In a recent Ontario decision, a court refused to set aside a separated couple’s Minutes of settlement, which would force the husband to sell their matrimonial home, finding that the wife could not prove her claim and that both parties had not been entirely forthcoming in their financial disclosure. The court also stated simply that the issues could not be resolved in an interim one hour motion.
In fact, at the outset, the court explained that the wife had attempted to address additional issues in her motion, but the court stated:
“Although there were other issues in the [wife]’s Notice of Motion, those issues could not be addressed within the one hour time permitted for motions under the most recent Notice to the Profession for Central East Region.”
The Notice, effective January 4, 2021, states: “The only [family] motions permitted at this time are short/one-hour motions. […] There will be no long motions set until further notice.”
Couple Signs Minutes of Settlement Following Separation
The husband and wife began cohabiting in 1997, were married in 2005, and had two children, now aged 17 and 14. The couple separated in February 2019.
On October 1, 2019, the couple entered into final Minutes concerning custody of the children. Those Minutes also settled, on an interim basis, the sale of the jointly owned matrimonial home in which the husband was residing at the time, and where he continued to reside.
Under the Minutes, the husband agreed to obtain a mortgage commitment for at least half of the equity in the home within 30 days of October 1, 2019 which would, effectively forestall a sale of the home. The intent was to confirm that the husband would be in a position to buy the wife’s interest in the home. If the husband failed to provide the commitment within the time permitted the home would be listed and sold on the terms set out in the Minutes.
Despite the fact that the husband complied with the Minutes and provided his mortgage commitment on time, the wife brought a motion for the partition and sale of the home.
The wife claimed that, prior to entering into the Minutes, the husband had misrepresented the nature and extent of his assets and liabilities and should not be permitted to rely upon the Minutes. She claimed that the husband had many more assets than she had thought and he should be required to list and sell the home. The wife claimed that the husband had “deliberately or recklessly excluded the significant assets”. She also submitted that the husband’s additional assets would entitle her to a large spousal support lump sum payment, which would require the sale of the home. Finally, the wife asked the Minutes to be set aside based on a lack of disclosure and hardship.
“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.”
The husband acknowledged leaving out certain assets because they were either already sold on the date of separation or were not owned by him on the valuation date, while stating that the other assets were left out because they were excluded assets.
Court Refuses Wife’s Request to Set Aside Minutes
The court stated that the first question to be answered was whether there was material non-disclosure warranting the agreement being set aside under s. 56(4) of the FLA. It further stated that proof of that failure to disclose on the balance of probabilities would be required to set aside the Minutes under s. 56(4)(a) of the FLA.
The court observed, however, that there was a conflict on the evidence as to the existence of certain assets on the date of separation and there was also a conflict on the issue of whether other assets were properly excluded assets. The court therefore held that the evidence about the assets in the husband’s hands at the date of separation was contradictory and incapable of resolution on the motion, stating:
“There is no possible way that the court may make the necessary determinations for the setting aside of the Minutes of Settlement on the evidentiary record that I was supplied with.
I therefore do not find that there was material misrepresentation of assets necessary to set aside the Minutes of Settlement dated October 1, 2019 under s. 56(4)(a) of the FLA.”
Turning to the wife’s spousal support lump sum argument, the court again noted:
“All of these [issues] may be a basis for a finding of “intentional underemployment” or non-disclosure of income […]. However, again, an interim one hour motion is no place to undertake a detailed analysis of imputation of income especially in the face of the [husband]’s conflicting evidence as to income.”
As a result, the court refused to take this claim into account in setting aside the Minutes.
The court further dismissed the wife’s lack of disclosure claim, finding that both parties had been responsible for certain delays.
Finally, the court rejected the wife’s hardship claim, finding that there was no guarantee that the wife’s hardship would be alleviated by the sale of the home in the circumstances.
As a result, the court dismissed the wife’s motion.
At Feigenbaum Law, our goal is to help you move forward following the breakdown of a relationship while retaining as much financial stability as possible and ensuring your children are provided for. Mark Feigenbaum is able to counsel his clients on all potential risks that may result from a family law dispute, not just those related strictly to the breakdown of a marriage. Contact Mark online or call him at (416) 777-8433 or toll-free at (877) 275-4792 to book a consultation.