COURT FILE NO.: FS-19-42424-00 (Milton)
DATE: 2021 07 22
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
IVAN CAPAR
Applicant
Robert Lepore, for the Applicant
- and -
ANNA VUJNOVIC
Respondent
Shawn Philbert, for the Respondent
HEARD: April 20 and 21, 2021 at Milton, by video-conference
Emery J.
REASONS FOR DECISION (#1)
(Validity of the Marriage Contract)
[1] An Order was made by Chozik J., with the consent of the parties at a Case Conference on June 26, 2020, for Ms. Vujnovic to bring a motion for a final order by way of summary judgment on the following issues:
The validity of a marriage contract the parties entered on November 30, 2016;
Mr. Capar’s claim for unjust enrichment;
Ms. Vujnovic’s claim for spousal support; and
The determination of the parties respective incomes for the purpose of spousal support.
[2] Justice Chozik also granted an Order that Mr. Capar was at liberty to bring a motion at the same time on the following issues:
Equalization of net family property;
Distribution of the anticipated proceeds of sale from the matrimonial home at 8 Barber Drive, Georgetown; and
Retroactive and ongoing spousal support.
[3] The parties each brought motions for summary judgment with the intention they be heard together. Because of the overlapping issues, the motions were for the most part different sides of the same coin and it made sense that the court hear them at one time. However, the economies of dealing with the various issues in those motions at the same time, while attractive in theory, was lost in the logistics of implementing that plan.
[4] Both motions were initially adjourned to January 19, 2021 for directions. On that date, Gibson J. made an order fixing April 20, 2021 as the hearing date. He also made an order providing Mr. Capar with the opportunity to bring a motion to question Jeffrey Eason, the lawyer who had provided him with independent legal advice when he executed the marriage contract on November 30, 2016.
[5] The motion of Ms. Vujnovic and the cross-motion of Mr. Capar were each to proceed in their entirety before me on April 20, 2021. Despite the best of intentions, it quickly became clear that the seven issues could not be argued within the time allotted. Counsel ultimately agreed that Ms. Vujnovic’s motion should proceed that day on the validity of the marriage contract. Counsel made representations to the court that the determination of the marriage contract issue might influence the positions taken by the parties on other issues when it came time to argue those issues. Counsel even went so far as to speculate that a ruling on the validity of the marriage contract might even have an impact on settlement discussions between the parties.
[6] The motion relating to the validity or enforceability of the marriage contract therefore proceeded first. Even that part of Ms. Vujnovic’s motion took the better part of two days to hear.
[7] Certain procedural issues arose during opening submissions as preliminary matters. Those matters were dealt with summarily as follows:
a. Ms. Vujnovic had served an affidavit after she was questioned by Mr. Lepore. I gave the parties leave to question the other on any late served affidavits relating to issues other than the marriage contact issue as those issues had not yet been reached; and
b. Any waiver of privilege by Mr. Capar on the advice he may have been given by Mr. Eason when he executed the marriage contract would be considered when the issue arose in context.
Background
[8] Mr. Capar and Ms. Vujnovic started dating in September 2011 and were married on May 19, 2012. They separated on January 17, 2019. They have one child, Lorena, born March 11, 2013.
[9] Ms. Vujnovic has two sons from a previous marriage, Daniel Nizic, born August 5, 2004, currently 16 years of age, and Nicholas Nizic, born May 6, 2006 and now 15 years old.
[10] At the time Mr. Capar and Ms. Vujnovic were married, Ms. Vujnovic owned a property municipally known as 40 Grey Owl Run, Georgetown, Ontario (the “Grey Owl Property”) that she had purchased on November 5, 2004. Prior to the marriage, Ms. Vujnovic lived in the Grey Owl Property with her sons. Mr. Capar moved into the home with Ms. Vujnovic and her sons and the Grey Owl Property became the matrimonial home.
The Marriage Contract
[11] Mr. Capar and Ms. Vujnovic signed a marriage contract dated November 30, 2016. Mr. Capar received independent legal advice from a lawyer, Jeffrey Eason, at the time he signed the marriage contract. A Certificate of Independent Legal Advice was signed by Mr. Eason and was appended to the marriage contract at the time of execution.
[12] In Ms. Vujnovic’s affidavit dated August 10, 2020, she states that in the marriage contract, Mr. Capar acknowledged that:
a. he read the marriage contract in its entirety and had full knowledge of the contents;
b. he understood his respective rights and obligations under the marriage contract, the nature of the contract and the consequences of that contract;
c. he had made full and complete disclosure of his financial circumstances to Ms. Vujnovic, including but not limited to his income, assets, and debts;
d. the terms of the marriage contract are fair and reasonable;
e. he was not subjected to coercion or undue influence when he signed the contract; and
f. he signed the marriage contract voluntarily.
[13] Ms. Vujnovic states that she had no reason to believe that Mr. Capar did not understand or did not agree to be bound by the terms of the marriage contract. Mr. Capar provided no information to the contrary in response to Ms. Vujnovic’s Requests for Information dated June 10 and 23, 2020.
[14] The definition of “property” in the marriage contract included the Grey Owl Property. The language and intent of the marriage contract prevented Mr. Capar from making a claim for any interest, present or future, vested or contingent, in the Grey Owl Property. Furthermore, the marriage contract confirmed that Ms. Vujnovic had brought the Grey Owl Property into the marriage and that she had no debt, except a small mortgage.
[15] In contrast, Mr. Capar brought no assets into the marriage, but did have some debt at the time the parties married. Ms. Vujnovic takes the position she helped to pay off Mr. Capar’s debts.
[16] The terms of the marriage contract confirmed that Mr. Capar did not have an interest in the Grey Owl Property, despite the fact it became the matrimonial home within the meaning of the Family Law Act (“FLA”). The marriage contract expressly provided that the Grey Owl Property was to be excluded from any division of property, equalization calculation or other method whatsoever in the event the parties separated.
[17] Ms. Vujnovic further maintains that the marriage contract ensured that the exclusion of the Grey Owl Property would apply to the value of any property that might be purchased in the future to the extent that a subsequent property was acquired through all or any portion of the proceeds from it’s mortgage or sale.
[18] Conversely, the marriage contract confirmed Mr. Capar’s waiver of all rights and entitlement to the Grey Owl Property, and the exclusion of that asset from any calculation of net family property upon a breakdown of the marriage.
[19] Mr. Capar acknowledged in the marriage contract that he agreed to be bound by it, and that the marriage contract was entered under s. 52 of the FLA.
8 Barber Drive
[20] The Grey Owl Property was sold on October 31, 2017 for $530,518.15. The balance owing on the mortgage against title was paid from these proceeds.
[21] Upon the sale of the Grey Owl Property, the parties purchased 8 Barber Drive in Georgetown as the matrimonial home. 8 Barber Drive was purchased on October 27, 2017 for $940,000. The parties used the net proceeds from the sale of the Grey Owl Property in the amount of $375,309.63 for the down payment.
[22] Mr. Capar and Ms. Vujnovic took title to this matrimonial home as joint tenants. Ms. Vujnovic maintains that Mr. Capar did not contribute any funds to the acquisition of this property.
[23] Mr. Capar submits that the equity in the Grey Owl Property had been increased as a result of the payments he had made to pay down the mortgage, and the parties jointly used this increased equity to purchase 8 Barber Drive. He also submits that the fair market value of the Grey Owl Property appreciated during the time he was paying the mortgage, and that he is entitled to participate in that growth.
[24] After closing, Mr. Capar made monthly payments of $2,642.44 on the mortgage against 8 Barber Drive from April 2019 to June 2020. Ms. Vujnovic submits that Mr. Capar has not contributed in any other way to the maintenance or preservation of the matrimonial home.
Positions of the Parties
[25] Ms. Vujnovic relies on the marriage contract to preserve the value of her interest in the Grey Owl Property that she owned on the date of marriage. She takes the position that the exclusion of that value under the marriage contract was carried forward into 8 Barber Drive. It is her position that the effect of this exclusion is the legal equivalent of treating each matrimonial home as any other asset under Part 1 of the Family Law Act. She pleads the marriage contract as a defence to Mr. Capar’s claim for equalization, and for unjust enrichment.
[26] Mr. Capar does not deny that he signed the marriage contract on or about November 30, 2016. However, he takes the position that he did not receive full, proper and independent legal advice at the time. He seeks an order setting aside the marriage contract on the following grounds:
a. Ms. Vujnovic did not make the necessary disclosure required by law;
b. He failed to understand what rights or benefit he was giving up; and
c. He signed the marriage contract when Ms. Vujnovic was exerting undue influence on him, and he was under duress.
[27] Mr. Capar has acknowledged that he understood the marriage contract was intended to preserve the value of Ms. Vujnovic’s interest in the Grey Owl Property as of the date of marriage. He does not dispute that this was the intention of the parties to that extent. The dispute between them arises from the position of Ms. Vujnovic has taken since the marriage ended that she also seeks to exempt the growth of equity in that property. The increased equity would reflect the value of the Grey Owl Property at the time it was sold and those proceeds that were used to purchase 8 Barber Drive.
[28] Mr. Capar refers to a letter of opinion obtained in October 2020 that the fair market value of the Grey Owl Property was estimated at between $395,000 and $405,000 as of the date of marriage. He also gave evidence that he paid the balance of the mortgage on the Grey Owl Property down from $78,000 to $21,000 during the time it was the matrimonial home. He maintains that he is entitled to share in the increased equity in that property through his payment of the mortgage, and the appreciation of its value through market forces. As this increased equity was used to purchase 8 Barber Drive, he reasons that he is entitled to share in the increased value of that property as a result.
Independent legal advice contested
[29] Mr. Capar argues that he did not receive independent legal advice from Mr. Eason when he signed the marriage contract. However, he has not produced any evidence beyond his bare allegations to support the position that he did not have the benefit of the independent legal advice reflected in the Certificate of Independent Advice attached to the marriage contract.
[30] Mr. Capar has refused to provide full disclosure about his communications with Mr. Eason. Mr. Capar merely relies on information from provided through Mr. Lepore’s inquiries that Mr. Eason’s file no longer exists, and that Mr. Eason had no recollection of meeting with him.
[31] When the parties attended on January 19, 2021, Gibson J. granted Mr. Capar leave to bring a motion for an order to examine Mr. Eason as a non-party. Gibson J. directed Mr. Capar to advise Mr. Philbert, counsel for Ms. Vujnovic, by February 1, 2021 if he decided against bringing that motion.
[32] In a series of letters and emails, entered as exhibits on the motion before this court with the agreement of counsel, Mr. Philbert advised Mr. Lepore that Ms. Vujnovic would consent to the order for leave to examine Mr. Eason if the motion were brought. Mr. Philbert also advised Mr. Lepore that his client also had questions to ask Mr. Eason if and when he was examined. Ms. Vujnovic adopted this strategy after Mr. Eason would not swear an affidavit that Mr. Philbert had drafted and sent to him to consider.
[33] Mr. Capar never brought the motion to examine Mr. Eason. No evidence was otherwise obtained from Mr. Eason on this motion for summary judgment.
Analysis
[34] This part of Ms. Vujnovic’s motion seeks summary judgment on the sole question of whether the marriage contract is valid and binding or should be set aside. The issues are first, whether the motion is suitable for summary judgment, and second, whether the marriage contract should be set aside on grounds recognized by Ontario law. The court is not being asked to interpret the marriage contract at this stage.
Is this Motion suitable for Summary Judgment?
[35] The motion for summary judgment is brought by Ms. Vujnovic under FLR 16 of the Family Law Rules. FLR 16 (1) provides that:
- (1) After the respondent has served an answer or after the time for serving an answer has expired, a party may make a motion for summary judgment for a final order without a trial on all or part of any claim made or any defence presented in the case.
[36] In January 2014, the Supreme Court of Canada released the ground-breaking decision of Hryniak v. Mauldin, 2014 SCC 7 that directed the courts on the approach to take on motions for summary judgment in Canada. Shortly after, I held in Afolabi v. Fala, 2014 ONSC 1713 that the principles in Hryniak were of general application and applicable to summary judgment motions in family law cases. Although the Supreme Court in Hryniak had considered the powers given to the court hearing summary judgment motion on a civil case, I wrote at para 38 in Afolabi that:
[38] The Supreme Court explained in Hryniak that while Rule 20 in the Ontario Rules of Civil Procedure goes further than other summary judgement rules in Canada; the values and principles relevant to its interpretation are of general application. In essence, the appropriate use of a motion for summary judgment under the (Ontario) Rules of Civil Procedure is an access to justice issue for parties to a civil action. I see no reason why parties to a family law case should not be accorded the same access to justice under the same principles. If anything, family law in Ontario cries out for the summary disposition of issues in appropriate circumstances as much as in any other area of law. This accessibility to timely, affordable justice is as important to the parties in conflict as it is to the confidence of citizens in our court system that cases will be adjudicated efficiently and effectively according to law.
[37] In my view, considerations of proportionality, timeliness and affordability are relevant for the adjudication of a motion for summary judgment under FLR 16. Those principles assist the court in measuring whether the summary judgment procedure provides a fair process to the parties for the adjudication of one or more matters in dispute. This procedure would be compared with any advantage provided by the trial process that would make a difference for the court to reach a just conclusion on the merits of the case.
[38] The evidentiary requirements on a motion for a final Order under FLR 16, and the evidentiary basis for opposing those motions appear to be similar, if not the same as the requirements in a summary judgment motion in a civil case. FLR 16(4) requires the party making the motion to serve an affidavit or other evidence that sets out specific facts showing there is no genuine issue requiring a trial. FLR 16(4.1) requires the party responding to set out specific facts showing a genuine issue in an affidavit or through other evidence.
[39] The mandatory language of FLR 16(6) is also similar to Rule 20.04 (2) as the court “shall” grant a final order if there is no genuine issue requiring a trial of a claim or defence.
[40] FLR 16 was amended on May 2, 2015 to give powers to the court to assess credibility, weigh evidence, or make an order to hear oral evidence on a “mini-trial”, unless it would be in the interests of justice for such powers to be exercised only at a trial. FLR 16 (6.1) and (6.2) provide the court with the power to make findings of fact to determine whether there is no genuine issue requiring a trial.
[41] In using these fact finding tools, the roadmap provided by Karakatsanis J. in paragraph 66 of Hryniak is particularly instructive:
[66] On a motion for summary judgment under Rule 20.04, the judge should first determine if there is a genuine issue requiring trial based only on the evidence before her, without using the new fact-finding powers. There will be no genuine issue requiring a trial if the summary judgment process provides her with the evidence required to fairly and justly adjudicate the dispute and is a timely, affordable and proportionate procedure, under Rule 20.04(2)(a). If there appears to be a genuine issue requiring a trial, she should then determine if the need for a trial can be avoided by using the new powers under Rules 20.04(2.1) and (2.2). She may, at her discretion, use those powers, provided that their use is not against the interest of justice. Their use will not be against the interest of justice if they will lead to a fair and just result and will serve the goals of timeliness, affordability and proportionality in light of the litigation as a whole.
[42] It is clearly the position of Ms. Vujnovic as the moving party that the validity of the marriage contract can be decided on the written record. She takes the position there is no genuine issue requiring a trial to decide that issue.
[43] Mr. Lepore at first submitted that a trial was necessary. However, at the motion he took the position on behalf of Mr. Capar that the marriage contract issue could proceed by way of summary judgment now that the court has the power to order a mini-trial. Accordingly, in the event the court ordered viva voce evidence, Mr. Capar could give evidence of his misunderstanding at the time he signed the marriage contract of what he was giving up. Mr. Capar also considered the motion would provide the latitude he needed to show how he was under duress when he entered the marriage contract.
[44] I am confident that I can decide whether the marriage contract is valid and enforceable, or whether it should be set aside on the record before me. I have considered the evidence filed by the parties and conclude that summary judgment would be a fair, just and proportionate way to determine the issue on it’s merits. I say this having compared the summary judgment process to the prospect of ordering a conventional trial on the issue. There is no genuine issue with any of Mr. Capar’s grounds to set aside the marriage contract that would require a trial to resolve.
Adjudication of the motion
Statutory Framework
[45] Section 52(1) of the Family Law Act provides that two persons who are married to each other may enter into an agreement in which they agree on their respective rights and obligations under the marriage or on separation. This includes the rights and obligations of the parties in relation to the ownership in, or division of property.
[46] Any challenge to set aside or to nullify a marriage contract in Ontario is brought under s. 56(4) of the Family Law Act. Section 56(4) reads as follows:
Setting aside domestic contract
(4) 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.
[47] The proper approach on an application to set aside a marriage contract under s. 56(4) involves a two step process. First, the party seeking to set aside a marriage contract must demonstrate to the court that one of the listed circumstances within s. 56(4) has been engaged. Second, the court must then consider whether it is appropriate to exercise its discretion in favour of setting aside the agreement or a provision within it. When exercising discretion under this second step, fairness between the parties is a guiding consideration. See Moses Estate v. Metzer, 2017 ONCA 767 and LeVan v. LeVan, 2008 ONCA 388.
[48] It is reasonable for the court to rely on the plain reading of the marriage contract for the purpose of determining whether the court should uphold the agreement or to enforce its terms: Peerenboom v. Peerenboom, 2020 ONCA 240 at para 62 and Hartstein v. Ricottone, 2016 ONCA 913.
[49] In Toscano v. Toscano, 2015 ONSC 487, Blishen J. of this court confirmed that the burden of proof to set aside a domestic contract is on the party seeking to set it aside.
[50] Mr. Capar submits that Ms. Vujnovic made no financial disclosure of the value of the Grey Owl Property she was seeking to exclude from any equalization process at the time they entered the marriage contract. This is the sole asset at issue on the marriage contract issue in the application, and on this motion.
[51] Ms. Vujnovic argues that, to the contrary, awareness of the other party’s assets is sufficient to avoid setting aside an agreement: Quinn v. Epstein Cole LLP, 2007 CanLII 45714 (ON SC); and Butty v. Butty, 2009 ONCA 852. As Raikes J. observed in Golton v. Golton, 2018 ONSC 6245, those authorities make it clear that a party cannot enter a marriage contract knowing of shortcomings in disclosure beforehand, and then rely on those shortcomings when attempting to set the agreement aside. Individuals are expected to conduct their due diligence in a timely fashion, and will be held accountable for their failure to ask obvious questions.
Waiver of Solicitor and Client Privilege
[52] Under the law of privilege, there are authorities that hold where a party’s knowledge is in issue, that party must reveal what he knows, even if the knowledge is from his solicitor. At the same time, those authorities recognize that disclosing this knowledge from that source is inherently problematic as the solicitor-client communication itself is privileged unless it falls within an exception. One such exception is where the initiating party contesting disclosure has put into issue the question of what legal advice he did or did not receive, thus waiving the solicitor-client privilege that might otherwise applied. See Jonas v. Pacitto, 2020 ONCA 727 .
[53] When determining whether privilege has been or should be deemed to be waived, the court must find the balance between the interests of full disclosure to the parties involved in the adversarial process to ensure a fair trial (or motion for summary judgment), and the preservation of solicitor and client privilege. When a party places her or his state of mind in issue and has received legal advice to help form that state of mind, privilege will be deemed to be waived with respect to such legal advice. This waiver can arise where the document (or evidence) is used as the basis for a claim or defence: James v. Maloney, 1972 CanLII 518 (SCJ).
Step One: grounds under s. 56(4)
Ground One: non-disclosure
[54] It is fundamental to Mr. Capar’s defence of Ms. Vujnovic’s claim for equalization and for the claim Ms. Vujnovic is making that the marriage contract is valid and binding for the court to determine whether the necessary disclosure was made prior to execution. In this case, that disclosure would concern the value of the Grey Owl Property.
[55] In Butty, the court held that adequate disclosure of assets was necessary to meet the requirements to uphold a domestic agreement, but not necessarily the value of an asset that the party challenging the validity of the agreement knew or ought to have known. On the application of this principle, it was not necessary for Ms. Vujnovic to provide Mr. Capar with the value of the Grey Owl Property at the time the marriage contract was entered. Mr. Capar was aware that Ms. Vujnovic owned the sole asset in dispute as the Grey Owl Property. That property was clearly the subject of the marriage contract, and he was living in the property at the time.
[56] Mr. Capar could have requested that Ms. Vujnovic provide the information from which the value of the Grey Owl Property could be ascertained, or taken steps to obtain that value directly. Mr. Capar cannot now use his own failure to carry out his due diligence as a basis to avoid the marriage contract: Butty v. Butty.
[57] I also note that s. 56(4)(a) does not contain the words “financial” or “value” to describe the nature of the disclosure of a significant asset.
[58] I conclude there is no genuine issue requiring a trial to determine that Mr. Capar had adequate disclosure of her interest in the Grey Owl Property at the time they entered the marriage contract. There was no failure to disclose a significant asset on the part of Ms. Vujnovic to satisfy the first ground to set aside a marriage contract under s. 56(4(a), as there was no requirement for Ms. Vujnovic to disclose its value under all the circumstances.
Ground Two: Failure to understand
[59] If Mr. Capar was to put his best foot forward to argue that he was misled, or that he misunderstood what he was giving up as a ground for attacking the marriage contract, the court would have expected him to bring the motion to examine Mr. Eason. This motion could have been brought as a Form 14B motion, on notice to Mr. Eason, as it would have been made with the consent of Ms. Vujnovic.
[60] If Mr. Eason had evidence to give to support Mr. Capar’s position, Mr. Capar had the obligation to “lead trump, or risk losing” by adducing that evidence for the motion. On a motion for summary judgment, the court is entitled to assume that all evidence that would be available for trial is before the court on the motion.
[61] I do not give any weight to Mr. Capar’s submission that he did not truly receive independent advice because Mr. Eason had previously acted for Ms. Vujnovic. I find as a fact that Mr. Eason had only met with Ms. Vujnovic on one occasion, and that was well before he advised Mr. Capar on the marriage contract. On that occasion, Ms. Vujnovic had seen him to sign or certify a travel document for a $20 fee. That service was unrelated to the services Mr. Eason provided to Mr. Capar in relation to the marriage contract, and for which Mr. Capar paid him directly.
[62] The fact that the parties used Mr. Eason as their lawyer after the marriage contract was signed to purchase 8 Barber Drive is immaterial to the issues before the court.
[63] Having no evidence before the court from Mr. Eason, I am left to conclude on the evidentiary record that he gave Mr. Capar independent advice before he signed the marriage contract. The Certificate in that respect is dispositive evidence of that fact. As the court explained in Mantella v. Mantella, 2006 CanLII 10526, at paragraph 39:
“But even in the unique and complex area of family law, a solicitor's duty is to her own client, and not to the other side. If the solicitor fails to provide competent legal advice, that is an issue for her own client. Where a solicitor certifies that she has provided independent legal advice, so far as the opposite party is concerned that should end the matter: non est factum will not be available unless the opposite party knew or was willfully blind to the fact that the other party did not understand the agreement. The solicitor's certification is dispositive evidence of comprehension on the part of the signatory, and not a representation from the solicitor herself to the opposite party.”
[64] Mr. Capar entered the marriage contract with his eyes wide open and in more or less an equal bargaining position. I have determined that he had the ability and the resources to gather the information he now finds lacking and to understand the nature of the transaction.
[65] There is insufficient evidence to find on the balance of probabilities that Mr. Capar was misled, or misunderstood what he was giving up by signing the marriage contract. I therefore find that Mr. Capar has not put any evidence from Mr. Eason or otherwise before the court to engage s. 56(4)(b) as a ground to set aside the marriage contract.
Ground Three: undue influence or duress
[66] The law of undue influence requires a special relationship where one party has unfair influence over another.
[67] The law of duress, on the other hand, requires a finding where that party having an equal or unequal standing with another exerts a form of illegitimate pressure, either physical, financial or otherwise that amounts to the coercion of the other to perform an act involuntarily. In Toscano v. Toscano, it was held that “[D]uress involves a coercion of the will of one party or directing pressure to one party so they have no realistic alternative but to submit to the party”.
[68] Mr. Capar argues that Ms. Vujnovic threatened to leave the marriage, and that he would not be permitted to see the child if he did not sign the marriage contract.
[69] It is understandable that Mr. Capar may have harboured the perception that he was under pressure to enter into the marriage contract. However, his own perception of the family dynamics does not meet the threshold for duress. See M.D. v. A.C., 2017 ONSC 6260 (SCJ)at paragraphs 82-83,and Butty v. Butty at paragraphs 224-227.
[70] In Toscano, Blishen J. discussed the elements of undue influence, at para. 59, in the following terms:
“In considering undue influence, the court must inquire into whether there was: (i) an improvident bargain, and (ii) if so, whether there was inequality in bargaining power (see Hyldtoft v. Hyldtoft (1991), 1991 CanLII 12868 (ON SC), 33 R.F.L. (3d) 99 (Ont. Gen. Div.) at paras. 26-28). To establish undue influence or inequality in bargaining power, "the plaintiff must prove the ability of one person to dominate the will of another, whether through manipulation, coercion, or outright but subtle abuse of power."
[71] I conclude that Mr. Capar regrets that he signed the marriage contract now that he is in family litigation. The grounds he relies upon to set the marriage contract aside under s. 56(4)(c) for undue influence or duress are attempts to invoke doctrines under the law of contract that he believes might fit the circumstances.
[72] In my view, this is not a proper application of s. 56(4)(c). A marriage contract should not be set aside because one of the parties to the contract regrets he or she signed it. As Spence J. observed in McCall v. Res, 2013 ONCJ 254:
[23] I do appreciate that parties, in their understandable desire to finalize litigation, will sometimes enter into a consent that they afterwards wish to tweak, or that they later feel does not adequately address all of their concerns. However, in the absence of a subsequent consent, it is not open to the court to change those orders simply because one parent or the other later experiences buyer’s remorse. And, as I have discussed, in the absence of a material change in circumstances, which is the case here, the parties must live with the existing order”.
[73] I find as a fact that Mr. Capar did not sign the marriage contract while subject to the undue influence of Ms. Vujnovic. Nor did she exert illegitimate pressure over Mr. Capar to sign the marriage contract to raise duress as a ground. Mr. Capar is now experiencing the remorse of a party who has signed a marriage contract and seeks to leverage his litigation position in the aftermath of a separation.
[74] I find there is no genuine issue requiring a trial to determine that Mr. Capar was under no undue influence or duress when he signed the marriage contract to avoid it under the law of contract.
[75] I have not considered whether any other principle under contract law might apply on the facts in evidence as no other defence has been pleaded to set aside the marriage contract. It is fundamental to the litigation process that cases must be decided within the boundaries of issues pleaded or on which evidence is called, on notice to all parties: Rodaro v. Royal Bank of Canada, 2002 CanLII 41834 (Ont. C.A.). Family law cases are no exception.
Step Two: discretion
[76] I conclude that Mr. Capar has not proven on the balance of probabilities that the marriage contract should be set aside on any ground enumerated under s. 56(4) of the Family Law Act. He has therefore failed to satisfy the first part of the test under LeVan.
[77] Even had Mr. Capar met one of the statutory reasons for setting aside the marriage contract, I would have exercised my discretion on the second part of the test to find it was valid and enforceable.
[78] In Turk v. Turk, 2018 ONCA 993, the Court of Appeal confirmed the criteria set out in Dochuk v. Dochuk (1999), 1999 CanLII 14971 (Gen. Div.) as a useful guide for later courts to follow when exercising this discretion. In Dochuk, Lack J. adopted the factors set out by Clarke L.J.S.C. in Demchuk v. Demchuk (1986), 1986 CanLII 6295, which are as follows:
(a) whether there had been concealment of the asset or material misrepresentation;
(b) whether there had been duress, or unconscionable circumstances;
(c) whether the petitioning party neglected to pursue full legal disclosures;
(d) whether he/she moved expeditiously to have the agreement set aside;
(e) whether he/she received substantial benefits under the agreement;
(f) whether the other party had fulfilled his/her obligations under the agreement.
[79] There is no basis to find that any of the factors affirmed by the Court in Turk would have been engaged to exercise the discretion of the court to set aside the marriage contract. The evidence that supports a finding on any one factor is also relevant to the others in a manner consistent with findings I have already made on the first part of the test. In particular, I find that:
a. there has been no concealment of an asset or material misrepresentation by Ms. Vujnovic. Mr. Capar knew at all times that she owned the Grey Owl Property at the time of marriage and upon entering the marriage contract;
b. the claims of Mr. Capar that he was under duress, or that he was subject to undue influence when he entered the marriage contract have not been made out;
c. Mr. Capar had the benefit of independent legal advice before he signed the marriage contract. There is some evidence that he may have met with Mr. Eason twice for this purpose. Despite having access to a lawyer, he chose to sign the marriage contract without asking for, or taking any other step to obtain information about the value of the Grey Owl Property. This decision amounts to waiving the ability to now rely upon the absence of disclosure as a factor to have the marriage contract set aside.
d. Mr. Capar did not move expeditiously to have the marriage contract set aside. As it was signed on November 30, 2016, Mr. Capar did not take steps to challenge the marriage contract until well after this proceeding was commenced in 2019;
e. Although Mr. Capar claims that the only benefit he received for signing the marriage contract was the preservation of the family relationship, he also received the benefit of all other terms under the marriage contract, which included the right to make an equalization claim, which would exclude the value of Ms. Vujnovic’s interest in the Grey Owl Property;
f. There is no evidence heard to date that Mr. Capar has not fulfilled his obligations under the marriage contract; and
g. The marriage contract was not executed under unconscionable circumstances and enforcing the marriage contract does not produce an unconscionable result. To establish that unconscionability, it must be proven that the parties to the impugned agreement were in unequal bargaining positions, and that one of the parties “preyed” upon the other such that the resulting contract was improvident on its face: See Dochuk at para. 5, and Rosen v. Rosen (1994), 1994 CanLII 2769 (Ont. C.A.).
[80] After considering all the evidence, and on hearing the submissions made on behalf of the parties, I find that their mutual intention behind entering the marriage contract was to allow Ms. Vujnovic to preserve her interest in the Grey Owl Property as at the date of marriage. What that interest may have been, and the value it may have, is for the court to determine when the motion for summary judgment continues.
Conclusion
[81] The motion of Ms. Vujnovic for summary judgment is granted. There will be a final order declaring the marriage contract entered on November 30, 2016 to be valid, binding and enforceable. The claim made Mr. Capar to set aside the marriage contract dated November 30, 2016 at paragraphs 24 to 28 of the Amended Application is dismissed.
[82] Counsel are invited to arrange a call with me through my judicial assistant to arrange subsequent dates for the court to hear the balance of the motions. Counsel may arrange a Motion Conference by emailing my judicial assistant at melanie.powers@ontario.ca in Brampton.
[83] Costs of the motions to date are reserved.
Emery J.
Released: July 22, 2021
COURT FILE NO.: FS-19-42424-00 (Milton)
DATE: 2021 07 22
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
IVAN CAPAR
Applicant
- and -
ANNA VUJNOVIC
Respondent
REASONS FOR DECISION (#1)
Emery J.
Released: July 22, 2021