Court File and Parties

COURT FILE NO.: FS-21-25945 DATE: 20240119 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Xuejun Yin, Applicant AND: Yong Jing Feng, Respondent

BEFORE: W.D. Black J.

COUNSEL: Marcy Segal, for the Applicant Haiyun Wang, for the Respondent

HEARD: January 2, 2024 – January 9, 2024

Endorsement

Overview

[1] The determination of this matter largely boils down to the validity or otherwise of a separation agreement (the “Separation Agreement”), negotiated and signed by the parties, dated March 20, 2021.

[2] Each party takes issue with certain aspects of the Separation Agreement, seeks that those items with which they take issue be set aside, and asks that the balance of the agreement remain in force.

[3] The applicant Xuejun Yin asserts that the provisions of the Separation Agreement valuing certain properties and funds for purposes of the division of family property between the parties are problematic. In the case of certain real properties, Mr. Yin argues that a strict reading of the terms of the Separation Agreement does not accurately reflect what was actually agreed in parallel discussions between the parties. With respect to division of liquid assets in bank accounts and investments, he maintains that the respondent Ms. Feng failed to make proper disclosure, such that the division was doomed to be and was in fact unfair.

[4] Ms. Feng strongly disagrees with those contentions, but, for her part, asserts that the provisions of the agreement which would have the parties’ son spend the majority of his time with Mr. Yin commencing on the son’s 12th birthday (in early February of this year), should not be given effect. She argues that, based on the son’s stated wishes as reflected in a recent Voice of the Child report, parenting time for the son should remain status quo, in which the son spends the majority of his time with Ms. Feng.

[5] The parties also disagree about how an agreed amount for arrears of child support should be paid: out of a joint account or accounts as Mr. Yin asserts, or out of an individual account of Mr. Yin, as Ms. Feng insists.

[6] A determination of these issues involves considering the language and context of the Separation Agreement, and assessing whether or not the agreement fairly reflects the parties’ intentions. In the case of parenting time for the parties’ son, it also involves weighing the Voice of the Child report (and the testimony of its author) against the clear language of the agreement and deciding – as is always the paramount goal in these cases – what is in the child’s best interests.

[7] These determinations in turn, given the parties’ respective attacks on aspects of the Separation Agreement, require me to consider section 56(4) of the Family Law Act, R.S.O. 1990, c.F.3 (the “FLA”).

[8] Finally, Mr. Yin also alleges that the independent legal advice that he received relative to the Separation Agreement was substandard, and did not bring home to him the risks and potential consequences of signing the document in the form that both he and Ms. Feng executed on March 20, 2021.

Conclusion

[9] I have decided not to set aside any of the provisions of the Separation Agreement, on either side. I find the Separation Agreement to be valid and enforceable, and order the parties to abide by its terms.

Background Facts

A. The Parties and Their Children

[10] The parties are from China, where they were both initially educated and trained as IT specialists. They each immigrated to Canada in 1998, and met one another in 1999 at an English as a second language school. Both parties’ first language is Mandarin, and in fact Ms. Feng chose to testify with the assistance of a Mandarin-English interpreter. However, both parties have worked in Canada in English environments and are reasonably fluent in English.

[11] They were married on June 16, 2000 in Waterloo, Ontario.

[12] The parties have three children. In addition to their son, who as noted above will turn 12 in early February of this year (d.o.b. February 4, 2012), they have a daughter who will be 15 in February (d.o.b. February 14, 2009), and another daughter who is 19 (d.o.b. October 23, 2004).

B. The Parties’ Education and Work Histories

[13] The parties have been successful in their careers and have both worked over the years at reasonably remunerative positions. Mr. Yin has a Master’s degree in computer science from Wuhan University in China, and Ms. Feng has a Master’s of electrical engineering degree from the University of Toronto. Mr. Yin has worked consistently as an IT specialist, and for the last couple of years has been self-employed. Ms. Feng has worked for a number of years with the Bank of Montreal. In recent years, their respective incomes (in the case of Ms. Feng including bonuses) have consistently been at or above the $100,000.00 level.

C. The Properties

[14] The parties invested in real estate during their marriage. In addition to their matrimonial home at 39 Castlemere Crescent in Toronto (“39 Castlemere), they also owned, as at the date of their separation and as at the date of the Separation Agreement, a condominium at 33 Singer Court in Toronto (“33 Singer”), a cottage property at 88 Forbes Road in the North Bruce Peninsula in Ontario (the “Bruce Cottage”), and another cottage property at 1445-1 Oxbow Lake Road in Lake of Bays, Ontario (the “Oxbow Lake House”) (collectively, the “Properties”).

D. The Separation

[15] The parties agree on a date of separation of August 15, 2020. They both continued, after that date, to live at 39 Castlemere, maintaining separate bedrooms and living apart under the same roof until June 2, 2021, at which point Mr. Yin moved out.

[16] It is clear that the parties’ hope and intention at and following their separation was to deal with one another cooperatively to devise mutually acceptable parenting arrangements and to facilitate an orderly division of assets.

[17] To that end, following their separation they discussed obtaining appraisals of the Properties, ostensibly with a view to dividing their assets equally. They also intended that funds held in various bank accounts and investments, including funds and accounts for the business through which they rented the Properties (other than 39 Castlemere) to third parties, be divided evenly between them.

[18] The parties agree that they began negotiating terms of their separation in or about December of 2020, and that initially the focus of their discussions was on parenting time.

[19] They began to discuss valuations of the Properties in late December of 2020 and/or in January of 2021. It appears that they obtained informal advice from various real estate agents in early 2021 about a range of values for the Properties at that time.

E. The Role of Appraisals

[20] It is evident that they also discussed the potential need for more formal appraisals, and there is evidence that each of them began contacting appraisers in the time leading up to and following the execution of the Separation Agreement.

[21] The fact that the parties were, indisputably, contacting appraisers during this timeframe features prominently in Mr. Yin’s argument.

[22] He says that he and Ms. Feng discussed, and it was always understood, that values for the Properties would ultimately be obtained based on formal appraisals. The overall division of assets, tentatively and temporarily accomplished by the Separation Agreement, would be fine-tuned and finalized once the precise values of the Properties were established by way of the appraisals contemplated.

[23] Mr. Yin acknowledges, however, that this approach is not reflected in the language of the Separation Agreement. Ms. Feng’s evidence is that she told Mr. Yin on or about March 17 or 18, 2021 - shortly before the Separation Agreement was signed - that there would be no need for appraisals, for purposes of equalizing the division of assets, after the agreement was signed. She explains her evident involvement in communications with appraisers after the Separation Agreement was executed by saying she wanted appraisals at that point for purposes other than equalization (for example, for determining the extent of capital gains tax owing).

F. The Involvement of Lawyers

[24] It becomes important, in order to assess Mr. Yin’s claim regarding the intended process (versus the deal described in the Separation Agreement), to consider the involvement and role of lawyers who became involved in the preparation of, and provided advice in relation to, the Separation Agreement.

[25] Mr. Yin contacted Victoria Xu sometime in early 2021, to assist in fleshing out and documenting the arrangements for parenting, support and division of assets that the parties had commenced negotiating by that time. It seems that initially, Mr. Yin contacted Ms. Xu on behalf of both parties.

[26] Ms. Xu prepared a draft version of the Separation Agreement, and the parties initially embarked on a process of reviewing and discussing the draft and providing comments from their respective viewpoints. Ms. Xu would then revise the working draft to incorporate these comments.

[27] At some point in February of 2021, Ms. Feng opted to obtain separate advice. She retained Pandora Du to review the draft agreement that Ms. Xu had prepared to that point with input from both parties.

[28] As of the time the draft was sent to Ms. Du, on February 24, 2021, its provision relative to division of the Properties contemplated that the parties would obtain formal appraisals of each property to provide a basis for “market value”.

[29] The provisions of the working draft prepared by Ms. Xu with respect to parenting time fluctuated modestly during the parties’ negotiation. However, overall, and certainly in Ms. Xu’s final draft of February 24, 2021, the draft agreement contemplated that Mr. Yin’s parenting time with at least the parties’ son would increase, such that Mr. Yin would provide the son’s primary residence once the son reached age 12. There was an effort in the negotiation and drafting to develop a plan for the children – at least the two younger children – to maintain schedules that would keep them together as much as possible. The negotiation about parenting time reflected an effort to balance this goal against the evident underlying understanding that the son would begin to spend more of his time with Mr. Yin.

[30] It is also important to note that, in parallel with the negotiation and drafting of the Separation Agreement, the parties were exchanging financial information, including providing one another with spreadsheets and account documentation to attest to their respective holdings.

G. Versions and Timing of Draft Agreements

[31] Mr. Yin confirmed in his testimony that he was satisfied with the contents of the February 24, 2021 agreement prepared by Ms. Xu.

[32] However, once the working draft agreement was sent to Ms. Du, there was a palpable change in the nature and pace of negotiations, and in the progress and content of the draft.

[33] That is, upon receiving the working draft prepared by Ms. Xu on February 24, 2021, Ms. Du worked on the agreement for almost a month before providing a revised draft on March 17, 2021.

[34] Mr. Yin in particular expressed concerns about this delay. The parties knew, as of the first quarter of 2021, that the company at which Mr. Yin had been working was undergoing fundamental changes, and that there was a significant and imminent risk that Mr. Yin would lose his job.

[35] If that happened, according to Mr. Yin’s evidence, the parties were concerned that it would complicate the exercise of dividing and refinancing the Properties, inasmuch as Mr. Yin might not qualify for mortgage financing if he lost his job. That in turn created a risk that the Properties, or some of them, might have to be sold rather than allocated between the parties.

[36] As such Mr. Yin found the delay while Ms. Du revised the agreement intolerable. He sent emails to Ms. Xu decrying the delay, threatening that he would have to report Ms. Du to LawPro, and effectively demanding that Ms. Xu intercede with Ms. Du to expedite the process.

[37] There is no evidence that Ms. Xu actually followed up with Ms. Du, let alone in the aggressive manner that Mr. Yin sought. In response to Mr. Yin’s entreaties. Ms. Xu responded that they should be patient and await Ms. Du’s draft. However, it appears that Mr. Yin’s demands that Ms. Xu follow up forcefully with Ms. Du led to a reluctance on Ms. Xu’s part to continue to advise Mr. Yin on the pending agreement. While it is clear that from February 24, 2021, to March 17, 2021, Mr. Yin believed that Ms. Xu continued to act for him, Ms. Xu testified that during this time frame, she was not certain that she was prepared to continue representing Mr. Yin. The evidence does not show any steps taken by Ms. Xu during that time frame to negotiate on behalf of, or otherwise assist Mr. Yin. Equally, there is no suggestion that Ms. Xu advised Mr. Yin of her misgivings, or that she would no longer advise him.

[38] On March 17, 2021, Ms. Du delivered the revised draft agreement (and on March 18 it was provided to Ms. Xu).

[39] Apart from taking longer than at least Mr. Yin had anticipated, Ms. Du’s revised version of the Separation Agreement appeared to make some fundamental alterations to the proposed approach to valuing and dividing the Properties.

[40] Rather than deferring the valuation of the Properties to appraisals to be undertaken following the execution of the agreement, Ms. Du’s draft assigned values to each of the Properties. I heard evidence that the numbers used for this purpose were based on information the parties had obtained from real estate agents earlier in 2021 as to the likely range of market values of the Properties.

[41] How and why this came about is somewhat unclear. According to Mr. Yin, Ms. Feng told him that her lawyer (Ms. Du) advised her that in order for the proposed allocation of the Properties to be enforceable there had to be values for each property included in the agreement.

[42] Mr. Yin purports to have been unhappy about this change, and maintains that he always took the position that definitive formal appraisals would have to be done.

[43] There is some evidence that this was indeed his stance. He continued, after the Separation Agreement was executed, to communicate with appraisers. For a limited time after execution of the Separation Agreement, Ms. Feng likewise was involved in communicating with appraisers, and in providing information and making arrangements for purposes of the pending appraisals.

H. Signing of the Separation Agreement and Transfer of Properties

[44] On the other hand, the evidence shows that Mr. Yin, in particular, was anxious to complete the transfer of the Properties contemplated by the Separation Agreement as soon as possible. Under the Separation Agreement, Mr. Yin was to receive sole title to 33 Singer and to the Oxbow Lake House (whereas Ms. Feng would receive sole title to 39 Castlemere and to the Bruce Cottage). The evidence indicates that, given Mr. Yin’s insistence that the Properties be valued by appraisals, Ms. Feng offered to defer the signing of the Separation Agreement until those appraisals were in hand. Mr. Yin declined, given the complications potentially created by his pending job loss, and continued to insist that the Separation Agreement be signed right away (which it was, on March 20, 2021).

[45] The transfers of the Properties were completed on May 12, 2021, about seven weeks after the execution of the Separation Agreement. Again, the evidence shows that it was Mr. Yin, in particular, who was pushing for these transfers to happen expeditiously.

I. Values Assigned to the Properties Under the Separation Agreement

[46] The values assigned to the Properties within the Separation Agreement, based not on formal appraisals but rather based on the informal values the parties received from unidentified real estate agents in early 2021, are described in the document as being “approximate”. The matrimonial home at 39 Castlemere is said to have a fair market value of “approximately $1,250,000.00”; 33 Singer is valued at “approximately $450,000.00”; the Bruce Cottage is pegged at “approximately $750,000.00”; and the Oxbow Lake House is ascribed a fair market value of “approximately $1,250,000.00”.

[47] Thus, the two properties to be transferred to Ms. Feng were collectively valued at approximately $2,000,000.00, and the two properties going to Mr. Yin were together valued at approximately $1,700,000.00.

[48] The Separation Agreement also noted the extent of financing encumbering the Properties.

[49] The combined mortgage debt on the two properties transferred to Ms. Feng under the Separation Agreement was just over $500,000.00 ($43,000.00 on 39 Castlemere and $469,000.00 on the Bruce Cottage), and the combined debt on the two properties transferred to Mr. Yin was just under $500,000.00 ($110,000.00 on 33 Singer and $379,000.00 on the Oxbow Lake House).

[50] There is evidence, in the form of subsequent appraisals, to suggest that the gap between the values of the Properties respectively transferred to Mr. Yin and Ms. Feng was greater than these amounts based on the “approximate” numbers recited in the Separation Agreement (at least at a particular point in time when those appraisals were undertaken). It is this delta about which Mr. Yin complains in this aspect of the case, suggesting that if one looks at the actual appraised value, there is a pronounced inequity in the division of assets between the parties.

J. Division of Other Assets

[51] In addition to the allocation of the Properties, the Separation Agreement provided that all other “Family Properties” were to be evenly split between them. The other “Family Properties” consisted of the funds in bank and investment accounts held by the business owned by the parties, eLogicor Inc., through which the Properties (other than 39 Castlemere) were rented to third parties, as well as the funds in joint bank accounts held by the parties.

[52] There is no mechanism within the Separation Agreement to reallocate these various assets or to have one party account to the other for any imbalance between the shares of these assets that the parties would respectively receive.

Key Provisions of the Separation Agreement

[53] Whereas one might expect that redress for any such imbalance(s) could be accomplished through the equalization regime under the FLA, the Separation Agreement provides explicitly to the contrary. Section 9 of the Separation Agreement says that the parties are aware of their rights to equalization under the FLA, but that they “agree that all property has been divided between them to their mutual satisfaction and the contents of this Agreement are in full satisfaction of any claims that either party may have for an equalization payment pursuant to the provisions of the FLA”.

[54] Other provisions of the Separation Agreement are similarly definitive in foreclosing potential avenues of recourse for any perceived inequity in the division of assets.

[55] The preamble to the agreement recites, among other items, that the agreement is intended to settle all existing rights between the parties, and is to replace any and all previous oral or written agreements. This notion of the finality of the agreement appears in various parts of the document; there can be no doubt, in reading the Separation Agreement, that it is meant to settle and/or sever all aspects of the parties’ relationship.

[56] The Separation Agreement sets out an extensive and definitive waiver of any potential claims by either party for spousal support. The parties also release any claims or potential claims relative to any pensions (including Canada Pension Plan Credits) held by either of them, or in RRSPs, Deferred Profit Sharing Plans or Annuities.

[57] Section 15 of the Separation Agreement sets out general and specific releases of all manner of claims and potential claims the parties may have against one another, again including potential claims for equalization under the FLA. The release section culminates in the statement that the parties “wish to be able to rely upon this Agreement as the final and binding one, a once‑and‑for‑all settlement of all of their differences and affairs to avoid ever engaging in further litigation with each other, whether about matters or causes of actions existing now or at any time”.

[58] The Separation Agreement also provides that its provisions are to prevail over any provisions of any relevant legislation, future legislation, or any subsequent domestic contract that either party may enter into with another person.

[59] In its “General” section, the Separation Agreement confirms that it is the full agreement between the parties, that the parties understand their respective rights and obligations under the agreement and view the terms of the agreement to be fair and reasonable.

[60] It also confirms that neither party has requested financial disclosure from the other. However, based on their marriage of 20 years the parties agree they have sufficient knowledge of one another’s income, assets and liabilities, that therefore the lack of financial disclosure “shall not constitute a ground for avoiding the provisions of this Agreement” and that the parties “deem financial disclosure to be irrelevant to the negotiation of the terms of the Agreement”.

[61] Finally, the two lawyers who had been involved in the preparation of the Separation Agreement at points in time, Ms. Xu and Ms. Du, each attested that they explained the meaning and implications at law of each provision of the agreement, and each signed attached certificates of having provided independent legal advice.

[62] I note again that the Separation Agreement also deals with parenting time and arrangements, discussed to some extent below in relation to Ms. Feng’s claim to set aside certain provisions regarding parenting time for the parties’ son.

[63] The Separation Agreement also addresses arrangements for child support payments and payment of s. 7 expenses, and the parties confirm that they have no outstanding disagreements or other issues on those matters, other than the one issue flagged above concerning the account from which agreed arrears of child support should be paid.

[64] On the face of it, the Separation Agreement appears iron-clad.

[65] Nonetheless, as noted above, each party attacks and seeks to set aside certain aspects of the Separation Agreement.

Mr. Yin’s Main Arguments

[66] For his part, in attacking the provisions of the Separation Agreement allocating the Properties and other assets (in sections 7 through 10), Mr. Yin relies on three main arguments.

[67] First, he maintains that the parties’ plan and agreement was always to obtain formal valuations of the Properties, and that this was not done, leading to an unequal and unfair result.

[68] Second, he asserts that Ms. Feng did not disclose certain of her accounts and investments, and that therefore the division of assets apart from the Properties was also flawed and unfair.

[69] Third, he alleges that he did not receive appropriate legal advice from Ms. Xu, and was accordingly unable to understand the risks associated with the provisions of the Separation Agreement.

[70] The interpretation and effect of the Separation Agreement is governed by sections 52 and 54 – 56 of the FLA and the extensive case law considering those provisions. The Separation Agreement conforms with a separation agreement as contemplated in s. 54 of the FLA. Section 56(4) sets out the test for setting aside a separation agreement or a provision thereof.

[71] Section 56(4) provides that a domestic contract – including a separation agreement or a provision in such an agreement - may be set aside if: (a) a party failed to disclose significant assets, debts or other liabilities existing at the time 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.

[72] Mr. Yin relies on all three prongs of s. 56(4). He alleges that Ms. Feng failed to make appropriate disclosure and that he did not fully understand at least the consequences of signing the Separation Agreement. He also argues that the understanding between he and Ms. Feng that the Properties would be formally appraised to yield a fair and final equalization was an agreement that was intended to survive and override the clear language of the Separation Agreement providing that the Separation Agreement was the complete and final deal between the parties.

Overview of Legal Test to Set Aside Domestic Agreements

[73] Cases interpreting s. 56(4) of the FLA confirm that the analysis requires two steps. First, the party seeking to set aside the contract must demonstrate that one or more of the provisions in (a) – (c) has been engaged. If that hurdle is overcome, the court must consider whether it is appropriate to set aside the agreement (LeVan v. LeVan, 2008 ONCA 388 at para. 51; Toscano v. Toscano, 2015 ONSC 487 at para. 43; and Hashemi v. Alanimehr, 2021 ONSC 8569 at para. 14). The burden is on the party seeking to set aside the agreement to bring themselves within one of the paragraphs of s. 56(4) and then to persuade the court to exercise its discretion to set aside the agreement (Faiello v. Faiello, 2019 ONCA 710, 438 D.L.R. (4th) 91, at para. 20).

[74] In general, the cases confirm that the court will respect the rights of individuals to enter into separation agreements and the associated expectation that the parties do so in order to achieve certainty and to avoid having their disputes adjudicated before the courts (Goulding v. Keck, 2014 ABCA 138, 572 A.R. 330, at paras. 26-27; Nisbett v. Nisbett, 2010 ONSC 4381, at para. 51; and Carvalho v. Couto, 2023 ONSC 4975 at para. 20).

[75] The latest word on this topic, strongly reinforcing the respect to be given to agreements negotiated between parties, comes from the Supreme Court of Canada’s recent decision in Anderson v. Anderson, 2023 SCC 13, 481 D.L.R. (4th) 1. In that decision, in holding that an agreement resolving property issues which did not satisfy Saskatchewan’s statutory requirements for interspousal contracts was nonetheless enforceable, Karakatsanis J. said at para. 8 that “Given the respect for spousal autonomy reflected in both the legislation and the jurisprudence, unless the court is satisfied that the agreement arose from an unfair bargaining process, an agreement is entitled to serious consideration… .”

[76] In considering whether to uphold a domestic agreement or individual terms of such an agreement, it is reasonable for the court to rely on a plain reading of the contract (Peerenboom v. Peerenboom, 2020 ONCA 240, 446 D.L.R. (4th) 418 and Hartstein v. Ricottone, 2016 ONCA 913).

Discussion of Mr. Yin’s Arguments

[77] With this backdrop, I will discuss Mr. Yin’s three arguments below. In doing so, I take into account that Mr. Yin, like Ms. Feng, is a sophisticated party who had the benefit of legal advice throughout the early phase of the negotiation, and received independent legal advice on the provisions and implications of the Separation Agreement before he signed it. As discussed above, I also note the explicit intention that the Separation Agreement would serve as a final and “binding once-and-for-all settlement of all of their differences and affairs to avoid ever engaging in further litigation with each other”.

A. The Contract Argument

[78] With respect to Mr. Yin’s third argument, that the Separation Agreement does not reflect the clear agreement between the parties to undertake formal appraisals of the Properties, his position is undermined, in my view, by two factors: the provisions of the Separation Agreement as executed by the parties on March 20,2021 (described above), and the version of the agreement prepared by Ms. Xu as at February 24, 2021. I find that as of February 24, 2021, Ms. Xu was acting only for Mr. Yin, inasmuch as Ms. Feng had by then engaged separate counsel, Ms. Du. Mr. Yin specifically confirmed in his evidence that he was happy with Ms. Xu’s February 24, 2021 version (the “February Version”).

[79] Significantly, Ms. Xu’s February Version of the agreement, while contemplating that the parties would obtain formal appraisals for each of the Properties, does not set out a specific purpose or mechanism for the use of those valuations.

[80] Like the final version of the Separation Agreement subsequently prepared by Ms. Du, the February Version gives two of the Properties to Mr. Yin and the other two to Ms. Feng (in each case, the same properties that are allocated to each party in the final Separation Agreement). Also like the final version, the February Version explicitly provides, in section 12, that the parties release one another from any and all claims under the FLA (and other applicable legislation), including in particular from claims for ownership or division of property, and claims for equalization.

[81] So, while the February Version does say that there will be appraisals, it does not describe a specific purpose for those valuations, and, like the provisions of the final signed version of the Separation Agreement, definitively forecloses claims based on perceived unfairness in the division of the Properties.

[82] I note that Mr. Yin’s pleading does not seek to set aside the various and all-encompassing release provisions of the Separation Agreement. Nor does he contest the “entire agreement” provisions, nor the specific acknowledgements, in the section confirming that each party received independent legal advice, that the provisions of the agreement are fair and reasonable. He also does not seek to set aside the provision confirming that the parties signed the agreement voluntarily and waive any need for more fulsome financial disclosure.

[83] However, even if Mr. Yin had included those provisions in his attack, I find that the inclusion of very similar language in the February Version that Ms. Xu drafted on his behalf, explicitly abandoning and foreclosing any claim for equalization, and the lack of any direction for the purpose and use of the appraisals, eviscerates any force to Mr. Yin’s assertions on this score.

[84] I reach that conclusion despite my impression that the formal appraisals contemplated in the February Version likely were intended, at that time, to serve as either vehicles for, or at least a check on, the equality of the division of the Properties. Indeed, Ms. Feng’s counsel candidly acknowledged, during her final submissions, that this was likely the intent.

[85] While it may be that Mr. Yin thus expected and intended that there would be an equalization adjustment based on the appraised values of the Properties once those appraisals were forthcoming, both the February Version of the agreement prepared by Ms. Xu, and the final signed version of the Separation Agreement provide explicitly to the contrary.

[86] As such, I do not accept Mr. Yin’s argument that the parties’ agreed allocation of Properties should be adjusted to achieve equalization. Neither the February Version of the agreement nor the final Separation Agreement includes any provision or mechanism for such adjustment.

[87] As a matter of contract, moreover, the Separation Agreement could not be any clearer in its confirmation that it is the full and final agreement between the parties, and that no recourse to the FLA equalization regime, or to any other legislation or agreement, is permitted. To fail to give effect to this clear language would render such language meaningless in this and potentially other domestic agreements; I am not prepared to rewrite the parties’ explicit agreement.

B. The Disclosure Argument

[88] Mr. Yin also argues, as a further basis to set aside the impugned provisions of the Separation Agreement that, pursuant to s. 56(4)(a), Ms. Feng failed to disclose significant assets existing when the agreement was made.

[89] Not surprisingly, given the fundamental importance of financial disclosure to the entire regime of Family law, there has been extensive consideration in the case law on the impact of incomplete disclosure on domestic agreements.

[90] While of course the cases confirm that full and fair disclosure is always to be encouraged, it has been held that a general awareness of the assets of the other party may be sufficient to avoid setting aside an agreement (Quinn v. Epstein Cole LLP et. al (2007) 87 O.R. (3d) 184; Odorico v. Odorico, 2021 ONSC 7290).

[91] In this regard, while acknowledging that she did not, in the exchange of financial information between the parties in January of 2021, include certain personal accounts held by her at the Bank of Montreal (“BMO”, her employer), nor her BMO pension, Ms. Feng asserts that Mr. Yin was generally aware of those accounts. As evidence in support of this assertion, Ms. Feng points out that she was, throughout most of the marriage, responsible for paying various household expenses, and that she did so, to the knowledge of Mr. Yin, from her personal BMO account or accounts, never depositing her pay cheques into any of the parties’ joint accounts.

[92] Likewise, she says that Mr. Yin was well aware that she had a pension plan with BMO, and of its approximate value.

[93] She also argues, as the Separation Agreement confirms, that the parties agreed, given their stated general knowledge of one another’s assets, to divide only joint accounts.

[94] She maintains that the amounts in the personal accounts that she did not disclose were in any event relatively modest, and not material to the division of assets that the parties were undertaking.

[95] Finally, she points out that Mr. Yin himself has a personal bank account in China, and has never divulged details of its contents. She also alleges, though there is some doubt about this on the evidence, that he also had an undisclosed TD bank account during the relevant timeframe. She goes so far as to allege that this non-disclosure by Mr. Yin means that he lacks “clean hands” and that therefore it does not lie in his mouth to complain about Ms. Feng’s alleged non-disclosure.

[96] I have some reservations about Ms. Feng’s positions, and I believe that she was at least cagey and calculated in her disclosure of assets. She was likewise less than fully forthcoming in disclosing her income. That is, she reported to Mr. Yin at the time of their negotiations with Mr. Yin her base salary in 2020, being just over $89,000.00, rather than her entire income, including bonuses, of $149,000.00.

[97] However, in my view, Mr. Yin’s argument that Ms. Feng failed to make appropriate and complete disclosure of her assets, is again undercut by the language of the Separation Agreement, and by the language of the February Version prepared by Ms. Xu.

[98] In section 8 of the Separation Agreement, the parties agree that they will split equally the funds held in accounts maintained and used by their business, eLogicor. There is nothing to suggest that this cannot be readily done.

[99] The parties also agree to divide equally the funds held in various bank accounts that they held jointly (which accounts are listed in s. 8.3 of the Separation Agreement). It is noteworthy that the provisions to divide these accounts appear under the heading “Joint Bank Accounts”.

[100] A good deal of evidence was led and contested about whether or not Mr. Yin in fact knew of Ms. Feng’s personal accounts, and whether in fact he had undisclosed personal accounts of his own.

[101] In my view, the specific language of the Separation Agreement means that the existence and extent of holdings in personal accounts is irrelevant.

[102] That is, the Separation Agreement provides for the equal division of the jointly held business accounts, and other joint accounts. It does not provide for division of the parties’ personal (non-joint) accounts.

[103] Again, whereas in the absence of the explicit provisions of the Separation Agreement there would or might be an argument that the alleged failure to disclose assets should lead to an equalization of those assets under the FLA, the Separation Agreement expressly precludes that recourse.

[104] That is, the clear and definitive language of section 9 of the Separation Agreement explicitly confirms that the parties were aware of their respective rights to equalization under the FLA, and that the parties expressly renounce their putative rights to an equalization payment.

[105] Nor is Mr. Yin’s position improved by reference to the February Version of the agreement prepared by Ms. Xu.

[106] In that February Version, as in the final signed Separation Agreement, the parties agree to divide equally the eLogicor business accounts and the jointly held accounts. Ms. Xu’s February Version refers to “joint accounts” as the accounts to be equally divided between them.

[107] The release provisions in s. 12 of the February Version expressly include all manner of property, and expressly rule out resort to the equalization mechanisms under the FLA.

[108] Of course, these conclusions would be harder to maintain if Ms. Feng’s undisclosed assets were more substantial. While this may seem at odds with my conclusion above that the Separation Agreement precludes the need for disclosure of personal accounts here, I note that the language of s. 56(4)(a) refers to a failure to disclose “significant” assets.

[109] Ms. Feng’s alleged non-disclosure encompasses assets worth somewhere between $23‑24,000.00 (her position) or three to four times that amount (Mr. Yin’s position). While these amounts are not trivial, they are also, in my view, not sufficiently material to lead me to believe that, if disclosed, they would have made a significant difference in the outcome, or that, had Mr. Yin been made specifically aware of these assets just before signing the Separation Agreement, it would have led him not to sign. In this regard, I note the decision of the Court of Appeal for Ontario in Turk v. Turk, 2018 ONCA 993, 143 OR (3d) 661, in which the Court confirmed that if more disclosure would not have changed the outcome, then that additional disclosure (or non-disclosure) is not “significant” for the purposes of s. 56(4)(a).

[110] I accept that Mr. Yin was generally aware of the existence of Ms. Feng’s personal accounts, and that he made no inquiry or particular effort to determine their worth. I also accept that, likewise, he did not disclose (and has not disclosed), the holdings in his personal bank account in China. He also signed the Separation Agreement with explicit terms contemplating the equal division of joint accounts (and not personal accounts), and, as discussed above, explicitly waiving recourse to the FLA equalization scheme, notions that were also found in the February Version prepared by his counsel Ms. Xu.

[111] For these reasons, despite my passing misgivings about Ms. Feng’s conduct, I do not give effect to Mr. Yin’s argument relative to the alleged lack of disclosure.

C. The Argument Based on an Alleged Lack of Understanding

[112] Regarding Mr. Yin’s third argument, relying on the alleged substandard advice from Ms. Xu, the issues are somewhat less clear. I note that Mr. Yin’s counsel Ms. Segal, in her forceful and very able argument, was understandably reticent to argue ineffective assistance of counsel, and indeed Mr. Yin’s written submissions explicitly say that he does not seek that finding.

[113] Apart from the understandable general reluctance to allege that a colleague in the Family bar was negligent, the issues are in any event not clearcut.

[114] On one hand, as discussed, Mr. Yin was content with the February Version of the agreement that Ms. Xu prepared. I have found that this February Version clearly did not contain any mechanism for equalizing the Properties based on the appraisals that the draft contemplated, and explicitly ruled out redress pursuant to the equalization scheme under the FLA if one party or the other felt aggrieved by the allocation of the Properties.

[115] Ms. Xu’s February Version was also explicit that, apart from the Properties, other assets to be divided were the funds in various joint bank accounts, including the accounts for the parties’ jointly owned business. It did not discuss the division of personal accounts, and again expressly waived any resort to the FLA equalization regime for any such assets.

[116] On the other hand, despite these various clear provisions, and the equally or more explicit terms of the Separation Agreement, and despite Ms. Xu having certified that she provided independent legal advice to Mr. Yin on the Separation Agreement, it appears that Mr. Yin may not have fully appreciated the impact and finality of the terms of the Separation Agreement prepared by Ms. Du (or even the terms of the February Version).

[117] He was clearly determined, including after the execution of the Separation Agreement, to obtain formal appraisals for the Properties, and seems not to have absorbed the notion that, even if the appraisals showed inequity in the division of the Properties, the Separation Agreement did not provide a remedy for such inequity.

[118] I was also somewhat concerned by the general tenor of Ms. Xu’s evidence, and by a couple of specific aspects of her testimony. One troubling and overriding aspect of Ms. Xu’s testimony, is that she had no notes of any of her interactions with the parties, and no notes of her provision of independent legal advice to Mr. Yin. She fairly acknowledged that therefore she had little or no recollection, or ability to refresh her recollection, of specific discussions.

[119] Ms. Xu confirmed that, after Mr. Yin talked in an email about the possibility of reporting Ms. Du to the Law Society (owing to Ms. Du’s delay in turning around the draft agreement in her possession from February 24, 2021 onward), Ms. Xu was reluctant to continue to advise Mr. Yin. This seemed to relate to her perception that Mr. Yin was being unduly aggressive. As noted, Ms. Xu was not prepared to follow up with Ms. Du as requested by Mr. Yin to find out what was causing the delay in preparing the next draft.

[120] Despite her hesitations, Ms. Xu did agree, literally on the eve of the parties signing the Separation Agreement that she would, for a fee, provide Mr. Yin with independent legal advice on the Separation Agreement. It became apparent in her evidence that, inasmuch as Ms. Xu had herself prepared an earlier draft of the agreement, she only focused on the provisions of Ms. Du’s draft that represented significant changes from Ms. Xu’s February Version. While this may have been an acceptable approach on Ms. Xu’s part, it meant that if Mr. Yin had not understood the provisions that Ms. Xu had earlier drafted, he would not have had the benefit of a full review of those provisions during the session of independent legal advice with Ms. Xu. Many of the provisions drafted by Ms. Xu in the earlier version remained provisions within the Separation Agreement.

[121] There was also one specific answer that Ms. Xu gave in her testimony that was troubling. That is, Mr. Yin’s evidence was that he raised with Ms. Xu, in the setting of her independent legal advice to him, his concern that the appraisals expressly referenced in Ms. Xu’s February Version had been removed in Ms. Du’s draft in favour of stated approximate market values. He said that he told Ms. Xu that he and Ms. Feng had agreed that they would still obtain and use formal appraised values. I note that Ms. Feng’s evidence was that, to the contrary, she told Mr. Yin on March 17, 2021, that she did not agree that this could happen after the Separation Agreement was signed, and that in any event, neither version of the agreement provided for adjustments based on appraised values.

[122] Nonetheless, Mr. Yin’s evidence was that he told Ms. Xu that he and Ms. Feng had agreed that the appraisals would still be done and used after execution of the Separation Agreement, and that he asked Ms. Xu if that “was ok”. Mr. Yin’s evidence at trial was the Ms. Xu told him in response that it “was ok” if both parties agreed.

[123] When this purported exchange was put to Ms. Xu, and she was asked if she would have said this, she said that she did not remember, but allowed that it was possible she might have said it.

[124] I am hard-pressed to find, if indeed Ms. Xu had given this answer to Mr. Yin’s question, any basis on which that would have been an acceptable answer.

[125] It seems to me that any lawyer giving independent legal advice would be expected to recognize, based on that question, that Mr. Yin was labouring under the misapprehension that appraisals could still be used to reallocate the division of assets under the Separation Agreement. This ran contrary to the clear language of the Separation Agreement.

[126] The question, if asked, should have provided a platform for Ms. Xu to explain to Mr. Yin that such appraisals, even if agreed, could serve no purpose under the Separation Agreement as drafted. It also should have provided an opportunity for Ms. Xu to point out to Mr. Yin the various provisions of the Separation Agreement definitively foreclosing any resort to adjustment or equalization.

[127] There is no claim before me against Ms. Xu. There is also no expert evidence about whether or not what Ms. Xu did was sufficient in the circumstances to meet the standard of care expected of her.

[128] Accordingly, whatever concerns I may have about Ms. Xu’s conduct in this case, I should not be taken to have made a finding that she was negligent.

[129] I must consider, however, whether or not there is evidence sufficient for me to find for the purposes of s. 56(4)(b), that Mr. Yin “did not understand the nature or consequences of the domestic contract”.

[130] In my view, the evidence falls short of demonstrating the required lack of understanding on Mr. Yin’s part.

[131] As noted, he is a very bright and sophisticated person; while English is not his first language, he has nonetheless functioned very well in English in employment settings over the years. He also clearly has an acute grasp of financial concepts and is adept at working with numbers generally.

[132] While he may have retained an expectation that the division of the Properties between the parties would be adjusted after the fact on the basis of formal appraisals to be undertaken, the language of the Separation Agreement clearly precludes any such interpretation.

[133] Whatever the shortcomings in Ms. Xu’s conduct and testimony, I accept that she told Mr. Yin, as she said would be a part of her normal and invariable practice while providing independent legal advice, that the Separation Agreement contained an entire agreement clause and other provisions indicating that it set out the final arrangement between the parties.

[134] As such, Mr. Yin understood or ought to have understood that in signing the Separation Agreement, he risked or accepted not having any further recourse once the deal was executed.

[135] I find that Mr. Yin was anxious to complete the deal, and anxious to receive and refinance the two properties transferred to him before potentially losing his job and thereby potentially losing the ability to qualify for mortgage loans.

[136] I believe that this wish to proceed expeditiously likely caused Mr. Yin to focus less on the details and risks of the Separation Agreement than might otherwise have been the case. As such, I am not prepared to find that Mr. Yin in fact did not understand the nature or consequences of the Separation Agreement. He had the wherewithal and ability to do so, and I find on the balance of probabilities that he was aware of provisions of the Separation Agreement which confirmed that the agreement was intended to be the final and binding “last word” on the arrangements between the parties.

[137] In Harnett v. Harnett, 2014 ONSC 359, McGee J. concluded that the quality of independent legal advice provided to one of the parties before her was “woefully deficient”. However, Her Honour determined that the deficiency was not caused by the opposite party, and that a plain reading of the agreement was “sufficient to an understanding of the nature and consequences of the agreement per section 56(4)(b), and that there was no undue influence and that the terms of the agreement were not unconscionable”.

[138] Similarly, in Gibbons v. Mulock, 2018 ONSC 4352, Jarvis J., in dismissing the husband’s application to set aside the marriage contract, said that the “issue of the competency of legal advice given to him is an issue between the husband and [the husband’s lawyer], and is not a reason to set aside the marriage contract unless the wife knew that the husband did not understand what he was signing”.

[139] Likewise, in the matter before me, whatever misgivings I may have about the advice provided by Ms. Xu, I find no evidence that there was pressure by Ms. Feng for Mr. Yin to sign the Separation Agreement, or that she thought that Mr. Yin did not understand the Separation Agreement. To the contrary, it was Mr. Yin who was pushing for the Separation Agreement to be signed immediately. He had commented on at least some of its provisions, and there was no reasonable basis on which Ms. Feng ought to have concluded or even suspected that Mr. Yin did not understand what he was signing.

[140] As such I conclude that, if Mr. Yin was unclear on the consequences of the Separation Agreement as a result of allegedly substandard advice from Ms. Xu, then his recourse, if any, is against Ms. Xu and not by way of setting aside the Separation Agreement.

Second Stage of the s. 56(4) Analysis

[141] The case law is clear that there is a second stage to the analysis under s.56(4), at which, if I find that one of the three provisions thereunder is engaged, I am still to consider whether or not to exercise my discretion to uphold the domestic contract.

[142] Had I concluded that Mr. Yin had met one of the statutory reasons to set aside the Separation Agreement, I would nonetheless have exercised my discretion on the second part of the test to find the Separation Agreement valid and enforceable.

[143] In Turk, supra, the Court of Appeal for Ontario confirmed the factors set out in Dochuk v. Dochuk (1999) as useful criteria for courts to consider in exercising the discretion at this second stage.

[144] For the reasons I have discussed, given the clear language of both Ms. Xu’s draft February Version, and of the final executed Separation Agreement, I am not prepared to set aside sections 7-10 of the Separation Agreement as argued by Mr. Yin, and I dismiss his claim. The Dochuk factors, which were originally articulated in Demchuk v. Demchuk (1986), are:

(a) whether there had been concealment of the asset or material misrepresentation; (b) where 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.

[145] Consistent with my findings above, I find no basis on which any of the factors laid out in Turk would cause me to exercise my discretion to set aside the Separation Agreement. As I have found, Mr. Yin was generally aware that Ms. Feng had personal accounts, and he took no steps in advance of signing the Separation Agreement to pursue disclosure of the contents of those accounts. I find no duress nor unconscionability; Mr. Yin felt pressure to close the deal, but the pressure related to factors personal to him (the pending potential job loss). Whether or not the value of what Mr. Yin received under the Separation Agreement equals that received by Ms. Feng, he nonetheless clearly received substantial benefits under the agreement. The other criteria similarly provide no compelling basis for me to exercise my discretion to set the Separation Agreement aside.

[146] Indeed, as noted above, in my view it is important to give effect to what the parties agreed following negotiations involving lawyers on both sides at various points in time.

[147] As also noted above, I am advised that the parties have agreed that neither is seeking spousal support, and have agreed on payments for section 7 expenses. In respect of child support, as noted, they have agreed on amounts, but require direction as to the account to be used for payment.

Ms. Feng’s Claim to Set Aside Parenting Time Provisions re Their Son

[148] That still leaves for my determination, Ms. Feng’s claim to set aside section 5.3(b), 5.3 (c) and 5.4(a) of the Separation Agreement.

[149] These sections provide that whereas until their son turns 12, Ms. Feng would have parenting time with the son from Sunday at 7:00 p.m. until Friday at 7:00 p.m., and Mr. Yin’s parenting time with the son would be on the weekend, once the son turns 12 – which he will on February 4, 2024. Mr. Yin will have primary residence of the son, and the parenting schedule will be reversed, such that Mr. Yin’s parenting time with the son will be from Sunday at 7:00 p.m. until Friday at 7:00 p.m. and Ms. Feng’s parenting time with the son will be on the weekend.

[150] I note that in the final draft of the February Version prepared by Ms. Xu dated February 24, 2021, it was contemplated that the son would reside with Mr. Yin for two-thirds of the year (2/3 of 365 days), and with Ms. Feng for the remaining one‑third (1/3) of the year.

[151] As such, the primary residence and parenting time provisions of the Separation Agreement, once the son turns 12, are consistent with what the parties had been negotiating as of the February Version prepared by Ms. Xu.

[152] In making decisions about primary residence and parenting time, I am of course guided by the paramount consideration as to what is in the best interests of the child.

[153] I note that the evidence before me is that the son loves and gets along well with both parents, and seems to be thriving and doing well in school.

The Voice of the Child Report

[154] Ms. Feng’s argument that sections 5.3(b) and (c) and 5.4(a) of the Separation Agreement should not be given effect, and that the current status quo should remain in place, is premised entirely on a Voice of the Child report prepared by Deborah Connerty dated December 19, 2023, and Ms. Connerty’s testimony at trial.

[155] In brief, the son advised Ms. Connerty that he would like the parenting schedule to remain as it currently is, with the son spending weekdays with his mother and weekends with his father.

[156] However, the son’s expression of preference cannot be characterized as adamant, or as being based on deep-seated concerns. The only basis for the son’s preference recorded in Ms. Connerty’s report is that whereas his mother drives him to school in the morning when he stays with her, when he stays with his father he often has to walk and/or take transit.

[157] Moreover, I have some concern that the son’s stated preference is more a product of his mother’s discussions with him than of deeply held or carefully considered views of the son.

[158] There is undisputed evidence that, at some point prior to Ms. Connerty’s meeting with her son, Ms. Feng had a discussion with her son about the pending interview and about the son’s preferences. The son’s alleged preference, as recorded by Ms. Connerty, uses almost identical language to that used by Ms. Feng in her own interview with Ms. Connerty. I have concerns that Ms. Feng’s intervention in the process influenced the son’s responses. There is also evidence that Ms. Feng spent some time in the interview with Ms. Connerty “bad-mouthing” Mr. Yin and his accommodations for the son.

[159] Despite Ms. Feng’s untoward behaviour, if I had concerns about the son’s well-being while being parented by Mr. Yin, I would not hesitate to overturn the parties’ agreement in the Separation Agreement, and would not hesitate to maintain the status quo.

Conclusion on the Parenting Time Issue

[160] However, I have no such concerns. The evidence shows that the son is safe, happy and productive while with his father.

[161] In the circumstances, I uphold the parties’ agreement, and confirm that as of February 4, 2024, the relevant provisions of sections 5.3 and 5.4 of the Separation Agreement shall be given effect.

Issue re Source of Retroactive Child Support Payment

[162] The parties’ respective submissions on the issue of the source for retroactive payment of child support are, frankly, a bit thin.

[163] That said, based on the provisions of the Separation Agreement, it is clear that Mr. Yin is to pay net table child support. It seems to me that the net amount is thus to come out of “his pocket” rather than joint accounts, and that this approach should hold true for the retroactive lump sum as well.

No Order as to Costs

[164] This leaves the issue of costs. I find that success is divided. Ms. Feng has largely prevailed on financial issues, but Mr. Yin has been successful on parenting time. As noted above, I also have some concerns about Ms. Yin’s caginess in relation to certain financial disclosure issues, such that even if it might be said that Ms. Yin’s successes relate to issues covering more trial time that the issues on which Mr. Yin was successful, I would be reluctant to reward Ms. Feng’s conduct by requiring Mr. Yin to pay her costs.

[165] As such, I make no order as to costs.

W.D Black J. Date: January 19, 2024