Dougherty v. Dougherty

• Jurisdiction: Ontario
• Court: Court of Appeal (Ontario)
• Judge: O'Connor, A.C.J.O., Rosenberg and Feldman, JJ.A.
• Neutral Citation: 2008 ONCA 302
• Citation: 2008 ONCA 302,(2008), 235 O.A.C. 85 (CA),89 OR (3d) 760,292 DLR (4th) 103,51 RFL (6th) 1,[2008] CarswellOnt 2203,[2008] OJ No 1502 (QL),165 ACWS (3d) 872,235 OAC 85,89 O.R. (3d) 760,292 D.L.R. (4th) 103,[2008] O.J. No 1502 (QL),(2008), 235 OAC 85 (CA),235 O.A.C. 85
• Date: 21 December 2007

Dougherty v. Dougherty (2008), 235 O.A.C. 85 (CA)

MLB headnote and full text

Temp. Cite: [2008] O.A.C. TBEd. AP.091

Samuel R. Dougherty (respondent/appellant) v. Thelma N. Dougherty (applicant/respondent)

(C46232; 2008 ONCA 302)

Indexed As: Dougherty v. Dougherty

Ontario Court of Appeal

O'Connor, A.C.J.O., Rosenberg and Feldman, JJ.A.

April 22, 2008.

Summary:

After 17 years of marriage the parties separated. The wife applied to set aside the parties' prenuptial agreement.

The Ontario Superior Court allowed the application and set aside the agreement. The husband appealed.

The Ontario Court of Appeal allowed the appeal, set aside the judgment and ordered a new trial of the issue.

Family Law - Topic 853

Husband and wife - Marital property - Distribution orders - Contracting out - Effect of - The parties separated - The wife applied to set aside their prenuptial agreement - In allowing the application, the trial judge stated that "The Family Law Act allows parties to enter into contracts for the purpose of arranging their affairs but the Court should be hesitant to enforce these." - The Ontario Court of Appeal held that the trial judge's statement was contrary to the law - The authorities generally agreed that the courts should respect arrangements that spouses made for the division of their property on the breakdown of their relationship - This was particularly so where the agreement was negotiated with independent legal advice - The trial judge accepted that the wife did not have independent legal advice - Nevertheless, there was no presumption that the courts would be hesitant to enforce a prenuptial agreement - The burden was on the party seeking to escape the agreement's effect to show that there were grounds for setting it aside - The lack of independent legal advice was a factor to be considered along with all of the other circumstances - See paragraphs 8 to 11.

Family Law - Topic 853

Husband and wife - Marital property - Distribution orders - Contracting out - Effect of - The parties separated - The wife applied to set aside their prenuptial agreement - The trial judge allowed the application on various grounds, including that the parties could not have understood the full effect and impact of the provisions of the agreement that released their rights that they might have or acquire under the laws of any jurisdiction and released any right that they might have in succeeding statute provisions in Ontario - The Ontario Court of Appeal allowed an appeal - There was nothing in the Family Law Reform Act, the Family Law Act or any other legislation that prevented the parties from contracting out of successor regimes for distribution of property - To the contrary, s. 70(3) of the Family Law Act specifically contemplated that the parties could do so - The provisions of the agreement were valid contractual terms that reflected a clear intention to exempt all property from the legislative grasp of the Family Law Reform Act, the Succession Law Reform Act or any successor legislation - See paragraphs 30 to 36.

Family Law - Topic 3207

Separation agreements, domestic contracts and marriage contracts - General - Financial disclosure - The parties separated - The wife applied to set aside their prenuptial agreement - In allowing the application, the trial judge found that the husband had not made the necessary financial disclosure respecting his pension from his employer before the agreement was signed - The Ontario Court of Appeal allowed an appeal - There was no evidence that the husband failed to disclose significant assets - As the trial judge pointed out, the wife knew that the husband had the pension but there was no evidence that the wife had a significant interest in it - The trial judge's finding that the wife might have had a significant interest in the pension was not sufficient to prove that the husband failed to disclose significant assets - See paragraphs 27 to 29.

Family Law - Topic 3261

Separation agreements, domestic contracts and marriage contracts - Enforcement - General - [See first Family Law - Topic 853 ].

Family Law - Topic 3274

Separation agreements, domestic contracts and marriage contracts- Enforcement - Evidence and proof - [See first Family Law - Topic 853 ].

Family Law - Topic 3350

Separation agreements, domestic contracts and marriage contracts - Effect of agreement - General - [See both Family Law - Topic 853 ].

Family Law - Topic 3356

Separation agreements, domestic contracts and marriage contracts - Effect of agreement - Maintenance - The parties separated - The wife applied to set aside their prenuptial agreement - The trial judge allowed the application - The Ontario Court of Appeal stated that one of the grounds on which the trial judge allowed the application appeared to be that the agreement did not provide for child or spousal support - There was no legal basis for setting aside an agreement dealing with property merely because it did not also deal with support, especially child support - The parties' agreement did not preclude the wife from applying for spousal and child support - In fact, an agreement that was unfair when considered solely from the point of view of the division of property could be acceptable when spousal and child support was considered - In any event, the terms of a domestic contract could not override the court's jurisdiction with respect to child support - See paragraphs 20 to 22.

Family Law - Topic 3357

Separation agreements, domestic contracts and marriage contracts - Effect of agreement - Maintenance of children - [See Family Law - Topic 3356 ].

Family Law - Topic 3382

Separation agreements, domestic contracts and marriage contracts - Grounds for setting aside - Material nondisclosure - [See Family Law - Topic 3207 ].

Family Law - Topic 3384

Separation agreements, domestic contracts and marriage contracts - Grounds for setting aside - Inequitable result or unfairness - [See Family Law - Topic 3356 ].

Family Law - Topic 4006

Divorce - Corollary relief - Maintenance awards - Effect of agreements - [See Family Law - Topic 3356 ].

Fraud and Misrepresentation - Topic 2502

Misrepresentation - General principles - Elements of actionable misrepresentation - The parties separated - The wife applied to set aside their prenuptial agreement - The trial judge allowed the application on various grounds, including that the husband misrepresented that to be valid the agreement had to be signed before the marriage - The Ontario Court of Appeal allowed an appeal - The trial judge made no attempt to apply the law respecting misrepresentation and in particular made no finding that the misrepresentation was material to the wife's decision to sign the agreement - Moreover, some of the judge's findings suggested that the misrepresentation was not material and that it was always the parties' intention to enter into a prenuptial agreement - The judge also did not expressly find that the misrepresentation induced the wife to enter into the agreement and there was evidence contrary to any suggestion of inducement - The wife's real complaint appeared to be that she understood that the agreement would only deal with their real estate whereas the agreement provided that all of the parties' real and personal property would be kept separate - However, this misunderstanding flowed from her failure to read the contract, or to read it carefully - It was not apparent how it could be said that the husband's misrepresentation as to timing vitiated her ability to understand the contents of the agreement - She might have been distracted about the upcoming marriage and might have felt rushed but she nevertheless had the opportunity to read the agreement - See paragraphs 12 to 19.

Cases Noticed:

Hartshorne v. Hartshorne, [2004] 1 S.C.R. 550; 318 N.R. 1; 194 B.C.A.C. 161; 317 W.A.C. 161, refd to. [para. 9].

Panzer v. Zeifman et al. (1978), 20 O.R.(2d) 502 (C.A.), refd to. [para. 13].

Beer et al. v. Townsgate I Ltd. et al. (1997), 104 O.A.C. 161; 36 O.R.(3d) 136 (C.A.), refd to. [para. 13].

Gregoric v. Gregoric (1990), 4 O.R.(3d) 588 (Gen. Div.), agreed with [para. 25].

Klinger v. Klinger, [1993] O.J. No. 170 (Gen. Div.), refd to. [para. 25].

Currey v. Currey, [2002] O.T.C. 260; 26 R.F.L.(5th) 28 (Sup. Ct.), refd to. [para. 25].

Grant-Hose v. Grant-Hose (1991), 32 R.F.L.(3d) 26 (Ont. U.F.C.), refd to. [para. 26].

Chandra v. Chandra (1999), 174 Nfld. & P.E.I.R. 136; 533 A.P.R. 136; 45 R.F.L.(4th) 181 (Nfld. C.A.), refd to. [para. 26].

Lay v. Lay (2000), 131 O.A.C. 47; 47 O.R.(3d) 779, refd to. [para. 31].

Statutes Noticed:

Family Law Act, R.S.O. 1990, c. F-3, sect. 70(3) [para. 32].

Counsel:

William R. Clayton, for the appellant;

Glen R. Carey, for the respondent.

This appeal was heard on December 21, 2007, by O'Connor, A.C.J.O., Rosenberg and Feldman, JJ.A., of the Ontario Court of Appeal. Rosenberg, J.A., released the following judgment for the court on April 22, 2008.