Ontario Superior Court of Justice

Court File No.: FC-24-120
Date: 2025-03-03

Between:
Ginette Marie Rolande Baillargeon, Applicant
and
William George Nesbitt, Respondent

Before: Justice M. Fraser

Counsel:
Alexandre Martel, Counsel for the Applicant
Jack Pantalone, Counsel for the Respondent

Heard: 2025-02-04

Endorsement

1. Introduction

[1] The issues in the within Application arise from the parties’ separation following a six-year relationship which included two years of marriage.

[2] At the commencement of their relationship, the parties signed a Cohabitation Agreement (“Agreement”). The Agreement purports to prohibit either party from asserting a claim against the other for support or to make a claim against the other’s property in the event there is a breakdown in the relationship.

[3] The Applicant, Ginette Marie Rolande Baillargeon (“Baillargeon”), asks, as part of the relief sought by her in this proceeding, that the Agreement be declared void. She also makes a claim for spousal support, for an equalization of the parties’ net family properties, a claim in equity for unjust enrichment, and she asks for an order finding that she has a constructive or resulting trust in the residence which had been occupied by the parties at the date of separation as their matrimonial home.

[4] The Respondent, William George Nesbitt (“Nesbitt”), by this motion is asking for, among other things, an order bifurcating the issue of the validity of the Agreement and ordering that that issue proceed to trial prior to the determination of the other issues in this proceeding.

[5] There was additional relief requested as part of this motion. That relief, unrelated to the bifurcation issue, was not contested and I made an order relating to that relief on February 4, 2025.

[6] This is my ruling with respect to the request for bifurcation.

2. Background Facts

[7] The parties met through a dating app in April 2016.

[8] They married on April 23, 2022. They separated two years later, on April 12, 2024.

[9] Baillargeon is 66 years old. Her marriage to Nesbitt is her third marriage. She has three adult children from another relationship.

[10] Nesbitt is 82 years old. This is his second marriage. He has four adult children from his prior marriage.

[11] Nesbitt owned a very successful gravel pit business, Nesbitt Aggregates Ltd., which had been in operation for over 50 years. Nesbitt also owned, personally and through certain corporations, numerous real properties. The residence, which became the parties’ matrimonial home, is located on one of those properties.

[12] When the parties met, Nesbitt was in the midst of a divorce proceeding with his former wife, and all financial issues (equalization and spousal support) were being litigated.

[13] Nesbitt asserts that the parties began to cohabit in May 2016 and that they resided in Nesbitt’s home in Renfrew. Nesbitt asserts that when the parties began to cohabit, he first required that the parties enter into the Agreement.

[14] Neither party disputes that the Agreement was prepared and signed by both of them in May 2016.

[15] Baillargeon disputes the date when the parties began to cohabit. She denies that they began to cohabit in May 2016. Rather, Baillargeon maintains that the parties began to cohabit in 2018 based upon Nesbitt’s promise, at that time, that the parties would get married and build a home together.

[16] Baillargeon asserts that she signed the Agreement in 2016 because Nesbitt had told her it would assist him with his divorce from his prior spouse. She asserts that Nesbitt assured her that she “just needed to sign” and that it would have no repercussions for her.

[17] Baillargeon claims that when the parties began to cohabit in 2018, her relationship with Nesbitt had “evolved significantly” and that it had evolved even more so by the time they were married on April 23, 2022.

[18] Baillargeon further maintains that during the relationship she contributed an estimated $600,000 in labour and materials to renovate the matrimonial home. She asserts that she increased its value by approximately $700,000.

[19] Baillargeon also claims that she managed and expanded the Respondent’s storage rental business, including advertising, client management, and maintenance. She claims that she contributed approximately 9,600 hours of unpaid labour valued at $816,000 for maintaining and improving the matrimonial home and the Respondent’s business.

Preparation of the Agreement

[20] According to Nesbitt, he retained the services of Phillip Augustine in April 2016 to negotiate and draft the Agreement on his behalf. Mr. Augustine was also representing Nesbitt in his divorce proceeding with his former spouse.

[21] Baillargeon retained Kevin Kavanagh to represent her in the negotiation and execution of the Agreement.

[22] The Agreement, by its terms, purports to provide, among other things, that:

• The parties intended to commence cohabitation on May 1, 2016;
• The parties waived any right by either of them to claim spousal support from the other upon the breakdown of their relationship or marriage;
• That the property owned by the parties whether acquired before or after the date of the Agreement would remain the exclusive property of the owner;
• That neither party would have a right to make a claim for an equalization or a division of property owned by the other upon the breakdown of the relationship or marriage;
• That the parties waived any right to make a claim against the property of the other in law or equity;
• That the parties would be residing at 1766 B Lochwinnoch Road (“residence”) which, at the time of signing the Agreement, was owned jointly by the Respondent with his former spouse and that the Respondent would continue to pay for all of the household expenses. If and to the extent that the Applicant paid any expenses for the residence, she would not acquire an interest in the residence;
• That in the event the parties married and the residence became a matrimonial home, by definition in the Family Law Act, the same provisions of the Agreement concerning their residence would apply to the matrimonial home;
• That the effective date for the Agreement was the date the latter party signed it;
• That there were no representations, collateral agreements, warranties or conditions affecting the Agreement;
• That any amendments to or agreements to vary the Agreement must be in writing, signed by the parties, dated and witnessed;
• That in the event the parties married, the Agreement would take effect and continue as a marriage contract;
• That each had made complete disclosure of his or her income, assets, and debts to the other and each was satisfied with the disclosure made;
• That each had had independent legal advice; and
• That each acknowledged the terms of the Agreement and understood his or her rights and obligations.

[23] Schedule A and B to the Agreement listed the assets and liabilities of the parties respectively. Nesbitt disclosed a net worth of $7,820,000 and Baillargeon disclosed a net worth of $501,000.

[24] Baillargeon asserts that the Agreement should be found to be “null and void”.

[25] To support this, Baillargeon claims that she did not participate in negotiating the Agreement and that she was not provided “proper” independent legal advice. She also asserts that the Agreement is invalid due to “coercion, lack of disclosure, and inequity”. In this respect, Baillargeon maintains that she did not receive full financial disclosure from Nesbitt. She maintains that she was induced to sign the Agreement in order to assist Nesbitt in resolving the outstanding issues with his former spouse. She asserts that Nesbitt represented to her that there would be no repercussions to her if she signed it. She asserts that the parties were not in fact cohabiting at that time and that it was not their intention to actually govern themselves by the terms set out in the Agreement.

[26] Nesbitt disputes this. He asserts that Baillargeon understood the terms of the Agreement, that he required this Agreement as a precondition to their cohabiting and that Baillargeon received effective independent legal advice prior to agreeing to the terms as confirmed by the Certificate of Independent Legal Advice appended to the Agreement. Nesbitt asserts that both parties exchanged full disclosure prior to signing the Agreement.

Court Application

[27] Among other things, the Applicant claims the following relief in this proceeding:

1. Divorce;
2. A Declaration that the Agreement signed by the parties is void;
3. Spousal support;
4. Equalization of the parties’ net family property;
5. Sale of family property;
6. An order that Nesbitt has been unjustly enriched by Baillargeon;
7. An order that Nesbitt reimburse Baillargeon for the work of her employee, Mr. Shane Werk, for the benefit of Nesbitt’s corporation; and
8. An order that Baillargeon has a constructive and/or resulting trust in the matrimonial home.

Motion to Bifurcate

[28] Nesbitt asks that the issue of whether the Agreement is valid be determined first and prior to Baillargeon’s remaining claims. If the Agreement is upheld, he submits, this will effectively bring the remaining claims advanced by Baillargeon to an end.

[29] Baillargeon opposes the request to bifurcate this proceeding. She submits that it is premature and procedurally improper to grant the bifurcation and that Nesbitt’s attempt to isolate the validity of the Agreement is merely a tactic to delay the proper adjudication of the substantive issues raised by her and is aimed at avoiding financial accountability.

[30] Baillargeon points out that, for instance, subparagraph 25(j)(iv) of the Agreement states: “Subject to any trust declaration relating to the matrimonial home, property held in the name of one party will be deemed to be owned by that party.” She argues therefore that aspects of her claims could proceed regardless of whether the Agreement is found to be valid.

[31] Baillargeon submits that even if the Agreement is valid, which she denies to be the case, it would still be necessary for Nesbitt to provide full financial disclosure. She therefore argues that a separate trial would add unnecessary time and complexity to this case rather than simplify it.

3. Legal Framework

[32] There is no issue that multiplicity of proceedings should generally be avoided, and all issues should be determined in one trial. However, there are instances where the interests of justice are served by bifurcation of the issues as long as no prejudice is caused to either party.

[33] Section 12(5) of the Family Law Rules provides:

(5) COMBINING AND SPLITTING CASES – if it would be more convenient to hear two or more cases, claims or issues together or to split a case into two or more separate cases, claims or issues, the court may, on motion, order accordingly. O.Reg. 114/99, r. 12(5).

[34] Quigley J. in Simioni v. Simioni, paras 15-17 provides a helpful analysis of the legal principles with respect to bifurcation. This analysis and framework has been followed in many subsequent decisions such as Grossman v. Grossman, 2014 ONSC 2090, Klasios v. Klasios, 2015 ONSC 1173, Schulman v. Ganz, 2015 ONSC 3254:

(15) First, it should be accepted as non-controversial that both the Family Law Rules and the inherent jurisdiction of the Court provide ample authority and power to permit cases such as this to be split: Family Law Act, section 2(10); Rule 12(5). The jurisprudence confirms that this is an authority and power that ought to be exercised if convenient, and if the exercise of the power would be in the interests of justice. The interests of justice will be served if there are clear time and expense benefits to be gained from the bifurcation and determination of the threshold issue, provided no real or meaningful prejudice is caused to either party: Elcano Acceptance Ltd. et al v. Richmond, Richmond, Stambler & Mills; General Refractory Companies of Canada v. Venturedyne Ltd., [2001] O.J. No. 746 (S.C.J.O.); Royal Bank of Canada v. Kilmer van Nostrand Co., [1994] O.J. No. 1476 (Ont. Ct. Jus.(Gen. Div.)).

(16) Nevertheless, it is equally important to remember that the splitting of a trial effectively denies the fundamental principle that as far as possible, multiplicities of proceedings are to be avoided, and thus the power to split a case should be regarded as one that is narrowly circumscribed and to be exercised in only the clearest of cases – in cases that exhibit the exceptional merit that calls upon the Court to exercise its inherent power: Courts of Justice Act, section 138; Elcano, above; Carriero (Litigation Guardian of) v. Flynn, [2004] O.J. No. 3117 (S.C.J.O.). In light of this caution, the onus necessarily lies upon the party seeking to bifurcate to satisfy the Court on a balance of probabilities that if granted, severance will result in the “just, expeditious and least expensive determination of the proceeding on its merits”: Merck & Co. v. Brantford Chemicals Inc., 2004 FC 1400, para 4.

(17) There are a number of questions the Court should consider in deciding whether the severance of the trial in this instance is just and expeditious. These include whether the issues for the first trial are relatively straightforward and the extent to which the issues proposed for the first trial are interwoven with those that will arise in the second. They include whether a decision from the first trial will likely put an end to the action, significantly narrow remaining issues, or significantly increase the likelihood of settlement. They include the extent to which resources have already been devoted to all issues, the possibility of delay, the advantages or prejudice the parties are likely to experience and whether the severance is sought on consent or over the objections of one or more parties: see General Refractories Co. of Canada, above at para. 16. However, as Himel J. noted there, emphasizing the observations of Wilkins J. in Royal Bank v. Kilmer, above, the focus of these questions on expediency does not displace fairness and justice as the dominant considerations.

4. Analysis

[35] In my view, the issue of whether the Agreement is valid in this instance is a discrete issue. There will be relatively few witnesses needed to testify to make that determination and the evidence will be focused on the circumstances surrounding the execution of the Agreement including what financial information was disclosed by the parties at the time of the execution of the Agreement.

[36] I agree that if the Agreement is upheld, this will prohibit most if not all of the substantive claims additionally being advanced by Baillargeon.

[37] Baillargeon did not dispute that if the Agreement is found valid, this would prevent her from making a claim for spousal support and equalization of the parties’ net family properties.

[38] Baillargeon submits that in the event the Agreement is valid, she is nonetheless entitled to bring her claim for equitable relief based upon the wording of subparagraph 25(j)(iv) of the Agreement (see paragraph 30 above).

[39] I disagree with Baillargeon’s interpretation of this provision.

[40] In my view, the Agreement expressly prohibits the bringing of equitable claims based upon the provisions set out in subparagraph 25(i) of the Agreement. Subparagraph 25(i) states the following:

Except as otherwise provided by this Agreement, each party waives all rights and entitlement, and releases and discharges the other, from all claims that each has on the effective date of this Agreement or may subsequently acquire in equity or the common law by way of resulting, constructive, or implied trust, including any claims for monetary or proprietary remedies for unjust enrichment, joint family venture or by way of any other doctrine in equity, and at law under the Family Law Act or any other applicable law of any jurisdiction, now or in the future, to compensation or to any interest in the property or the value, or increase in the value, of the property owned by the other by reason of:

a. the transfer of property to the other without any payment or any adequate payment or any other consideration;
b. work, money or money’s worth contributed to the acquisition, management, maintenance, operation, or improvement of property;
c. the existence of a joint family venture; or
d. any other fact or circumstances creating a beneficial interest in property.

[41] In this respect, and in my view, subparagraph 25(j)(iv) should not be interpreted as permissive of the bringing of an unjust enrichment claim or other claim for equitable relief. In my view, the reference to “subject to any trust declaration relating to the matrimonial home” is referencing subparagraph 25(j)(i) which provides:

1. Title to any property in the name of one of the parties will be conclusive proof of the separate and exclusive ownership of the property by that party, unless the party having title has expressly acknowledged by written declaration of trust or other written document, the ownership rights of the other party (emphasis added).

[42] As such, if the Agreement is found to be valid, Baillargeon’s claim for equitable relief would also be prohibited.

[43] However, I point out that whether subparagraph 25(j)(iv) of the Agreement would permit Baillargeon to assert a claim for unjust enrichment or not, is an issue of contract interpretation which would be secondary to the determination of whether the Agreement is valid or not. The evidence, if any, needed to determine that issue is separate and distinct from the evidence which needs to be first considered when determining the validity of the Agreement.

[44] Additionally, the evidence relevant to whether the Agreement is valid is not the same as or pertinent to the evidence that needs to be adduced to support the remaining claims in this proceeding. The evidence which will determine the issue of the Agreement’s validity seems relatively straightforward. It will consist of the testimony of the lawyers who represented the parties detailing the nature and extent of their involvement, what if anything occurred with respect to the exchange of financial disclosure, and the negotiation of the terms of the Agreement. That evidence may possibly include the verification of the financial disclosure made at that time but even so, such disclosure will relate to the parties’ assets as at the date of the Agreement. This evidence is not relevant to the other claims made in this proceeding.

[45] The nature of the evidence which will be required to support Baillargeon’s remaining claims (i.e., for spousal support, equalization of net family properties, and equitable relief) will be significantly more complex and voluminous in its scope. The valuation of assets will require appraisals based upon values at the date of marriage and the date of separation. The value of the parties’ assets as at the commencement of the parties’ cohabitation may also be relevant. This is further complicated by the fact that Nesbitt asserts that the date of cohabitation was in May 2016 whereas Baillargeon asserts that the date of cohabitation was not until sometime in 2018. Nesbitt will likely need to also retain tax experts to assist in the valuation process.

[46] Significant evidence would also be needed to trace the financial transactions which occurred during the relationship if Baillargeon wishes to advance her claims for unjust enrichment and a constructive or resulting trust. Evidence pertaining to the roles assumed by both parties throughout the relationship would also have to be led.

[47] Given that the evidence that would be required to support the remaining claims is not required to determine the validity of the Agreement, there could be, in my view, considerable cost and time saved by the parties if the validity of the Agreement is first determined.

[48] The issues are not so interwoven as to require the determination of all issues at the same time. I conclude the opposite. The first trial would deal with the validity of the Agreement. If a second trial, dealing with the remaining claims is necessary, that evidence is distinct from the evidence needed to determine the validity of the Agreement.

[49] If the issues in this proceeding are not bifurcated, and this matter proceeds in the normal course to one trial instead, the trial will be significantly larger in scope and significantly more complex. In this event, I do not see concessions being as readily made by the parties to increase the likelihood of settlement prior to a trial given their significantly disparate positions on the issues.

[50] On the other hand, addressing the validity of the Agreement first would likely prompt settlement discussions as the validity of the Agreement will greatly impact the scope of any claims Baillargeon is entitled to advance. An early determination of the issue of whether the Agreement is valid could promote a quicker resolution of the remaining issues and thereby reduce the costs that would be incurred by both parties.

[51] At this stage in the proceedings, no significant disclosure or questioning has taken place. The motion for bifurcation has been brought early in the proceedings. Bifurcating the proceedings at this time has the potential to save the parties from incurring significant time and money on issues which Baillargeon may not be permitted to advance. There have not been steps already taken which would mitigate against the argument that this route would promote cost savings for the parties as well as the most effective use of court resources.

[52] I do not see that either party would be prejudiced in the event the bifurcation is ordered. In my view, Baillargeon has not demonstrated she would suffer prejudice in the event that a bifurcation order is made. To the contrary, Baillargeon’s exposure to a cost award is significantly minimized by having this issue determined first. Once the issue is determined, knowing whether the Agreement is valid provides both parties with the ability to better assess the merit of Baillargeon’s remaining claims prior to the parties expending significant time and money litigating those issues.

[53] A trial on the validity of the Agreement can likely be obtained within a four- to six-month period. It will not be lengthy, and the parties should be able to have the matter prepared to proceed to trial within that timeframe. Thus, having this issue determined first will not cause undue delay to either party.

[54] If the Agreement is declared void, having this issue first determined will not, in my view, result in a duplication of effort or costs to the parties. While a second trial might then be required to determine the remaining claims, these are distinct issues requiring different evidence.

[55] Baillargeon relied upon Smith v. Torelli, 2013 ONSC 1936 (“Smith”) as standing for the position that the onus is upon the party seeking bifurcation to establish, on a balance of probabilities, that severance will lead to the just, expeditious, and least costly resolution of the proceeding on its merits. That case concerned an issue of retroactive child support. The moving party sought to sever the determination of the issue of entitlement to support from the secondary issue of the payor’s ability to pay which would necessitate the production of financial disclosure for the years in question. I note that Nelson J. in reviewing the case law specifically distinguished that case from cases where a party sought to bifurcate the determination of the validity of a separation agreement prior to the determination of any consequent claims in the event that the separation agreement was found to be invalid. At paragraph 50 he states:

I do not find the cases severing the issue of the validity of a separation agreement particularly helpful. The validity of a separation agreement is a threshold issue that revolves around the determination of different facts (usually the circumstances surrounding the making of the agreement) and the application of different legal principles (unconscionability, mistake, and so on) from subsequent issues of support or property division (which relate largely to current financial circumstances). In the case at bar, the Respondent is asking the court to order separate trials on the same issue: retroactive child support, albeit for different periods. It seems to me that a trial on the issue of whether there is entitlement for the period of 1995-2007 would look very similar to a trial on the issue from 2007 onwards.

[56] The factual situation in this case is, however, likewise distinguishable from the factual situation in Smith. Rather, the circumstances in this case fall far more squarely in line with the circumstances arising from the cases severing the issue of the validity of a separation agreement. The validity of the Agreement is a threshold issue which requires a determination of a separate factual circumstance and the application of different legal principles than what would be required to determine the remaining issues. As such, while I agree with the principles of law Smith sets out as applicable, this case is factually more aligned with the cases which have granted bifurcation requests.

[57] I conclude, considering the relevant factors as set out above, that Nesbitt has established on a balance of probabilities that an order bifurcating the issues, so that the issue of the Agreement’s validity is determined first, will lead to the most just, expeditious, and least costly resolution of this proceeding on its merits.

5. Disposition

[58] For the above reasons, I order the following:

1. The issue of the validity of the Agreement shall be severed from the remaining issues and shall proceed to a trial prior to the remaining claims being advanced or determined.
2. The parties shall return to a Case Conference before me by scheduling same through the trial coordinator. That Case Conference shall occur no later than March 28, 2025 and its purpose shall be to provide further direction to the parties at that time with respect to next steps.
3. Counsel are to prepare, for that Case Conference, a proposed timeline for the litigation of this bifurcated issue. They are to set out a proposed timetable and schedule of steps which addresses deadlines for making any required disclosure and for any questioning which needs to occur.

[59] If the parties are unable to agree on the issue of costs for this motion, Nesbitt may serve and file his submissions concerning costs on or before March 14, 2025. Baillargeon may serve and file her submissions concerning costs on or before March 21, 2025. Cost submissions shall be no more than three pages in length, plus any offers to settle and bills of costs.

M. Fraser
Date: March 3, 2025

Released: March 3, 2025