Court File and Parties
COURT FILE NO.: FC-21-832-001 (Welland) DATE: 2024/09/18 ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
ANTHONY VACCA Applicant – and – ANNA VACCA Respondent
Counsel: Applicant is Self-Represented Ashley Gibson, Counsel for the Respondent
HEARD: June 24, 25, 26, 27, 28 and September 5 and 6, 2024
BREITHAUPT SMITH J.
Reasons for Judgment
Summary
[1] This is the trial of an issue: Is the Cohabitation Agreement, signed by the Applicant on July 12, 2019 and by the Respondent on September 9, 2019, enforceable or not? The Applicant Husband says that the agreement should be upheld; the Respondent Wife says that it should be set aside.
[2] Note that all the usual substantive issues arising in a separation remain to be determined at another time. The parties are parents to a young son and claims have been advanced regarding parenting and support arrangements for him, together with spousal support and property division.
[3] This single-issue trial was heard over seven days, from June 24 – 28, 2024 and on September 5 and 6, 2024. Both parties testified, together with the lawyers who advised them and the Applicant’s financial planner. For the balance of these reasons, I refer to the Applicant, Mr. Anthony Vacca, as “Anthony” and to the Respondent, Ms. Anna Vacca, as “Anna.” As the agreement, by operation of the legislation, changes in nature from a Cohabitation Agreement (its title) to a Marriage Contract due to the parties’ marriage, I refer to it simply as “the agreement”.
[4] For the reasons that follow, the agreement is set aside.
Evidentiary Issues
[5] There were several instances when inadmissible hearsay slipped into the parties’ testimony due to the nature of the entry of the narrative. It is important that I confirm that I have not included any such inadmissible evidence in my determination of the issues.
[6] Secondly, although he had litigation counsel at the Trial Scheduling Conference, Anthony was self-representing at trial. Due to the unique circumstances of this matter, an adjournment was required mid-trial so that he could retain and instruct counsel to conduct the cross-examination of Anna. Full details regarding my determination of this issue are found in my Endorsement of June 28, 2024.
[7] Finally, lawyers were called as witnesses, which is to be expected in matters such as this one where the formation and validity of a contract is under scrutiny. Here, three lawyers testified: the lawyer hired by Anthony to prepare the agreement; the lawyer first consulted by Anna, who refused to sign the agreement with her; and the lawyer consulted by Anna days before the wedding. At the outset of the trial, LawPRO representatives for the two lawyers consulted by Anna were present, however the lawyer hired by Anthony did not have counsel. I specifically asked him if he would be consulting with a lawyer, and he indicated that he did not intend to do so. For clarity, Anthony called his consultation lawyer as his own witness, which had been pre-arranged through Anthony’s litigation counsel in advance of the Trial Scheduling Conference held on January 3, 2024. During the course of the evidence, both parties confirmed on the record that they were waiving solicitor-client privilege so as to allow these professionals to testify.
The Evidence
[8] As the Applicant, Anthony testified first. His evidence was that:
a. He wanted to marry a beautiful, innocent woman who had not been Canadianized. When he met Anna through his Aunt, he saw her as that woman.
b. Anna assisted in his restaurant, unpaid, before they were engaged to be married, and the understanding was that her “assistance” was exchanged as a barter arrangement with his father for the expense to his family of having Anna over for dinner or providing her with transportation and similar favours.
c. The agreement was fairly negotiated and Anna was fully aware of its contents and told him that she agreed to its terms.
d. He provided all financial information that was requested of him, in the form of the personal summary of assets produced by his financial advisor at TD Bank. Anna failed to provide her financial information properly: on August 19, 2019, he wrote to his lawyer that “Anna has nothing to add into Schedule A.” At trial, he testified that the completion of the agreement was being held up by Anna’s failure to provide the list of her assets.
e. If they were to separate, Anna was not entitled to receive anything as a result of the agreement.
f. He refused to make any “major changes” to the agreement such as were set out in the version prepared by Anna’s first lawyer, which preserved his pre-marriage net worth but required the equalization of net family property earned during the period of the marriage.
g. He did not instruct his lawyer to write back to Anna’s lawyer.
h. He never told Anna that the wedding would not proceed without the agreement being signed: he did not have to do so because he found the alternate solution of taking her to see a different lawyer.
i. On September 12, 2019, the date when Anna signed the agreement, he drove her to the appointment and waited in the car. The appointment lasted about 45 minutes. When Anna came out, she said: “I love you, I want to marry you and I signed it because of that.” He replied that she didn’t have to sign it because she loved him, but that it was to protect both of their assets. She then threatened him, saying if “you do anything wrong to me” she would say that she was under duress. This discussion was followed by a “loving moment” in which they embraced in the vehicle.
j. He expected Anna to contribute to the costs of maintaining and improving the matrimonial home from her minimum wage employment during the earliest months of the marriage.
k. He has a lengthy criminal history, all of which charges stem from being set up by individuals who are jealous of his success.
[9] Anthony has a tremendous ability to recall details in this litigation. For example, he can accurately list figures described on documents filed without needing to review the documents themselves. He was able to list his sources of income and had a clear recollection of specifics regarding his family’s various business dealings undertaken over roughly six years (between 2015 and 2021). If Anthony wants to recall the truthful details of an event, I am confident that he is able to do so. He was, however, selective and self-aggrandizing overall. As an exercise of my discernment in this fact-finding hearing, I find that Anthony was the least credible of all witnesses who testified. Therefore, where the evidence of Anthony differs from that of any other witness in this matter, I prefer the evidence of the other witness.
[10] Anthony’s summary of assets attached as Schedule “A” to the agreement does not reflect the sworn evidence of values of his date of marriage assets as set out in his Financial Statement dated March 17, 2022. The following chart sets out the differences in values, noting that Anthony’s evidence at trial is that, when the agreement was prepared, he did not know that his father had listed him as a 25% shareholder of the corporation which owned the plaza in which the family restaurant “Somebuddy’s” was operated:
| Asset | Value on Schedule “A” | Value on Financial Statement |
|---|---|---|
| 8178 Thorold Stone Road | $650,000 | $875,000 |
| 8204 Thorold Stone Road | $300,000 | $375,000 |
| 8216 Thorold Stone Road | $475,000 | $625,000 |
| 4016 Kalar Road | $279,000 | $325,000 |
| 3615 Gunning Drive | $602,000 | $850,000 |
| 25% share of 1546967 Ont. Inc. | Not shown | $325,000 |
[11] The total value of the real estate assets in Schedule “A” is $2,306,000. The total value of the real estate in the sworn Financial Statement is $2,625,000. The asset summary accurately lists the associated registered encumbrances, totaling $1,315,921. The difference in net worth is such that Schedule “A” underreports $319,000 in assets. When the corporate interest of $325,000 and furnishings and personal effects that the Financial Statement estimates at a value of $90,000 are included, the theoretical discrepancy grows to $734,000.
[12] Anthony’s father, Mr. Natalino Vacca, provided particulars regarding the corporate structure of the restaurant business, the plaza in which the restaurant operated and an additional adjacent piece of real estate. I accept his evidence that he did not involve Anthony or his wife in the legal details of the corporate ownership structure but that they were both aware that they were shareholders in 1546967 Ontario Inc., the corporation that owned the plaza. I further accept his evidence that Anna “volunteered” to help in the restaurant without expecting payment and that multiple family members did so at different times. Mr. Natalino Vacca also attested that the investments held by 1546967 Ontario Inc., in which Anthony held a 25% interest, were worth about $1Million on the date of marriage. His evidence on these financial matters was helpful to the Court. However, he was touchy and evasive in responding to questions about personal interactions, and I assign his evidence in that area very little weight.
[13] Anthony’s long-time financial planner, Mr. Ken McKinley, confirmed that his office produced the document as Schedule “A” to the agreement (“TD Canada Trust – Your Personal Assessment – As at July 11, 2019”). Mr. McKinley confirmed that the values for the real estate assets listed at Schedule “A” came directly from Anthony during a meeting held between them in June of 2019. This contradicts Anthony’s testimony that the values came from appraisals done by the bank during the financing process.
[14] Mr. Edwin (“Ted”) Sauer, the lawyer consulted by Anthony who prepared the agreement, also testified. He is now semi-retired. He had minimal specific recollection of the circumstances around the preparation of the agreement, which is understandable considering the passage of time (five years) and the short span of his involvement (about three months). Using his terminology, he was the “scribe” for what he believed to be the terms of a contract already negotiated between the parties. He summarized the scope of his work thus: “the client tells me what to do and, unless it’s illegal, I abide by the instructions.” He did not write to Anna to provide her with the draft agreement and encourage her to obtain independent legal advice. He was not aware of whether Anthony was a “T-4 employee” at the time of the agreement, but knew that Anthony had a variety of investments which could generate income. He did not undertake any exploration of financial disclosure regarding the parties’ incomes and relied upon Schedule “A” as prepared by the investment advisor. It was his practice only to undertake a detailed review of financial disclosure if he was concerned that a client was not being truthful with him. He opined that financial disclosure regarding income would not be necessary in a situation where spousal support is being waived.
[15] This concluded Anthony’s case.
[16] Anna’s evidence is that:
a. She moved to Canada in 2017, after having spent considerable time here visiting family (up to six months annually on each instance).
b. She started learning English in 2018 at Brock University. She can have basic conversations in English but she conducts all written communication, including on social media, in Italian. She earns minimum wage at a deli where she communicates regularly with customers in Italian.
c. The parties met in 2017 or 2018 and used a smartphone App to communicate, as Anthony does not speak Italian fluently. At the time, she felt that she had met Prince Charming as a result of being inundated with attention from him, including text messages “every ten minutes.”
d. Once they moved in together in 2017, Anthony would regularly ask her questions about his concern that she wanted his money and his family’s money. He would yell at her loudly, saying she was “a mouse,” “retarded,” “useless” and incapable of vacuuming the house or serving tables in the restaurant. She believes that Anthony’s temper was partly due to his “blood sugar problem.” Arguments before the marriage were verbal; there was no physical violence until after the marriage.
e. Anthony had a number of business interests about which she knew very little; in her eyes, his primary business was the restaurant.
f. She learned about the agreement when Anthony told her she needed to show it to a lawyer and sign it. She found and retained Ms. Lauren Angle [1], who told her that the agreement was unfair and that she should not sign it. She did not consider having the agreement translated into Italian because the available time was short, she trusted Anthony, and he said that the marriage would not proceed if she did not sign it.
g. Her understanding of the goal of the agreement was that Anthony would protect what he owned prior to the marriage, and that what they had together after the marriage would belong to both of them. An example of property that was meant for both of them was the matrimonial home. Her view was that “his money was his money” and she was sensitive to Anthony’s continuous expressed fear that she was after his money and his family’s money.
h. The parties exchanged WhatsApp messages (Anna’s in broken English) in which Anthony gave a number of categories of items that “you DO NOT want to bring into the marriage”, and to which Anna responded with a list of different assets, among which were two gifts from her parents, one of €80,000 given toward the wedding expenses; and the other a $15,000 gift toward the assisted reproduction process that the parties undertook. She did not understand the list to relate to a marriage contract, but rather stated that her list was regarding monies used for the wedding.
i. The lawyer that she eventually signed with, who Anthony had located after it became clear that Ms. Angle would not witness the agreement in its original form, also told her that it was not in her interests. Anthony made the appointment with the lawyer, drove her to the appointment and paid the bill. During the appointment, the lawyer made no mention of any financial documents or other evidence regarding the values set out in the agreement.
j. She didn’t really understand the lawyers’ concerns about the agreement, just that Ms. Angle did not want her to sign it, and Mr. Peglar said that it was not good for her but he didn’t really explain why. She summarized: “…the time was short, my husband was mad at me, so I had to sign, otherwise there would be no marriage.” “For me, it was important that my husband was happy.” She trusted Anthony’s representation to her that “even if we were to divorce, you’ll be with me in this same house.”
[17] The testimony of subsequent witnesses called by Anna, namely the two lawyers with whom she met, caused the court’s confidence in her evidence to waver. For clarity, it is not so much an issue of credibility, in that I do not find that Anna was intentionally misleading the court or withholding evidence. Rather, it is a question of reliability as it seems that Anna found herself confused and overwhelmed at times during her evidence. She had a run-on and repetitive manner of speaking, often speaking over the interpreter which required multiple directives both from Anna’s counsel and from me. There were occasions when she responded to questions posed in English before waiting for translation. There were occasions when the interpreter advised the Court that phrases were not being interpreted verbatim due to repetition. It appeared from Anna’s answers that she did not understand some questions posed to her, even in translation. Further, she seemed to conflate her current understanding with what she knew when the agreement was presented to her (e.g., regarding the legal nature of the matrimonial home). I do not find that Anna was dishonest in her testimony, but aspects of her evidence are unreliable due to her own challenges with comprehension and expression. To be clear, my comments should not be misinterpreted as having sympathy or pity for Anna; my conclusion is a factual finding regarding the credibility and reliability of her evidence. I have assigned varying weight accordingly, with little weight given to Anna’s recollection of data points such as dates and figures and greater weight given to her evidence regarding her experiences.
[18] Lauren Petlichkov (previously Angle) was the first lawyer consulted by Anna. Her evidence was clear and straightforward, and I assign it considerable weight. She testified that:
a. She was consulted by Anna in the summer of 2019 seeking independent legal advice regarding a marriage contract that had been prepared by her fiancé. The first meeting was on August 8, 2019. She does not recall whether Anna attended with any support person at the appointments.
b. In providing independent legal advice, it is her practice to meet with a client regarding the agreement first, and then, depending upon the outcome of that meeting, a formal longer-term retainer would be implemented.
c. After the first meeting, she specifically recalls Anna attending her office on more than one occasion without an appointment, crying and very upset. Anna would express to Ms. Angle that if she didn’t sign the agreement then Anthony would be cancelling her wedding, which clearly distressed her. Anna would tell her often that “she was scared” and that she felt obligated to sign the agreement so that the wedding would proceed.
d. Anna could hold a conversation in English, but her first language was Italian. Ms. Angle did not feel that there was a language barrier and is confident that Anna understood their discussions. Anna appeared to understand “the spirit behind the agreement” in that Anthony sought to protect his assets, but Ms. Angle does not think that she understood that the agreement was worded to exclude post-marriage asset growth from division or that Anna would be required to immediately vacate the matrimonial home on separation.
e. She advised Anna not to sign the agreement and suggested that changes be made. Her concerns included the absence of financial disclosure and the language of the agreement. The list of accounts attached to the draft agreement was insufficient financial disclosure in her view. Nothing else was ever received by way of financial disclosure and she was not made aware that Anthony had a financial planner. Anna did not seem to have any personal knowledge of Anthony’s financial situation.
f. Anna retained her to prepare a revised contract on the basis of the legal advice provided. She sent her first letter to Mr. Sauer ten days after the first appointment, attaching the revised agreement that she had prepared.
g. One of her concerns was that, although a Marriage Contract would be valid if signed after the wedding day, Anna was being pressured with the cancellation of the wedding as a tactic to get the agreement signed in its original form.
h. Ms. Angle never received any responding correspondence from Mr. Sauer either to her first letter or to the follow up letter of September 6, 2019. After September 6, 2019, Anna told Ms. Angle that she intended to sign the agreement and Ms. Angle made it clear that she would not participate.
[19] Stephen Peglar is the lawyer who met with Anna on the day that she signed the agreement. He is now retired. He has no independent recollection of any aspect of his interaction with Anna, and all records held by his firm have been lost. Realistically, he was only able to speak to his usual practices. I appreciate his attendance and his candour, however I can assign no weight to his testimony.
The Law
[20] The operative legislation is the Family Law Act, R.S.O. 1990, c. F.3 (the “Act”). The following sections are applicable to this matter:
52 (1) Two persons who are married to each other or intend to marry may enter into an agreement in which they agree on their respective rights and obligations under the marriage or on separation, on the annulment or dissolution of the marriage or on death, including,
(a) ownership in or division of property;
(b) support obligations;
(c) the right to direct the education and moral training of their children, but not the right to decision-making responsibility or parenting time with respect to their children; and
(d) any other matter in the settlement of their affairs.
(2) A provision in a marriage contract purporting to limit a spouse’s rights under Part II (Matrimonial Home) is unenforceable. [2]
53 (1) Two persons who are cohabiting or intend to cohabit and who are not married to each other may enter into an agreement in which they agree on their respective rights and obligations during cohabitation, or on ceasing to cohabit or on death, including,
(a) ownership in or division of property;
(b) support obligations;
(c) the right to direct the education and moral training of their children, but not the right to decision-making responsibility or parenting time with respect to their children; and
(d) any other matter in the settlement of their affairs.
(2) If the parties to a cohabitation agreement marry each other, the agreement shall be deemed to be a marriage contract.
55 (1) A domestic contract and an agreement to amend or rescind a domestic contract are unenforceable unless made in writing, signed by the parties and witnessed.
56 (1) In the determination of a matter respecting the education, moral training or decision-making responsibility or parenting time with respect to a child, the court may disregard any provision of a domestic contract pertaining to the matter where, in the opinion of the court, to do so is in the best interests of the child.
(1.1) In the determination of a matter respecting the support of a child, the court may disregard any provision of a domestic contract pertaining to the matter where the provision is unreasonable having regard to the child support guidelines, as well as to any other provision relating to support of the child in the contract.
(4) A court may, on application, set aside a domestic contract or a provision in it,
(a) if a party failed to disclose to the other significant assets, or significant debts or other liabilities, existing when the domestic contract was made;
(b) if a party did not understand the nature or consequences of the domestic contract; or
(c) otherwise in accordance with the law of contract. R.S.O. 1990, c. F.3, s. 56 (4) .
(7) Subsections (4), (5) and (6) apply despite any agreement to the contrary.
[21] The Ontario Court of Appeal sets out the two-stage analysis for setting aside a domestic contract in Virc v. Blair, 2014 ONCA 392 (referencing LeVan v. LeVan, 2008 ONCA 388):
[52] In LeVan, at para. 51, this court held that s. 56(4) comprises a two-stage analysis:
(i) Can the party seeking to set aside the agreement demonstrate that one or more of the s. 56(4) circumstances is engaged?
(ii) If so, is it appropriate for the court to exercise its discretion to set aside the agreement?
[22] The analysis of section 56(4) has been the subject of much judicial comment. The following is the governing direction from the Supreme Court of Canada in Rick v. Brandsema, [2009] 1 SCR 295, 2009 SCC 10:
[40] There is no doubt that separation agreements are negotiated between spouses on the fault line of one of the most emotionally charged junctures of their relationship - when it unravels. The majority in Miglin v. Miglin [2003] 1 S.C.R. 303, 2003 SCC 24 concluded that because of the uniqueness of this negotiating environment, bargains entered into between spouses on marriage breakdown are not, and should not be seen to be, subject to the same rules as those applicable to commercial contracts negotiated between two parties of equal strength:
The test should ultimately recognize the particular ways in which separation agreements generally and spousal support arrangements specifically are vulnerable to a risk of inequitable sharing at the time of negotiation and in the future …
Negotiations in the family law context of separation or divorce are conducted in a unique environment … [at] a time of intense personal and emotional turmoil, in which one or both of the parties may be particularly vulnerable. [paras. 73-74]
[42] Based on these realities, the Court in Miglin stated that judicial intervention would be justified where agreements were found to be procedurally and substantively flawed (my emphasis):
[W]here the parties have executed a pre-existing agreement, the court should look first to the circumstances of negotiation and execution to determine whether the applicant has established a reason to discount the agreement. The court would inquire whether one party was vulnerable and the other party took advantage of that vulnerability. The court also examines whether the substance of the agreement, at formation, complied substantially with the general objectives of the Act.
[W]e are not suggesting that courts must necessarily look for “unconscionability” as it is understood in the common law of contract. There is a danger in borrowing terminology rooted in other branches of the law and transposing it into what all agree is a unique legal context. There may be persuasive evidence brought before the court that one party took advantage of the vulnerability of the other party in separation or divorce negotiations that would fall short of evidence of the power imbalance necessary to demonstrate unconscionability in a commercial context between, say, a consumer and a large financial institution.
[23] The Supreme Court of Canada continued on to affirm parties’ contractual autonomy, particularly in the individualized and subjective definition of what constitutes “mutually acceptable sharing” of the consequences of the dissolution of a relationship, but stressed the importance of integrity in the bargaining process. This integrity includes full and frank financial disclosure. The Court wrote (internal citations omitted):
[46] Decisions about what constitutes an acceptable bargain can only authoritatively be made if both parties come to the negotiating table with the information needed to consider what concessions to accept or offer. Informational asymmetry compromises spouse’s ability to do so.
[24] Parties’ vulnerabilities can be addressed by the involvement of professionals, in which case the agreement made by two spouses (intended or separating), should be respected:
[61] … This is an important observation. Given that vulnerabilities are almost always present in these negotiations, the parties’ genuine wish to finalize their arrangements should, absent psychological exploitation or misinformation, be respected. One way to help attenuate the possibility of such negotiating abuse is undoubtedly through professional assistance. But exploitation is not rendered anodyne nearly because a spouse has access to professional advice. It is a question of fact in each case.
[25] Section 56(4) does not compel the court to set aside a domestic contract. If the Applicant can demonstrate that one of the s. 56(4) circumstances is engaged, the court must then consider whether it is appropriate to exercise its discretion in favour of setting aside the agreement. (See Shinder v. Shinder et al., 2018 ONCA 717 at paragraph 42.)
[26] In assessing financial disclosure, we must consider the significance of the non-disclosed assets. In determining “significance,” the court should not focus exclusively on a mathematical exercise but must measure significance in the context of the entire relationship between the parties and considering all of the surrounding circumstances. (See Turk v. Turk, 2018 ONCA 993 at paragraph 11.)
[27] In determining whether a party understood the agreement before signing it, the question is not simply whether the party understood the words set down on paper. Section 56(4)(b) authorizes the court to set aside a domestic contract if a party does not understand either the nature or the consequences of the document, which necessarily means that the party must understand both. This understanding can be tainted by conflicting messages in the explanation of the document.
[28] The assessment of vulnerability and psychological exploitation is the application of the contractual concepts of duress, undue influence and unconscionability to the family context. The Court of Appeal’s commentary in Rosen v. Rosen, is included in the Supreme Court of Canada’s more recent assessment of vulnerability and psychological exploitation in Rick v. Brandsema. The Court of Appeal was focused on the common law concept of unconscionable agreements and noted:
… The question therefore becomes was there an inequality between the parties, a praying of one upon the other which, combined with improvidence, cast the onus upon the husband of acting with scrupulous care for the welfare and interests of the wife. …
We must always remember that it is not the ability of one party to make a better bargain that counts. Seldom are contracting parties equal. It is the taking advantage of that ability to prey upon the other party that produces the unconscionability.
[29] We must appreciate the evolution of the law on this important point: Anna need not demonstrate “unconscionability” or “duress” in the commercial contract sense for the agreement to be set aside. I echo the guidance of the Supreme Court of Canada in underscoring that the review of a domestic contract differs from the approach to be taken with commercial contracts (citation at paragraph 21 above):
There may be persuasive evidence brought before the court that one party took advantage of the vulnerability of the other party in separation or divorce negotiations that would fall short of evidence of the power imbalance necessary to demonstrate unconscionability in a commercial context between, say, a consumer and a large financial institution.
Discussion and Findings
[30] Immediately identifiable is the conflict between the agreement and section 52(2) of the Act, namely that paragraph 9(c) of the agreement requires Anna to give Anthony vacant possession of the matrimonial home on the date of separation. As this paragraph purports to limit Anna’s right of possession of the matrimonial home under section 19(1) of the Act, it is unenforceable pursuant to section 52(2).
[31] When we further apply section 56(4), interpreted with the guidance of the jurisprudence described above, we see that:
a. Anthony undervalued his assets such that his disclosure was tainted, possibly by as much as 30% (i.e., $734,000 on $2,625,000). Appreciating that the analysis is not exclusively mathematical, it is essential to note that the failure of disclosure included any information regarding any value associated with Anthony’s interest in the restaurant. Anna spent time at the restaurant which she believed to be owned by Anthony. Anthony held himself out as a decision-maker in the restaurant and was, in fact, an owner of the corporation which benefitted from the sale of the plaza in which the restaurant was located. The complete absence of any mention of Anthony’s business interests in the agreement is, in and of itself, significant. Even if Anthony did not know that he personally held shares in the corporation, he must have understood that his contribution to the investment in the restaurant was being maintained somewhere. I find that Anthony’s disclosure was significantly defective, negatively impacting informational symmetry and the integrity of the negotiation process.
b. Anna did not fully understand the agreement. Although she knew that it was not in her favour, and that Ms. Angle would not allow her to sign it, she did not actually appreciate what she was giving up due to her own comprehension challenges and the time limitations caused by the impending marriage. She trusted Anthony when he told her that their family home would always be shared equally between them.
c. Anna did not understand the nature of the list of property to be excluded from future division on separation. To her husband, she provided a list of items that included monies gifted to the parties jointly. She was confused about how those monies should be valued, i.e., whether in Canadian dollars or in Euros. In contrast, she told Ms. Angle about approximately $80,000 in assets which may or may not have been held in her name and which were not included in the agreement, but which Ms. Angle presumed were Anna’s alone. Anna’s confusion on this point is, in and of itself, fatal to the agreement, as it cuts out the foundation upon which any provisions regarding the division of property post-separation could be based.
d. Anna was vulnerable in multiple ways. Her written communication is in Italian. Her difficulty with the English language was an obstacle to understanding detailed legal concepts that were not explained to her in Italian. She had already been subjected to Anthony’s verbal abuse and angry outbursts. She was confused by the opposing advice that she was getting from Anthony, who said that the agreement protected her, and from the two lawyers, who warned her against signing it. She was afraid of the financial and emotional repercussions of failing to sign the agreement.
[32] On the question of sufficient financial disclosure, Anthony referred the Court to Verkaik v. Verkaik, 2010 ONCA 23, in which the Court of Appeal supported the trial judge’s decision to uphold a domestic contract. That case is readily distinguished on its facts, as the party seeking to set aside the domestic contract on the basis of deficient disclosure “was involved in the respondent’s business as a bookkeeper and real estate manager, the trial judge found she had full access to the books of the company and knew well his and its financial position.” (See paragraph 4.) Similarly, in Smith v. Smith, 2017 ONCA 759, also cited by Anthony, the trial judge found as a fact that “the wife was aware of all of the husband’s sources of income and assets and did not pursue further disclosure.” (See paragraph 11(c)). In contrast, both parties in this matter testified that Anna knew nothing of Anthony's finances and indeed was not interested in obtaining such knowledge. She believed that it was none of her business.
[33] The circumstances of the negotiation and execution of the agreement demonstrate clearly that Anthony took advantage of Anna’s vulnerability such that the integrity of contract itself fails. I find as facts that Anthony engaged in emotional and psychological manipulation and coercive control through expressions of anger and the threat of abandonment, including the threat to cancel the wedding. I accept Anna’s evidence that when she signed the agreement she knew that it was contrary to her interests but felt relieved because she was satisfying Anthony’s requirement, thus saving her wedding day.
[34] Although regarding a separation agreement, the findings of Justice Vogelsang in Butler v. Butler, 2015 ONSC 6796 resonate with the facts in this matter:
[50] Ms. Butler demonstrated a remarkable lack of sophistication when Mr. Butler was sorting out their post-separation financial affairs for them. … Unfortunately, the result was that she virtually threw herself on his mercy – instead of actually bargaining – with respect to her reasonable entitlements on separation. Her capitulation, while appearing magnanimous, was actually a demonstration of a sad misunderstanding of her position and her actual rights.
[51] In my view, Mr. Butler exerted his will over Ms. Butler and was in a demonstrably stronger position which had the result of a real disadvantage to Ms. Butler. His telling her what the result would be, in the context of her trust in him that he would be fair, represented a pressure on her will that left no realistic ability to freely decide.
[35] Anthony also referred this court to the case of Butty v. Butty, 2009 ONCA 852 in which the Court of Appeal reversed the trial judge’s decision to set aside a domestic contract due to insufficient financial disclosure. Noting first that the Court of Appeal did not appear to have the benefit of the Supreme Court of Canada’s guidance from Rick v. Brandsema, which is not referenced in the decision, again the case is distinguishable on its facts. In Butty, the trial judge found that the applicant knew what she was signing, that she entered into the contract of her own free will and that there was “no type of threat or evidence of negative consequences or deprivation if she failed to sign the contract on Mr. Butty’s terms.” (See paragraph 39.) Here, insufficient financial disclosure is but one aspect of the failure of procedural integrity that is fatal to the agreement.
[36] I therefore conclude that disclosure was significantly deficient; that Anna did not understand the nature and consequences of the agreement; and that the circumstances of the negotiation and signing of the agreement demonstrate Anna’s vulnerability (unremediated by Mr. Peglar’s involvement) and psychological exploitation by Anthony. The agreement is set aside in its entirety.
[37] As a result of my conclusions in this regard, it is not necessary to determine whether the spousal support release set out in the agreement is separately unenforceable.
Order
[38] Final Order to issue:
The domestic contract (entitled “Cohabitation Agreement”) signed by Anthony Vacca on July 12, 2019 and by Anna Pansino (now Vacca) on September 9, 2019 is set aside in its entirety.
Costs submissions regarding this trial of an issue are to be made as follows:
a. Anna, through her counsel, shall serve and submit to the court written submissions (not to exceed 4 pages in length, hyperlinking citations to any relevant caselaw) together with a detailed Bill of Costs and copies of any Offers to Settle by September 27, 2024.
b. Anthony shall serve and submit to the court responding submissions (not to exceed 4 pages in length, hyperlinking citations to any relevant caselaw) together with a detailed Bill of Costs and copies of any Offers to Settle by October 4, 2024.
c. Anna, through her counsel, shall serve and submit to the court any reply submissions (not to exceed 4 pages in length, hyperlinking citations to any relevant caselaw) by October 11, 2024.
d. There shall be no extensions to these deadlines. If a party fails to meet these deadlines, there shall be no costs payable to that party, although costs may still be awarded against that party.
e. Submissions are to be directed to my judicial assistant at mona.goodwin@ontario.ca and Kitchener.SCJJA@ontario.ca. It is imperative that it is indicated in the subject line of the covering email: (1) the court file number; (2) that these are costs submissions; and (3) that they are being sent to the attention of Justice Breithaupt Smith.
f. The parties shall further ensure their costs submissions are filed with the Court.
J. Breithaupt Smith J.
Released: September 18, 2024
Footnotes
[1] Ms. Angle has changed her surname due to marriage, but for ease for the parties in this matter, I continue to refer to her as she was known at the time of her involvement.
[2] Part II of the Family Law Act sets out particular rights regarding the matrimonial home, being the real estate in which either party holds an ownership interest and in which the parties resided on the date of separation. In summary form, the rights which cannot be abrogated by a marriage contract are: the right of possession (s. 19); the ability to register a designation of the matrimonial home on title to the property (s. 20); a prohibition on financially leveraging the property without both spouses’ written consent (s. 21); relief against forfeiture if a third party is realizing upon an encumbrance (s. 22); right to request exclusive possession (s. 24); and the right for a non-titled spouse to remain in the property for sixty days after the date of death of the titled spouse (s. 26).