Court File and Parties

COURT FILE NO.: FS-06-200-002 DATE: 2024/01/03 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

R.P. Applicant – and – P.R.P. Respondent

COUNSEL: L. Kaddory (agent only), for the Applicant A. Stoner, for the Respondent

HEARD: November 15, 2023

Reasons for Decision

THE HONOURABLE JUSTICE A.D. Hilliard

[1] The Applicant has brought a motion to set aside certain provisions of the final order of Justice Thompson, dated January 23, 2017. The Respondent resists the motion.

[2] It is notable at the outset that Mr. P. seeks to have only certain provisions of the final order set aside, specifically those dealing with property and the matrimonial home, but not the spousal support release.

[3] For the reasons that follow, the motion is dismissed.

Factual Background

[4] The parties married in India in 1996 and immigrated to Canada in 2000.

[5] There is one child of the marriage – P.P., born October 15, 2004.

[6] Mr. and Ms. P. first divorced in 2007 and then remarried shortly thereafter on June 5, 2007. The parties separated for a second and final time in January 2015.

[7] In April 2016, Mr. P. commenced an application for divorce.

[8] There is a factual dispute about the events that led up to the signing of minutes of settlement that were presented to Justice Thompson at the case conference on January 23, 2017. However, both Mr. and Ms. P. agree that Ms. P. was the person who drafted the minutes, and that they were revised prior to signing. Mr. and Ms. P. also agree that together they met with a lawyer, Ryan Martin, who provided them some legal advice and assisted in amending the minutes of settlement.

[9] The minutes of settlement signed by both parties sets out the terms of the parties’ agreement and has waivers of financial statements and independent legal advice attached. Both attached waivers are signed by both Mr. P. and Ms. P. The execution of the minutes was completed prior to the court attendance on January 23, 2017.

[10] At the case conference on January 23, 2017, neither party was represented by a lawyer. Both appeared in person and spoke to the presiding judge, Justice Thompson, on their own behalf. A transcript of the case conference attendance was prepared and filed as part of the evidence on this motion.

[11] After receiving and reviewing the proposed minutes of settlement, Justice Thompson questioned both parties about their failure to file financial statements. He also questioned both parties about their understanding of their rights and obligations. Justice Thompson specifically indicated to the parties that he did not think they understood their legal rights and what they were agreeing to. Mr. P. responded that he did understand his rights and confirmed that he was giving Ms. P. the matrimonial home for her and their daughter to stay in.

[12] Only after questioning the parties on their understanding and agreement with the proposed settlement did Justice Thompson endorse the minutes of settlement and make a final order on consent. The order included a spousal support release and a provision granting the divorce.

[13] Pursuant to the terms of Justice Thompson’s order, Mr. P. transferred both vehicles the parties owned during the marriage to Ms. P. He also cooperated in the transfer of the parties’ property in Cochrane and the matrimonial home to Ms. P. solely. Then shortly thereafter, Mr. P. left Canada for India where his new bride-to-be was waiting.

[14] After the parties separated, their daughter made allegations of sexual abuse against Mr. P. When Mr. P. returned to Canada from India in 2018, he was charged criminally as a result of P.P.’s allegations and was subject to a no-contact order for a period of time. The charges were ultimately resolved without Mr. P. pleading guilty.

[15] Ms. P. permitted Mr. P. and his new wife to move back into the former matrimonial home after they came to Canada from India. Mr. P. built a separate unit for himself, his new wife, and ultimately the child they had together. Pursuant to an arrangement between Mr. P. and Ms. P., Mr. P. contributed to the mortgage payments.

Legal Test

[16] Rule 25(19) of the Family Law Rules (FLR) sets out the statutory framework for changing an order:

The court may, on motion, change an order that,

(a) was obtained by fraud; (b) contains a mistake; (c) needs to be changed to deal with a matter that was before the court but that it did not decide; (d) was made without notice; or (e) was made with notice, if an affected party was not present when the order was made because the notice was inadequate or the party was unable, for a reason satisfactory to the court, to be present.

[17] There is also the applicable body of caselaw developed in both the family and civil context. Justice Sheard in Ciraolo (Litigation Guardian of) v. Ricci summarized the factors to be considered in setting aside a consent order:

In Sri Guru Nanak Sikh Centre Brampton v. Rexdale Singh Sabha Religious Centre, 2017 ONSC 6252, from and after para. 42, the court provided a survey of the law applicable to motions to set aside consent orders, which may be summarized as follows:

(a) The court has discretion to set aside a settlement where, in the totality of the circumstances, it would not be appropriate to enforce the parties' agreement. However, as a matter of public policy, a settlement ought to be enforced by the court unless enforcement would create a risk of clear injustice. Ruter v. 1049077 Ontario Ltd., [2014] O.J. No. 3595 (S.C.J.) at para. 6;

(b) The fact that a settlement has been implemented by a consent order does not preclude the court from exercising its discretion respecting enforcement of the settlement and a party may move to set aside the court order on a ground set out under rule 59.06 (2);

(c) Attempts to reopen matters that are the subject of a final judgment must be carefully scrutinized and the moving party must demonstrate circumstances that warrant deviation from the fundamental principle that a final judgment, unless appealed, marks the end of the litigation: Tsaoussis (Litigation Guardian of) v. Baetz, 165 D.L.R. (4th) 268 (ONT. C.A.), at para. 20 and Catalyst Fund General Partner Inc. v. Hollinger Inc., at para 17;

(d) A consent order may be set aside on any ground that invalidates the underlying settlement agreement or on a material change in circumstance after the order was made. Such grounds include common mistake, misrepresentation, fraud, or any other ground which would invalidate contract (sic) or, a material change in circumstance occurring after the consent order. Joshi v. Joshi, 2014 ONSC 4677;

(e) The court in Joshi also endorsed the principle that a consent judgment is binding and final, and that finality is important in litigation because the parties reached their bargain on the premise of an allocation of risk and the implicit understanding that they would accept the consequences of the settlement. For those reasons, r.59.06 limits the avenues to set aside a settlement and consent dismissal;

(f) Even where a material change in circumstances is established, the court has discretion to refuse to set aside the order based on factors such as prejudice to the other parties or unreasonable delay in bringing the motion. Hodge v. Toronto Police Service, 2015 ONSC 5508; and

(g) In all cases, the onus is on the moving party to show that circumstances warrant making an exception to the fundamental rule that final judgements are, in fact, final. [^1]

[18] Although there is some overlap between the factors set out above and the test for setting aside a domestic contract in section 56(4) of the Family Law Act, I find that the provisions of section 56(4) do not apply on the facts before me. The parties did not enter into a separation agreement or domestic contract. There was a divorce application that was commenced by Mr. P. that was ultimately resolved by way of minutes of settlement prepared and executed by the parties and endorsed by a judge.

[19] The most important distinction between a domestic contract and a consent order based on minutes of settlement is judicial oversight. There is no judicial oversight of domestic contracts between parties that are not involved in litigation. That is the reason why the test for setting aside a domestic contract is different, and arguably broader, then the test for setting aside a consent order.

[20] Section 56(4) of the Family Law Act functions as a judicial review procedure for domestic contracts. The circumstances under which a court may set aside a domestic contract, or provisions of one, are intended to address circumstances where the parties have contracted improvidently, without adequate understanding of their legal rights and obligations, or outside the scope of what is legally proscribed under the legislation or common law.

[21] All court orders are assumed to be correct. Other than in the circumstances set out in FLR 25(19) and the caselaw regarding setting aside consent orders, a judge has no jurisdiction to review the order of another judge at the same level of court. A motion to set aside a consent order must not be allowed to become an appeal in disguise.

[22] However, I acknowledge that it has long been established that the test to set aside consent orders differs from the test to set aside an order where that has been judicial adjudication of one or more issues. As Justice Patrick Monahan wrote: “Because the basis for a consent order is simply the parties’ agreement, such an order may also be set aside on the same grounds as the underlying agreement that gave rise to it.” [^2]

[23] The starting point remains that a final order is final subject to the moving party, Mr. P. in this case, demonstrating with evidence that the order should be set aside based on the test as set out in the legislation and the caselaw. It is only in exceptional circumstances that a court order should be set aside. Courts have long recognized the importance of upholding agreements reached by parties based on the need for finality in litigation.

Analysis

[24] Mr. P. argues that portions of Justice Thompson’s order should be set aside based on a combination of lack of independent legal advice, a lack of understanding by Mr. P., and the property provisions of the order being unconscionable. He submits that Justice Thompson’s questioning of the parties at the case conference did not amount to judicial oversight in relation to the minutes of settlement filed.

[25] Lack of independent legal advice is not a ground upon which a consent order can be set aside. In this case, Justice Thompson specifically addressed the issue of neither party having independent legal advice prior to accepting the minutes of settlement. Both parties advised Justice Thompson that they did not wish to get legal advice.

[26] Parties are free to contract with one another without consulting with lawyers. The failure to obtain legal advice is not fatal to the agreement made. Mr. P. specifically confirmed with Justice Thompson that he wanted nothing to do with lawyers. Although he may now regret that decision, the lack of independent legal advice cannot now form the basis upon which to set aside the consent order.

[27] The failure to exchange financial disclosure alone also cannot form the basis upon which a consent order can be set aside, failing evidence to demonstrate fraud or mistake as a result. The lack of financial disclosure was also canvassed with the parties by Justice Thompson. It was put to the parties that neither had filed a financial statement and questions were asked about the nature of the agreement they had reached. I find that there was no misunderstanding by Mr. P. on the parties’ respective financial circumstances.

[28] Ms. P. was specifically asked about whether she had a pension and she said she did not. Although Mr. P. argues that Ms. P.’s answer was false, his position in this regard is not supported by the evidence. Ms. P. agrees that she did have an RRSP during the marriage, but her evidence is that she withdrew the funds in her RRSP to pay a marital debt and the funds had therefore been depleted by the time the parties appeared before Justice Thompson. Therefore, it was not a false statement made by Ms. P. that she did not have a pension or RRSP. At the time the question was put to her, Ms. P. answered honestly that she did not. There is no other evidence that the lack of financial disclosure resulted in a mistake or fraud that could form the basis for the order to be set aside.

[29] Unconscionability is a ground upon which a contract can be set aside and therefore by extension a ground upon which a consent order can be set aside. However, the modern law of unconscionability does not stand for the proposition that persons cannot agree to terms of a contract that are unfavourable to them. There must be an aspect of inequality between the parties and that inequality must have been utilized by one party to prey upon the other. I find no such inequality here. Ms. P. was not in a position of unequal power and influence over Mr. P.

[30] Furthermore, I find that Ms. P. did not exert power over Mr. P. to enter into the minutes of settlement. The fact that the Order of Justice Thompson is more favourable to Ms. P. is not in and of itself proof that the agreement is unconscionable. As the Ontario Court of Appeal set out in Mundinger v. Mundinger, it is not the role of the Court to protect a person from their own “folly or carelessness” but rather to ensure that no one is taken advantage of by a person in a position to exert pressure or influence over the other by virtue of their position. [^3]

[31] I do not accept the argument of Mr. P. that there was minimal judicial oversight of the minutes of settlement in this case such that they should be treated no differently than a domestic contract. The transcript of the case conference bears out the position of Ms. P. that Justice Thompson took time to review the minutes with the parties, discuss with both their rights and obligations, and only after hearing from both parties did Justice Thompson then endorse the minutes.

[32] Another part of the argument advanced by Mr. P. is that the parties had a side deal in relation to the matrimonial home. Mr. P.’s evidence is that despite the court order that provided for the matrimonial home to be transferred to Ms. P., he retained his half of the equity which he expected to realize at some later unspecified date.

[33] Mr. P. also argues that he was coerced into signing the minutes of settlement that provided for the transfer of the matrimonial home to Ms. P. alone. His evidence is that Ms. P. threatened him with criminal charges if he did not sign the minutes as she had drafted them. I note that the coercion argument was specifically not advanced as an argument in the alternative but rather in addition.

[34] I do not accept Mr. P.’s evidence that there was an agreement that he would retain his equity in the matrimonial home despite what was set out in the minutes of settlement. I also do not accept his evidence that he was threatened with criminal charges and coerced into signing the minutes of settlement.

[35] Furthermore, I am of the view that these two positions are mutually exclusive. Mr. P. would not need to have been coerced into signing minutes of settlement transferring all his equity in the matrimonial home to Ms. P. if there was a side agreement that sometime in the future he would still be able to realize his equity despite a court order.

[36] The argument that the parties’ behaviour after the court order somehow corroborates Mr. P.’s position is without merit. Ms. P.’s position is equally, if not more plausible. Mr. P. returned to Canada from India with his new wife and had no place to live. Ms. P. agreed to allow Mr. P. to reside in the residence with his new wife so long as he contributed to the mortgage, which he in fact did. I note that Mr. P. built an entirely separate self-contained unit for his new wife and child at the residence. There is nothing inherent in this arrangement that supports Mr. P.’s position that he was residing in the matrimonial home and contributing to the mortgage in order to maintain security in his equity.

[37] In my view, this is a case of buyer’s remorse. Mr. P. made some rash decisions in the wake of his separation from Ms. P., in part due to his having a relationship with a new woman whom he wished to marry. There was pressure on Mr. P. to resolve the issues arising out of his separation, but not from Ms. P., rather from his new partner in India. I accept that Mr. P.’s new wife’s family was not happy with her relationship with Mr. P. prior to their being formally married. Whatever pressure Mr. P. felt was of his own making and not imposed by Ms. P.

[38] I also do not accept that pending criminal charges played any role in Mr. P. signing the minutes of settlement. Criminal charges as a result of P.P.’s allegations of sexual assault were not laid until 2018. The parties separated in 2016 and the case conference before Justice Thompson was in January 2017.

Conclusion

[39] I am not satisfied on the evidence before me that the property provisions of that final order are unconscionable, nor do I find that there is evidence of mistake or fraud such that the order should be set aside. There is no legal basis upon which any of the provisions of the final order of Justice Thompson should be set aside and the Applicant’s motion will be dismissed accordingly.

[40] The parties may file costs submissions as follows:

1. The Applicant shall file primary costs submissions, no longer than 3 pages in length, 12-point font, double-spaced, exclusive of Bill of Costs and Offer(s) to Settle on or before January 19, 2024.
2. The Respondent shall file responding costs submissions, no longer than 3 pages in length, 12-point font, double-spaced, exclusive of Bill of Costs and Offer(s) to Settle on or before January 26, 2024.
3. Reply by the Applicant, no longer than 2 pages in length, 12-point font, double-spaced, on or before February 2, 2024.

[41] Order to go:

1. The Applicant’s motion is dismissed.

A.D. Hilliard Released: January 3, 2024

[^1]: Ciraolo (Litigation Guardian of) v. Ricci, [2002] O.J. No. 225 (SCJ) at para. 91. [^2]: Sonia v. Ratan, [2002] O.J. No. 5326 (SCJ) at para. 29. [^3]: Mundinger v. Mundinger, [1969] 1 O.R. 606 (CA) at pp. 609-610.