COURT FILE NO.: FC-19-1492 DATE: 20230307

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

S.C.H. Applicant Husband

– and –

S.R. Respondent Wife

Counsel: Toni E. Wharton, for the Applicant Husband Dani Frodis, for the Respondent Wife

HEARD: March 3, 2023 RELEASED: March 7, 2023

REASONS FOR DECISION ON MOTION

Justice Alex Finlayson

PART I: BACKGROUND AND NATURE OF THIS MOTION

[1] This matter came before me for a 16-day trial between November 22, 2022 and February 27, 2023. The trial solely concerned parenting issues respecting two children. The trial consumed almost the entirety of the fall 2022 sittings, and it spilled over into the new year. This was after there had already been lengthy prior proceedings, during which there were numerous conferences and motions. In addition to the 16 days of trial time, the parties participated in a mid-trial Settlement Conference with Justice Scott on January 18, 2023. That occurred during the hiatus between the end of fall 2022 sittings and the completion of the trial in February.

[2] Each party had two lawyers present throughout the trial. [^1] In addition to the oral testimony of numerous witnesses [^2], they cumulatively tendered some 167 Exhibits comprising hundreds, if not thousands of pages of documentary evidence.

[3] The Court has not yet released its judgment following the trial, the trial having just ended eight days ago.

[4] It is not a stretch to imagine that this trial was tremendously expensive for these parties, who are by no means wealthy. Indeed, they both say as much, now that the trial is over. Except for some money from the sale of the matrimonial home that is left in trust and in the husband’s case, his pension that he cannot access, neither party has any assets left. Both parties are in debt.

[5] Child support, spousal support and property were not amongst the issues for trial. That is because on November 17, 2022, five days before the start of the trial, the husband presented two new Offers to Settle to the wife respecting those issues. His first Offer to Settle dated November 16, 2022 was not severable. It did however include an option within it for the wife to choose between lump sum and periodic spousal support. The husband’s second Offer, also dated November 16, 2022, was severable. He included a term for periodic spousal support only in it.

[6] On November 18, 2022, the wife accepted the husband’s non-severable Offer to Settle. She opted for the lump sum.

[7] There is very little documentation between the parties or their counsel that created this settlement. After the husband served his two Offers, Ms. Tint sent an email to Ms. Wharton and Mr. Stall at 11:04 AM on November 18, 2022, to advise that the wife was accepting the non-severable Offer to Settle. She suggested a telephone call between counsel. There are then two emails between counsel respecting the scheduling of that telephone call, but they do not touch upon the contents of the settlement.

[8] On November 18, 2022 at 12:11 PM, Ms. Tint sent the following email to Ms. Wharton and Mr. Stall:

Dear Ms. Wharton and Mr. Stall,

As discussed, we confirm that [Ms. R] is accepting Option 2 of Part D [the lump sum of spousal support from your client] within your client’s non-severable offer dated November 16, 2022.

Thank you,

Arin Tint

[9] On November 21, 2022, the day before the start of what would now only be a parenting trial, Mr. Frodis filed a Confirmation Form advising the Court that the property and support issues had settled. The Confirmation Form states that counsel would be incorporating the terms of the settlement into a draft Order.

[10] On November 22, 2022, at the outset of the trial, the wife had at her disposal a proposed draft Order for use during her Opening Trial Statement. It included both the terms that had settled and the other the parenting terms that she now intended to ask the Court to order at trial. The Court asked the wife to submit a revised proposed draft Order respecting the outstanding issues only for the Opening Statement. It asked counsel to prepare a separate, draft Order containing the property and support terms that had settled, for the Court’s review and signature.

[11] The trial then began. But the draft Order incorporating the terms of the financial settlement was not presented to the Court right away. Periodically throughout the trial, the Court inquired about the status of the draft Order. The Court expressed a concern, that it would be very problematic, if in fact it turned out that there was a problem with the settlement. The Court was assured that that was not the case.

[12] Meanwhile, out of court, the wife’s lawyer incorporated the terms of the accepted Offer to Settle into a draft Order. This happened on November 22, 2022. Counsel sent it to the husband’s lawyer for review and approval.

[13] On November 30, 2022, the husband’s lawyer sent back a revised draft Order.

[14] The parties finally tendered the final version of a draft Order to the Court on December 9, 2022. This became the “Final Order dated December 9, 2022”. December 9, 2022 was the last day of the fall, 2022 sittings, and it was supposed to be the last day of this trial (but the trial did not finish on time).

[15] The delay in submitting the draft Order occurred because the parties engaged in further post-settlement discussions about how the payment of lump sum spousal support would to impact the future pro rata sharing of section 7 expenses. This additional issue was resolved on December 8, 2022, and is reflected in paragraph 6 of the Final Order dated December 9, 2022.

[16] I signed the draft Order on December 9, 2022 when I received it, with one minor change. I deleted paragraph 25. Paragraph 25 provided for a form of a confidentiality Order. I had previously advised the parents that the Court required submissions about this. The Court will address confidentiality, when it releases the trial judgment. [^3]

[17] There is now a dispute about the implementation of this settlement. The wife has brought a motion asking the Court to enforce the Final Order dated December 9, 2022 in a certain manner. She wants the Court to order that $77,000.00 from the sale proceeds being held in trust be released to her at this time. The husband disagrees. He says the funds should be held back until the Court releases its trial decision and decides costs, so that there can be a complete accounting of who owes who what amount in the end.

PART II: THE RELEVANT PROVISIONS OF THE SETTLEMENT

A. The Property Settlement

[18] As alluded to above, the matrimonial home had been sold during the interim stages of this case. Paragraph 2 of the Final Order dated December 9, 2022 states that the husband shall pay to the wife $140,000.00 on account of property. To arrive at that figure though, paragraph 2 first sets out over several subparagraphs the various amounts that the parties already received by way of interim distributions from the sale proceeds.

[19] Subparagraph 2(iv) then provides for the method by which the wife is to receive this further sum of $140,000.00 on account of property. The funds are to come from the sale proceeds in trust. But she is to receive that amount:

…. immediately upon the final resolution of all issues in this matter (by written agreement between the parties, or court order), subject to deduction from this amount of any further amount found owing by [the wife to the husband] by way of written agreement or court order, upon resolution of all remaining outstanding issues, in order to pay [the husband] any such amount owing.”

[20] Then, there is another subparagraph, but still within paragraph 2 (although not numbered). It states that the balance of the sale proceeds will be released to the husband. But yet again, there is further, similar verbiage respecting a holdback of his funds, too.

[21] This subparagraph reads:

The remaining amount from the proceeds of sale of the matrimonial home shall be released to [the husband] immediately upon the final resolution of all issues in this matter (by written agreement between the parties, or court order), subject to deduction from this amount of any further amount found owing by [the husband to the wife] by way of written agreement or court order, upon resolution of all remaining outstanding issues, in order to pay [the wife] any such amount owing.

B. Child and Spousal Support

[22] Later on still, in both the accepted Offer and the corresponding Final Order dated December 9, 2022, the husband’s net proceeds are further subject to other allocations to the wife, in satisfaction of retroactive child and spousal support, and lump sum spousal support.

[23] The relevant paragraphs in the Final Order dated December 9, 2022 read as follows:

Retroactive Child Support and Contributions to Section 7 Expenses

17. In full and final satisfaction of all claims that either has or may have with respect to child support and contributions towards special and extraordinary expenses owing, by either party to the other from the date of separation until November 17, 2022, as well as full and final satisfaction of post-separation adjustments claimed/paid by [the husband] in lieu of child support (attached as Schedule A for clarification) [the husband shall pay to [the wife] an amount of $34,000, which shall be paid from [the husband’s share of the net proceeds of sale of the matrimonial home.

Spousal Support

18. In full and final satisfaction of [the wife’s] claim to prospective spousal support, [the husband] shall pay [the wife] an amount of $33,000, which shall be paid from [the husband’s] share of the net proceeds of sale of the matrimonial home.

Retroactive Spousal Support

21. In full and final satisfaction of [the wife’s] claim with respect to spousal support owing from the date of separation until November 18, 2022, [the husband] will pay to [the wife] an amount of $10,000. This amount is a fixed lump sum and is not tax deductible to [the husband], nor taxable to [the wife], which shall be paid from [the husband’s share of the net proceeds of sale of the matrimonial home.

[24] These payments to the wife total $77,000.00. There is no similar holdback language repeated within these paragraphs.

C. Subsequent Events Leading to this Motion

[25] Although the parties entered into further negotiations about the pro rata sharing of section 7 expenses between the time the wife accepted the husband’s Offer to Settle and December 9, 2022 when the Court signed the Order, there is no evidence that this dispute about the release of $77,000.00 to the wife was raised by either of them. There is no evidence before me that it was raised particularly promptly thereafter, either.

[26] The wife did not take steps to try to access the $77,000.00, until January 9, 2023 when Ms. Tint wrote to the real estate lawyer by email to request the payment out to the wife. On January 10, 2023, immediately upon being copied with the wife’s request for the release of the funds, Ms. Wharton sent an email to the real estate lawyer asking to hold off on the release. Ms. Wharton indicated that she was in a trial on another matter, but there was, “…a dispute over what if anything is to be released at this stage.”

[27] This dispute was first brought to the Court’s attention late in the day on February 13, 2023. That was now the 15th day of this trial, and the last day on which the Court heard evidence. The parties had already closed their respective cases. The only witness remaining to testify was the clinician from the Office of the Children’s Lawyer, subject to the husband’s right to call reply evidence.

[28] I adjourned the dispute to be argued. The motion was argued on March 3, 2023.

PART III: THE PARTIES’ POSITIONS

A. The Wife’s Position

[29] The wife says she is not disputing that paragraph 2 of the Final Order dated December 9, 2022 includes a holdback respecting the $140,000.00. But, she goes on to say there is “no term in the Final Order that requires the additional amount payable [to her] for child support and spousal support ($77,000) to be held in trust pending a final resolution of [their] matter.”

[30] The wife states that the husband’s position is not genuine and the husband is not credible. She asserts that he is actually blocking the release of funds to her to coerce her into accepting the terms of an agreement that she never made, and never would have made. Over several subparagraphs in paragraph 17, and in paragraph 18 of her affidavit sworn February 22, 2023, the wife again says, as she did earlier in her affidavit, that the husband has continued to restrict her access to funds in an attempt to coerce and control her. She points out that the husband only started paying child support in December 2022 and that she has not ever received any spousal support.

[31] The wife says that the trial has just ended, and she does not know when the Court will render its judgment. She says she would not have accepted the husband’s Offer, had she known that she would not be receiving at least a portion of the funds that are payable to her, for possibly several more months. She alleges that the timing of the payment to her was a material term that factored into her decision to accept the husband’s Offer.

B. The Husband’s Position

[32] The husband also says that the settlement is clear, but in contrast to the wife, he says that it reflects his intention that all of the various payments would be made when there was a final resolution of this matter. He says that the purpose was that there would be no prejudice to either party, knowing that there was about to be a long trial and significant costs to both sides. He says that it was important for there to be an accounting of all amounts owing before a final release of the funds, and the wife’s motion is contrary to his intention and the interpretation of the wording in the document itself. He says paragraph 2 of the Final Order dated December 9, 2022 provides for this result. It is not limited to just the $140,000.00.

[33] Alternatively, the husband says that there was a mistake. In his affidavit of March 1, 2023, he frames his primarily alternative position as a “mutual mistake”. During argument, the husband then raised unilateral mistake in the further alternative.

[34] If the Court finds a mistake, the husband argues that the Court should exercise its equitable jurisdiction and rectify the Order. He does not seek recission.

[35] Indeed, both parties agree that recission as a remedy would be very problematic. It is not something that either of them suggests should occur.

PART IV: ANALYSIS

A. Preliminary and Evidentiary Issues

[36] There are two preliminary/ evidentiary issues.

(i) Ms. Wharton was the Affiant of An Affidavit Used on this Motion

[37] Ms. Wharton swore an affidavit for this motion. Ms. Wharton’s affidavit sworn March 1, 2023 mostly duplicates what the husband has said in his. But it does add two, and possibly three points to the husband’s evidence.

[38] First, Ms. Wharton states that there was no other discussion between her and Ms. Tint about the terms of payment of support during the phone call that followed shortly after the wife’s acceptance of the husband’s Offer to Settle.

[39] Second, Ms. Wharton says that the husband’s legal fees to date in connection with this three year, high conflict litigation are well in excess of $350,000.00.

[40] Finally, at paragraph 11 of the affidavit, Ms. Wharton states the husband’s alternative position, that if the order is not clear, then there was a “mistake and misunderstanding with respect to the paragraph for which [the wife] seeks release” and that paragraphs 17, 18 and 21 of the Final Order dated December 9, 2022 are silent because of the intention in paragraph 2 to apply to all.

[41] Normally, a lawyer cannot swear an affidavit and then argue the motion on that affidavit. Ms. Wharton intended to have her co-counsel argue the motion, but her co-counsel could not then attend on March 3, 2023 for personal reasons that were explained to the Court.

[42] I allowed Ms. Wharton to argue the motion in part because Mr. Frodis did not object. In fact, he wanted the motion to proceed without any further delay.

[43] And in terms of the import of Ms. Wharton’s evidence:

(a) That there was no discussion between Ms. Wharton and Ms. Tint about the timing of payment is not a controversial or disputed fact;

(b) The amount of legal fees that Ms. Wharton says the husband incurred will be considered in due course when it comes to costs. At this point the number is not important. The concept that the parties’ debts exceed their assets, and that there are going to be significant legal fees claimed, is not controversial; and

(c) Ms. Wharton’s affidavit does not say that she made the mistake; it just says a mistake was made. I am able to rely on the husband’s affidavit as to who is alleged to have made the mistake.

(ii) The Wife’s Evidence About Coercive Control

[44] Primarily at paragraphs 17 and 18 of her affidavit of February 22, 2023, but also elsewhere within it, the wife says that the husband’s position on this motion is really just another example of his coercive controlling behaviour towards her. In those paragraphs, she gives a number of specific examples going back in time. This evidence follows the trial, during which a significant part of the theory of her case respecting the parenting issues, and the evidence she called, was about coercive control.

[45] In his responding affidavit sworn March 1, 2023 (and earlier during the trial proper), the husband “vehemently” denies these allegations. In his responding affidavit for this motion, he says the coercive control allegations are both false, and some of them are “brand new” since the trial.

[46] There was an abundance of evidence called at trial about this issue by both sides. It was raised pursuant to section 16(4)(b) of the Divorce Act. The Court will deal with it in the trial judgment. But the Court has no intention of getting into this issue now, to resolve a relatively narrow financial dispute centered around the timing of payment of certain funds in a settlement.

[47] I am not prepared to make findings about coercive control, or related credibility determinations, in a piecemeal fashion, to decide this motion, that does not even engage section 16 of the Divorce Act. I also find it to be inappropriate that the wife is now giving additional examples of coercive control in her affidavit, that go beyond her trial evidence. She had ample opportunity to testify at trial. By raising new allegations in this post-trial affidavit, the husband is of course not able to cross-examine on them.

[48] The Court is disregarding the evidence in subparagraphs in paragraph 17, or paragraph 18 of the affidavit in particular, both for this motion, but also when it comes to the trial decision. So that it is clear to both parties, the Court will be relying on the evidence at trial, when it renders its trial judgment.

B. Principles of Contractual Interpretation

[49] The Final Order dated December 9, 2022 is a consent Order that incorporated contractual terms between the parties, as a result of the wife’s acceptance of the husband’s Offer to Settle. It is settled that a consent Order is still final and binding and can only be amended when it does not express the real intention of the parties or where there is fraud: see McCowan v. McCowan (1995), 24 O.R. (3d) 707 (C.A.).

[50] Many of the submissions made during this motion focused on the alternative position about mistake, and on what remedy should be ordered if a mistake is found. However both parties also argued the Order was clear. The Court will first interpret the settlement before deciding whether it is even necessary to consider mistake.

[51] At ¶ 47 of Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, the Supreme Court succinctly set out the principles of contractual interpretation. The Court adopted the “modern approach” holding that the interpretive process involves reading the agreement “as a whole, giving the words used their ordinary and grammatical meaning, consistent with the surrounding circumstances known to the parties at the time of formation of the contract.” There need not first be a finding of ambiguity in the contract, before the Court can consider surrounding circumstances.

[52] Also at ¶47 of Sattva Capital Corp. v. Creston Moly Corp., the Court recognized the difficulty of ascertaining contractual intention when looking at the text alone, because words alone do not have an “immutable or absolute meaning”. The Court quoted a passage that contracts are not made in a “vacuum”, and must be placed in context of the setting in which they are made.

[53] At ¶48 of Sattva Capital Corp. v. Creston Moly Corp., the Court found that the meaning of words is derived from a number of contextual factors, including the purpose of the agreement and the nature of the relationship created by the agreement. The meaning which a document would convey to a “reasonable man” is not necessarily the same thing as the meaning of the words used in the contract, themselves. In this case before me, the parties have to some extent made statements about their subjective intentions in making and accepting the Offer to Settle, but the goal in contractual in contractual interpretation is to ascertain the objective intent of the parties: see ¶ 49 of Sattva Capital Corp. v. Creston Moly Corp..

[54] Although the surrounding circumstances may be considered, they should not be allowed to overwhelm the words of the agreement. Rather, they should “deepen the decision-maker’s understanding of the mutual and objective intentions of the parties as expressed in the words of the contract”. The interpretation must be grounded in the text, and read in light of the entire contract: see ¶57 of Sattva Capital Corp. v. Creston Moly Corp..

[55] What the surrounding circumstances may be, will vary. They should consist of objective evidence of background facts known at the time of execution of the contract. That knowledge must have either been, or reasonably ought to have been within the knowledge of both parties at or before the date of contracting. Surrounding circumstances can be “absolutely anything which would have affected the way in which the language of the document would have been understood by a reasonable man”: see ¶58 of Sattva Capital Corp. v. Creston Moly Corp..

C. Analysis Respecting the Principles of Contractual Interpretation Applied to this Settlement

[56] While perhaps some language might have been included to make it clearer that paragraphs 17, 18 and 21 would form part of the accounting later on, I find the holdback language in paragraph 2 was sufficient.

[57] First, it is clear that pursuant to the Final Order of December 9, 2022, the wife’s entitlements to funds for her various financial claims, is settled. The amounts to which she is entitled are reduced to writing. Although it may be later determined that the wife owes other money to the husband or vice versa, resulting in set-off style adjustments, the quantification of the various claims now settled, is not open for re-negotiation.

[58] It is equally clear that it is the husband, only, who owes money to the wife, under this Order, at this time [my emphasis added]. There are no amounts owing from the wife to the husband right now.

[59] But it is also equally clear, that the structure of this deal, called for a future accounting at which the amounts in the Order owing by the husband to the wife may very well be adjusted, if amounts are determined owing to him, or for that matter if more money is determined to be owing by him, to the wife.

[60] Second, I am to read the disputed clauses in the context of the entire document. I find the structure of both the accepted Offer itself, and the resulting Final Order dated December 9, 2022 to be important. Paragraph 2 of the Final Order dated December 9, 2022 is the paragraph by which the husband’s share of the sale proceeds is determined. The lump sums in paragraph 17, 18 and 21 are to be paid from his share.

[61] To repeat, paragraph 2 of the Final Order dated December 9, 2022 lists what has already been paid out. It then says that the wife is entitled to the next $140,000, subject to a potential adjustment in the future accounting). Then, the husband is entitled to the rest, also subject to a potential adjustment later. The lump sum support amounts then come later in the document, at paragraphs 17, 18 and 21 and are paid from his share. I am left wondering, were the wife’s interpretation to prevail, exactly how the husband is to pay the lump sum amounts in paragraphs 17, 18 and 21 from his share of the sale proceeds, when that share will not even be determined until later, under paragraph 2 itself.

[62] Relatedly, as it already is, there are insufficient funds in trust to satisfy the amounts owing under the Order before the parties even get to the question of any potential adjustments in the later accounting. Although it is not specifically stated in the Final Order dated December 9, 2022, the evidence before me is that at the time of this settlement, only $210,349.23 remained in trust with the real estate lawyer. [^4] There is already a shortfall of just under $7,000.00.

[63] Suppose on the wife’s interpretation, she receives the $77,000.00 now. That leaves less than $140,000 in the “husband’s share” in the later accounting.

[64] In a scenario where the husband is entitled to costs, this shortfall situation may not be a problem. But what if he is not? Does that mean that the wife’s share of $140,000.00 will get reduced? I strongly doubt the wife would be in agreement with such an interpretation. And if the Court finds the wife owes costs, then how will they be paid? What if he owes costs? These unknowns indicate to me that the plan was indeed to reconcile all this at once, once the case is fully over, costs are determined and all of these things are fully known.

[65] Third, there is another difference that goes to the timing of payments, within the Order itself. Periodic and lump sum amounts are treated differently. For example, paragraph 5 of the Order provides for the payment of go forward child support as of December 1, 2022. The corresponding paragraph of the accepted Offer to Settle also has the same commencement date. The evidence before me is that the husband is paying it. The wife could have accepted the periodic spousal support term in the Offer, which had a specific commencement date too, but she elected for the lump sum out of the husband’s share, not yet determined.

[66] Fourth, I consider the following contextual factors.

[67] On the one hand, I appreciate the wife’s argument, that $34,000.00 of the $77,000.00 in the Final Order of December 9, 2022 is intended to be on account of retroactive child support, and the rest is for past and future spousal support. Earlier I referred to the mother’s argument that the husband had not paid child support until December of 2022. While I am not clear about the extent to which this statement is fully accurate, since the language in paragraph 17 of the Final Order dated December 9, 2022 regarding retroactive child support also makes reference to crediting for both parties’ section 7 expenses and post-separation adjustments that the husband paid, and because I myself already made a pre-trial order for lump sum uncharacterized support on a prior motion, I still accept that $34,000.00 of the $77,000.00 amount is the settlement for past money owing for child support. That wouldn’t have been agreed to, had it been paid at the time in the correct amount, for the benefit of the children.

[68] But on the other hand, it was very clear at the time of the Offer, or it should have been, that the husband was concerned about his ability to collect on a potential future costs order. Both parties knew or ought to have known about the shortfall of funds in trust, referred to above. Both knew that apart from these sale proceeds and the husband’s pension (which he cannot access), both parties’ debts exceeded their other assets coming into this trial. Financial statements saying this had been exchanged. Both parties obviously knew that they had not settled the trial. Both parties knew that they were about to embark upon a long parenting trial. Both parties knew or ought to have known, that the trial would be expensive, and that he or she might be facing costs exposure.

D. Should There Be Contra Proferentum Construction?

[69] The wife says that I should construe the accepted Offer to Settle against the husband since he drafted and presented it. As I have not found an ambiguity, I do not need to address these arguments any further: see Guarantee Properties Limited v. Edmonton (City of), 2000 ABCA 215 ¶33.

E. Mistake

[70] Although she has made statements about what she intended to bargain for in her affidavit, the wife has not asserted a mistake. Rather, the wife argued that the Court should accept her arguments about interpretation and reject the husband’s arguments about mistake.

[71] The husband has raised mistake arguments in the alternative to his main position. Having decided the motion based on the above, I do not need to consider the husband’s alternative argument and because the wife has not sought relief based on asserting a mistake.

F. The Costs of this Motion

[72] By failing to resolve this motion, the parties consumed more court time and incurred more fees. They also took valuable time away from the Court, that could have been spent working on the judgment proper.

[73] I am not inviting costs submissions at this time. The parties should be settling costs. If they cannot, then they are going to have to wait until the time comes to make costs submissions after the trial judgment is released.

PART V: ORDER

[74] The wife’s motion is dismissed. The real estate lawyer shall continue to hold the remaining net proceeds of sale of the matrimonial home in trust, pending further order or agreement of the parties.

Justice Alex Finlayson

Released: March 7, 2023

Footnotes

[^1]: Ms. Wharton and her co-counsel, Mr. Stall, represented the husband. Mr. Frodis and his co-counsel, Ms. Tint, represented the wife. Only Ms. Wharton and Mr. Frodis (with his client) were present by zoom on March 3, 2023, when this motion was argued. [^2]: The parties themselves each spent several days in the witness box. [^3]: I have referred to the parties by initials in this decision out of an abundance of caution. I do so on a without prejudice basis until such time as I am able to fully consider the confidentiality issue. [^4]: This is as of September 7, 2022, according to the real estate lawyer’s trust ledger statement.