Court File and Parties
COURT FILE NO.: FS 19-83 DATE: 2021-07-16 ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
Nordana Smith Applicant
– and –
Jeffrey Secord Respondent
Counsel: Unrepresented, for the Applicant Maybelline Massey, for the Respondent
HEARD: March 24 and 25, 2021
BEFORE: The honourable R. J. Harper
Issues
[1] The Applicant (Nordana) seeks to set aside a separation agreement she entered into with the Respondent (Jeffrey) on December 1, 2017.
[2] Nordana takes the position that the agreement should be set aside for the following reasons:
a. Jeffrey failed to disclose significant assets, debts or other liabilities existing at the time of separation.
b. Nordana did not understand the nature and consequences of the agreement.
c. Jeffrey made material misrepresentations.
d. Jeffrey repudiated that agreement by not complying with the access terms.
e. Nordana had a lack of and or inadequate independent legal advice.
f. Nordana entered into the agreement with a mistaken understanding of material terms of the agreement.
g. The agreement is unconscionable.
Background
[3] Nordana and Jeffrey started to cohabit in or about the summer of 1996. The parties never married. They separated in November of 2014.
[4] Throughout the course of their cohabitation, Jeffrey worked at CAMI Automotive. Nordana suffered a workplace injury in or around 2001. She has been on WSIB since approximately 2005.
[5] Nordana has a college education. She had multiple courses in marketing. She went on to operate her own business until approximately 2 years prior to cohabiting with Jeffrey. At the time of cohabitation, she was working at Atlas Moving Co. in Brantford, Ontario.
[6] Nordana had 2 sons from another union who moved in with Jeffrey and her. They had a child from their union, namely Kiara, who was born October 30, 2003. At the date of separation, the older twin boys were in their 20s and working.
[7] Nordana had a workplace injury in 2001. She has been receiving Workers Compensation Pension since that time. She will receive this pension until she is 65. She is presently 62 years old.
[8] Shortly after her workplace injury to her back and neck, Nordana was diagnosed with fibromyalgia. She stated that with that diagnosis she had a host of other health problems. She developed osteoarthritis and also suffers from depression from time to time. According to Nordana, she takes medication for her health problems and also sees counsellors who are mostly social workers.
[9] Nordana did not produce any medical or counselling records or reports. She stated that she did not want Jeffrey to see them.
[10] The parties were amicable for a period of time after separation. They had their own discussions with respect to the terms that they would agree to in order to settle their matters. They wrote out a separation agreement outline to that effect and brought it to Brantford lawyer, Birkin Culp. He informed them that he could not act for both parties. No action on the agreement was taken until Nordana engaged the legal services of a different Brantford lawyer, Kevin Davis in the fall of 2017.
[11] Negotiations with respect to the terms of the separation agreement took place between the months of September through November 2017. The separation agreement was signed December 1, 2017.
Independent Legal Advice
[12] I find that both parties had independent legal advice. Nordana testified that her counsel, Mr. Davis, was not deficient in any way in his representation of her in arriving at the separation agreement that was signed. She stated that he was a good lawyer. She also stated that she did not blame him in any of this. She acknowledged that Mr. Davis signed the certificate set out in the agreement that indicated that he gave her independent legal advice and that Nordana understood the agreement and was signing the agreement voluntarily. The Certificate he signed reads, in part:
Nordana Smith acknowledged that she completely understood the nature and effect of the Agreement. Nordana Smith executed the Agreement in front of me and confirmed that she was entering into the Agreement of her own volition without any fear, threats, compulsion or influence by Jeffrey Secord or any other person.
[13] In the process of negotiating the agreement, counsel for Nordana, Mr. Davis, made a number of suggested amendments to the drafts sent to him from counsel for Jeffrey. His suggested amendments that were incorporated into the final agreement that was signed by the parties.
[14] Mr. Davis did not testify.
[15] Nordana also acknowledged that she signed the agreement that had a clear representation that she had independent legal advice and that she understood the agreement and appreciated the nature and consequences of the agreement.
[16] Nordana conceded that there was a clause in the agreement whereby she represented that she was signing the agreement voluntarily and not under any duress.
[17] However, in or about May of 2018, Nordana went to another Brantford lawyer, Howard Staats. Following a consultation with him she intended to gather more evidence and take the matter back to court. However, she wanted to go on a planed trip that she had with her daughter to Europe first.
[18] She then retained a different lawyer, Hamilton lawyer, Jamie Montford in September of 2018.
[19] Between the time that she saw Mr. Staats and Mr. Montford, she was charged with public mischief. The charge arose out of an incident whereby Nordana had received information that Jeffrey was about to cross the border into the United States with his new girlfriend. Without Jeffrey’s knowledge she had installed a GPS tracking device that allowed her to track his whereabouts. She claimed that she thought the device that she referred to as: “track your spouse” was legal.
[20] Nordana contacted the Border Security Services and told them that Jeffrey was about to cross the border and he most likely was smuggling goods across the border. She eventually pled guilty to public mischief and was placed on probation by an order dated June 14, 2018.
[21] Nordana agreed in cross examination that she went to see Mr. Montford after she was charged and arrested, and her daughter Kiara found out about the events.
Financial Disclosure
[22] During the negotiations, the parties exchanged financial disclosure. A schedule that set out their respective income, assets and liabilities was attached to the separation agreement.
[23] In her testimony, Nordana stated that Jeffrey did not disclose a property that he had in Florida. This representation was not accurate. I find that Jeffrey disclosed that he had an interest in two properties in Florida and Nordana was aware of this. In fact, Nordana agreed that she had received one half of the proceeds of a property that they both sold in Florida in 2015 or 2016.
[24] I find that Jeffrey did disclose all of his assets and his debts. Nordana complained that the values ascribed by Jeffrey were not accurate. However, she conceded that she signed the agreement indicating that both parties had accurately and fully set out all of their income, assets and debts at the time of signing the agreement.
[25] Nordana started her Application in this matter on May 3, 2019. She stated that, at the time of the Application, she had retained Mr Montford for what she called “bundled legal services”. She was self represented throughout the trial. No lawyer was ever shown as solicitor of record.
[26] The matter did not come to trial until April 2021. She admitted in her cross examinations that during the approximate 23 months that transpired from the date of the Application until trial she did not bring a motion requesting further and better disclosure and proof of values of the assets of Jeffrey.
[27] I find that it was Nordana who did not fully disclose all of her assets at the time of the agreement nor did she in her financial statement that she swore to this court dated March 3, 2019. Prior to her financial statement that she filed only a few days before trial, she never disclosed that she had an interest in 130 Powell Rd. Brantford, Ontario. She led Jeffrey and the court to believe that she was merely a tenant in that property.
[28] However, in cross examination she was shown a handwritten letter dated March 20, 2014 from Laverne Fleet that stated:
I, Laverne Fleet, purchased the house @ 130 Powell Rd. with Nordana Smith.
Both parties share equally in the deposit for the purchase of the house. Both parties are beneficiaries 50/50.
In the event the house is sold, all loans, liens shall be repaid first. All remaining money shall be paid equally divided
In the event of death each of the parties will not dispose lease mortgage of otherwise encumber his undivided interest.
[29] Nordana identified both Mr. Fleet and her signature on that letter. She did not even disclose that she had an interest in this property in the financial statement that she sworn on May 3, 2019. She stated that she did not do that because she did not take title to the property until May 29, 2020.
[30] In her financial statement sworn on March 2, 2021 she shows that she owns 130 Powell Rd and she sets a value of $550,000.00. She also shows a mortgage on that property in the amount of $396,631.53.
[31] I find that she did not take title to this property nor disclose her beneficial interest in order to hide the fact of her ownership. She purposely misled the court in order to lower the actual value of her assets at the time of the separation negotiations and at the time that she started this action.
Nordana’s emotional state at the time of signing the agreement
[32] Nordana claims that she signed the agreement under duress and that she was in such an emotional state that she did not understand the agreement or appreciate the consequences.
[33] I do not accept either of her claims for the reasons set out below.
[34] Nordana agreed in her testimony that Jeffrey never threatened her, nor did he offer her any inducements in order to get her to sign the agreement.
[35] Nordana testified in her direct examination that she did not even read the separation agreement before she signed it. However, in cross examination she agreed that her lawyer was a good lawyer and that he probably read it to her.
[36] Mr. Davis signed the certificate that Nordana did understand the agreement, appreciated the consequences of the agreement and that she was signing it voluntarily. Nordana stated that she did not feel that Mr. Davis was in any way at fault.
[37] The agreement was negotiated over a period of approximately 3 months. The only suggested amendments came from Nordana’s counsel. She stated that the draft agreement was probably sent back by her lawyer about 3 times with suggested amendments and they were all accepted by Jeffrey.
[38] Nordana called a friend of hers, Brandi Bean, in order to corroborate her evidence that she was emotionally distressed at the time of negotiating her agreement.
[39] Ms. Bean became friendly with Nordana as a result of both of their daughters being on the same synchronized swim team.
[40] She knew Jeffrey but was only friendly with him as a swim team parent who came to some of his daughter’s events. Ms. Bean became a close friend of Nordana.
[41] According to Ms. Bean, Nordana told her that she was depressed and that on one occasion she had called the suicide help line after her own mother had passed away. She stated that she missed her mother deeply and that was the main cause for her depression.
[42] Ms. Bean stated that Jeffrey also told her about Nordana calling the help line. She could not put a timeline on when this had occurred. She only recalled that Nordana’s mother had already passed away and that, at that time, she was not that close with Nordana. She stated that all of this was such a blur.
[43] Jeffrey stated that Nordana did tell him in or about July 2017 that she had had suicidal thoughts around the time that her mother had passed away. He stated that he felt this was her way of trying to get back and re engage with him.
[44] However, Nordana had a boyfriend, Laverne (Joe) Fleet. This is the same man that she bought a house with in or about 2014. According to Jeffrey, Nordana told him that her boyfriend Joe was putting pressure on her to get her on the mortgage on the house they had bought.
[45] Jeffrey stated that when Nordana found out that he had a girlfriend, Helen, that is when things changed and Nordana became angry and spiteful. She was also angry that she was charged criminally and that her daughter was interviewed by the police over that incident. She blamed Jeffrey for causing that interview.
[46] Brandi Bean testified that she had numerous discussions with Nordana about separation agreements. Ms. Bean went through a separation and she had the experience of the negotiation process that culminated in her own agreement. Ms. Bean talked to Nordana about the terms that were the subject matter of her agreement. She also stated that she felt that Nordana understood what was in her draft agreement. She expressed to Nordana that she did not feel that she should accept some of the terms.
[47] Ms. Bean’s testimony was inconsistent with Nordana’s claim that she did not read or understand the agreement.
[48] I find that Nordana was not a credible witness. She misrepresented her assets on her financial statements. She also misrepresented the extent to which she had read and had an understanding of the agreement that she had entered into.
[49] Nordana did not provide credible evidence on the balance of probabilities that she was so emotionally distraught at the time of signing the agreement that she did not understand the agreement nor appreciate the consequences of it.
The Claim of Unconscionability
[50] Nordana agreed that at the time of entering into the separation agreement the financial circumstances were as follows:
Net Worth
[51] At the time of signing the separation agreement, the net worth of Nordana was $398,000.00. That is without her undisclosed interest in the property that she owned with Laverne (Joe ) Fleet.
[52] The net worth of Jeffrey, at this time, was $356,337.00
Incomes
[53] At the time of the negotiation and signing of the separation agreement, Nordana’s disclosed income was from Workers Compensation Pension and child tax benefit in the annual amount of $36,537.00. Jeffrey’s income at that time was $84,420.00. From the time of separation in 2014 until May 2015, the child Kiara resided with her father. However, in May 2015 his job shifts changed, and he could no longer work the day shift. Kiara went to stay with her mother while her father was not available. I accept Jeffrey’s evidence that Kiara would still spend approximately 80% of the time at his home.
Parenting
[54] According to Jeffrey, Kiara was with him almost every weekend and often times during the week
[55] Jeffrey testified that the time Kiara spent with him changed after he got a girlfriend in or about September 2018 when Nordana started to influence Kiara to spend less time with her father. Jeffrey stated that he had not even seen Kiara since September of 2020.
[56] Jeffrey started to pay child support pursuant to the separation agreement as of March of 2016. He paid an amount slightly below the guideline amount due to the fact that he had been paying all of Kiara’s significant synchronized swimming costs since the separation of the parties and he was given a credit for that.
[57] The child support has been adjusted in August of every year after Jeffrey receives in his notice of assessment and he makes the adjustment according to the CSGs.
[58] His income is now reduced. He has been laid off due to the COVID pandemic. He is receiving unemployment insurance in the amount of $72,322.00 per annum. He does not know when he may be called back into work.
Child Support
[59] Nordana claimed that Jeffrey should have been paying child support from the date of separation. She asserted that the starting date in the agreement was a mistake. I do not accept this contention.
[60] Nordana and Jeffrey shared the residency of Kiara. I accept the evidence of Jeffrey that the child spent most of her time with him during the period he was on day shift and even when that changed, she was with him in excess of 50% of the time.
[61] The parties were fully aware of all of the parenting time Kiara spent with each parent prior to signing the agreement. They agreed to the start date for child support and the amount to be paid took into consideration an adjustment for Jeffrey paying for all of the synchronized swimming expenses for Kiara.
[62] There shall be no retroactive payment ordered for child support.
[63] I find that Jeffrey has paid the appropriate amount of child support.
[64] At the time of trial, Nordana’s income from Workers Compensation Pension was $38,917.85. Jeffrey’s income from his UI was $ $72,322.00 per annum.
Financial Circumstances at the time of Trial
[65] As a result of the separation agreement, Nordana received at least all of the equity in the home that she owned jointly with Jeffrey. This amounted to approximately $150,000.00. She also received a lump sum of $50,000.00 for spousal support.
[66] She is owed an additional $10,000.00 that Jeffrey does not have to pay until he sells the home that he used to own jointly with Nordana. However, he undertook to provide her with that $10,000.00 by the end of July, 2021.
[67] The net worth of Nordana at trial was $262,328.18 . The net worth of Jeffrey at trial was $162,312.00
The Law and Analysis
Setting Aside a Separation Agreement
[68] The starting point is s. 56(4) of the Family Law Act which reads 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.
[69] The Court of Appeal for Ontario in Turk v. Turk, 2018 ONCA 993, 143 O.R. (3d) 661, 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.
[70] In Paunovic v. Wojcik, 2020 ONSC 1341, McSweeney J. also reviewed the legal analysis that a court must consider when determining if a separation agreement should be set aside. I adopt the approach taken in that case commencing at para 16:
[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.
Application to this case
[71] The separation agreement entered into by the parties in this case conforms to all of the procedural requirements set out in the Family Law Act s. 56(4). I find that it is a Domestic Contract as defined in that statute.
[72] I find that there was no undue influence or pressure on Nordana to sign the agreement. She was represented by experienced senior counsel who she agreed gave her legal advice that she could not fault. She understood the agreement and signed the certificate stating that she also appreciated the nature of the agreement and that she was signing it voluntarily.
[73] I find that Nordana chose to make an effort to set aside the agreement only after she learned of Jeffrey’s new girlfriend. She entered into a mindset of anger that partly drove her to bring this Application, after being charged with public mischief when she used a device called “spouse tracker” as an aid to locate Jeffery and report him to Border Services to have him charged with smuggling.
[74] I find that the separation agreement was entered into having regard to all of the objectives that are set out in both the Divorce Act and Family Law Act relative to support. The spousal support agreement, under all of the circumstances is not unconscionable. Nordana has a higher net worth than Jeffrey. She is capable of using her education and experience to advance a career path. She has chosen not to. She had largely relied on her Workers Compensation pension and her child support to live on. She was given a lump sum by way of spousal support and she used that and her other assets that were accumulated during the marriage to amass more assets than her former spouse There was no evidence put forward by her that she made any effort to find any form of employment.
[75] I dismiss Nordana’s claims to set aside any portion of the separation agreement.
[76] The parties may submit a written outline for costs within 30 days.
Harper, J.
Released: July 16, 2021