COURT FILE NO.: FS-19-008492
DATE: 20201014
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
DEBBIE GORMAN
Applicant
– and –
DAVID SADJA
Respondent
Dani Frodis and Kori Levitt, for the Applicant
Richard Diamond and Brigitte Barsalou, for the Respondent
HEARD: January 27-29, 2020
M. D. FAIETA j.
reasons for decision
INTRODUCTION
[1] The parties were married for about 27 years prior to their separation. The Applicant has two children from an earlier marriage and the parties share one son who is now 27 years old. The Respondent husband seeks to set aside a marriage contract that they signed a few days prior to their marriage in 1991 which, amongst other things, provides that each party generally releases all rights to and interest in property owned by the other. The Respondent claims an interest in the increased value of the matrimonial home that the Applicant brought into the marriage and seeks to set aside the marriage contract on grounds that he: (1) received inadequate financial disclosure; (2) did not understand the marriage contract; and (3) signed the marriage contract under duress. Alternatively, the Respondent seeks to rectify the marriage contract in order to permit him to claim an interest in the matrimonial home.
[2] At the end of trial, I advised the parties that the Respondent’s claims to set aside the Marriage Contract and, alternatively, to rectify the Marriage Contract, were dismissed. These are the reasons for that decision.
BACKGROUND
[3] The parties met in December, 1986. The Applicant was 32 years old, with two young children, separated from her first husband. The Respondent was 26 years old and had never been married.
[4] All issues between the Applicant and her first husband were resolved pursuant to a Separation Agreement dated July 8, 1991 with the result that the Applicant received sole ownership of the matrimonial home (“the Strathearn Road home”) and its contents, an equalization payment of $225,000, child support of $1,000 per month per child, and $5,000 per year for section 7 expenses.
[5] One month later, in August, 1991, the Respondent proposed to the Applicant. She accepted his proposal in September, 1991 and shortly thereafter the Respondent then moved into the Strathearn Road home.
[6] The Applicant obtained a divorce from her first husband on October 17, 1991.
[7] The Applicant states that the Respondent wanted a quick wedding because he wanted children and she was “not getting any younger”. The Respondent denies that he pushed for a quick wedding. In any event, the parties booked their wedding for December 8, 1991.
[8] The Applicant’s parents are wealthy. The Applicant states that her father encouraged her to enter a marriage contract with the Respondent. The Respondent denies that the Applicant asked him to enter a marriage contract. Instead, the Respondent states he offered to sign a marriage contract because he knew that she had assets, including the Strathearn Road home, that she might want to protect. The Respondent states that he did not discuss terms of the marriage contract with the Applicant but rather told her that “… if she was intent on having me sign a contract to please provide one in a timely fashion”.
[9] The Applicant retained Ronald P. Biderman to prepare a marriage contract. He had represented the Applicant in her earlier divorce. The Respondent retained his step-father, Albert H. Kruger.
[10] There were three draft marriage contracts exchanged between counsel.
First Draft – November 28, 1991
[11] Mr. Biderman delivered a draft marriage contract, dated November 28, 1991, to Mr. Kruger (“November 28 Draft Marriage Contract”). Mr. Kruger made notes on the First Draft Marriage Contract. He also made notes on separate sheets of paper dated December 1, 1991 and December 2, 1991. The Respondent states that he discussed suggested changes to the First Draft Marriage Contract with Mr. Kruger.
Second Draft – December 4, 1991
[12] By letter dated December 4, 1991, Mr. Biderman delivered a revised draft marriage to Mr. Kruger “as discussed” (“December 4 Draft Marriage Contract”).
Third Draft – December 5, 1991
[13] By letter dated December 5, 1991, Mr. Biderman delivered five copies of a further revised draft marriage contract to Mr. Kruger “in accordance with our telephone discussion this morning”.
[14] On December 6, 1991, Mr. Kruger delivered to Mr. Biderman several copies of the marriage contract that had been signed by the Respondent (“Marriage Contract”).
Differences between the First Draft Marriage Contract and the Marriage Contract
[15] There are many differences between the First Draft Marriage Contract and the Marriage Contract. Some of the differences are shown in Schedule “A” to this decision and are as follows:
• The First Draft Marriage Contract stipulated that the parties had exchanged disclosure. The Marriage Contract included the caveat that the parties had exchanged disclosure “to the extent requested”;
• The First Draft Marriage Contract required the Respondent to fully and finally release spousal support. The Marriage Contract provided the Respondent with the ability to claim spousal support so long as the parties had a child of their marriage;
• The First Draft Marriage Contract required both parties to be entirely separate as to property. On the other hand, the Marriage Contract provided that:
o If the Applicant pre-deceased the Respondent after the parties had a child together, and had been married for five years, the Applicant’s estate would pay the Respondent one-half of the growth in the value of the Strathearn Road home which was solely owned by the Applicant;
o If the Respondent pre-deceased the Applicant after the parties had a child together and had been married for five years, the Respondent’s estate would pay the Applicant half of the growth in value of the Respondent’s solely owned business;
• The First Draft Marriage Contract was silent as to the Respondent’s possessory rights with respect to the Strathearn Road home in the event of her death. The Marriage Contract provides that if the parties had a child and the Applicant predeceased the Respondent, then he could remain in the home until the child became 18 years old.
[16] The parties lived in the Strathearn Road home until the Applicant sold it in April, 2007, as they decided they did not want to renovate the home to accommodate three children. Instead, the Applicant purchased a lot on Ridge Hill Drive for $830,000 for the purpose of building a new home. The Respondent did not contribute toward the purchase. This purchase was funded by the proceeds of sale of the the Strathearn Road home as well as her parents.
[17] The parties lived in rented premises for about 14 months until completion of the Applicant’s new home that was built on Ridge Hill Drive. It was funded by a $500,000 mortgage. The new home was owned by the Applicant. The Respondent states that he contributed $125,000 to the renovation of the Strathearn Road Home in the year prior to its sale and that he put $50,000 in improvements into the Ridge Hill Drive home.
[18] During their marriage, the Respondent ran a landscaping business, then built houses and most recently is a supplier of playground equipment. The Respondent’s annual income fluctuated between $45,000 and $65,000 while the Applicant’s income was considerably higher largely because of the receipt of income from various entities established by her parents.
[19] The parties separated on January 1, 2018.
[20] The Applicant commenced this Application on March 4, 2019 for a divorce and, amongst other things, an order for Judgment in accordance with the Marriage Contract.
[21] The Ridge Hill Drive home was sold in July, 2019 for $4,070,000. The Applicant received $1,738,294,.61 and the Respondent received $10,000 from the proceeds of sale.
[22] The Respondent asks that the Marriage Contract be set aside on the basis that:
• No financial disclosure was exchanged and he felt intense pressure to sign the Marriage Contract;
• He and his lawyer, Mr. Kruger, misunderstood paragraph 3.3 of the Marriage Contract as the Respondent believed that he would be entitled to share equally in the increase in value of the Strathearn Road home above $900,000.00 after the parties had been married for at least five years and there had been a child of the marriage even if she had not predeceased him;
• The Marriage Contract is unconscionable as the Respondent will be left destitute if the Marriage Contract is not set aside.
[23] Spousal support was not released by the Marriage Contract. The Respondent’s claim for spousal support was settled prior to trial as follows:
• The Applicant paid the Respondent $5,800.00 per month from July 1, 2019 to January 31, 2020;
• The Applicant shall pay the Respondent a futher $1,200,000.00.
[24] The only witnesses at trial were the parties. Mr. Biderman has retired. He has no recollection of this matter and his file was destroyed long ago. Mr. Kruger has passed away however, his notes remain and the parties agreed that they be admitted at trial.
ANALYSIS
[25] The marriage contract signed by the parties in this case is a “domestic contract” within the meaning of s. 51 of the Family Law Act, R.S.O. 1990, c. F.3., as amended (“FLA”).
[26] Subsection 56(4) of the FLA provides that a court may set aside a domestic contract or any provision in it,
(a) If a spouse failed to disclose significant assets, significant debts or other liabilities when the domestic contract was made;
(b) If a spouse did not understand the nature or consequences of the domestic contract; or,
(c) Otherwise in accordance with the law of contract.
[27] Whether a domestic contract should be set aside requires the application of a two-step approach:
(a) The party seeking to set aside must demonstrate that one of the listed circumstances within s. 56(4) has been engaged; and,
(b) The court must then consider whether it is appropriate to exercise discretion in favour of setting aside the agreement or a provision within it: See Moses Estate v. Metzer, 2017 ONCA 767, para. 9.
[28] The party who seeks to set aside the contract carries the burden of proof throughout: LeVan v LeVan, 2006 CanLII 31020 (ON SC), [2006] O.J. No. 3584, at para. 177, aff’d 2008 ONCA 388.
Issue #1: Did the Applicant fail to disclose significant assets, significant debts or other liabilities ?
[29] Nothing in the FLA precludes a litigant from entering into a domestic contract without full financial disclosure. Where a spouse, chooses not to pursue further disclosure, with the benefit of independent legal advice, the litigant cannot resile from the consequences of that decision unless he demonstrates that the other spouse’s financial disclosure was inaccurate, misleading or false: Quinn v. Epstein, Cole LLP, 2008 ONCA 662, paras. 3-4.
[30] The Respondent submits that the parties did not provide each other with full financial disclosure prior to signing the Marriage Contract.
[31] Paragraph 2.3 of the Marriage Contract states that:
Each of the parties has made disclosure to the other to the extent requested, of his or her income and assets. Each is fully satisfied with the disclosure made by the other. The parties acknowledge that this provision is inserted in the Agreement because of section 56 of the Family Law Act which permits the Court to set aside a domestic contract if a party failed to disclose to the other, significant assets, debts or liabilities. Each of them covenants with the other not to seek to set aside the Agreement on this ground, and acknowledges that any further disclosure provided by either of them to the other, is not of significance within the meaning of the Act.
[32] The Respondent placed his initials next to paragraph 2.3.
[33] The Respondent relies on notes made by Mr. Kruger on December 1, 1991 in relation to paragraph 2.3 which states:
“Full disclosure” – no discl. at all. In what manner?
[34] However, it appears that Mr. Kruger was unaware at the time when he wrote these notes that the Respondent, based on his evidence and the Applicant’s evidence at trial, was aware of the Applicant’s finanical circumstances. I find that the Respondent knew that at the time that he signed the Marriage Contract: (1) the Applicant owned the Strathearn Road home; (2) the Strathearn Road home had a value of about $800,000-900,000; (3) the Applicant owned the contents of the home, which included art and furniture, with a value of about $75,000; (4) the Applicant had received a lump sum settlement of $225,000 from her first husband; (5) the Applicant had a job and a bank account.
[35] There is no evidence that the disclosure provided by the Applicant was inaccurate, misleading or false. The list of asssets and values described above is generally consistent with the figures outlined in a memorandum from Mr. Biderman dated December, 1990 prepared in relation to the Applicant’s separation from her first husband.
[36] Although with the assistance of independent legal counsel, the Respondent demanded the inclusion of favourable terms in the Marriage Contract (such as allowing him to claim spousal support in the event of their separation), he chose not to demand further financial disclosure.
[37] Given the evidence, including the representations in the Marriage Contract, I find that the Respondent has not established that the Applicant failed to disclose significant assets, significant debts or other liabilities when the domestic contract was made.
[38] In any event, in Butty v. Butty, 2009 ONCA 852, 99 O.R. (3d) 228, at para. 54, the Ontario Court of Appeal stated that “.. a party to a marriage contract cannot enter into it knowing of shortcomings in disclosure and then rely on those shortcomings as the basis to have the contract set aside”. Thus, given that Mr. Kruger was of the view that there had been “no disclosure at all”, it is too late for the Respondent to complain when the need for disclosure could have been addressed at the time that the terms of the marriage contract were negotiated.
Issue #2: Did the Respondent not understand the nature or consequence of the marriage contract
[39] The Respondent states that he did not read the Marriage Contract despite having initialled every page.
[40] Despite this, the Respondent submits that both he and his lawyer, Mr. Kruger, misunderstood paragraph 3.3 of the Marriage Contract which, along with paragraphs 1.6 and 3.4, state:
1.6 “Triggering Event” means the earliest to occur of any of the following events:
i. When the parties have separated with no reasonable prospect that they will resume cohabitation (there will be deemed to be no reasonable prospect that the parties will resume cohabitation upon either party giving written notice to the other that in the view of the party giving the notice no such reasonable prospect exists);
ii. When a divorce is granted; or
iii. When the marriage is declared a nullity;
iv. The death of the Husband or the Wife.
3.3 The parties agree that if (a) they have been married for at least 5 years; and (b) there has been a child of the marriage; and (c) the Wife predeceases the Husband prior to the occurrence of a Triggering Event described in Paragraph 1.6.i, ii, or iii, they shall share equally any increase in the value of the Family Residence over its present value, which they agree is the sum of $900,000.00, such sharing to be implemented in the manner set out in Paragraph 3.4
3.4 If the conditions set out in Paragraph 3.3 are satisfied, the Wife’s estate shall pay to the Husband within six months of her death the value of his interest in the Family Residence being one-half of the difference obtained by subtracting from the value thereof as at the date of the Wife’s death, the sum of $900,000. If the Wife’s personal representatives and the Husband are unable to agree on such value, it shall be determined by a single arbitrator agreed upon by them, or if they are unable to agree appointed on the application of either of them by a Judge of a court of competent jurisdiction. The Husband shall then release any and all interest he may have in the Family Residence, to the Wife’s estate.
[41] In short, the Respondent states that he believed that he was entitled to ½ of the increase in value of the Strathearn Road home once they had been married for at least five years and there had been at least one child of the marrrige. However the Marriage Contract does not accord with the Respondent’s view. Instead, it provides that he is only entitled to that 50% share of the Family Residence in the event that the Applicant dies before they separate, divorce or their marriage is declared a nullity.
[42] There is no evidence that Mr. Kruger shared the Respondent’s mistaken view of this provision.
[43] It appears that paragraphs 3.3 and 3.4 were added to the Marriage Contract at the behest of Mr. Kruger given his notes dated December 1, 1991 state “… should be provision on a graduated scale if marriage endures … if 3 yrs – ½ value ofr increase of matr. Home from date of marriage”.
[44] In support of his view that Mr. Kruger did not understand this provision, the Respondent relies on Mr. Kruger’s notes dated December 2, 1991 which state “5 yrs children - David to get 50% of increase in Matr Home”. However, those notes were written before paragraphs 3.3 and 3.4 had been drafted given that they first appeared in the draft Marriage Contract delivered by Mr. Biderman on December 4, 1991 and remain on the draft delivered by Mr. Biderman on December 5, 1991.
[45] The Strathearn Road home was sold in April, 2007 for $1,755,000.00. When asked at trial why he did not ask for payment of that portion of the proceeds of sale that exceeded $900,000, the Respondent stated that it had not occurred to him.
[46] I find that the Respondent has not established that he did not understand that he would only be entitled to a 50% interest in the event of the Applicant’s death;
(1) the conditions for the Respondent to obtain a 50% interest in the Family Residence are plain on the face of the Marriage Contract and one of the conditions requires that the Applicant be deceased;
(2) On cross-examination, the Respondent admitted that these terms were plain and unambiguous;
(3) The Respondent received independent legal advice from Mr. Kruger;
(4) Mr. Kruger delivered a Certificate dated December 5, 1991 which states that:
That I have reviewed with him and explained to him fully and carefully all of the provisions of the said Agreement; that he fully understands the said provisions and their consequences and legal effects and in particular that the provisions of the said Agreement are intended to be a full, complete and effective final release of any and all claims of any sourt which he now has or may have against Debra Saltsman, except as provided therein. I explained to him that it is intended that there be no right by him to seek any amendment or revision of the Agreement at any future time.
That I gave careful consideration to the question of whether he entered into the Agreement voluntarily and free of duress and satisfied myself after full and frank discussion with him that such was the case.
(5) The Respondent signed an Acknowledgment, dated December 5, 1991, which states that:
I hereby acknowledge and declare that I retained Albert Kruger as my solicitor to advise me and to explain to me the nature and effect of the agreement referred to in the certificate of the said solicitor herein and the said Solicitor having so advised and informed me, I hereby acknowledge and declare that I am fully aware of the nature and effect of the said agreement and my rights and liabilities thereunder and that I executed the said Agreement of my own volition and without fear, threat, compulsion or influence from Debra Saltsman or any other person.
(6) There is nothing in the evidence to suggest that Mr. Kruger believed that the Respondent would be entitled to a 50% interest in the Family Residence merely after five years of marriage and the birth of a child;
(7) The Respondent’s failure to request a 50% interest in the proceeds of sale of the Strathearn Road home is inconsistent with the position that he now takes. Further, his explanation that it never occurred to him to ask for such interest makes little sense particulary given that he and the Applicant testified that their marriage had been difficult for many years;
(8) The Applicant states that they had horrible arguments in 2012 and 2015. On those occasions, the Respondent stated that if they divorced he would be left with nothing and that he would contest the Marrriage Contract.
(9) The Respondent states that he would not have given his pay cheques to the Applicant over the course of their marriage had he understood that their matrimonial home was not a savings “nest egg” for him that he could share in the event that they separated. However, that submission is belied by the fact that the Respondent nevertheless contributed his pay cheques to the Applicant, which she would place along with her own funds into a joint bank account to pay household and other expenses, during the first five years of their marriage when it was clear under section 3.3. of the Marrriage Contract that he had no entitlement to share in the increase in value of the matrimonial home if they separated during the first five years of marriage.
Issue #3: Should the Marriage Contract be set aside in accordance with the law of contract?
[47] The Respondent advanced various grounds: 1) unconscionability; 2) duress and 3) rectification of unilateral mistake.
Is the Marriage Contract Unconscionable?
[48] In Tadayon v. Mohtashami, 2015 ONCA 777, paras. 28-29, the Ontario Court of Appeal stated that unconscionability in the context of the execution of domestic contracts involves:
… circumstances of oppression, pressure, or other vulnerabilities and evidence of one party's exploitation of such vulnerabilities during the negotiation process, with the result that the domestic contract deviates substantially from the legislation, the contract need not be enforced.
[49] There is no evidence that the Respondent had any vulnerabilities that were exploited by the Applicant that compelled him to sign the Marriage Contract. The fact that the Respondent stated that he raised the question of a marriage contract and offered to sign such contract is somewhat inconsistent with the execution of such contract being unconscionable. The fact that the Marriage Contract was presented ten days before the wedding day is not duress. Certainly, the Respondent did not demonstrate any vulnerabilities in relation to the potential postponement or cancellation of the wedding as he refused, on more than one occasion, to sign the Marriage Contract without changes for his benefit which were accepted by the Applicant. Some of these changes are shown in Schedule “A”. The Respondent had only moved into the Applicant’s home a few months earlier. The Respondent, a business person, had the means to return to renting this own premises if his relationship with the Applicant ended.
[50] I find that the Respondent has not established that the Marriage Contract is unconscionable.
Duress
[51] Duress is the coercion of a person’s will through illegitimate pressure, with one party dominating the will of another at the time that a contract is executed: Ramdial v. Davis, 2015 ONCA 726, para. 42. The fact that the Marriage Contract was presented ten days before the wedding day does not amount to a coercion of the Respondent’s will through illegitimate pressure. As noted, he retained counsel and made significant changes to the drafts including Mr. Kruger’s request for the addition of paragraph 3.3 . Those amendments speak loudly to the fact that the Respondent’s will was not dominated at the time that he signed the Marriage Contract. Further, the fact that he now has remorse regarding the the language of paragraph 3.3 of the Marriage Contract is no basis for a finding of duress.
Rectification of Unilateral Mistake
[52] The Respondent submits that he did not agree to the inclusion of the pre-condition of the Applicant’s death found in paragraph 3.3(c) in order for the Respondent to be entitled to an interest in the increase in value of the Family Residence. He submits that this provision appears in error in the Marriage Contract and that he signed the Marriage Contract unaware that it was included. The Respondent submits that the Marriage Contract should be rectified to remove paragraph 3.3(c).
[53] In Canada (Attorney General) v. Fairmont Hotels Inc., 2016 SCC 56, the Supreme Court of Canada explained at paras. 12-15, when the equitable remedy of rectification is available:
[12] If by mistake a legal instrument does not accord with the true agreement it was intended to record — because a term has been omitted, an unwanted term included, or a term incorrectly expresses the parties’ agreement — a court may exercise its equitable jurisdiction to rectify the instrument so as to make it accord with the parties’ true agreement. Alternatively put, rectification allows a court to achieve correspondence between the parties’ agreement and the substance of a legal instrument intended to record that agreement, when there is a discrepancy between the two. Its purpose is to give effect to the parties’ true intentions, rather than to an erroneous transcription of those true intentions (Swan and Adamski, at §8.229).
[13] Because rectification allows courts to rewrite what the parties had originally intended to be the final expression of their agreement, it is “a potent remedy” (Snell’s Equity (33rd ed. 2015), by J. McGhee, at pp. 417-18). It must, as this Court has repeatedly stated (Shafron v. KRG Insurance Brokers (Western) Inc., 2009 SCC 6, [2009] 1 S.C.R. 157, at para. 56, citing Performance Industries Ltd. v. Sylvan Lake Golf & Tennis Club Ltd., 2002 SCC 19, [2002] 1 S.C.R. 678, at para. 31), be used “with great caution”, since a “relaxed approach to rectification as a substitute for due diligence at the time a document is signed would undermine the confidence of the commercial world in written contracts”: Performance Industries, at para. 31. It bears reiterating that rectification is limited solely to cases where a written instrument has incorrectly recorded the parties’ antecedent agreement (Swan and Adamski, at §8.229). It is not concerned with mistakes merely in the making of that antecedent agreement: E. Peel, The Law of Contract (14th ed. 2015), at para. 8-059; Mackenzie v. Coulson (1869), L.R. 8 Eq. 368, at p. 375 (“Courts of Equity do not rectify contracts; they may and do rectify instruments”). In short, rectification is unavailable where the basis for seeking it is that one or both of the parties wish to amend not the instrument recording their agreement, but the agreement itself. More to the point of this appeal, and as this Court said in Performance Industries (at para. 31), “[t]he court’s task in a rectification case is . . . to restore the parties to their original bargain, not to rectify a belatedly recognized error of judgment by one party or the other”.
[14] Beyond these general guides, the nature of the mistake must be accounted for: Swan and Adamski, at §8.233. Two types of error may support a grant of rectification. The first arises when both parties subscribe to an instrument under a common mistake that it accurately records the terms of their antecedent agreement. In such a case, an order for rectification is predicated upon the applicant showing that the parties had reached a prior agreement whose terms are definite and ascertainable; that the agreement was still effective when the instrument was executed; that the instrument fails to record accurately that prior agreement; and that, if rectified as proposed, the instrument would carry out the agreement: Ship M. F. Whalen v. Pointe Anne Quarries Ltd. (1921), 1921 CanLII 57 (SCC), 63 S.C.R. 109, at p. 126; McInnes, at p. 820; Snell’s Equity, at p. 424; Hanbury and Martin Modern Equity (20th ed. 2015), by J. Glister and J. Lee, at pp. 848-49; Hart v. Boutilier (1916), 1916 CanLII 631 (SCC), 56 D.L.R. 620 (S.C.C.), at p. 622.
[15] In Performance Industries (at para. 31) and again in Shafron (at para. 53), this Court affirmed that rectification is also available where the claimed mistake is unilateral — either because the instrument formalizes a unilateral act (such as the creation of a trust), or where (as in Performance Industries and Shafron) the instrument was intended to record an agreement between parties, but one party says that the instrument does not accurately do so, while the other party says it does. In Performance Industries (at para. 31), “certain demanding preconditions” were added to rectify a putative unilateral mistake: specifically, that the party resisting rectification knew or ought to have known about the mistake; and that permitting that party to take advantage of the mistake would amount to “fraud or the equivalent of fraud” (para. 38). [Emphasis added]
[54] Accordingly, in the case of a unilateral mistake, rectification is available only when permitting the party to take advantage of the mistake would amount to a fraud or the equivalent of fraud.
[55] In this case, there is no basis for the rectification of the Marriage Contract as requested by the Respondent as:
• There is no evidence of a prior oral contract between the parties, or their lawyers, that specifically contemplated that paragraph 3.3(c) not be included in the Marriage Contract; and
• There is no evidence that the Applicant knew that paragraph 3.3(c) was included in error in the Marriage Contract.
[56] Accordingly, the Respondent’s claim for rectification of the Marriage Contract is dismissed.
CONCLUSIONS
[57] The Respondent has not demonstrated that one of the listed circumstances within s. 56(4) of the FLA has been engaged. Even if he had done so, I would not have exercised my discretion to set aside the Marriage Contract as it would have been, in all the circumstances, unfair to do so.
[58] The Applicant made offers to settle the Respondent’s property claim on June 11, 2019 as well as in December, 2019 and January, 2020. In exchange for an Order that the Marriage Contract was valid, the Applicant offered to pay $150,000.00 then $200,000.00 and finally $300,000.00. The Applicant’s Bill of Costs in respect of this property issue amount to slightly more than $91,000 inclusive of taxes and disbursements. The Respondent took no issue with the amount of costs incurred by the Applicant however he submitted that full indemnity costs should run only from the time of that the first offer to settle was made. I agree. I find that it is fair and reasonable for the Respondent to pay costs of $85,000.00, inclusive of taxes and disbursements, as the parties have agreed.
[59] I make the following Order:
• The Respondent’s claim to set aside the Marriage Contract and, alternatively, for rectification of the Marriage Contract, is dismissed;
• The Respondent shall pay costs of $85,000.00, inclusive of disbursements and taxes, to the Applicant within 30 days; and
• This Order takes effect immediately without a formal Order being issued and entered.
Mr. Justice M. D. Faieta
Released: October 14, 2020
Mr. Biderman’s November 28, 1991 draft with Mr. Kruger’s additions italicized
Mr. Kruger’s handwritten notes dated December 1, 1991 – italicized notes were written in a different ink colour
Mr. Kruger’s handwritten notes dated December 2, 1991 – italicized notes were written in a different ink colour
Mr. Biderman’s December 4, 1991 draft with Mr. Kruger’s additions italicized and underlining
Signed Agreement
December 5-6, 1991
“Family Residence” – Paragraph 1.3
“Family Residence” means the property known as 129 Strathearn Road, … and includes the appls used in conn. therewith
“Family Residence” means the property known as 129 Strathearn Road, … and includes the appliances used in connection therewith
Full Disclosure – Paragraph 2.3
Each of the parties has made disclosure to the other of his or her income and assets. Each is fully satisfied with the disclosure made by the other. …
“Full disclosure” – no disc. at all – in what manner?
Each of the parties has made disclosure to the other to the extent requested, of his or her income and assets. Each is fully satisfied with the disclosure made by the other. …
Each of the parties has made disclosure to the other to the extent requested, of his or her income and assets. Each is fully satisfied with the disclosure made by the other. …
Family Residences – Paragraph 3.2
The Husband acknowledges that the Wife is the sole owner of the Family Residence and that the Husband has made no contribution to its acquisition. If the Husband should make some contribution to the renovation, repair or maintenance of the Family Residence such contribution shall not create any right, title or interest in the Husband in the Family Residence, other than loans made to the Wife by Husband on terms acknowledged by both at time loan is made.
Mechanism for pro rata interest or at very least loan to be repaid with interest. Additionally – if everything given by Dave then to be acknowledged by Deb & treated as loan – interest agreed to between parties
The Husband acknowledges that the Wife is the sole owner of the Family Residence and that the Husband has made no contribution to its acquisition. If the Husband should make some contribution to the renovation, repair or maintenance of the Family Residence such contribution shall not, unless the Parties have signed a written acknowledgement to the contrary, create any right, title or interest in the Husband in the Family Residence.
The Husband acknowledges that the Wife is the sole owner of the Family Residence and that the Husband has made no contribution to its acquisition. If the Husband should make some contribution to the renovation, repair or maintenance of the Family Residence such contribution shall not, unless the Parties have signed a written acknowledgement to the contrary, create any right, title or interest in the Husband in the Family Residence.
Should be a provision on a graduated scale if marriage endures: a. For one or 2 yrs – separation occurs then Dave to get ____; b. If a child btwn D & D – then a life interest in matr. Home or until child is 21 whichever is earlier; c. Covenant by D to provide for any child’n of their marriage in her Will on equal basis with the children of her former marriage; d. For 5 yrs - $100,000; e. 10 yrs - $250,000; f. If 3 yrs – ½ value of increase of matr. home from date of marriage
5 yrs children - David to get 50% of increase in Matr Home
Present valuation - $800,000 to $900,000
If Deb predeceases David & there is a child or children can remain at M.H. until child 18 or attend school up to age 25.
All Household exps including taxes, insce & maintenance to be paid by estate. However all public utilities to be pd by H.
Covenant that W will treat for any children of the marriage on equal footing with children of former marriage.
“No sharing”
3.3 The parties agree that if (a) they have been married for at least 5 years; and (b) there has been a child of the marriage; and (c) the Wife predeceases the Husband prior to the occurrence of a Triggering Event described in Paragraph 1.6.i, ii, or iii, they shall share equally any increase in the value of the Family Residence over its present value, which they agree is the sum of $900,000.00, such sharing to be implemented in the manner set out in Paragraph 3.4
3.4 If the conditions set out in Paragraph 3.3 are satisfied, the Wife’s estate shall pay to the Husband within six months of her death the value of his interest in the Family Residence being one-half of the difference obtained by subtracting from the value thereof as at the date of the Wife’s death, the sum of $900,000. If the Wife’s personal representatives and the Husband are unable to agree on such value, it shall be determined by a single arbitrator agreed upon by them, or if they are unable to agree appointed on the application of either of them by a Judge of a court of competent jurisdiction. The Husband shall then release any and all interest he may have in the Family Residence, to the Wife’s estate.
3.5 The Parties agree that if: (a) they have been married for at least 5 years; and (b) there has been a child of the marriage; and (c) the Wife Husband predeceases the Husband Wife prior to the occurrence of a Triggering Event described in Paragraph 1.6 I, ii, or iii, they shall share equally any increase in the value of the Husband’s interest in the business known as New Life Property Maintenance over its present value which they agree is the sum of $30,000, such sharing to be implemented in the manner set out in Paragraph 3.6
3.6 – If the Conditions set out in Paragraph 3.5 are satisfied, the Husband’s estate shall pay to the Wife within 6 months of the Husband’s death the value of her interest in the Husband’s interest in the said business being one-half of the difference obtained by subtracting from the value thereof as at the date of the Husband’s death, the value thereof as of the date of the marriage sum of $30,000.xx. If the Husband’s personal representatives and the Wife are unable to agree on such value it shall be determined by a single arbitrator agreed upon by them, or if they are unable to agree appointed on the application of either of them by a Judge of a court of competent jurisdiction. The Wife shall then release any and all interest she may have in the interest of the said Business, to the Husband’s estate.
3.7 Provided that the Husband gives a written undertaking to pay the realty taxes on and do all necessary repairs, not of a capital or long, as approved by the Husband and maintenance to, the Family Residence, and does not default under the said undertaking, and further provided that a child of the marriage under the age of eighteen years resides there with him, the Husband during his lifetime shall have the right to continue to reside in the Family Residence after the Wife’s death.
3.8 The Wife’s estate shall maintain insurance on the Family Residence from the time of the Wife’s death, while the Husband’s right of occupancy pursuant to the paragraph 3.7 exists.
3.9 The Wife’s estate shall, notwithstanding the right of occupancy accorded to the Husband as hereinbefore set forth have the right to mortgage the Family Residence, to the extent of 75% of its appraised value at such time, and the Husband shall execute such documents as may be required to postpone his possessory interest in the property to such mortgage. The Wife’s estate shall maintain any such mortgage in good standing.
3.3 The parties agree that if (a) they have been married for at least 5 years; and (b) there has been a child of the marriage; and (c) the Wife predeceases the Husband prior to the occurrence of a Triggering Event described in Paragraph 1.6.i, ii, or iii, they shall share equally any increase in the value of the Family Residence over its present value, which they agree is the sum of $900,000.00, such sharing to be implemented in the manner set out in Paragraph 3.4
3.4 If the conditions set out in Paragraph 3.3 are satisfied, the Wife’s estate shall pay to the Husband within six months of her death the value of his interest in the Family Residence being one-half of the difference obtained by subtracting from the value thereof as at the date of the Wife’s death, the sum of $900,000. If the Wife’s personal representatives and the Husband are unable to agree on such value, it shall be determined by a single arbitrator agreed upon by them, or if they are unable to agree appointed on the application of either of them by a Judge of a court of competent jurisdiction. The Husband shall then release any and all interest he may have in the Family Residence, to the Wife’s estate.
3.5 The Parties agree that if: (a) they have been married for at least 5 years; and (b) there has been a child of the marriage; and (c) the Wife Husband predeceases the Husband Wife prior to the occurrence of a Triggering Event described in Paragraph 1.6 I, ii, or iii, they shall share equally any increase in the value of the Husband’s interest in the business known as New Life Property Maintenance over its present value which they agree is the sum of $30,000, such sharing to be implemented in the manner set out in Paragraph 3.6
3.6 – If the Conditions set out in Paragraph 3.5 are satisfied, the Husband’s estate shall pay to the Wife within 6 months of the Husband’s death the value of her interest in the Husband’s interest in the said business being one-half of the difference obtained by subtracting from the value thereof as at the date of the Husband’s death, the value thereof as of the date of the marriage sum of $30,000.xx. If the Husband’s personal representatives and the Wife are unable to agree on such value it shall be determined by a single arbitrator agreed upon by them, or if they are unable to agree appointed on the application of either of them by a Judge of a court of competent jurisdiction. The Wife shall then release any and all interest she may have in the interest of the said Business, to the Husband’s estate.
3.7 Provided that the Husband gives a written undertaking to pay the realty taxes on and do all necessary repairs and maintenance not of a capital or long-lasting nature to, the Family Residence, and does not default under the said undertaking, and further provided that a child of the marriage under the age of eighteen years resides there with him, the Husband during his lifetime shall have the right to continue to reside in the Family Residence after the Wife’s death.
3.8 The Wife’s estate shall maintain insurance on the Family Residence from the time of the Wife’s death, while the Husband’s right of occupancy pursuant to the paragraph 3.7 exists.
3.9 The Wife’s estate shall, notwithstanding the right of occupancy accorded to the Husband as hereinbefore set forth have the right to mortgage the Family Residence to the extent of not more than 75% of its appraised value at such time, and the Husband shall execute such documents as may be required to postpone his possessory interest in the property to such mortgage. The Wife’s estate shall maintain any such mortgage in good standing.
Joint and Separate Property – paragraph 4.1
Each party agrees that property owned by the other as at the date hereof or acquired by the other hereafter shall be the Separate Property of the party owning or acquiring it and shall be totally excluded from any calculations or adjustments under the Act, and without limitation, shall not be included in calculating net Family Property. For the purpose of this agreement property registered or recorded in the name of a Party is conclusively deemed to be owned by such Party except for cases where the titled party has signed a trust declaration in which case the trust declaration shall prevail.
[Note: No changes were made to Paragraph 4.1]
Joint and Separate Property – paragraph 4.2
Notwithstanding any other provision in this Agreement, property acquired after the date hereof in the common or joint name of the Parties, shall be their common or joint property and each shall be entitled to a one-half interest therein save for any property held by them as joint tenants in which case a right of survivorship shall apply
Try to get explanation – how about survivorship? – will change
Notwithstanding any other provision in this Agreement, property acquired after the date hereof in the common or joint name of the Parties, shall be their common or joint property and each shall be entitled to a one-half interest therein; this provision shall not detract from the effect of any right of survivorship with respect to jointly held property; and such right of survivorship shall be fully effectual.
Supremacy of Agreement – paragraph 5.1
Except for any provisions in this Agreement to the contrary, [t]his agreement prevails over all provisions of the Act, the Divorce Act, the Succession Law Reform Act or any other legislation which affects the property rights of the parties and their obligations to one another.
[Note: No changes were made to Paragraph 5.1]
Release of Rights to and Interest in Property – paragraph 6.1
Except as provided in this Agreement the Husband and the Wife each releases and discharges all rights to and interest in property owned by the other … except as aforesaid: …(d) any interest in property by way of implied, or resulting or any other type of trust constructive trust; (e) all right under section 10 of the Act.
[Note: No changes were made to Paragraph 6.1 however Mr. Kruger’s added the following handwritten change at the end of this provision “except for any rights of the parties under para 3 hereof”.
Except as provided in this Agreement the Husband and the Wife each releases and discharges all rights to and interest in property owned by the other … except as aforesaid: …(d) any interest in property by way of implied, or resulting or any other type of trust; (e) all rights under section 10 of the Act, except for any rights given the parties under paragraph 3 hereof.
Release of Rights to and Interest in Property – paragraph 6.2
The parties agree that except as provided for in this Agreement neither party shall at any time commence or prosecute any action or other proceedings for possession of or title to or division of any property owned by the other. If any such action or proceeding shall be brought by either the Husband or the Wife against the other this Agreement may be pleaded as an Answer to any claim asserted in such action or proceeding and shall constitute a full and complete defence thereto other than matrimonial home.
The parties agree that except as provided for in this Agreement neither party shall at any time commence or prosecute any action or other proceedings for possession of or title to or division of any property owned by the other. However, nothing in this Agreement is intended to over-ride Section 19 of the Act. If any such action or proceeding shall be brought by either the Husband or the Wife against the other this Agreement may be pleaded as an Answer to any claim asserted in such action or proceeding and shall constitute a full and complete defence thereto.
The parties agree that except as provided for in this Agreement neither party shall at any time commence or prosecute any action or other proceedings for possession of or title to or division of any property owned by the other. However, nothing in this Agreement is intended to over-ride Section 19 of the Act. If any such action or proceeding shall be brought by either the Husband or the Wife against the other this Agreement may be pleaded as an Answer to any claim asserted in such action or proceeding and shall constitute a full and complete defence thereto.
Release of Rights to Estate – paragraph 7.1
Except as provided in this Agreement and subject to any right by a party hereto the other by Will or by inter vivos disposition the Husband and the Wife each releases and discharges all rights that he or she has or may have under the laws of any jurisdiction in the estate of the other …
[Note: No changes were made to Paragraph 7.1]
Lump Sum Payment and Release of Spousal Support – paragraph 9.2
If a child of the Husband and Wife is born or if Husband and Wife adopt a child, the Husband and Wife agree that paragraph 9.1 above shall no longer apply to a claim by the Wife or Husband but all other provisions contained in the Agreement herein shall remain in full force and effect. …
They’re assuming Deb will have custody – completely unfair – Dave should have right to apply for custody & his right for support if the child be unimpaired – will make it mutual
If a child of the Husband and Wife is born or if Husband and Wife adopt a child, the Husband and Wife agree that paragraph 10.1 above shall no longer apply to a claim by the Wife or the Husband but all other provisions contained in the Agreement herein shall remain in full force and effect. …
If a child of the Husband and Wife is born or if Husband and Wife adopt a child, the Husband and Wife agree that paragraph 10.1 above shall no longer apply to a claim by the Wife or the Husband but all other provisions contained in the Agreement herein shall remain in full force and effect. …
COURT FILE NO.: FS-19-008492
DATE: 20201014
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
DEBBIE GORMAN
Applicant
– and –
DAVID SADJA
Respondent
REASONS FOR DECISION
Mr. Justice M.D. Faieta
Released: October 14, 2020