NEWMARKET COURT FILE NO.: FC-22-1036-00 DATE: 20231011

SUPERIOR COURT OF JUSTICE – ONTARIO – FAMILY COURT

RE: Miao Huang, Applicant -and- Lilin Guo, Respondent

BEFORE: The Honourable Madan Justice A.A. Casullo

COUNSEL: Tammy Law, for the Applicant Daniel Wiener, for the Respondent

HEARD: October 4, 2023

ENDORSEMENT

OVERVIEW

[1] The parties separated on June 30, 2021. A Separation Agreement (“Agreement”) was signed on October 27, 2021.

[2] The Applicant Mother (“AM”) contends that the Respondent Father (“RF”) threatened that if she did not agree with his terms of separation, she would not be able to see their daughter (Emma Weier Guo, born May 24, 2017), and she would become financially destitute.

[3] The AM alleges that the RF threatened to kill or hurt her if she did not sign the Agreement. Frightened, the AM signed the Agreement.

[4] The AM received independent legal advice.

[5] The AM concedes she received an equalization payment pursuant to the Agreement. However, she now believes that the RF’s lack of financial disclosure renders the terms of the Agreement unfair. She submits the RF did not disclose significant personal and corporate assets. He did not provide information about his income. He also did not value the one corporation that the AM was aware of. A second corporation came to light at the appearance before McPherson J. on February 7, 2023, and the RF has not provided a value for this corporation either.

[6] Accordingly, the AM seeks to set aside the Agreement. She submits it was signed under duress, without adequate financial disclosure, and its terms are unconscionable.

[7] In the context of this motion, the AM seeks the following relief:

a. An order that the RF provide all disclosure set out in the Order of Justice MacPherson, dated February 7, 2023, within 30 days of this Court’s order;

b. An order that the additional disclosure set out at Appendix “A” to the Notice of Motion shall be provided within 60 days of this Court’s order;

c. An order that the RF pay interim child support to the AM in the amount of $2,379.00 per month based on an imputed income of $300,000 commencing August 1, 2023;

d. An order that the RF pay interim spousal support to the AM in the amount of $7,742.00 per month based on an imputed income of $300,000 commencing September 1, 2023;

e. An order that the RF pay 69% of all s.7 expenses commencing September 1, 2023;

f. An order that the RF pay retroactive s.7 expenses in the amount of $6,638.48 forthwith; and,

g. costs.

[8] The RF confirms that the AM received over one million dollars ($1,000,000) in cash, property, and equity in accordance with the terms of the Agreement. In his view, the Agreement is valid.

[9] He further submits that this motion is ill-timed, and that a determination as to the Agreement’s validity should be heard by way of bifurcated proceedings. This approach is not only convenient, but cost-effective as well, as the parties are not incurring expenses that would be rendered unnecessary should the Agreement be upheld.

[10] The RF submits that the AM is seeking to circumvent the required procedural steps in this matter, with a view to obtaining a financial benefit she is not entitled to.

Background

[11] The parties met when the RF was visiting the AM’s hometown of Wuxi, China. In 2012, the AM left her job as a pediatric nurse and moved to Canada to be with the RF. The two were married in January 2013 and separated in June 2021.

[12] Instead of nursing, the AM did administrative work at the RF’s office, which allowed the RF to income split with her. This source of income was cut off when the parties separated.

[13] Following separation, the AM enrolled in a five-year Occupational Health and Safety program at Toronto Metropolitan University, where she is currently garnering good grades. Financially, she survives on investments, (which she sold earlier this year to purchase her condominium), and OSAP loans.

[14] It is the AM’s evidence that the RF was controlling and manipulative during the marriage. She submits he was aggressive and would fly into fits of rages and threats. This behaviour worsened as the marriage broke down.

[15] The RF kept weapons in the house, including a crossbow, a shotgun, a BB rifle, and a BB handgun.

[16] The AM could not afford to move out when the parties separated, and she remained in the matrimonial home while the parties negotiated the Agreement. The AM signed the Agreement on October 27, 2021. She received the negotiated financial consideration in January 2022 and moved out thereafter.

[17] The AM states that in the summer of 2021, the RF began to shoot at live animals in their backyard. She states she has a video of him killing a racoon. The AM submits she lived in fear of the RF.

[18] Pursuant to the Agreement, Emma was to remain with the RF, with the AM exercising parenting time. Given this, child support was not addressed in the Agreement. Further, the Agreement did not include a provision for spousal support, in light of the equalization payment.

[19] In August 2022, during a parenting time exchange, the RF threatened to kill the AM with a gun in front of Emma. The police were called, and they confiscated the weapons he kept in his home. As a consequence of this, Emma moved in with the AM. The move was supported by the York Children’s Aid Society. The OCL clinician recommends that Emma remain in the AM’s primary care.

[20] The RF pled guilty to charges and is currently on probation. There is evidence he admitted that this was not an isolated incident.

[21] The couple enjoyed a relatively lavish lifestyle during their time together. Their home in Richmond Hill is valued at $1,600,000. The RF bought two luxury vehicles (a Porsche and a Tesla). He also bought a yacht, to which is attached expenses such as docking fees, storage fees, insurance, etc. Emma went to a private school. The family travelled annually.

[22] The RF owns and operates L&G Auto, an auto mechanic shop that the RF submits has fallen on hard times. However, his gross revenue was $890,135 for 2019, $737,037 for 2020, $588,252 for 2021, and $521,383 for 2022.

[23] The AM submits that the limited disclosure provided by the RF shows suspicious transactions. For example, in 2021 he received 123 deposits into his personal accounts that totalled almost $400,000. The AF believes these are cash payments from customers that the RF failed to report as income to CRA.

[24] Given the RF’s historic spending patterns, the AM believes his annual income for support purposes should be imputed to at least $300,000.

Analysis

[25] I begin my analysis by confirming that child support is the right of the child, and no contract or agreement can operate to oust the jurisdiction of the court to order interim child support: Deiter v. Sampson, [2004] O.J. No. 904, at para. 4.

[26] When there is a dispute surrounding a separation agreement, the central issue to be determined is the validity of the agreement. Only after that is determined can any secondary issues be addressed, including, for example, support: Chee-A-Tow v. Chee-A-Tow, 2021 ONSC 2080, at paras. 36-38.

[27] However, in Salzmann v. Salzmann, [2004] O.J. No. 166, the court held (at para. 19) that interim spousal support may be granted, in spite of a waiver of spousal support, where there is a triable issue as to the enforceability of a contract.

[28] On motions for interim spousal support, courts should apply the two-stage approach as set out by the Supreme Court of Canada in Miglin v. Miglin, 2003 SCC 24, [2023] 1 S.C.R. 303, when assessing whether spousal support should be ordered despite it having been waived in an agreement.

[29] As the court held in Chaitas v. Christopoulos, [2004] O.J. No. 907, at para. 20:

In my view, the court, on an application for interim support, is required to conduct the Miglin analysis. If, on the evidence filed, a serious issue to be tried has been raised with respect to the circumstances under which the contract was negotiated and executed, then the contract will not act as a bar to the application. This is particularly the case in circumstance where, as here, if the contract is upheld at trial, there are assets in the applicant’s name that can be used to compensate the respondent for any support that should not have been paid. Interim orders are not final orders. As noted by Granger J. in Cafik, they are meant to provide “a reasonably acceptable solution to a difficult problem until trial.”

[30] The Miglin two-stage approach is as follows. At the first stage, the court must consider whether the agreement was negotiated under terms which are so unimpeachable that there is no reason to discount it and, if so, whether the heart of the agreement substantially complies with the overall objectives of the Divorce Act.

[31] At the second stage, the court must assess whether the agreement still reflects the original intentions of the parties, and the extent to which it is still in substantial compliance with the objectives of the Divorce Act.

[32] In my view there are clearly triable issues with respect to both stages of the Miglin analysis. The AM has provided evidence to suggest that the Agreement was not negotiated under unimpeachable conditions. The fact that she lived with the RF during the negotiation process, during which time she felt extremely unsafe, is damning evidence.

[33] Failure to provide financial disclosure is also an important factor when determining whether an agreement was negotiated in unimpeachable conditions: Rick v. Brandsema, 2009 SCC 10, [2009] 1 S.C.R. 295, at para. 47. The RF did not provide sufficient financial disclosure prior to the Agreement being signed. In fact, significant disclosure remains outstanding despite counsel’s position that the RF has satisfied the disclosure required pursuant to McPherson J.’s Order. When I drilled down on this, counsel conceded that the disclosure has not been provided, but rather that the RF has now agreed to provide it. Providing, and agreeing to provide, are not one and the same.

[34] Further, the spousal support waiver did not substantially comply with the objectives of the Divorce Act. Here it did not, as the AM received no compensatory support to reflect the fact that the AM mother left a stable career in China for the RF, and the RF does not dispute that he promised to take care of the AM financially.

[35] Given my determination that there is a triable issue at the first stage, I need not go on to determine whether there is a triable issue with respect to the second stage. If I am incorrect at the first stage, I would find that the current circumstances do not reflect the parties’ original intentions. As noted above, the Agreement provided that Emma would live with the RF. Instead, Emma has lived with the AM since August 28, 2022.

[36] I need not determine whether the AM is prima facie entitled to spousal support. An interim order for support is intended to cover the period of time between the order and the trial. An in-depth analysis is not required at this stage. If the AM can demonstrate need, and the RF has the ability to pay, that should suffice.

[37] The AM has demonstrated need, and the RF has the ability to pay. As in Chaitas, the AM has an asset which can satisfy any overpayment made by the RF should the Agreement ultimately be upheld.

[38] At this stage, I am not prepared to accede to the AM’s request that I impute an annual income of $300,000 to the RF.

[39] The RF asks that I impute his income to be $150,000 annually, given that the parties have already agreed to this amount. [1]

[40] For the purposes of this interim order only, I impute the RF’s annual income to be $150,000. This is of course without prejudice to the AM arguing at the hearing that the amount is higher.

[41] In arriving at what I believe to be “a reasonably acceptable solution to a difficult problem,” the RF shall pay child support and spousal support on an interim basis.

[42] Order to go as set out in paragraph [7] above, with the necessary support and s. 7 expenses recalculations, using the RF’s imputed annual income of $150,000.

Costs

[43] The AM was wholly successful and is entitled to her costs on a partial indemnity basis.

[44] There were no bills of costs filed on Caselines, and I did not ask counsel to make costs submissions at the conclusion of the hearing.

[45] The parties are encouraged to agree to an amount for costs. If they are unable to do so, costs of this motion are reserved to the judge hearing the Application.

Casullo J.

Released: October 11, 2023

[1] To be fair to the RF, he has begun making table child support payments. However, simply because the AM accepts his payments, which are calculated based on an annual income of $150,000, does not mean the AM agrees that his annual income is $150,000.