COURT FILE NO.: FS-14-81392
DATE: 2020 02 28
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
ZORAN PAUNOVIC
Applicant
– and –
REGINA WOJCIK
Respondent
Shana Maiato, for the Applicant
Ron Palleschi, for the Respondent
HEARD: January 22, 23, 24, 25; April 1, 2019
reasons for decision
MCSWEENEY j.
[1] Should the court set aside the parties’ separation agreement? This was the only issue for trial.
[2] The Applicant Zoran Paunovic and the Respondent Regina Wojcik married on August 30, 2003, when Mr. Paunovic was 53 years old and Ms. Wojcik was 50 years old. It was a second marriage for both parties.
[3] There is no dispute on the following foundational facts:
The parties separated on March 30, 2012.
They signed a separation agreement (“the Agreement”) in front of a lawyer on April 2, 2012.
Neither party obtained legal advice prior to signing the agreement.
The parties waived spousal support as a term of the agreement;
Mr. Paunovic paid all amounts owing to Ms. Wojcik under the Agreement.
Mr. Paunovic filed an Application two years later, in August 2014. His Application sought only the divorce.
The divorce was granted by Edwards J. on June 1, 2015.
[4] In her Answer to the divorce application, Ms. Wojcik challenges the fairness of the Agreement and asks the court to set it aside. She counterclaims for spousal support and unequal division of property.
[5] Mr. Paunovic opposes the relief sought. He asks that the separation agreement be upheld and Ms. Wojcik’s claims be dismissed.
[6] The evidentiary portion of this trial took place from January 22 to 25, 2019. Final arguments and submissions were made on April 1, 2019. The parties were represented throughout. Three witnesses testified: Mr. Paunovic, Ms. Wojcik, and the lawyer who witnessed the Agreement.
THE POSITIONS OF THE PARTIES
[7] Ms. Wojcik asks the court to set aside the Agreement on the following bases: (i) she signed it under duress; (ii) she did not have independent legal advice; (iii) she did not understand the agreement; (iv) the agreement was unfair to her; and (v) Mr. Paunovic did not make financial disclosure to her before she signed the Agreement.
[8] Mr. Paunovic says that he and Ms. Wojcik discussed the terms of their separation over several months and that the terms were more than fair to Ms. Wojcik. He submits that she knew what she was agreeing to and what she would receive under the Agreement. He characterizes her claim as an attempt to reopen their Agreement to get more money from him.
THE LEGAL FRAMEWORK
Subsection 56(4) of the Family Law Act
[9] The test Ms. Wojcik must meet before the court will consider setting aside a separation agreement is set out in s. 56(4) of the Family Law Act, R.S.O. 1990, c. F.3, which states that:
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.
[10] The analytical approach to this statutory test was articulated by the Court of Appeal for Ontario in LeVan v. LeVan (2008), 2008 ONCA 388, 90 O.R. (3d) 1 (C.A.). The analysis first requires the court to assess whether the party seeking to set aside the agreement has demonstrated that at least one of the circumstances set out in s. 56(4) has been engaged.
[11] With respect to s. 56(4)(c), under the law of contract, a contract may be declared void if the parties can show unconscionability, undue influence, mistake, duress or misrepresentation.
[12] If that hurdle has been overcome, the next stage is to consider whether it is appropriate for the court to exercise its discretion in favour of setting aside the agreement. The person who seeks to set aside the contract carries the burden of proof throughout.
[13] The Court of Appeal for Ontario in Turk v. Turk, 2018 ONCA 993, 143 O.R. (3d) 661, recently approved the following criteria set out in Dochuk v. Dochuk (1999), 1999 CanLII 14971 (ON SC), 44 R.F.L. (4th) 97 (Ont. Ct. Gen. Div.) as a useful guide for the exercise of the court’s discretion to set aside a separation agreement:
Whether there had been concealment of assets or material misrepresentation;
Whether there had been duress, or unconscionable circumstances;
Whether the petitioning party neglected to pursue full legal disclosures;
Whether the petitioning party moved expeditiously to have the agreement set aside;
Whether the petitioning party received substantial benefits under the agreement;
Whether the other party had fulfilled his or her obligations under the agreement; and
Whether the non-disclosure was a material inducement to entering the agreement, in other words, how important the non-disclosed information was to the negotiations.
[14] The Supreme Court of Canada in Rick v. Brandsema, 2009 SCC 10, [2009] 1 SCR 295, reiterated the importance of full and honest disclosure of financial information to the integrity of the bargaining process in the uniquely vulnerable circumstances of a family separation. The court is required to take a holistic approach in determining whether there has been a failure to make disclosure under s. 56(4) of the FLA. This requires a careful balancing of the circumstances, including those set out in LeVan and Turk, and a detailed analysis of the intentions underlying the parties’ conduct: see Virc v. Blair, 2014 ONCA 392, 119 O.R. (3d) 721, at para. 74.
Additional considerations where spousal support has been waived
[15] In this case, because Ms. Wojcik has waived spousal support as part of the agreement she seeks to set aside, an additional analytical step is required
[16] The Supreme Court of Canada in Miglin v. Miglin, 2003 SCC 24, [2003] 1 S.C.R. 303, provided guidance to courts in the exercise of a discretionary power to vary or set aside spousal support orders. Miglin contains a two-step analysis. The first step requires a procedural and substantive review of the circumstances of the formation of the agreement or order. This step involves considerations similar to the s. 56(4) analysis set out above.
[17] Where spousal support is waived as part of an agreement, however, the second step of the Miglin analysis requires the court to also consider whether the agreement still reflects the original intentions of the parties, such that it remains in substantial compliance with the objectives of the Divorce Act.
[18] Where the evidence shows that the parties are facing new circumstances not anticipated when they negotiated their separation agreement, and if the new circumstances are significantly outside of the range of reasonable outcomes they could have anticipated when spousal support was waived, the court must consider whether upholding the waiver is still consistent with the objectives of the Divorce Act.
[19] Cases have established that some degree of change in circumstances is always foreseeable. For example, parties are generally presumed to be aware that health, job markets, parental responsibilities, housing markets and values of assets are all subject to change.
[20] The second step in Miglin offers the court a framework for balancing two important objectives: supporting the finality in separation agreements and preventing unforeseen substantive unfairness in a post-divorce context.
[21] Accordingly, where the court finds on the evidence that the claimant’s current circumstances fall significantly outside of the range of reasonable outcomes anticipated when spousal support was waived, such that upholding the waiver would amount to condoning a situation inconsistent with the parties’ intentions and the objectives of the Divorce Act, the court may set aside the waiver.
The Separation Agreement:
[22] The terms of the Agreement are as follows.
BACKGROUND:
The Husband and Wife were lawfully married on August 30th, 2003, in Mississauga, Ontario. Due to certain differences that have developed between the Husband and the Wife, they agree to live separate and apart from each other, subject to the terms and conditions in this Agreement.
The Husband and Wife have made complete, fair and accurate disclosure to each other on all financial matters reflected in this Agreement.
The terms of this Agreement are intended to settle the matters addressed and may be incorporated into a final decree of divorce, unless specific matters are amended or addressed in a subsequent Separation Agreement.
The Husband and Wife have each voluntarily entered into this Agreement and have not been forced by anyone to sign this Agreement, and both the Husband and the Wife confirm are in sound mental health
IN CONSIDERATION OF the mutual promises and covenants contained in this Agreement, and as well as the condition; means, needs and other circumstances of each spouse has been taken into consideration and other valuable consideration, the receipt and sufficiency of which consideration is hereby acknowledged, the parties agree as follows:
LIVING SEPARATE AND APART
- The Husband and Wife have lived separate and apart since March 30, 2012. Neither party will attend the other's home or work without invitation or approval.
CHILDREN
- There are no children of the marriage. Furthermore, the Wife is not now pregnant and the parties shave not adopted any children.
SPOUSAL MAINTENANCE
- Neither party claims entitlement to spousal maintenance. Both parties expressly waive any claim to spousal maintenance now and in the future, regardless of any change in circumstances experienced by either party.
MARITAL HOME
- The parties will see the marital home and divide the proceeds of the sale unequally, with the Husband receiving 55.00% of the proceeds and the Wife receiving 45.00% of the proceeds.
The husband and wife will reside in, and share possession of the marital home, until it is sold.
- The expenses relating to the marital home, including but not limited to mortgage payments, utility bills, property taxes, and repair costs, will be paid by the Husband.
ASSETS
- The parties acknowledge that they have agreed upon a division of all assets, owned or possessed by them as marital property or separate property. The parties are in possession of all of those assets to which he or she is respectively entitled. Accordingly, neither makes any claim to any assets in the possession of the other, except as stated below:
a. The parties acknowledge that they have agreed upon a division of all assets, owned or possessed by them as marital property or separate property. The parties are in possession of all of those assets to which he or she is respectively entitled. Accordingly, neither makes any claim to any assets in the possession of the other, except as stated below:
Description
Value
I
Furniture and Household Items
$5,000.00
b. The Wife will be entitled to the following assets free of any claims by the Husband:
Description
Value
I
Furniture and Household Items
$5,000.00
2
Car /Mercedes B200 /2006 transfer to wife name
$15,000.00
3
Proceeds from the sale of house
$75,000.00
4
Money transfer to Regina Wojcik account
$27,500.00
DEBTS
The parties agree that any indebtedness secured against, or attributable to, any item of property that either party is receiving under this Agreement will be the sole responsibility of the party receiving the particular property.
Neither party will incur any further debt or liability on the other party's credit. Any debt
accumulated as of the date of this Agreement is the debt of the individual party, regardless if the debt was incurred as a result of joint credit.
ADDITIONAL CLAUSES
- Zoran and Regina will live separate and part from each other. Neither Zoran nor Regina, nor any person on his or her behalf, will at any time, directly, molest, annoy, disturb, or interfere with the other, or his or her person, business or manner of life. Each of the parties hereby accepts and acknowledges and agrees that each will deemed to be self-supporting and not in need of support from the other.
GENERAL PROVISIONS
The Husband and Wife will promptly sign and give to the other all documents necessary to give effect to the terms of this Agreement.
This Agreement contains the entire agreement between the Husband and Wife about their relationship with each other. It replaces any earlier written or oral agreement between the parties.
Should any portion of this Agreement beheld by a court of law to be invalid, unenforceable, or void, such holding will not have the effect of invalidating u voiding the remainder of this Agreement, and the parties agree that the portion so held to be invalid, unenforceable, or void, will be deemed amended, reduced in scope, or otherwise stricken only to the extent required for purposes of validity and enforcement in the jurisdiction of such holding.
The Husband and Wife may only amend this Agreement in writing after both parties have obtained legal advice on the changes.
In the event that a dispute arises regarding this Agreement, the parties will try to resolve the matter through negotiation or mediation, prior to initiating a court action.
Notwithstanding that the parties acknowledge and agree that their circumstances at the execution of this Agreement may change for any reason, including but without limiting the generality of the foregoing, the passage of years, it is nonetheless their intention to be bound strictly by the terms of this Agreement at all times.
This Agreement creates a fiduciary relationship between the parties in which each party agrees to act with the utmost of good faith and fair dealing toward the other in all aspects of this Agreement.
The parties agree to provide and execute such further documentation as may be reasonably required to give full force and effect to each terms of this Agreement.
The headings of this Agreement form no part of it and will be deemed to have been inserted for convenience only.
This Agreement will be binding upon and will ensure to the benefit of the parties, their respective heirs, executors, administrators, and assigns.
If the Husband and Wife reconcile, the terms of this Agreement will remain in effect unless the parties revoke it in writing.
This Agreement may only be terminated or amended by the parties in writing signed by both of them.
The law of the Province of Ontario will govern the interpretation of this agreement, and the status, ownership, and division of property between the parties wherever either or both of them may from time to time reside.
ISSUES
[23] The following legal questions must be answered in analyzing Ms. Wojcik’s claim:
Did Ms. Wojcik understand the nature and consequences of the Agreement she signed?
Did Ms. Wojcik sign the Agreement under duress?
Was there material non-disclosure on the part of Mr. Paunovic?
Are there unforeseen present circumstances such that upholding the spousal support waiver is now inconsistent with the objectives of the Divorce Act?
[24] If any of the above questions are answered in the affirmative, I must consider whether the court should exercise its discretion to set aside the agreement.
CREDIBILITY: GENERAL NOTE
[25] As emphasized by respondent’s counsel in his submissions, an assessment of the credibility of the parties is required based on the discrepancies in their evidence. For the reasons that follow, where the evidence conflicts, I prefer the evidence of Mr. Paunovic.
[26] Mr. Paunovic testified in a direct manner. He had significant recollection of the events relating to his printing business, Coronex Printing and Publishing Limited (“Coronex”), over the duration of the marriage. In particular, Mr. Paunovic was able to be specific about the factors leading to the decline in revenue of Coronex. This evidence was not shaken on cross-examination.
[27] He was able to be specific with respect to the details relevant to their separation and the process through which they came to their settlement agreement.
[28] In cross-examination, Mr. Paunovic fairly conceded details such as dates and transactions when he could not remember the details. He also said “I don’t know” when he did not know.
[29] The court did observe Mr. Paunovic to become irritable and almost argumentative at some points in his cross-examination, however, such response arose in response to suggestions he disagreed with and felt strongly about. These suggestions included Ms. Wojcik’s allegations that he had “power or control” over her during their marriage, that he withheld information from her, and that he deprived her of opportunities to have a full understanding of the financial picture relating to their marriage.
[30] By contrast, Ms. Wojcik’s evidence at times lacked detail and was internally inconsistent. Her claims of vulnerability to Mr. Paunovic in financial and domestic matters were contradicted by her evidence and by her own financial acumen as demonstrated during her cross-examination.
[31] During cross-examination, Ms. Wojcik’s credibility was weakened. For example, when confronted by applicant counsel with her own annotations in joint account documents showing her name next to certain withdrawals, Ms. Wojcik denied that that is what the annotations meant. In so doing she contradicted her previous testimony as to the meaning of her notations. When confronted with her own bank statement, she agreed she took certain monies from the joint spousal account into her personal account.
Issue 1: Did Ms. Wojcik understand the nature and consequences of the agreement she signed?
[32] The separation agreement is written in English. Ms. Wojcik’s first language is Polish. Ms. Wojcik claims that she did not understand the Agreement or what she was signing and that she would not have signed it if she had. She claims that she was afraid of Mr. Paunovic.
[33] Ms. Wojcik testified that the Agreement was prepared by Mr. Paunovic, reflected his terms, and was not shown to her until they were on their way to the Polish-speaking lawyer to have it witnessed. She claims he forced her to sign the Agreement without the opportunity to read or understand it.
[34] Mr. Paunovic disputes Ms. Wojcik’s description of the negotiation of the Agreement. His evidence is that the terms were discussed by the parties over several months and that the Agreement was more than fair to Ms. Wojcik. The Agreement was witnessed by a Polish-speaking lawyer arranged by, paid for, and known to Ms. Wojcik. He submits that there was no duress and that Ms. Wojcik understood what she was signing.
[35] On cross-examination Ms. Wojcik admitted that she made the appointment with the lawyer, Mr. Antonik. Mr. Antonik spoke Polish, which is her mother tongue. Mr. Paunovic does not speak or understand Polish. While Mr. Antonik testified that he would not have spoken in Polish at the meeting unless both parties understood the language, Ms. Wojcik agreed that she could have spoken to Mr. Antonik in Polish. She conceded she did not tell Mr. Antonik – either in English or in Polish – that she had concerns about understanding the Agreement or with its contents.
[36] I find that the evidence does not support Ms. Wojcik’s claim that she did not understand what she was signing.
[37] Mr. Antonik was called as a witness by Ms. Wojcik and testified at trial. He confirmed that he did not give either party independent legal advice and that his role was restricted to witnessing the signing of the Agreement by both parties. He did not remember the specific meeting described by the parties because it occurred seven years ago. He did testify clearly that the practice he follows every time he notarizes a document is to advise the parties that he will not be providing legal advice as to the contents of what they are signing. His role is limited to witnessing their signatures, checking their identification, confirming their identities, and then ‘stamping’ or notarizing the document.
[38] On cross-examination, Mr. Antonik confirmed that where he has a suspicion of a power imbalance or any other issue regarding whether one of the parties is signing a document of their own free will, his practice is to decline to notarize the documents. He testified that he has refused to notarize documents for this reason on several occasions in the past. While Mr. Antonik could not recall the specific details of this meeting, I conclude that this was not one of those cases where Mr. Antonik identified concerns about a power imbalance or the parties’ free will, as he notarized the document.
[39] I further accept Mr. Paunovic’s evidence that he proposed using a lawyer to develop the separation agreement and that the reason they did not do so was based on Ms. Wojcik’s suggestion that they save money and do it themselves.
[40] Mr. Paunovic was clear and consistent with respect to his testimony that Ms. Wojcik’s adult son reviewed the parties’ separation agreement prior to its execution and had no concerns about it. He indicated that the son was present “at the kitchen table when we worked on this – mother invited him to take a look and say what he thinks.” He did not deviate from this evidence.
[41] Ms. Wojcik suggested without detail that her son never saw the agreement and her counsel advised that he would be calling her son as a witness. She did not do so. While there is no property in a witness, and either party could have called the son, I find that, on a balance of probabilities, it is likely that the son did review the agreement.
[42] I cannot find on the evidence, on a balance of probabilities, that Ms. Wojcik did not know what she was signing on April 2, 2012. The following evidence supports a conclusion that Ms. Wojcik knew was she was bargaining for and what the parties’ relevant assets were.
[43] The parties discussed separation in the final months of 2011 and agreed the relationship was over. Discussions about the terms of their separation and how to share their assets took place over several months in the end of 2011 and into 2012, prior to the date of the Agreement.
[44] When they formalized the Agreement, they chose March 30, 2012 as the date of separation for its convenience, being the date that their house sale closed.
[45] Coronex was no longer operative on the date of separation as the CRA had frozen its accounts. Mr. Paunovic was working for another printing company and had to sell off Coronex’s assets (its printing machinery) to pay creditors.
[46] In December 2011 Ms. Wojcik removed $30,000 from the parties’ joint account without telling Mr. Paunovic. He asked her to put some of this money back and she returned $10,000.
[47] During this time, the parties discussed selling their home on Silverado Drive in Mississauga. They jointly listed the property for sale in February 2012 and the transaction closed at the end of March 2012.
[48] I note further that on March 12, 2012, Ms. Wojcik wrote a letter on her own to parties’ real estate lawyer to protect her own interests regarding the proceeds of sale of their home. This was a prudent step to take in the context of the separation. I find that it strains credulity that after having taken such steps that Ms. Wojcik would not take care to carefully read the separation agreement before signing it.
[49] As referenced earlier, the parties had already negotiated their agreement prior to the date of signing. Ms. Wojcik by her own evidence was already moving out of the home on the date of the Agreement. Her moving was clearly in reliance on the negotiated agreement under which she knew she would receive proceeds from the sale of the house.
[50] My conclusion as to Ms. Wojcik’s understanding of the financial meaning and consequences of signing the separation agreement is also supported by the court’s observation of the skills demonstrated by Ms. Wojcik in her cross-examination. She was able to answer questions from counsel accurately with reference to debits, credits, and withdrawals from bank accounts. Her testimony was specific and confident.
[51] During cross-examination Ms. Wojcik also demonstrated her competence and ease with money and figures. She was able to describe and demonstrate her method of checking and cross-referencing payments made from Coronex accounts. She showed her calculations, admitted when she had made a mathematical error and was able to follow counsel’s questions easily. She admitted that during the time she was working at Coronex and doing the bookkeeping, she would express concern and ask questions of Mr. Paunovic about expenditures and choices that he made. She acknowledged meeting monthly with the Coronex accountant as part of her bookkeeping role.
[52] I find on the basis of the evidence and her testimony that, contrary to Ms. Wojcik’s position that she was kept ignorant of the state of finances of Coronex during the marriage, she had specific knowledge of the accounts, finances and money in the business.
[53] With respect to Ms. Wojcik’s language skills, it was clear in her evidence that she reads English fluently. She had no apparent trouble reading English language exhibits. She was quickly able to identify and speak to the numbers in the documents with headings in English, including all financial statements and banking accounts referenced in her evidence.
[54] I find on the evidence that it is not credible that Ms. Wojcik did not understand what she was signing on April 2, 2012. Nor can I conclude that she did not understand the financial consequences to her and specifically what she would get paid from the terms of the Agreement.
[55] Ms. Wojcik has not met her onus of proving that she did not understand the nature and consequences of the Agreement she signed.
Issue 2: Did Ms. Wojcik sign the Agreement under duress?
[56] Ms. Wojcik’s position is that Ms. Paunovic pressured her into signing the Agreement.
[57] As noted above, Mr. Antonik, the lawyer who witnessed the signing of the Agreement, testified about his practice in notarizing documents. Based on his practice and the fact that he notarized the Agreement, I concluded that this is not a case where Mr. Antonik identified anything suspicious or concerning about the parties’ free will in signing the Agreement.
[58] Ms. Wojcik did not raise any concerns about duress to Mr. Antonik during the meeting. While Mr. Antonik was not acting as counsel to Ms. Wojcik and, according to his practice, would have advised her that he was not providing independent legal advice, her failure to raise concerns about duress during the meeting is indicative of her choice to sign the Agreement at that time.
[59] I note in particular that Mr. Antonik and Ms. Wojcik both speak and understand Polish whereas Mr. Paunovic does not. If Ms. Wojcik had concerns about being forced to sign the Agreement, she could have voiced them to Mr. Antonik in relative privacy by speaking them in Polish because Mr. Paunovic would not have been able to understand what she was saying.
[60] I conclude that Ms. Wojcik has not met her onus to prove that she was under duress when she signed the Agreement.
Issue 3: Was there material non-disclosure on the part of Mr. Paunovic?
[61] Having found that Ms. Wojcik understood the Agreement and signed it of her own accord, the threshold may yet be met under s. 56(4) if Mr Paunovic failed to disclose information which, if disclosed, would have been material to her decision to sign the agreement.
[62] Ms. Wojcik claims that Mr. Paunovic failed to make required financial disclosure and that she was therefore materially misled and unable to make an informed decision as to whether the separation agreement was fair. Mr. Paunovic did not commission a valuation of his business at the date of separation, and she denies that the business had a nil value at that time.
[63] With respect to financial disclosure, Mr. Paunovic responds that Ms. Wojcik did not ask him to value his business nor to provide other financial information to her. While he owned and ran the business, Ms. Wojcik worked as its bookkeeper and in other roles over the years. She had full access to all records, met regularly with the accountant, and had full signing authority to act for him in his absence.
[64] The parties agree that no valuation of the business was requested by Ms. Wojcik nor provided by Mr. Paunovic. The evidence is that neither party requested disclosure from the other.
[65] Ms. Wojcik’s counsel urges the court to find that Ms. Wojcik was under the financial and psychological “power or control” of Mr. Paunovic and that she accordingly had no way of knowing or confirming whether Coronex had a nil value at the date of separation.
[66] I cannot agree. Certainly Mr. Paunovic was the owner of Coronex, a company he started many years before the parties’ marriage. He undoubtedly knew more about the printing business in general through that experience.
[67] However, with respect to the comparative abilities of the parties in financial and bookkeeping matters, the evidence supports a finding that Mr. Paunovic relied on and trusted Ms. Wojcik extensively. This trust included giving her full access to accounts as well as signing authority for the company, including for payroll and all other financial matters when he was out of the country. Both parties also testified to Ms. Wojcik, not Mr. Paunovic, being the spouse primarily involved in negotiating the purchase and the sale of the various houses owned during their marriage.
[68] Ms. Wojcik testified that she was not involved in running the business. The evidence confirms that although she did not hold a management role in the business, she was significantly knowledgeable about and involved in all aspects of its operations.
[69] In cross-examination, Ms. Wojcik conceded that she worked for ten years at Coronex in “all aspects of the business”, that she was knowledgeable about its equipment and business processes and that she was financially minded. She expressed frustration in her testimony that her husband did not rely on her more or ask her advice more often with respect to financial or business decisions.
[70] She acknowledged that she stayed back and oversaw the business when her husband went to Serbia and did not dispute that she had the signing authority he described over all the accounts. In her cross-examination, she contradicted her testimony-in-chief, acknowledging that she could see all of Mr. Paunovic’s accounts and that he trusted her with access to all the company’s accounts.
[71] Having considered the evidence and the submissions of the parties, I make the following findings with respect to material non-disclosure. The only true assets owned by the parties at the time of separation were Mr. Paunovic’s business and the parties’ home. The house was divided fairly in the agreement, with 55% of the proceeds going to Mr. Paunovic, who was also responsible for the carrying costs, and 45% of the proceeds going to Ms. Wojcik. In fact, the parties agreed at trial that the division was actually closer to 53% for Mr. Paunovic and 47% for Ms. Wojcik.
[72] I accept Mr. Paunovic’s evidence regarding the decline of his business prior to separation. In particular, I accept the evidence supported by CRA documentation, that at the time of separation the company was inactive and had no value. The assets had been sold to satisfy debts owing to the CRA.
[73] I further conclude that Ms. Wojcik had sufficient knowledge of the business realities of the state of the Coronex business at the time of separation that she neither requested nor needed documentation to show that the business had no value.
[74] I therefore find that there was no imbalance of information between the parties with respect to access to relevant financial information. Both parties had knowledge of the value or lack of value of the business as well as of the value of the home. No information was withheld from Ms. Wojcik. If the information provided was not complete, Ms. Wojcik had the opportunity during these proceedings to review that information. There was no evidence led at trial that there was any information withheld from her that was material to her decision to sign the Agreement.
[75] I conclude that there was no material non-disclosure on the part of Mr. Paunovic.
Issue 4: Whether, due to unanticipated circumstances arising subsequent to the signing of the agreement, it is now unconscionable for the court to uphold the spousal support waiver?
[76] Ms. Wojcik does not argue that there were unanticipated subsequent circumstances that rendered the Agreement unfair. Her argument is that the Agreement was unfair from the outset.
[77] Nonetheless, considering the principles in Miglin and as a matter of fairness, especially where the Agreement was entered without either party obtaining legal advice, it is appropriate for the court to consider whether the current circumstances of the parties are such that it would be so unfair as to be unconscionable for the court to uphold Ms. Wojcik’s waiver of spousal support.
[78] Ms. Wojcik did not testify to unanticipated circumstances rendering her more in need than planned at the time of entering the Agreement.
[79] However, Mr. Paunovic testified at trial that he is now close to 70 years old and has significant health problems. He is living on disability benefits. Ms. Wojcik did not dispute him on this point.
[80] I find no unforeseen circumstances since separation that have disadvantaged Ms. Wojcik such that the court would be required to revisit the waiver of spousal support.
RECENT LIMITATION PERIOD DECISION
[81] A recent decision of this court, released subsequent to final argument in this case, has ruled that a two-year limitation period applies to the setting aside of domestic contracts: see F.K. v. E.A., 2019 ONSC 3707, per Minnema J. That decision is currently under appeal.
[82] Ms. Wojcik counterclaimed in August 2014 to set aside the Agreement dated April 2, 2012. If the holding in F.K. v. E.A. were applied to her claim, it would be statute-barred as to the setting aside of the Agreement other than as it relates to spousal support.
[83] Mr. Paunovic did not argue a limitation period defense. Nor did I offer the parties an opportunity to make submissions on this decision. In light of the conclusion I have reached on the merits of the claim and the pending appeal of FK v. EA, I did not consider it necessary to do so.
CONCLUSION
[84] I have carefully considered the evidence as referenced above and the submissions of the parties.
[85] This court finds on the evidence that Mr. Paunovic and Ms. Wojcik negotiated the agreement with knowledge of the state of Mr. Paunovic’s business and the value of their jointly owned home and assets. I find on the evidence that the resulting Agreement represented a fair allocation of their assets at separation. If anything, the Agreement resulted in a greater allocation of the assets to Ms. Wojcik.
[86] I disagree with Ms. Wojcik that this case is similar to Brandsema with respect to full disclosure and the vulnerability of one of the parties. I have found that both parties had the information needed to make an informed decision about separating their assets. They were motivated by their shared intention to end their relationship fairly and with a minimum of disagreement.
[87] The parties both chose not to seek independent legal advice. Ms. Wojcik had the opportunity, up until the moment of signing the Agreement, to reconsider whether to do so. She conceded that she could have indicated any concerns in her native language of Polish to Mr. Antonik. Mr. Antonik was clear in his evidence that if were any signs of concern or reluctance from Ms. Wojcik such that he was concerned about her signing the Agreement of her own free will, he would have refused to notarize their Agreement.
[88] Further, Ms. Wojcik’s conduct of waiting two years to set aside the Agreement after receiving the benefits she was entitled to under it militates against setting aside the agreement.
[89] Ms. Wojcik has failed to establish any of the threshold bases of unfairness which would require the court to consider setting aside this agreement or the spousal support waiver.
[90] The separation agreement is therefore upheld.
ORDER
[91] Ms. Wojcik’s claims are dismissed.
[92] The Separation agreement dated April 2, 2012 is upheld.
[93] For clarity, the Court rules that the spousal support waiver is also upheld.
COSTS
[94] Mr. Paunovic was fully successful and is entitled to his costs. The parties are both of modest means and are encouraged to agree on costs.
[95] If they are unable to do so, however, they may make written submissions to my attention by way of the Brampton SCJ Registrar’s office, to be served and filed by the following dates: Mr. Paunovic by March 16, 2020; Ms. Wojcik by March 30, 2020; Mr. Paunovic’s reply, if any, by April 3, 2020.
[96] Cost submissions not to exceed four pages, double spaced, exclusive of bill of costs and relevant offers to settle. Reply submission limited to two pages.
McSweeney J.
Released: February 28, 2020
COURT FILE NO.: FS-14-81392
DATE: 2020 02 28
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
ZORAN PAUNOVIC
Applicant
– and –
REGINA WOJCIK
Respondent
REASONS FOR JUDGMENT
McSweeney J.
Released: February 28, 2020