introduction

[1] The applicant M.O. (husband/father) and the respondent F.S. (wife/mother) met while studying electrical engineering in Tehran, Iran in May 2005. They were married in Iran on May 5, 2006 and moved to Canada in December 2006 to pursue doctoral studies in engineering at the University of Manitoba. Their only child was born in 2013.

[2] The parties separated on October 15, 2015. In March 2016, the wife decided that she wanted to reconcile. The husband agreed to reconcile if the wife signed a Marriage Contract that his lawyer had prepared. The wife obtained independent legal advice. She signed the Marriage Contract on October 28, 2016, even though she was “strongly” advised not to do so.

[3] The Marriage Contract provides that neither party will ever seek spousal support from the other, equalization of property is waived, and the parties will use their capital if they need support.

[4] After the Marriage Contract was signed, the parties resumed cohabitation in December 2016. They separated again in July 2017 and the husband commenced this application.

[5] The wife suffers from psychosis and schizoaffective disorder. She has been hospitalized on several occasions, is under the care of a psychiatrist and takes medication. Her mental health problems started before she came to Canada. She is unemployed, and her only source of income is ODSP. The child lives with the father and the mother has supervised access.

[6] In this application, the husband seeks sole custody of the child and child support. He states that the mother’s access to the child should be at his discretion, supervised and only after she is assessed by her psychiatrist.

[7] The wife seeks custody, access, spousal support, equalization and an order setting the Marriage Contract aside. She argues that the Marriage Contract was signed without disclosure, that she did not understand the nature and consequences of the contract, that she was under duress and that the Marriage Contract is unconscionable.

[8] The husband states that when his wife signed the Marriage Contract, she was mentally stable and understood the terms of the contract. He argues that the Marriage Contract is valid. As a result, he states that the wife has no right to seek spousal support or equalization.

[9] On March 12, 2019, Moore J. ordered that the issue of the validity of the Marriage Contract be bifurcated from the other issues and proceed to trial. This is the decision from the trial of that issue.

The Legal Framework

[10] Section 56 (4) of the Family Law Act, R.S.O. 1990, c. F.3, that sets out when a court may set aside all or part of a domestic contract as follows:

A court may, on application, set aside a domestic contract or a provision in it,

(a) if a party failed to disclose to the other significant assets, or significant debts or other liabilities, existing when the domestic contract was made;

(b) if a party did not understand the nature or consequences of the domestic contract; or

(c) otherwise in accordance with the law of contract.

[11] The application of s. 56(4) involves a two-stage analysis (LeVan v. LeVan, 2008 ONCA 388 at para. 51; Virc v. Blair, 2014 ONCA 392 at para. 52):

(i) Can the party seeking to set aside the agreement demonstrate that one or more of the s. 56(4) circumstances is engaged?

(ii) If so, is it appropriate for the court to exercise its discretion to set aside the agreement?

[12] The onus is on the party seeking to set aside the separation agreement, to prove that one or more of the subsections of s. 56(4) apply and, if so, that the court should exercise its discretion to set aside all or part of the contract.

[13] The wife relies on s. 56(4) (a), (b), and (c) to set the Marriage Contract aside.

Factual overview

[14] The evidence in chief was introduced by affidavit and the parties were cross-examined. Some of the wife’s medical records were filed on consent and accepted for the truth of the contents. A full copy of her medical records was not provided at trial.

[15] The facts as I find them are set out below and will provide context for the analysis. Further facts will be referred to in the analysis as required. Where evidence of significance differs, it will be identified and considered.

Before the First Separation

[16] In May 2006, the parties were married in Iran. The wife was working as an engineer. She also had part-time employment at two universities. The husband’s family paid all of the wife’s student loans and debts that she accumulated while attending university in Iran.

[17] In December 2006, the parties moved to Winnipeg, Manitoba to pursue doctoral studies in electrical engineering. Before moving to Iran, the wife gave her father-in-law a power of attorney to deal with their finances in Iran.

[18] While the wife was first in her class in Iran when she completed her undergraduate and Master degrees, she struggled to complete her PhD.

[19] During the marriage, the wife testified that she was subject to her husband’s abuse and control. The abuse is dealt with later in these reasons. On the issue of control, the wife was not cross-examined on her evidence and the husband did not deal with this in his evidence.

[20] The husband’s controlling behaviour was pervasive in the marriage. He controlled their money and the wife’s relationships with friends and family. The wife gave her income to her husband and he paid all of the expenses. He did not allow her to keep her own money. Every time she went grocery shopping, her husband insisted on checking the receipts and, if she ever bought something for herself, he would question her about the expense. Her husband did not allow her to have a cell phone until 2015, even though he had one from the time they arrived in Canada. When the wife purchased gifts for her family in Iran, her husband scrutinized the cost and, in anger would tell her that they could not afford gifts. He yelled at her when he thought that she had spent too much money on herself.

[21] The husband controlled his wife’s relationships with her family in Iran and friends in Winnipeg. If she came home late he got angry. He was not happy when she delayed completion of her PhD and he talked to her PhD advisor behind her back. Typically, when they fought he would bring her parents into the argument and try to get them to side with him.

[22] In August 2009, the parties purchased a condominium in Winnipeg. They each contributed $15,000 to the down payment and contributed equally to the expenses.

[23] In September 2009, the parties decided to purchase a one-bedroom condominium in Iran. They contributed equally to the purchase and sent the husband’s father $55,000 to cover the full price. The Iran condominium was put in the wife’s name.

[24] In 2011, the husband completed his doctoral studies and obtained his PhD in electrical engineering. He authored many publications and has two patents. There were no jobs that matched the husband’s skills in Winnipeg. Nevertheless, he explained that he sacrificed his career and remained in Winnipeg while his wife continued to work on her PhD. At this point the husband was earning about $50,000.

[25] From 2007 to 2014, the wife had an income of $18,000. In addition, she received a total of $20,000 in scholarships during this time frame.

[26] In February 2013, the husband told his wife that he wanted to sell the one-bedroom condominium in Iran that was in his wife’s name and purchase a two-bedroom condominium in his name alone. The wife agreed to this sale if it was transferred into their joint names after the mortgage was paid off. After this agreement to sell the condo and buy another one, the wife received no further information about the transactions.

[27] After the birth of their child in 2013, the wife suffered from post-partum depression. Around this time, the husband explained that his wife’s behaviour “started to radically change” and “[s]he started to have serious problems with her supervisor at the University”.

[28] In 2013, the wife began to see a psychologist in Winnipeg on a regular basis. She also joined meditation sessions that the Canadian Mental Health Association organized. Despite this help, the husband observed that his wife’s behavioural symptoms gradually worsened.

[29] The wife felt pressure from her husband to complete her PhD studies. He had completed his PhD and he wanted to move and pursue employment opportunities in another province. There were no jobs in Winnipeg that allowed him to take advantage of his PhD. He explained that his friends “laughed” at him for staying in Winnipeg and “sacrificing everything” for his wife.

[30] The husband explained that his wife was continually fighting with “almost everyone” at the University and she accused her PhD supervisor of sexual misconduct. The allegations were investigated and dismissed. When the wife was asked if she accused her professor of sexual assault, she explained that she was thinking about doing this but did not pursue her allegation, although she talked to the University about her complaint. The wife agrees that she was having delusions at this point and one of her delusions was that her professor wanted to sexually assault her. This is consistent with the wife’s medical records that record her delusions.

[31] In 2014, the husband was busy looking for a job. Despite being busy, he says that he “never stopped supporting” his wife. He planned activities with friends and several trips for them. In 2014, the husband accepted a position teaching in Barrie, Ontario. Before the family moved to Barrie, the wife decided to visit her family in Iran. The husband thought that the trip would help her and so he bought tickets for the trip. The wife and child stayed in Iran for about five months and the husband returned to Canada after two weeks to start his new job.

[32] In 2014, they sold their Winnipeg condominium. From the net proceeds, each received $40,000 and they deposited a further $40,000 in their joint bank account.

[33] The husband testified that prior to 2015, he had no idea that his wife’s behaviour was due to a mental health illness. He thought that she was under stress. While the husband may not have had a medical diagnosis to explain his wife’s behaviour, he knew while they were living in Winnipeg that something was seriously wrong. The husband was so concerned about his wife that he never left her behind and was concerned about leaving her alone with the child. When he travelled to Barrie for a job interview, he took his wife and child with him.

[34] In the summer of 2015, the parties discussed buying a home in Barrie. The husband decided to rent a home rather than buy one because his wife was not earning an income to contribute to a purchase.

[35] At some point in 2015, after eight years in the PhD program, the wife withdrew from the program. She agreed that her mental illness was a reason for the withdrawal. Her symptoms increased that summer. Her husband observed that she looked depressed and suffered from a sleep disorder and anxiety. He took her to see a doctor and she was prescribed anti-depressants. The wife started to exhibit symptoms of hallucination and paranoia. As the husband stated, his wife tried to “blame everyone for every perceived thing and was displaying paranoia frequently”.

[36] By this point the husband “did not feel safe around” his wife. He “never left her alone” and explained “we were a team”. During his cross-examination, the husband reflected on the past and stated: “I’m proud of how much support I provided my wife”.

[37] I accept that the husband may have provided some support for his wife, but this support ended in October 2015 when they separated. He has no reason to be proud of his actions after separation.

[38] As I will explain, the wife’s mental illness has resulted in periods of hospitalization and to date she is unable to work. She lives alone, relies on ODSP and sees her child if access is supervised. She receives no support from her husband.

The Alleged Assault and First Separation

[39] On October 15, 2015, the parties separated. On this day, the wife told the police that her husband had assaulted her. He was charged, and the charges were later withdrawn. The husband did not see the child for 58 days after his arrest.

[40] The wife acknowledges that because of her mental health illness, at times she is unable to distinguish between what is real and what is not real. During cross-examination, the wife was questioned about the assault. Since she admitted that she had delusions about her professor wanting to sexually assault her, she was asked if being assaulted by her husband was another delusion. She replied, “absolutely not”.

[41] The wife testified that her husband was “physically violent” with her three times. On one occasion, he grabbed her leg to prevent her from checking the child who was sleeping. This left a large bruise on her leg. On a second occasion, they were moving out of the Winnipeg condominium when he pushed her into the fridge. She bruised her head and had a persistent headache. These incidents were not reported to anyone. On the third occasion, the wife says that he pushed her into the bathroom, grabbed her face and yelled at her about how good his parents were to her. The wife called 911, was interviewed by the police and charges were then laid against the husband.

[42] The husband’s evidence about the “physically violent” behaviour and the charges is limited. As noted, by the summer of 2015, the husband did not feel safe around his wife. After his arrest he describes being “kicked out” of his home by the police. He was in a state of shock for several months. He testified that in March 2016, his wife apologized to him for her “erratic behaviour”. He states that none of her allegations have any “basis in fact”.

[43] The violence that the wife described was either real or a delusion. Based on the hospital records that were filed for the truth of the contents, the violence was probably a delusion. Either way, the wife firmly believed that her husband was violent and, as a result, she feared for her child’s safety. This fear ultimately fueled her desperation to reconcile and sign the Marriage Contract.

[44] In November 2015, the husband commenced an application in Barrie seeking custody of the child and a divorce. Both parties advanced claims against each other.

[45] After the father was charged, the child remained in her mother’s care until December 2015 when the Simcoe Children’s Aid Society (“CAS”) apprehended the child and commenced Child Protection proceedings. The child was taken into care and found to be a child in need of protection.

[46] In December 2015, the mother was admitted twice at the Emergency Department of the Royal Victoria Regional Health Center. On December 12, a crisis worker and the police brought the wife to the emergency. The hospital record confirms that she was confused, “not understanding questions” and “agitated, crying & screaming not knowing where child is”. At this point, the child had been taken into care. The need to see a psychiatrist was noted. She was diagnosed with a “situational crisis”. The record also states “? PTSD abusive spouse”. On December 23, 2015, the wife was taken to the emergency by ambulance. The record describes “emotional distress” a “panic attack”, “stress D/T court issues” and an inability to sleep. The wife had stopped taking her medication on December 11, 2015. She was diagnosed with anxiety. The record also notes “hx abuse”.

[47] On January 7, 2016, the wife was admitted to the Royal Victoria Regional Health Center complaining of numbness and delusions involving dead bodies in her house. She believed that her husband was one of the bodies and his body was controlled with a mechanical heart. She reported being unable to sleep for 10 to 14 days. The Emergency Report notes that her speech was pressured and her thoughts “made no sense”. She told the crisis team that her thoughts were being controlled and microwaves were causing her to think about self harm. The wife was hospitalized under a Form 1 until February 8, 2016, when she was discharged.

[48] During the hospitalization, the wife was examined by a psychiatry team. She told the team that she experienced episodes of domestic abuse with her husband after they moved to Barrie. Their arguments escalated in the fall of October 2015 and then the assault happened. The wife reported that she was telepathically communicating with an ex-boyfriend. She believed that an ex-boyfriend was controlling her husband with microwaves.

[49] The hospital consultation report records that the wife started to experience unusual behaviour in her teenage years. The report records the wife’s description of an unknown person telepathically connecting with her. At the age of 17, she started university and lived away from home. During her university years, the wife heard voices that she believed were demons. She was very depressed but did not seek medical help.

[50] The psychiatry team found that the wife’s thought process was unclear and disorganized with significant delusions. Of concern was her lack of insight as described in the record as follows:

Most importantly, the patient had no insight into her illness. Despite explanation from the psychiatry team, she stated that she was actually feeling quite well now that she had realized the truth regarding her husband actually being a dead body…. she did not feel she had a mental health disorder. She refused to take any medications…

[51] The wife was found to be incapable of making decisions and a substitute decision maker was established with the Office of the Public Guardian and Trustee. She had supervised visits with the child.

[52] The wife responded well to antipsychotic treatment and medication. She was diagnosed with a psychotic disorder and a possible schizoaffective disorder. With medication, her psychotic and schizoaffective symptoms lessened. She was discharged from the hospital on February 8, 2016 and enrolled in the partial hospitalization program for ongoing care. The wife remained under doctor’s care and was very anxious.

[53] The wife was treated in the Royal Victoria out-patient clinic on March 7 and 18, 2016. On March 7, her psychiatrist, Dr. Mulder, recorded that she was doing “okay overall” and there was “no evidence of any psychosis”. According to the doctor, the wife seemed to be managing. March 18 was an unscheduled visit. The wife returned to the clinic with complaints about not sleeping, feeling “very anxious” and under stress. There is no evidence that she was psychotic at this point. Her medication was increased to address the concerns, and this was to be reviewed at the next visit. The wife remained under Dr. Mulder’s care while living in Barrie. However, no Royal Victoria medical records after the March 18, 2016 were submitted into evidence at the trial.

[54] During the child protection proceedings, the child was eventually placed in her father’s care. Clearly, the CAS was satisfied that the child would be safe. This supports a finding that the wife’s belief that her husband was violent, was a result of her delusions.

[55] When the wife was discharged from the hospital, she started to have supervised visits with the child at the CAS office. Slowly the access was increased and eventually it became unsupervised.

The Wife Seeks Reconciliation

[56] After release from the hospital, the wife was very determined to reconcile with her husband. In March 2016, she called Victim Services and told them she wanted her husband to get a Peace Bond so they could communicate. On April 1, 2016, the assault charges against the husband were resolved. The charges were withdrawn.

[57] During the spring of 2016, the husband and his parents received many texts and emails from the wife. She also called him many times. In these communications, the wife “apologized” to them “for her erratic behaviour”. She told her husband that she wanted to reconcile. He was not interested and did not reply to her texts and emails.

[58] The wife wanted to reconcile because she was “scared” to leave the child alone with her husband, who she thought was “unpredictable and subject to violence”. The wife believed that she could only protect the child if they all lived together. She did not trust her husband to take care of the child. She believed that her husband had assaulted her, and she was scared that he would do the same to the child.

[59] When the wife spoke to her husband about wanting to reconcile, she told him that she loved him and never revealed her concern for the child’s safety. When the wife was cross-examined, she was asked if the husband had ever been violent with the child before reconciliation.

[60] The wife described one occasion when the child did not like the food she was given and was not eating. She said that the father took the child to the bathroom and “imprisoned [the child] in the bathroom”. According to the wife, this happened in January 2017, after they reconciled. In the summer of 2015, she recalls that the child was hungry and crying and the father yelled at the child. This upset the child and made her sad. The father then hugged the child. The wife testified that on other occasions her husband was angry with the child and yelled at her. The mother did not provide any specifics.

[61] If protection of the child was a concern, why didn’t the wife continue her court proceeding in Barrie and seek custody? The wife explained that this was not an option because she did not think that she could obtain sole custody. In the spring of 2016, she was still seeking more access. In her mind, reconciliation was the only way to protect her child.

[62] During cross-examination, it was suggested that the wife first voiced her concern for the child’s safety in her affidavit for trial. The suggestion was that she was fabricating the evidence to support her request that the Marriage Contract be set aside. She did not plead her concern in her Answer and it was suggested that she never told the CAS or the Children’s Lawyer during their involvement with the family. During the Barrie litigation, the wife says that she talked to her lawyer about her husband’s violent behaviour. It is not known if the concern was raised with the court in Barrie. Limited evidence about the Barrie court proceeding was provided during the trial. There was also limited evidence about the child protection proceedings and the involvement of the Children’s Lawyer.

[63] I reject the suggestion that the wife fabricated her evidence about fearing for the child’s safety. The wife suffers from a significant mental health illness. Her delusions are documented in the hospital records, as is her report of abuse. On a balance of probabilities, I find that the wife was probably another delusion. Real or delusional, the wife firmly believed that her child’s safety was at risk and reconciliation was necessary to protect her child.

The Husband Agrees to Consider Reconciliation

[64] The husband eventually agreed to meet his wife on a few occasions. She continued to ask her husband to reconcile and withdraw his Barrie court application. The husband resisted his wife’s requests to reconcile. He did not want to reconcile.

[65] Around April 2016, the husband started to think about his wife’s constant plea to reconcile. He thought about asking her to sign a Marriage Contract and explained his reasons as follows:

One reason I thought about having a Marriage Contract was because I paid an extremely expensive cost (financially and emotionally) for my true love. I still didn’t feel safe with her. I hadn’t seen [the child] for 58 days after my arrest. I was about to lose my job and I found life really “hard”. I wanted to protect myself and [my child].

[66] The husband testified that he changed his mind about the possibility of reconciliation for two reasons. First, his wife showed him a consistent pattern of stability. Second, while he had suffered a lot during the last few years of the marriage, he believed that the child would benefit if they reconciled.

[67] According to the husband, Dr. Mulder told him that his wife’s mental illness was under control. The husband testified that his wife continued to see Dr. Mulder and he went to each appointment with his wife. It is unclear how many appointments the wife had with Dr. Mulder after March 18, 2016, because there are no medical records to document the visits.

[68] The husband also testified that he attended a meeting at the CAS office in Barrie in April 2016 and at this meeting Dr. Mulder told him the mental illness was under control. The husband said he continued to have discussions with Dr. Mulder until March 2017.

[69] In May 2016, the parties attended a case conference in the Barrie application. The husband said that he received medical documents from Dr. Mulder at this case conference. If the husband was given medical records created after March 18, 2016, they were not produced at the trial.

[70] What Dr. Mulder told the husband is hearsay and is not verified in the hospital records that were filed. The last record from Dr. Mulder is dated March 18 and at this point the wife’s medication was increased because of her complaints of not sleeping, feeling anxious and under stress.

[71] While there is no medical evidence after March 18, 2016, there is some evidence that the wife’s condition stabilized during the summer of 2016. During this period of stability, she was able to orally defend her PhD and she gained unsupervised access to the child. The degree of stabilization from a medical point of view is not known.

[72] In the summer of 2016, the wife prepared to orally defend her PhD thesis that she had previously finished. Her husband helped her with some technical questions. He purchased her airline ticket and she flew to Winnipeg in late July 2016 and successfully defended her thesis.

[73] By September 2016, the wife had unsupervised access to the child. On September 12, 2016, a court order was issued in the child protection proceeding. The court found the child to be in need of protection.

[74] Under s. 57.1(1) of what was then the Child and Family Services Act, R.S.O. 1990, c. C.11, a final order was made for “joint custody…to mother and father with shared parenting arrangement”. Under Minutes of Settlement, the parties were bound by the CAS’s Plan of Care for three months. The Plan gave the CAS worker access to the home and child for scheduled and unscheduled visits. The parties were required to cooperate with all requests pertaining to protection concerns and the mother agreed to “continue to seek treatment through her psychiatrist Dr. Mulder or another psychiatrist in Toronto referred by Dr. Mulder.”

[75] From April 2016 until her next hospitalization in March 2017, the wife believed that she was well and able to function. She thought that her employment prospects were good though she did not look for a job. It was the wife’s plan to find a job as an electrical engineer after she completed five research papers that were a continuation of her PhD studies. She needed to finish the papers to secure a post-doctoral fellowship. Only then would she begin to earn money. Unfortunately, her mental illness has prevented her from completing these steps.

Reconciliation Discussions

[76] After the wife successfully defended her PhD in late July 2016, the husband decided to discuss reconciliation with his wife. He was only prepared to consider reconciliation if his wife signed a Marriage Contract. The wife knew that her husband wanted a Marriage Contract. They started to talk about reconciliation and a Marriage Contract. The evidence about what they discussed is conflicting.

[77] The husband had his lawyer prepare a Marriage Contract. It is agreed that he did not give the Marriage Contract to his wife until October 20, 2016. She signed the Marriage Contract on October 28, 2016.

[78] During their discussions, the husband says that he provided his wife with full disclosure of his financial circumstances and told her about his purchase of a property in Bradford, Ontario. It is the wife’s evidence that she did not receive full financial disclosure and was not told about the purchase of the Bradford property. I will address the conflicting evidence and explain why I reject the husband’s testimony about disclosure.

1. Red Lobster Meeting / Bradford Property

[79] On August 4, 2016, the husband invited his wife to a dinner at the Red Lobster restaurant to celebrate the completion of her PhD. Before the dinner, he told his wife that if they reconciled he wanted her to sign a Marriage Contract. He did not bring a draft Marriage Contract to the restaurant.

[80] The husband recalls that during the dinner they talked about what he wanted in a Marriage Contract and discussed an offer he had made to purchase a property in Bradford, Ontario. On both topics their evidence differs.

[81] The husband testified that he told his wife the Marriage Contract had to include the following: that they would be financially independent from each other, would never pay spousal support to the other spouse or share property. They would each work and earn their own money. If one spouse bought property and that property was in the name of the spouse, then it would belong to that spouse. The purchase of a car was used as an example. The husband told his wife that because of his close bond with the child, he would take care of the child, no matter what happened.

[82] The wife agrees that they met for dinner at the Red Lobster. She recalls that her husband said he would not reconcile unless two conditions were met: that they would be financially separate and that the child would never see her parents again. The wife explained that her husband was angry with her parents because they took her side at the time of the assault charges. The husband denies that he ever asked for this no contact term.

[83] At this point, the wife understood that being financially independent meant that they would keep separate bank accounts and share daily expenses. She did not understand that she would have “no claim on his money or assets”.

[84] I accept the wife’s recollection of the discussions at the Red Lobster dinner for the following reasons.

[85] This was a dinner to celebrate the successful defence of her PhD thesis. It is highly unlikely that the husband would have discussed the specific details of what he wanted in the Marriage Contract at a celebratory dinner, particularly when the terms he wanted were wholly unfair to his wife and required her to give up all her rights to equalization of property and support.

[86] It makes sense that they discussed basic financial information and financial independence in the sense that they would keep separate bank accounts and share daily expenses. For example, the husband told her that he was earning about $80,000 and another $10-20,000 through consulting. He recalls mentioning their chequing and TFSA accounts and the balances in those accounts.

[87] The wife had just completed her PhD and she hoped that her mental health problems were behind her. If the husband had been forthright, he would have told her what his intended terms really meant; that if her mental illness continued to interfere with her ability to function that he would have no obligation to help and support her.

[88] I find that the husband was very careful not to spell out the clear intent of his Marriage Contract at this early stage of their discussions. He was not forthright with his wife. The husband was facing his wife’s claim for spousal support in the Barrie application. The Marriage Contract, if signed, meant that his wife’s claims against him in the application would be dismissed. The husband’s actions were calculated to ensure that he got what he wanted (waiver of all her claims). He was careful about what he told her during their discussions and what he hid from her (his purchase of the Bradford property). He did not give her the Marriage Contract until October 20, 2016.

[89] The husband’s evidence about the Bradford property is further support for my finding that he was not forthright with his wife. Before the Red Lobster dinner, the husband made an offer to purchase a property in Bradford, Ontario. During the dinner meeting, the husband says that he told his wife that he was buying a property in Bradford and that the purchase price was $715,000.

[90] The husband admits that he did not reveal any details about the purchase because according to him “she didn’t care”. He did not tell his wife how he was going to pay for the property. She didn’t ask and so he didn’t tell her.

[91] Furthermore, the husband’s evidence about what he disclosed is internally inconsistent. On the one hand, he says he did not reveal the details of his Bradford purchase and yet his evidence is that his wife knew everything:

At all times she knew about the properties I own. She knew about all my assets and debts. We were a team. We made decisions jointly and she had knowledge of all my financial information and she had the means to obtain the value of my asset if she wanted to.

[92] The wife knew that her husband had plans to buy a property. She did not know that he had seen a property in Bradford and had made an offer to purchase it. She did not know that his offer was accepted, that he took title as a sole owner and did not know where he got the money from to buy the property. She did not know that he took $43,000 from their joint bank account two days before the sale closed. The sale closed on October 13, 2016. The husband gave the wife the Marriage Contract on October 20 and she signed it on October 28, 2016.

[93] The husband says it was his wife’s idea for him to buy a property. He relies on a text message that his wife sent to him on April 26, 2016. At that point, the wife was moving to Toronto from Barrie. The husband was already living in Toronto. The following text exchange does not support the husband’s evidence:

Hi dear [husband]

As you know, I’m going to move to Toronto from Barrie. I got a suggestion from… [a friend] that when I think about it, it’s a great idea. The idea is that you purchase a house for yourself in Toronto and I rent your house basement. I look for a job and when I become financially independent, I’ll compensate you for the rents. This is great for [our child] too. When you’re busy [the child] comes to me. When I’m busy, [the child] comes to you. When both of us are busy we’ll leave her with someone.

Note that I do not want to financially get involve with the house purchase.

[94] The husband replied: Do you think enough money [is] left for me to purchase a house? I suffered a lot.”

[95] The wife’s reply was not responsive to the husband’s question. She replied: “God is great! We both trust in God.” The next day she sent another text simply telling her husband: “Today I missed you and [the child] so much! I love you! Kissssssssssssss”.

[96] The husband relies on this text exchange to argue that his wife agreed to his purchase of the Bradford property. This April text was about a possible house purchase in Toronto that would give the wife a place to live. Clearly, the Bradford property was not what the wife was suggesting.

[97] Aside from this one text exchange, there is no evidence of any other communications about the husband buying any property.

[98] The wife testified that her husband’s plan to buy the Bradford property was never revealed before she signed the Marriage Contract. She agrees that at some point before the Red Lobster meeting, her husband told her that he had plans to buy a property but a specific property with details about price, location, funding etc were not revealed. The wife did not know that the property would be bought in his name alone and he did not tell her where he was getting the money from to buy a property. The wife also did not know that the husband agreed to lease the Bradford property after the purchase.

[99] The husband obtained a $572,000 mortgage to purchase the Bradford property. In the Charge document registered on title, the husband states “I am not a spouse”. He claims that he told the real estate lawyer that he was separated and suggests that this explains the declaration. However, at this point he had agreed to reconcile, and they were about to sign the Marriage Contract. I reject the husband’s explanation. I find that he did not reveal his marital status to the real estate lawyer. This finding is consistent with my assessment of the husband’s evidence concerning the Bradford property.

[100] During this litigation, the wife learned that the husband paid $715,000 for the Bradford property with a mortgage of $572,000. The wife now believes that there is $143,000 of equity in the property. The husband’s evidence about how he funded the purchase is as follows:

I paid a deposit of $30,000. In total I paid a down payment of $127,000. I had $40,000 from the sale of our matrimonial home in Winnipeg. My share was $40,000. I used that money as part of the down payment. My father helped me with the balance of the down payment and transferred money from Iran 2 installments of $30,000 and $55,000.

[101] In December 2016, the wife discovered that her husband had taken $43,000 from their joint account and she confronted him. She believes that he used this money to fund his purchase of the Bradford property. The husband admits that he withdrew $43,000 from their joint bank account on October 11, 2016, two days before the Bradford property deal closed. He did not mention the withdrawal of the $43,000 in his affidavit (evidence in chief). Half of this money belonged to the wife. When cross-examined the husband explained that he took the $43,000 as retribution. He says that when he was arrested he had to leave all his belongings in the home and his wife had not returned the belongings to him.

[102] When the wife confronted her husband in December, he gave her two cheques to reimburse her for the money that he had taken. The wife then misplaced the cheques and when found they were stale dated. The husband has not replaced the cheques and still owes her this money.

[103] Whether the husband used the $43,000 for the purchase of the Bradford property or took it as retribution, it is a fact that half of the money belonged to his wife and he did not tell her that he had withdrawn the money from the account.

[104] At the Red Lobster dinner, the husband described his wife as eager to sign a Marriage Contract as soon as possible. The fact that she wanted to sign it right away is consistent with her single-minded reason for reconciliation, to protect her child.

[105] The husband insisted that his wife consult a lawyer. He testified that she did not show any signs of being under pressure to sign a Marriage Contract.

[106] The husband explained that because his wife was a female engineer with a PhD, in his view, she would have no difficulty finding a good job and becoming financially independent. I reject that the husband honestly held this view. His own evidence documents his wife’s serious mental illness and how it has seriously impaired her ability to function for many years. His evidence about her employment opportunities was an attempt to justify the severity of the Marriage Contract he imposed on his wife, in exchange for his agreement to reconcile. He took advantage of her during a period of some stability.

2. Tim Hortons and other Disclosure

[107] It is the husband’s evidence that his wife also received financial disclosure through her access to his records and when they met at Tim Hortons. I will deal with the Tim Hortons meeting first.

[108] According to the husband, he met his wife at Tim Hortons on September 15, 2016 and provided her with more financial disclosure. He explained that the wife’s lawyer in the ongoing Barrie Family Court litigation, had requested some disclosure. The wife does not recall the Tim Hortons meeting. As noted, the parties had ongoing claims against each other in Family Court and the Family Law Rules would have required disclosure.

[109] The husband testified that when they met at Tim Hortons, he gave his wife copies of the documents that her lawyer requested: his 2013, 2014 and 2015 Notices of Assessment, his 2015 income tax return, T4 forms for three years, copies of three recent pay cheques and his most recent bank statements. After this meeting, the husband states that his wife sent an email to her own lawyer to confirm her receipt of the disclosure. Of note, he did not testify that he gave her any documents pertaining to his pending purchase of the Bradford property.

[110] The husband testified that he gave his wife this information because he wanted her to have “a full picture” and yet he did not give her “a full picture” of the property he was buying in Bradford and the money he withdrew from their account. Instead he hid this purchase from her.

[111] There is nothing to corroborate his evidence about his disclosure. The husband did not attach the disclosure he delivered to his affidavit in chief. It is not clear how he knew that his wife emailed her lawyer. If he was copied on the email, the email was not provided at trial.

[112] I accept as fact that the husband provided some disclosure in the Barrie litigation because the Family Law Rules require disclosure. If disclosure was outstanding, it is fair to say that it would have been discussed at a case conference and an order would have been made. While I cannot conclude with certainty what happened in the Barrie litigation, I am satisfied on a balance of probabilities that some disclosure was given to the wife (such as the income tax returns, bank statements and pay cheques). This is the type of basic disclosure that is typically provided. To be clear, I do not accept that he disclosed his purchase of the Bradford property.

[113] Lastly, the husband maintains that the wife cannot complain about lack of disclosure because she had access to his computer after the assault charges.

[114] According to the husband, they decided to include a waiver of financial disclosure in the Marriage Contract because “we already knew all our financial disclosures”. The husband did not explain in his evidence when and where they talked about this waiver. It is a fact that the Marriage Contract includes such a waiver. It is also a fact that the wife did not know all about her husband’s financial circumstances. He did not disclose the Bradford property.

[115] After the husband was arrested, he could not go back to their rented apartment in Barrie where the wife continued to live. His computer and financial records were in the apartment. Until the spring of 2016, the husband’s bank records and his Notices of Assessment were mailed to the apartment. His wife had access to his mail and the password to his computer. She denies that she used his password to access his computer. Further, for many weeks after the husband’s arrest, the wife was suffering from symptoms of mental illness and was hospitalized. Even if she did have access to his computer and records, her ability to access and understand the information is doubtful given her psychotic disorder and other symptoms.

[116] The wife was not cross-examined on her evidence about the sale of the one-bedroom apartment in Iran and the purchase of the two-bedroom apartment. The husband did not disclose what happened to this investment.

[117] I accept that the wife was generally aware of their family finances. She admitted her knowledge in cross-examination. She knew that he had a pension through his employment. She did not know what had happened to the property in Iran.

The Marriage Contract

[118] Throughout their discussions, the wife continued to tell her husband that she wanted to sign the Marriage Contract right away. The husband insisted that she consult with a lawyer. He testified; “I asked her to go and talk to a lawyer. I wanted to make sure that she fully understands and receives legal advice ... I was not 100% sure”.

[119] On October 20, 2016, the husband delivered the Marriage Contract to his wife for her to sign. This was the first time that she had seen the Marriage Contract. The husband had already signed the contract. He told her that he paid a lawyer $2,600 to draft the Marriage Contract. He asked her to read it and sign it in front of a lawyer.

[120] The Marriage Contract states that the parties intend to “reconcile and resume cohabitation”, that the husband’s 2015 income “was $87,074” and that the wife is unemployed and “is pursuing and expects to obtain full time employment”

[121] The purpose of the Marriage Contract is set out in section 3:

3.1 Each party intends by this contract:

(a) to avoid any rights and obligations relating to property and spousal support which arise or which may in the future arise at law or in equity from their marriage; and

(b) except as specifically provided by this contract, to elect and affirm that none of the property of either party will be divided between them except according to ownership

[122] Section 9 sets out the waiver of all spousal support:

9.1 (a) The parties acknowledge that they wish to remain completely financially independent of each other. Each of the parties, at all times during cohabitation, marriage, or upon a breakdown of the relationship, is deemed to be self-supporting and is responsible for supporting himself or herself, …. Each party acknowledges his or her obligation and ability to obtain and maintain employment sufficient to support himself or herself, and to use his or her own capital for his or her own support without recourse against the other party.

[123] Section 9(c) states that the parties recognize that the financial circumstances may change in the future, but the waiver applies regardless of any change in circumstances in the future:

9(c) The parties realize that their respective financial circumstances may change in the future, by reason of career reversals, loss of employment, retirement, lack of employment opportunities, contingencies of life including illness and disability, childcare responsibilities, inheritances, adverse economic circumstances such as rising costs and inflation, the mismanagement of funds by themselves or others, financial reversals, poverty, or a general change in family conditions, inter alia. No such change in circumstances, wither catastrophic, drastic, radical, material, profound, unanticipated, foreseeable, foreseen, unforeseeable, unforeseen or beyond imagining, and no matter how extreme or consequential for either or both of them, whether or not the change is causally connected to the cohabitation and/or marriage, and whether or not such change arises from a pattern of economic dependency related to the cohabitation and/or marriage, will alter this Agreement or entitle either party to support from the other.

[124] Section 9 (d) states that the parties acknowledge the following:

(i) they are financially independent and do not require financial assistance from the other;

(ii) they have negotiated this Agreement in an unimpeachable fashion and that the terms of this Agreement fully represent their intentions and expectations;

(iii) they have had Independent legal advice, or the opportunity to obtain independent legal advice and elected not to do so, and all the disclosure they have requested and require to understand the nature and consequences of this Agreement and the implications of waiving support, and to come to the conclusion, as they do, that the terms of this Agreement, including the release of all spousal support rights, reflects an equitable arrangement for support in their cohabitation, marriage or upon. a breakdown of the relationship;

(iv) the terms of this Agreement substantially comply with the overall objectives of the Family Law Act and the Divorce Act now and in the future, and the parties have specifically considered the provisions and factors set out in sections 30 and 33 of the Family Law Act and sections 15.2 and 17 of the Divorce Act;

(v) they have been advised by their respective solicitors (if they have obtained independent legal advice) of the rulings in the Ontario courts in which the court has awarded spousal support, notwithstanding that full releases of spousal support have been contained in an agreement. The parties require the courts to respect their autonomy to achieve certainty and finality in their lives and to enforce this Agreement and specifically this spousal support release;

(vi) this Agreement may be pleaded as a complete defence to any claim brought by either party for spousal support in contravention of this Agreement;

[Emphasis added.]

[125] Given the findings of fact I have made, the representations emphasized were false and the husband knew or ought to have known so. The wife was not “financially independent” when she signed the Marriage Contract. It was not negotiated in an “unimpeachable fashion” and it did not “substantially comply with the overall objectives of the Family Law Act and the Divorce Act”.

[126] Sections 10 and 11 deal with property:

NO NET FAMILY PROPERTY:

10.1 Under no circumstances will any property owned at any time by either party, or by them together, or any income from any such property be included in the net family property of either party.

RIGHTS OF OWNERSHIP GOVERN PROPERTY DIVISION:

11.1 Except as provided in this agreement, each party waives all rights under Part I of the Family Law Act and in lieu thereof each with the other provides by this agreement that;

(a) rights of ownership govern the division of property between them, and there will be no division of property except according to ownership;

(b) neither of them will be entitled to property rights arising out of their marital relationship;

(c) neither of them will be entitled to a division of property owned by the other;

(d) neither of them will be entitled to the equalization of their net family properties;

(e) neither of them will be entitled to a share of any property, and

(f) neither of them will have any monetary or other claim against the other measured by reference to the value of any property owned by the other .…

[127] After reading the Marriage Contract, the wife called her husband and told him she would not sign the contract because it was unfair, and she had not expected a 20 page document. The conversation did not end well. They had two or three telephone conversations and fought about the Marriage Contract.

[128] The husband accused his wife of not signing the Marriage Contract because she loved money. The wife hung up on her husband. The husband called his wife once or twice and reminded her that she had begged him to reconcile and that they had already talked about financial separation. Referring to the Marriage Contract, the wife told him that “she did not expect him to do something like this”. The husband told his wife to go to 47 Sheppard Ave East and find a lawyer. She could choose whoever she wanted, and he would reimburse her for the fees.

[129] The parties could not reach an understanding. The husband insisted that she sign the Marriage Contract if she wanted to reconcile. It was important to the wife that they reconcile so that she could protect her child. As a result, she testified that she “let it go”, went to see a lawyer and agreed to sign the Marriage Contract.

[130] When cross-examined, the wife was asked if she understood the Marriage Contract. She answered, “not completely” “almost”. She read it carefully but she “didn’t know what was going to be the consequences”. When questioned further about her level of understanding, she knew the following having read the Marriage Contract; that if they separated then each would own what they owned on separation and there would be no spousal support paid.

The Independent Legal Advice

[131] On October 27, 2016, the wife went to 47 Sheppard Ave to look for a lawyer. She located Barry Nussbaum, a family lawyer, and asked him to provide independent legal advice (“ILA”) about the Marriage Contract. He did not have enough time to meet her and she returned the next day.

[132] Mr. Nussbaum does not have an independent recollection of his meeting with the wife. The documents in his file record what happened: The Client Questionnaire, an Acknowledgment that the wife signed on October 28, 2016, the signed Certificate of Solicitor attached to the Marriage Contract and Mr. Nussbaum’s invoice and a credit card receipt documenting payment of the invoice.

[133] On October 27, 2016, someone in Mr. Nussbaum’s office completed the Client Questionnaire. This document records the wife’s contact information and notes that she is unemployed. In the Comment section, it states that she is separated, wants to reconcile and wants a lawyer to “check over the Agreement and give her advice re: Marriage Contract. She would then like the Agreement.”

[134] Mr. Nussbaum typically spends one hour with a client to give ILA. Based on the $226 fee he charged and his hourly rate, I find that he spent about one hour with the wife.

[135] The Acknowledgment is a memorandum from the wife to Mr. Nussbaum. The wife signed the Acknowledgement and Mr. Nussbaum witnessed her signature. Mr. Nussbaum testified that he likely dictated the Acknowledgment on his iPhone and had it transcribed. The Acknowledgment was used to memorialize what happened during his meeting and his ILA.

[136] The Acknowledgment confirms that Mr. Nussbaum met the wife on October 27 and 28 “to review a marriage contract”. The Acknowledgement covers the ILA, the wife’s acknowledgment of the ILA and her decision to sign the Marriage Contract as set out below:

Mr. Nussbaum explained and confirmed to me in detail all the terms of the marriage contract when I was signing.

We spoke at great length with regard to the spousal support release. Because I am the primary caregiver and will likely be the primary caregiver for my child and future children, Mr. Nussbaum strongly suggested that I not agree to a spousal support release. Despite his strong suggestion and the fact that the agreement seems one sided, I advised I still want to sign the agreement nonetheless.

Mr. Nussbaum further explained in detail to me that the parties will be consenting, per the agreement, to the splitting of their assets by way of ownership and not pursuant to the Family Law Act. Mr. Nussbaum particularly highlighted that the father is working and I believe that he has a pension, being that he is a professor, and that pension is in his name and in the future could be very large. Mr. Nussbaum suggested that it is not wise based on the fact that the trajectory is that he will have more assets than me and I should not agree to overriding the Family Law Act.

Notwithstanding Mr. Nussbaum's advice I still want to sign the agreement and I am doing do freely.

To highlight, I understand that this agreement is unusual in the sense that neither party will inherit or comes from a family with a lot of money or has a lot of money or assets (which are the usual circumstances surrounding a cohabitation agreement) and we are continuing our life together but I am signing it freely and despite the suggestions from Mr. Nussbaum.

[137] When providing ILA, Mr. Nussbaum does not require every client to sign an Acknowledgement. Given the Acknowledgment he asked the wife to sign, Mr. Nussbaum explained that it was concerning to him that she was signing a Marriage Contract that waived her right to equalization and spousal support.

[138] The wife recalls that when she met Mr. Nussbaum on October 28, he told her that he had read the Marriage Contract. She recalls that he asked her, “this is something very rich people do, is he very rich?” She told him that her husband was “average rich”.

[139] The wife recalls that Mr. Nussbaum told her that she was waiving her legal rights and she should not sign the contract.

[140] It is the wife’s evidence that she told Mr. Nussbaum she wanted to reconcile with her husband because she was “scared for [her daughter’s] safety” in her husband’s sole care without her present. This is not recorded in the Acknowledgement. Whether she told Mr. Nussbaum or not, I accept that the wife continued to hold this fear in her mind.

[141] The wife did not have a problem signing the Marriage Contract because she did not think that they would be separated again. All she thought about was the safety of her daughter. Her husband would not reconcile without a signed Marriage Contract. She believed that her husband had assaulted her, and she was afraid that he would do the same to their child.

[142] The Acknowledgement does not record the fact of the wife’s mental illness. The wife did not tell Mr. Nussbaum about her mental illness. If Mr. Nussbaum had been told, I find that it would have been recorded in the Acknowledgement because this would have been an important piece of information. Further, if such disclosure had been given to Mr. Nussbaum, this would have (at a minimum) caused him to question whether he should sign the Certificate of Solicitor without knowing more about her mental illness. Further, a prudent lawyer who knew about the mental illness would not have signed the Certificate after a one-hour meeting.

[143] The wife asked Mr. Nussbaum to delete section 18.2 of the Marriage Contract. This section states:

18.2 The parties specifically release the other from any claims they may have against each other pursuant to their mahr.

[144] The wife understood that by deleting section 18.2 she “was holding [her husband] to his obligation to pay [her] the Mahr, which is 114 8-ounce gold coins”. The Mahr is a dowry that they had agreed to on marriage.

[145] In the signed copy of the Marriage Contract section 18.2 is crossed out, initialled by the wife and dated October 28, 2016. The Acknowledgment does not include any reference to the wife’s request to delete section 18.2. I accept her evidence that she deleted this section and that this was done on October 28, 2016 in the presence of Mr. Nussbaum.

[146] The wife felt under pressure to sign the Marriage Contract even though Mr. Nussbaum advised that it was a “bad agreement” for her. She felt that she had no choice if she wanted to reconcile. She explained it as follows:

I felt that I had no choice if I wanted to reconcile with [my husband], which I did mainly because of my concern for [the child’s] safety without me there, as well as because of the history of physical and verbal abuse perpetrated by [my husband] against me during the last 3-4 years of our marriage.

At the time of attending at Mr. Nussbaum’s office and signing the Marriage Contract, my main priority was reconciling with [my husband] to ensure [my child’s] safety. I would have done almost anything to make this happen.

[147] After providing ILA to the wife, Mr. Nussbaum commissioned the wife’s Affidavit of Execution. In this affidavit, she acknowledged her receipt of ILA from Mr. Nussbaum that the full nature and consequences of the terms and conditions of the Marriage Contract were fully explained to her and that she “willingly, voluntarily and with the full knowledge” signed the Marriage Contract.

[148] In his Certificate of Solicitor, Mr. Nussbaum confirmed that he “advised her with respect to the domestic contract” and believes that she is “fully aware of the nature and affect” of the contract and is “signing it voluntarily”. He would not have signed this Certificate unless he was satisfied that she had read and understood the Marriage Contract.

[149] When cross-examined, the wife agreed that she was “well and functioning” in the summer of 2016 until her next set back in March of 2017. During the rest of 2016, she slowly reduced her medication. She hoped that her mental illness was “gone forever”.

[150] As I will explain below, the wife’s period of stability was fragile and started to disintegrate after reconciliation.

After the Marriage Contract was signed

[151] After the Marriage Contract was signed, the parties dismissed the family application in Barrie. This meant that the wife’s pending motion for child and spousal support did not proceed.

[152] The parties reconciled and resumed cohabitation in December 2016. Their relationship remained “fraught with conflict”. The husband yelled at his wife in front of the child. The wife felt “very stressed” about the marriage and the effect on the child.

[153] The wife’s mental health deteriorated. She started to experience delusions again. These delusions involved her belief that she was in love with another man and wanted to separate from her husband. On March 23, 2017, the wife was hospitalized at North York General Hospital where she remained until April 10, 2017.

[154] During the wife’s hospitalization, the CAS reopened the family’s file and commenced an assessment of the child’s safety. There is no evidence from the CAS regarding the outcome of this assessment. It is fair to infer that the CAS had no concern about the safety of the child while in the father’s care, because the child has remained in his care. This further supports my finding that the wife’s fear for her child was caused by her delusions.

[155] A Patient Discharge Information record from the hospital sets out the following facts. The wife was admitted to hospital “due to increasing bizarre behaviour, possibly wandering into traffic.” She was detained in the hospital under a Certificate of Involuntary Admission pursuant to a Form 30 under the Mental Health Act. The basis for this Certificate was a mental disorder that would likely result in “serious physical impairment”. She was found “not mentally capable to consent to treatment of a mental disorder”. This hospital admission was “in the context of reduction and discontinuation of her antipsychotic medication by her outpatient psychiatrist, as she had been doing very well symptomatically”. In the hospital, the wife was observed speaking to herself and giggling. No other psychotic symptoms were noted. The wife was declared incapable and her husband was appointed the statutory decision maker. During the hospitalization, the wife resumed her medication and she continued to voice a desire to “undergo marital separation and divorce”.

[156] The instructions on discharge listed items for follow up. She was directed to continue to take her medication to help prevent future psychotic episodes and to follow up with her psychiatrist. The dosage was reduced because the wife was complaining of fatigue. Marital counselling and therapy were recommended. It was arranged that the wife would return to live with her husband for a temporary stay. The wife was travelling home to Iran in May and June. She was encouraged to arrange a place to live on her return.

[157] The wife travelled to Iran and while there wrote her husband a long letter. She explained to him that the man she said she was in love with was a delusion and she asked him if he would agree to reconcile again. He did not answer her letter and the parties did not reconcile on her return from Iran in June 2017.

[158] From July to October 2017, the wife searched for work in engineering. She sent out about 50 resumes and was granted one interview. She accepted a job offer in November 2017 earning $30,000 a year plus commissions. The job required the wife to review contract documents within a deadline. Once she started the job, she felt that she was under too much pressure. It was very stressful and after three days she quit. Since this experience the wife has not looked for another job.

[159] On January 28, 2018, the wife felt unwell. She voluntarily admitted herself to the North York General Hospital and had another psychotic episode. Two days later, her husband obtained an ex parte order for sole custody of the child. The wife was released from the hospital on February 4, 2018.

[160] On March 24, 2018, psychotic symptoms once again led to the wife’s admission at North York General Hospital. She remained hospitalized until April 5, 2018 and was then followed in the Day Hospital Program by her out-patient psychiatrist Dr. M Zare-Parsi. Limited records from this period of treatment were submitted into evidence. “Psych Day Hospital” notes dated April 17 and 26, 2018 provide some information. On April 17, 2018 she was “settled, very cooperative and appear[ed] to have good insight”. On April 26, 2018, the record states that the wife was “seen daily by the Day Hospital psychiatrist”. That day there were no signs of psychosis. Her behaviour was “settled and organized” and her thoughts were clear. The wife was referred to a community case management service. The treating doctor recorded that the wife would benefit from “long-term case management to help ensure ongoing compliance to allow increase of access to her [child]”.

[161] A social worker at Unison Health and Community Services wrote a letter on June 6, 2018 to urge support for the wife’s joint custody of the child. In this letter, she states that the wife has attended 14 therapeutic counselling sessions to help with stress management.

[162] Since the spring of 2018, the wife has not experienced any further set backs in her mental health that have required hospitalization. This does not mean she is functioning and able to work as an engineer. She continues to experience anxiety. Every day, she must work to overcome her anxiety. As a result, she says that it is not easy to look for a job. She has financial problems and does not see her child without supervision.

[163] On March 14, 2019, Dr. Zare-Parsi signed the forms that the wife submitted for ODSP benefits. The forms record that her “thought disorders” are “continuous” and the prognosis is “likely to remain same”.

[164] Recently, the wife started to volunteer as a math and physics tutor for one grade 12 student. Going forward her plan is to do some “simple jobs” like tutoring. If she can get rid of the anxiety and her mental health improves she hopes to find someone to help her to apply for engineering jobs.

analysis

[165] The wife seeks to set aside the Marriage Contract and relies on s. 56(4) (a), (b) and (c) of the Family Law Act. The onus is on the wife to prove that one of the circumstances in s. 56(4) is engaged.

[166] If the onus is met, then the court must consider if it is appropriate to exercise its discretion to set aside the Marriage Contract.

[167] As I will explain, the wife has met the burden and has satisfied s. 56 (4)(a), (b) and (c). On the facts of this case, it is appropriate to exercise my discretion and set aside the Marriage Contract.

Did the husband fail to disclose significant assets debts or liabilities before the Marriage Contract was signed?

[168] The wife argues that the husband did not disclose his pension. I disagree. There is no evidence that the husband told his wife about the pension while they were talking about reconciliation. He did not give her any pension documents. However, the wife knew that her husband had a pension because her knowledge of the pension is referred to in the Acknowledgment that Mr. Nussbaum prepared as follows: “I believe that he has a pension, being that he is a professor, and that pension is in his name and in the future could be very large”. Given this knowledge, the wife could have asked for more information about the pension but did not do so.

[169] The wife also argues that her husband did not provide disclosure of his actual income for 2016. The husband did not attach a copy of all documents that he gave his wife during their discussions. However, I have accepted that income disclosure would have been provided in the Barrie family litigation and, for this reason, I reject the wife’s position that there was non-disclosure of his actual 2016 income.

[170] I have found as a fact that the husband did not disclose his purchase of the Bradford property before the Marriage Contract was signed. This Bradford property was a significant asset for the following reasons. The parties did not own any property in Canada when they moved to Ontario. They had modest savings and lived in a rented apartment. Purchasing a property was a significant step. The equity in the property and the fact that it generated rental income adds to the significance of this asset.

[171] Linked to the non-disclosure of the Bradford property are two important facts that he did not disclose to his wife. She did not know that he represented to the real estate lawyer that he was “not a spouse”. She also did not know that he had removed $43,164 from their joint account two days before he purchased the Bradford property. Half of this money belonged to the wife and represented most of her savings. Clearly this was significant. While the husband denies that he used the money for the Bradford purchase, the timing of this withdrawal and the lack of clear evidence suggests otherwise. Either way, he took her money and has not paid it back. He created a debt that he did not disclose.

[172] In Rick v. Brandsema, 2009 SCC 10 at paras. 47-48, the Supreme Court said the following about financial disclosure in the negotiation of a domestic contract:

… a duty to make full and honest disclosure of all relevant financial information is required to protect the integrity of the result of negotiations undertaken in these uniquely vulnerable circumstances. The deliberate failure to make such disclosure may render the agreement vulnerable to judicial intervention where the result is a negotiated settlement that is substantially at variance from the objectives of the governing legislation.

[48] Such a duty in matrimonial negotiations anchors the ability of separating spouses to genuinely decide for themselves what constitutes an acceptable bargain. It also helps protect the possibility of finality in agreements. An agreement based on full and honest disclosure is an agreement that, prima facie, is based on the informed consent of both parties. It is, as a result, an agreement that courts are more likely to respect. Where, on the other hand, an agreement is based on misinformation, it cannot be said to be a true bargain which is entitled to judicial deference.

[173] In summary, the husband deliberatively decided not to disclose the Bradford property to his wife. This non-disclosure was significant and impacted the integrity of the process that led to the signing of the Marriage Contract.

Did the wife understand the nature or consequences of the Marriage Contract?

[174] It is the wife’s position that because of the non-disclosure, she could not understand the nature and consequences of the Marriage Contract. She does not rely on the status of her mental health to support her lack of understanding.

[175] Parties have an obligation to make full and honest disclosure when negotiating agreements such as a Marriage Contract or Separation Agreement. The husband in this case failed to honour this fundamental obligation. He was not honest with his wife. Instead, he deliberately decided not to reveal the Bradford property to his wife and his use of their joint funds.

[176] The Marriage Contract is a complete opt out of all rights to equalization of property and support. A party needs to know what she is giving up, to understand the consequences of the agreement: LeVan at para. 54; Dubin v. Dubin, 2003 CanLII 2103 (ON SC), [2003] O.J. No. 547. At para 32 in Dubin the court stated:

… 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 contract. It is in this context that financial disclosure is critical, in that knowing assets and liabilities at the date of the agreement is fundamental to an eventual calculation of net family property. A party needs to know what asset base might potentially grow, in order to determine what he or she is being asked to give up in the agreement. Coupled with financial disclosure is the notion of understanding legal rights and obligations under the legislative scheme. This second notion carries with it the concept of independent legal advice. Thus, a party must know what assets and liabilities exist at the date of the contract, and must understand the general legislative scheme in order to know what he or she is giving up in the proposed agreement.

[177] The wife did not understand the nature and consequences of what she was giving up because there was absolutely no disclosure about the purchase of the Bradford property as set above. As a result, she had no understanding of how the purchase price was funded, that the property might grow in value or the rental income earned.

Is the Marriage Contract otherwise in accordance with the law of contract?

[178] Subsection 56(4)(c) of the Family Law Act codifies the common law position that ordinary contract law principles apply to domestic contracts. Under the law of contract, contracts may be set aside if:

there was undue influence at the time of signing;
there was duress at the time of signing;
unconscionability;
there was a mistake as to an essential element of the contract;
there was fraud or material misrepresentation; or
there was a repudiation of a term in the contract.

[179] The wife argues that the Marriage Contract is unconscionable, and she was under duress when she signed it.

1. Is the Marriage Contract Unconscionable?

[180] The legal context to assess and answer this question was set out by the Supreme Court stated in Miglin v. Miglin, 2003 SCC 24 and again in Rick v. Brandsema, at para. 43. These decisions direct that unconscionability in the matrimonial context be considered as follows.

[181] First, to decide if an agreement is unconscionable, the court must focus on the circumstances of negotiation and execution of the agreement and not the result of the agreement (see Miglin at para. 4).

[182] Unconscionability in the matrimonial context is not equivalent to unconscionability in a commercial context. As stated in Miglin at para. 82:

… There is a danger in borrowing terminology rooted in other branches of the law and transposing it into what all agree is a unique legal context. There may be persuasive evidence brought before the court that one party took advantage of the vulnerability of the other party in separation or divorce negotiations that would fall short of evidence of the power imbalance necessary to demonstrate unconscionability in a commercial context between, say, a consumer and a large financial institution.

[183] The question to be asked is whether there were “‘any circumstances of oppression, pressure, or other vulnerabilities’, and if one party’s exploitation of such vulnerabilities during the negotiation process resulted in a separation agreement that deviated substantially from the legislation” (Brandsema at para. 44).

[184] Examples of inequality in bargaining may include one party being intellectually weaker by reason of a disease of the mind, economically weaker or situationally weaker. The “mere presence of vulnerabilities will not, in and of itself, justify the court’s intervention. The degree of professional assistance received by the parties will often overcome any systemic imbalances between the parties” (Miglin at para. 82).

[185] The court should not “presume an imbalance of power in the relationship or a vulnerability on the part of one party, nor should it presume that the apparently stronger party took advantage of any vulnerability on the part of the other”. There must be evidence to conclude that “the agreement should not stand on the basis of a fundamental flaw in the negotiation process. Recognition of the emotional stress of separation or divorce should not be taken as giving rise to a presumption that parties in such circumstances are incapable of assenting to a binding agreement” (Miglin at para. 82).

[186] The mere presence of vulnerabilities will not, in and of itself, justify the court's intervention. The degree of professional assistance received by the parties will often overcome any systemic imbalances between the parties. However as stated in Brandsema, at para. 61 it is a question of fact in each case:

… Given that vulnerabilities are almost always present in these negotiations, the parties’ genuine wish to finalize their arrangements should, absent psychological exploitation or misinformation, be respected. One way to help attenuate the possibility of such negotiating abuses is undoubtedly through professional assistance. But exploitation is not rendered anodyne merely because a spouse has access to professional advice. It is a question of fact in each case.

[187] Based on the circumstances of the negotiation and execution of the Marriage Contract, I find on a balance of probabilities that the wife has proven unconscionability.

[188] During the negotiations and execution of the Marriage Contract, the wife was vulnerable, and her husband exploited her vulnerability. Her vulnerability is rooted in her long-standing mental illness that has seriously impaired her ability to function and become financially independent.

[189] The last medical note on record before the Marriage Contract is dated March 18, 2016. On this date, her medication was increased because of stress, anxiety and problems sleeping. She had been hospitalized because of delusions and was found to be incapable of making decisions. She lost the right to care for her child and had no home or job to support herself. She begged her husband to reconcile because she feared for her child’s safety. This fear, as I have found, was likely another delusion.

[190] I reject the husband’s position that the wife was not vulnerable during their period of negotiations and when she signed the Marriage Contract. His position is unreasonable and narrowly focused on a period of fragile stability that allowed her to defend her PhD thesis. His position assumes that we can ignore her many years of mental illness and the uncontested evidence that her illness has drastically impacted her ability to function and become financially independent. This was her state of vulnerability at the time of negotiations and when she signed the Marriage Contract.

[191] The period of fragile stability did not eliminate her vulnerability. She remained alone, unable to support herself and afraid for her child’s safety. Her decisions were fueled by her imagined fear that led her to give up every right that is afforded to a spouse under the Divorce Act, R.S.C., 1985, c. 3 (2nd Supp.)). She was desperate to reconcile and was dependent on her husband in every way.

[192] The husband’s evidence reveals his awareness of her ongoing vulnerability. Even he was not 100% sure if she understood the Marriage Contract.

[193] The husband exploited his wife’s vulnerable state. He was facing a motion for support and an equalization claim. The Marriage Contract was his tool to extinguish her rights. His negotiation tactics were deliberative and manipulative and he was not honest as I have explained.

[194] The one hour of ILA that Mr. Nussbaum provided did not neutralize the husband’s negotiation conduct. Mr. Nussbaum had no knowledge of the wife’s mental illness and her vulnerable condition. If he had known, it would have been recorded in the Acknowledgment. A prudent lawyer would not have signed the Certificate of Solicitor that day without further evidence of her stability.

[195] In summary, the wife has proven that the circumstances of the negotiation and execution of the Marriage Contract, are unconscionable.

2. Duress

[196] Duress is described in Toscano v. Toscano, 2015 ONSC 487 at para. 72 as follows:

Duress involves a coercion of the will of one party or directing pressure to one party so they have no realistic alternative but to submit to the party (see Berdette v. Berdette (1991), 1991 CanLII 7061 (ON CA), 81 D.L.R. (4th) 194 at para. 22 (Ont. C.A.)). Equity recognizes a wider concept of duress including coercion, intimidation or the application of illegitimate pressure.

[197] Further, “there can be no duress without evidence of an attempt by one party to dominate the will of the other at the time of the execution of the contract." (Ludmer v. Ludmer, 2013 ONSC 784 at para. 53)

[198] To prove duress, the wife must show that she was compelled to enter into the Marriage Contract out of fear of actual or threatened harm of some kind. There must be something more than stress associated with a breakdown in the marriage. There must be credible evidence demonstrating that she was subject to intimidation or illegitimate pressure to sign the agreement (see Ludmer at para 53).

[199] When the party alleging duress received independent legal advice and had a meaningful opportunity to review the domestic contract, courts are less likely to make a finding of duress (see Balsmeier v. Balsmeier, 2016 ONSC 950 at paras 121-122, 153; Ludmer at paras 55-58).

[200] The wife signed the Marriage Contract under duress. She acted on her imagined belief that her child was unsafe living alone with her husband. The fear for her child’s safety gave her no option but to sign the Marriage Contract.

Should the Court Set the Marriage Contract Aside?

[201] A finding that a party has violated a provision of s. 56(4) of the Family Law Act does not automatically result in the nullification of the contract. Rather, a trial judge must determine whether it is appropriate, in the circumstances, to order that the contract be set aside. This is a discretionary exercise (LeVan at para. 33).

[202] The fairness of the Marriage Contract is an appropriate consideration at this stage (LeVan at para 60).

[203] I have decided that it is appropriate to exercise my discretion and set aside the Marriage Contract. I do so for the following reasons. There is nothing “fair” about the Marriage Contract. It is a complete waiver of the wife’s right to equalization and spousal support. It is an agreement premised on false assumptions: that the wife is “financially independent”, that it was negotiated in an “unimpeachable fashion” and that it “substantially complies” with the objectives of the Divorce Act and the Family Law Act.

[204] During a period of fragile stability, the husband took advantage of his wife’s desperation and conveniently got rid of her equalization and spousal support claims against him in the Barrie litigation

[205] The Marriage Contract is fatally infected by the husband’s deliberative and dishonest conduct. This is not an agreement that is entitled to judicial deference.

conclusion

[206] In summary, the wife has proven on a balance of probabilities that her husband failed to disclose a significant asset and debt, that she did not understand the nature and consequences of the Marriage Contract, that the circumstances of the negotiation and execution of the Marriage Contract are unconscionable, and she signed it under duress.

[207] I exercise my discretion and make the following orders:

(i) The Marriage Contract is set aside.

(ii) The parties shall immediately schedule a settlement conference to be held no later than November 15, 2019

(iii) If the parties cannot agree on costs they shall exchange brief costs submissions and file them with the court by September 25, 2019.

___________________________ C. Horkins J.

Released: August 30, 2019

COURT FILE NO.: FS-18-004002

DATE: 20190830

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

M.O. Applicant

– and –

F.S. Respondent

REASONS FOR JUDGMENT

C. Horkins J.

Released: August 30, 2019

M.O. v. F.S., 2019 ONSC 5091

Case Summary