analysis is to consider whether the terms of the agreement, at the time it was made, substantially complied with the general objectives of the Divorce Act.

[254] The spousal support provisions are found at para. 7 of the agreement. It simply says that the parties acknowledge that neither is a dependent on the other for financial support, and each will be fully and solely responsible for his or her own support in the future. They agree never to make a claim for spousal support.

[255] The spousal support terms must be looked at in the context of the agreement as a whole. The agreement expressly contracts out of the equalization provisions of the Family Law Act and precludes equitable claims such as constructive or resulting trust. The parties intended to remain separate as to property, finances and income.

[256] The terms of the agreement are clear and unambiguous. The general theme is: there is only mine and yours, no ours. If we break up, you keep yours, I keep mine. We go our separate ways with no obligations owing to the other.

[257] With respect to support, the Cohabitation Agreement expressly states at paragraph 2 (2) and (3) that each are employed and where. It is with that background information that they acknowledge and agree at paragraph 7(1)(a) that “neither party is dependent on the other for financial support”.

[258] The agreement was negotiated and executed relatively soon after they began to cohabit and before they married. Both were then employed. They were in good health. Kaelyn was living with them but Lauren’s primary residence was with Susan.

[259] It seems to me that the agreement as it relates to the waiver of future spousal support was premised on continued employment or at least the ability to work. As the parties were employed (or employable) and each was relatively self-sufficient at the time the agreement was signed, it cannot be said that the agreement did not comply with the objectives of s. 15.2 at the time it was made.

[260] Miglin involved a separation agreement negotiated between spouses after marriage breakdown. In the case of a separation agreement, the economic effects of the marriage and its breakdown are largely known.

[261] By contrast, the agreement here was anticipatory – what would happen if they broke up in the future. Neither party had a working crystal ball; they could not know how long they would be together, or what life had in store for each of them. Some allowance must be given the parties in those circumstances. The agreement as at the date of its formation should not be assessed against the objectives of the Act with hindsight nor with the expectation that they could or would anticipate every contingency.

[262] In my view, it was open to the parties to enter into a contract by which both waived spousal support entitlement in the future in the belief and expectation that they would each continue to work outside the home. In other words, the assumption underlying this agreement as it relates to spousal support was not unreasonable at the time the contract was made.

[263] The temporal focus of the stage one “substantial compliance” analysis is at the time of formation of the agreement in question. The fact that Kim waived her right to seek spousal support from Dave, the clearly higher earner at that point, does not automatically lead to the conclusion that the agreement fails to comply with the objectives of the Act.

[264] On balance, I find that the Cohabitation Agreement does substantially comply with the objectives of the Divorce Act for spousal support purposes. In coming to that conclusion, I have considered the various objectives of the Act in the context of Kim and Dave’s relationship and the circumstances at the time.

b. Stage Two Analysis

[265] In Miglin, Justices Bastarache and Arbour wrote at paras. 87-91:

87. Where negotiation of the agreement is not impugned on the basis set out above and the agreement was in substantial compliance with the general objectives of the Act at the time of creation, the court should defer to the wishes of the parties and afford the agreement great weight. Nevertheless, the vicissitudes of life mean that, in some circumstances, the parties may find themselves down the road of their post-divorce life in circumstances not contemplated. Accordingly, on the bringing of an application under s. 15.2, the court should assess the extent to which enforcement of the agreement still reflects the original intention of the parties and the extent to which it is still in substantial compliance with the objectives of the Act.

88. The parties’ intentions, as reflected by the agreement, are the backdrop against which the court must consider whether the situation of the parties at the time of the application makes it no longer appropriate to accord the agreement conclusive weight. We note that it is unlikely that the court will be persuaded to disregard the agreement in its entirety but for a significant change in the parties’ circumstances from what could reasonably be anticipated at the time of negotiation. Although the change need not be “radically unforeseen” and the applicant need not demonstrate a causal connection to the marriage, the applicant must nevertheless clearly show that, in light of the new circumstances, the terms of the agreement no longer reflect the parties’ intentions at the time of execution and the objectives of the Act. Accordingly, it will be necessary to show that these new circumstances were not reasonably anticipated by the parties, and have led to a situation that cannot be condoned.

89. We stress that a certain degree of change is foreseeable most of the time. The prospective nature of these agreements cannot be lost on the parties and they must be presumed to be aware that the future is, to a greater or lesser extent, uncertain. It will be unconvincing, for example, to tell a judge that an agreement never contemplated that the job market might change, or that parenting responsibilities under an agreement might be somewhat more onerous than imagined, or that a transition into the workforce might be challenging. Negotiating parties should know that each person’s health cannot be guaranteed as a constant…. That said, we repeat that a judge is not bound by the strict Pelech standard to intervene only once a change is shown to be “radical”. Likewise, it is unnecessary for the party seeking court-ordered support to demonstrate that the circumstances rendering enforcement of the agreement inappropriate are causally connected to the marriage or its breakdown. The test here is not strict foreseeability; a thorough review of the case law leaves virtually no change entirely unforeseeable. The question, rather, is the extent to which the unimpeachably negotiated agreement can be said to have contemplated the situation before the court at the time of the application.

90. The court’s focus should be on the agreement’s continued correspondence to the parties’ original intentions as to their relative positions and the overall objectives of the Act, not on whether a change occurred per se. … [Italics added]

[266] I am satisfied that there has been a significant change in circumstances from that contemplated by the parties in the terms of the Cohabitation Agreement. That change is Kim’s health and corresponding inability to work.

[267] Dave argues that Kim can, in fact, work. He was willing to pay for her to obtain her real estate licence which she refused to do. There are and have been other jobs for which she is suited given her education and past employment skills. He maintains that she is deliberately underemployed. He points to the absence of medical evidence at the trial to confirm her inability to work.

[268] I note that Kim is on long-term disability. She has been for several years. The insurer no longer requires medical evidence that she cannot work. She was on disability during the last five years of their relationship. There was no suggestion by Dave during that period that she should have been working or that that was an issue they discussed. He accepted that she could not work.

[269] I infer from the fact that she has been on long-term disability for so long that she is incapable of working. She has tried part-time employment including work which requires minimal physical exertion but was unable to continue because of pain. Her insurer has apparently accepted that she cannot work and so do I.

[270] As indicated above, the Cohabitation Agreement contemplated that both “will be responsible at all times for his or her own support”. Implicit in that commitment is the capacity to do so.

[271] I am satisfied that the Cohabitation Agreement never contemplated that one of the parties would be incapable of employment for health reasons. I am mindful of the dicta in para. 89 in Miglin that parties to an agreement must be taken to know that their health cannot be guaranteed as a constant. However, that reasoning does not mean that every possible health related change should be ignored.

[272] I find that the Cohabitation Agreement did not contemplate a situation where Kim’s health was so compromised that she would be unable to work at all. As I have indicated earlier, the agreement assumed ongoing employment or at least the ability to work. Surely the parties did not intend that they each be responsible for their own financial needs even in circumstances where they are incapable of doing so.

[273] I observe that Dave’s conduct post-separation and prior to these proceedings is inconsistent with the strict enforcement of the agreement. He purchased the home for her at 93 Bee St.. He paid for work done at that home. He did some of that work himself. He put money in her account from time to time to help her out. He kept her on his health plan so that she could get her medications for less expense.

[274] I do not intend by that observation to mean that Dave‘s conduct prevents him from relying on the agreement or signals that he accepted that some form of ongoing support was due. Courts should be hesitant to force parties to be churlish about enforcing the limits of their obligations. Good deeds should not be punished.

[275] In my view, Dave’s conduct post-separation is consistent with his evidence that when they were discussing his desire for an agreement, he would not have thrown Kim and Kaelyn out of the house; that he would never see Kim be in hardship. Dave still cared for Kim even if the marriage was at an end. His conduct confirms that Kim needed financial help when they separated and since then. Because of her health and the expenses related to those issues, Kim cannot be self-dependent.

[276] The evidence shows that but for the Cohabitation Agreement, Kim would have been entitled to spousal support on a compensatory basis as:

1. She assumed greater responsibility for domestic chores which freed Dave to pursue his career. His job entailed long hours and travel which he could do, in part, because Kim took care to household tasks.
2. Although her relationship with Lauren was one of considerable conflict, Kim nonetheless took on child care responsibilities for Lauren when Dave was at work or away.
3. Kim assisted Dave in entertaining clients and Dave’s staff/co-workers at both the cottage and their home.

[277] In my view, Kim would also be entitled to spousal support on a non-compensatory basis as:

1. She was unable to meet her financial needs on marriage breakdown. But for Dave’s purchase of the 93 Bee St. property, she would not have been able to afford a home.
2. The economic impacts of the breakdown of their marriage were more keenly felt by Kim who lacked a job or the ability to be employed. Her standard of living post-separation in 2010 was substantially diminished and far below Dave’s.

[278] Further, the financial statement filed by Kim and her evidence at trial supports that she continues to be in need. She has had to discontinue some medications because they are too expensive. She has gone into debt to meet her ongoing expenses which are modest.

[279] I am satisfied that in the context of the whole of their agreement, strict enforcement of the terms of the Cohabitation Agreement as it relates to spousal support does not comply with the objectives of the Divorce Act, specifically s. 15.2(6)(a) and (c).

Spousal Support Entitlement - Conclusion

[280] I conclude that the agreement no longer reflects the original intentions of the parties as reflected in the terms of the Cohabitation Agreement in light of Kim’s unexpected and significant health issues. Further, Kim’s changed circumstances are such that strict application of the Cohabitation Agreement would no longer be in substantial compliance with the objectives of the Act. In these circumstances, the Cohabitation Agreement does not bar Kim’s claim for spousal support although it does continue to have relevance on the issues of quantum and duration.

Equalization/Quantum and Duration of Spousal Support

[281] It follows from my finding that the Cohabitation Agreement is valid and binding that no equalization is payable by Dave to Kim.

[282] With respect to spousal support, Kim’s position is that:

• Spousal support should be paid by Dave at the mid-range of the Spousal Support Advisory Guidelines based on their respective incomes between 2016 and 2018;
• Dave retired early to avoid or minimize spousal support payable. His 2017 income ($430,000) should be used as his income for spousal support purposes for 2018;
• Mid-range monthly spousal support payable for 2016, 2017 and 2018 is: 2016 $10,677 2017 $7,059 2018 $7,059.
• If there is no equalization payment, Dave should pay lump sum spousal support of $800,000 based on a nine year support order.

[283] Kim’s spousal support approach assumes that if the Cohabitation Agreement provisions on spousal support are not to be enforced strictly, spousal support should be calculated as if the Cohabitation Agreement never existed. I disagree.

[284] If the Cohabitation Agreement had been set aside under s. 56(4) Family Law Act or if the stage one Miglin analysis required that the agreement be given little weight, Kim’s approach makes sense. However, in this case I have found that but for Kim’s unexpected health issues and their effect on her ability to be financially independent, the Cohabitation Agreement would apply and would be entitled to great weight in the s. 15.2 analysis. The existence of and intent of the Cohabitation Agreement should not be cast aside and ignored.

[285] I am mindful that para. 3.2.4 of the Spousal Support Advisory Guidelines expressly contemplates that the intentions of the parties as expressed in an agreement may continue to influence the outcome (amount of spousal support) where the agreement is set aside or overridden under existing law.

[286] In my view, the quantum of spousal support should not be calculated by simply looking at their respective incomes and plugging in the information necessary to get a range based on the Spousal Support Advisory Guidelines. It is Kim’s need and circumstances which drive the analysis, not their previous standard of living. The intention of the parties in their agreement still bears on the amount and duration of spousal support payable: see Miglin, para. 90.

[287] Recognition must also be taken of monies advanced by Dave to and for Kim to date in calculating the quantum and duration of spousal support. She has sole title to a home that Dave paid for. She has received other monies for home improvements and more.

[288] I am mindful of the great disparity in their respective incomes and Dave’s ability to pay. I do not agree with Kim’s bald assertion that Dave retired early to reduce his spousal support obligations. He was 63 years old and had worked in the trucking business for 43 years. His job was demanding.

[289] The Spousal Support Advisory Guidelines are not mandatory; however, the figures provided by Kim’s counsel in written submissions are noted and have been considered as part of this analysis.

[290] Kim’s financial statement sworn March 19, 2018 indicates that her monthly expenses exceed her monthly income from all sources by $1,640. Her assets include the house which she estimates is valued at $226,000. There is a loan of $51,702 from the Bank of Montreal secured against the house. There is a second loan of $33,626 for a vehicle loan also from the Bank of Montreal.

[291] In Davis v. Crawford, 2011 ONCA 294, Justices Simmons and Lang writing for the five judge panel set out the following principles applicable to a lump sum support payment:

• A court’s ability to award a lump sum payment is not restricted to situations where there is a real risk that periodic payments will not be made or to very unusual circumstances (para. 51).
• Lump sum awards should not be made in the guise of support for the purpose of redistributing assets (para. 60).
• Lump sum awards can be made to relieve against financial hardship if this has not been done by orders dealing with distribution of property and the matrimonial home (para. 61).
• Whether the payor has the ability to make a lump sum payment without undermining his or her future self-sufficiency is an important consideration (para. 63).
• The court must weigh the advantages of a lump sum award against the disadvantages of doing so on the facts of each case (paras. 66-68).
• The judge making the lump sum award should provide a clear explanation for both the basis for the exercise of that discretion and the rationale for the figure arrived at (para. 75).
• If a lump sum award is made, the court should consider whether the amount is in keeping with the Spousal Support Advisory Guidelines and, if not, explain why the Guidelines do not provide a satisfactory result (para. 76).

[292] I find that this is an appropriate case for a lump sum spousal payment for the following reasons:

1. Kim is suffering financial hardship which has not been relieved by property distribution.
2. Dave has significant assets and his annual income even in retirement is more than adequate. His future self-sufficiency will not be undermined by such a payment.
3. Kim has an immediate need as she has gone into debt, in part, to pay health expenses.
4. Although there is minimal risk that periodic payments will not be made, payment of a lump will sever the final knot and allow for a clean break to their past relationship.
5. Both parties’ incomes are unlikely to change significantly in the future so a variation application is unlikely.

[293] I fix the amount of the lump sum spousal support payment at $250,000. In arriving at that figure, I have

1. Fixed monthly spousal support if payable on a periodic basis at $3,000 per month;
2. Accepted the nine year period for duration of spousal support put forward by Kim;
3. Discounted the global figure to take into account monies already advanced by Dave and the present value principle.

[294] To be clear, I have considered the Spousal Support Advisory Guideline ranges for 2016-18. The amount selected for the monthly amount is lower for the reasons expressed above at paras. 285-6.

[295] There is no exact mathematical formula used to arrive at the lump sum amount. It strikes me as a reasonable amount based on Kim’s financial needs, Dave’s ability to pay, Dave’s past payments for Kim’s benefit, the ages of the parties and the length of their cohabitation and marriage.

Conclusion

[296] I conclude as follows;

1. Dave shall pay to Kim a lump sum spousal support payment in the amount of $250,000;
2. The balance of Kim’s claims are dismissed.

[297] If the parties cannot agree on costs, they may make written submissions not exceeding 5 pages within 30 days of release of this decision.

Justice R. Raikes

Released: October 22, 2018

Corrected Released: October 23, 2018

Corrigendum

In paragraph [293] point number 2, missing the word year. Therefore now reads:

[293] ………

2. Accepted the nine year period for duration of spousal support put forward by Kim;

COURT FILE NO.: 10579/15

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Kimberly Jane Golton Applicant

– and –

David William Golton Respondent

REASONS FOR JUDGMENT

Raikes, J.

SCJ

Released: October 22, 2018