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When a couple decides to separate before getting a divorce, they may choose to enter into a separation agreement. A separation agreement can address issues like spousal support, child support, custody, the matrimonial home, and other issues. This allows for those items to not be left aside while waiting for a divorce to become finalized. But sometimes things occur to make one party want to set an agreement aside. A recent decision by the Ontario Superior Court of Justice looks at how the courts approach such dilemmas.

Separation agreement allows father to stay in the home

The parties involved began living together in 1997. They were married in 2005 and at the time of the trial had two daughters, aged 17 and 14. The parents separated in February 2019.

On October 1, 2019, the parties entered into final Minutes which addressed a number of issues, including the sale of the jointly owned matrimonial home. At the time of the separation, the father was living in the home. He was given 30 days from October 1, 2019, to obtain a mortgage commitment for at least half of the equity in the home which would allow him to potentially buy out the mother’s interest and avoid a sale. The father met these conditions and was approved for a mortgage.

However, the matter ended up being far from resolved. The mother told the court that  she discovered the husband had not been truthful about his assets and liabilities at the time, and therefore the Minutes should no longer be in force. She also believes that her discovery of additional assets will ultimately entitle her to a sizable spousal support claim, which would require the sale of the home.  

Can the Minutes be set aside?

The mother relied on Section 56(4) of the Family Law Act, which states a court may, on application set aside a domestic contract or a provision in it for reasons including one party’s failure “to disclose to the other significant assets, or significant debts or other liabilities, existing when the domestic contract was made.”

The court turned to look at the misrepresentations in order to determine whether they warranted a setting aside of the Minutes. One item the mother claimed the father hid was a 1977 Pontiac Firebird, which was reported to be worth $40,000. However, the father said he sold it in order to pay household expenses. The mother also said a number of other items such as Skidos, musical instruments, and other miscellaneous items were not included in the accounting of the father’s assets.

The court did not find the omission of miscellaneous items to be equal to a serious misrepresentation. Meanwhile, the parties’ conflicting statements about when the Skidos and car were sold, or if the former were even the property of the father could not be determined by the court, and therefore the court could not find whether there was any material misrepresentation of assets that should lead to the setting aside of the Minutes of Settlement.  

The court declined to set aside the Minutes of Settlement, and told the parties it appeared that neither of them had been completely truthful up to this point.

In addition to being a significant asset, the matrimonial home is usually associated with deep emotional ties.  At Gelman & Associates, our family law lawyers provide compassionate, forward-thinking guidance to our clients while aggressively pursuing their legal interests. Call us at (416) 736-0200 or 1-844-736-0200 or contact us online.

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