Tadayon v. Mohtashami, 2015 ONCA 777

• Judge: Gillese, Pepall and Lauwers, JJ.A.
• Court: Court of Appeal (Ontario)
• Case Date: September 11, 2015
• Jurisdiction: Ontario
• Citations: 2015 ONCA 777;(2015), 341 O.A.C. 153 (CA)

Tadayon v. Mohtashami (2015), 341 O.A.C. 153 (CA)

MLB headnote and full text

Temp. Cite: [2015] O.A.C. TBEd. NO.028

Leila Fatemeh Tadayon (applicant/respondent/appellant by way of cross-appeal) v. Ali Mohtashami (respondent/appellant/respondent by way of cross-appeal)

(C58382; 2015 ONCA 777)

Indexed As: Tadayon v. Mohtashami

Ontario Court of Appeal

Gillese, Pepall and Lauwers, JJ.A.

November 16, 2015.

Summary:

The parties were married in 1984, separated in 1999 and divorced in 2004. They had three children. The parties entered into a separation agreement in 1999 which set out (1) how the matrimonial home (the Yorkminster Property) was to be dealt with, and (2) that the husband was to pay the wife $2,000 as combined child and spousal support. In 2005, the Yorkminster Property was sold and another home (the Charnwood Property) was purchased for the wife and children. Title to the Charnwood Property was taken in the wife's name alone. As a result of these changed circumstances, the parties entered into an amending agreement in 2005 which provided that each party had a 50% interest in the Charnwood Property. In 2010, the wife brought an application in which she sought (1) to set aside the 1999 and 2005 agreements; (2) retroactive and prospective child and spousal support; and (3) to be declared the sole owner of the Charnwood Property. The husband sought a declaration that the wife held 50% of the Charnwood Property in trust for him.

The Ontario Superior Court set aside the 2005 agreement, finding that the husband's non-disclosure of significant income and the treatment of the Charnwood Property was unconscionable. The husband was ordered to pay the wife a lump sum of $172,133, which was the total net amount that he owed for child and spousal support to the end of 2013, less a costs award of $35,915 payable by the wife. No child support was payable after December 2013, but the husband was ordered to pay prospective spousal support of $7,452/month until December 2015. The husband appealed, arguing that the application judge erred in (1) setting aside the 2005 agreement; (2) finding the wife to be the sole owner of the Charnwood Property; and (3) determining the quantum and duration of prospective spousal support. The wife cross-appealed, arguing that the application judge erred in (1) failing to order retroactive child and spousal support prior to 2010; (2) failing to award prejudgment interest on the retroactive support order; (3) determining the quantum and duration of prospective spousal support; and (4) ordering costs.

The Ontario Court of Appeal dismissed the appeal. The cross-appeal was allowed only in respect of the wife's entitlement to prejudgment interest on the retroactive support award, which was an oversight by the application judge.

Family Law - Topic 3353

Separation agreements, domestic contracts and marriage contracts - Effect of agreement - In divorce actions - Corollary relief - [See Family Law - Topic 4021.1 ].

Family Law - Topic 3356

Separation agreements, domestic contracts and marriage contracts - Effect of agreement - Maintenance - [See Family Law - Topic 4021.1 ].

Family Law - Topic 3375

Separation agreements, domestic contracts and marriage contracts - Variation - Of maintenance - [See Family Law - Topic 4021.1 ].

Family Law - Topic 3382

Separation agreements, domestic contracts and marriage contracts - Grounds for setting aside - Material nondisclosure and misrepresentation - The parties entered into a separation agreement in 1999 which set out (1) how the matrimonial home (the Yorkminster Property) was to be dealt with, and (2) the husband's support obligations - In 2005, the Yorkminster Property was sold and the Charnwood Property was purchased for the wife and children - Even though title to the Charnwood Property was taken in the wife's name alone, the parties entered into an amending agreement which provided that they each had a 50% interest in the Charnwood Property - At this time, the husband represented that his income was $80,000 when it was actually $344,000 - In 2010, the wife applied to have both agreements set aside - The application judge set aside the 2005 agreement, finding that the husband's non-disclosure of significant income and the treatment of the Charnwood Property was unconscionable - The Ontario Court of Appeal dismissed the husband's appeal - There was no error in the application judge's findings that the husband materially misrepresented his 2005 income, that the misrepresentation was an inducement for the wife to sign the 2005 agreement, and that the wife would not have executed the 2005 agreement if she had known the correct financial information - The husband preyed upon the wife by, inter alia, not disclosing significant financial information - The application judge's findings on financial non-disclosure justified his finding of unconscionability - See paragraphs 19 to 31.

Family Law - Topic 3382

Separation agreements, domestic contracts and marriage contracts - Grounds for setting aside - Material nondisclosure and misrepresentation - The parties entered into a separation agreement in 1999 which set out (1) how the matrimonial home (the Yorkminster Property) was to be dealt with, and (2) the husband's support obligations - In 2005, the Yorkminster Property was sold and the Charnwood Property was purchased for the wife and children - Even though title to the Charnwood Property was taken in the wife's name alone, the parties entered into an amending agreement which provided that they each had a 50% interest in the Charnwood Property - At this time, the husband represented that his income was $80,000 when it was actually $344,000 - In 2010, the wife applied to have both agreements set aside - The application judge set aside the 2005 agreement, finding that the husband's non-disclosure of significant income and the treatment of the Charnwood Property was unconscionable - The husband appealed, arguing that the application judge failed to consider the relevant factors when exercising his discretion to set aside the 2005 agreement - The Ontario Court of Appeal dismissed the appeal - After finding that the 2005 agreement was unconscionable, the application judge also considered the wife's conduct in respect of financial disclosure - He noted that the wife could have pursued more detailed disclosure in 2005 and that she took the benefits of the agreement, but concluded that these did not factor against the wife - He further found that the wife had fulfilled her obligations under the agreement by paying the mortgage and other carrying costs on the Charnwood Property - See paragraphs 32 to 39.

Family Law - Topic 3386

Separation agreements, domestic contracts and marriage contracts - Grounds for setting aside - Unconscionable bargain - [See both Family Law - Topic 3382 ].

Family Law - Topic 3386

Separation agreements, domestic contracts and marriage contracts - Grounds for setting aside - Unconscionable bargain - The parties entered into a separation agreement in 1999 which set out (1) how the matrimonial home (the Yorkminster Property) was to be dealt with, and (2) the husband's support obligations - In 2005, the Yorkminster Property was sold and the Charnwood Property was purchased for the wife and children - Even though title to the Charnwood Property was taken in the wife's name alone, the parties entered into an amending agreement which provided that they each had a 50% interest in the Charnwood Property - At this time, the husband represented that his income was $80,000 when it was actually $344,000 - In 2010, the wife applied to have both agreements set aside - The application judge set aside the 2005 agreement, finding that the husband's non-disclosure of significant income and the treatment of the Charnwood Property was unconscionable - The Ontario Court of Appeal dismissed the husband's appeal - The application judge found that only the wife's funds were used for the down payment on the Charnwood Property, and that the wife was entirely responsible for the mortgage payments and other carrying costs - The wife met those obligations from the support she received from the husband, for which the husband received a tax deduction - These factors, coupled with the findings that the husband preyed on the wife's economic vulnerability and that he had not disclosed material financial information, satisfied the test for unconscionability - The presumption of resulting trust did not apply where only the wife's funds were used to purchase the property - See paragraphs 40 to 47.

Family Law - Topic 3992

Divorce - Corollary relief - General - Delay in application - Effect of - [See Family Law - Topic 4001.1 ].

Family Law - Topic 3997

Divorce - Corollary relief - General - Economic self-sufficiency - [See Family Law - Topic 4021.1 and first Family Law - Topic 4022.1 ].

Family Law - Topic 4001.1

Divorce - Corollary relief - Maintenance and awards - Retroactive awards - The parties were married in 1984 and divorced in 2004 - They had three children - They executed a separation agreement in 1999 which provided that the husband would pay the wife $2,000/month as combined child and spousal support - In 2010, the wife applied for retroactive child and spousal support based on increases to the husband's income - The application judge dismissed the claim - The Ontario Court of Appeal dismissed the wife's appeal - The application judge found that the wife had not put forward any credible or reasonable excuse for failing to assert her claim before 2010 - The wife had sworn an affidavit in 2004, to obtain the divorce, in which she indicated that she was content with the terms of the 1999 agreement respecting support - The application judge also found that the wife had not provided a basis for her claim - The court understood this to be referring to the absence of evidence suggesting that either the children's needs or her needs had not been met in the relevant time period - See paragraphs 56 to 58.

Family Law - Topic 4006

Divorce - Corollary relief - Maintenance and awards - Awards - Effect of agreements - [See Family Law - Topic 4021.1 ].

Family Law - Topic 4021.1

Divorce - Corollary relief - Maintenance awards - Considerations - Financial consequences of child care and household responsibilities - The parties were married in 1984 and separated in 1999 - They had three children - They executed a separation agreement in 1999 which provided that the husband would pay the wife $2,000/month as combined child and spousal support - In January 2014, an application judge ordered the husband to pay ongoing spousal support of $7,452/month until the end of 2015 - The husband appealed, arguing that the application judge failed to consider whether the substance of the 1999 agreement was in substantial compliance with the objectives of the Divorce Act - The Ontario Court of Appeal dismissed the appeal - The application judge succinctly set out the applicable legal principles - Respecting entitlement, he found that the husband derived a significant benefit from the wife's dominant role in childcare even post-separation - While the wife's role did not prevent her from working at all, it did create some limits on what she could do - He ordered a further two years of spousal support to enable the wife "to regroup, assess her options, pursue additional job training or development and transition to financial self-sufficiency" - The quantum was based on the methodology that the husband had proposed for setting retroactive support for 2010 to 2013 - There was no basis to interfere with the application judge's exercise of discretion - See paragraphs 48 to 55.

Family Law - Topic 4022.1

Divorce - Corollary relief - Maintenance awards - To spouse - Extent of obligation - The parties were married in 1984 and divorced in 2004 - They had three children - They executed a separation agreement in 1999 which provided that the husband would pay the wife $2,000/month as combined child and spousal support - In 2014, based on increases to the husband's income, an application judge recalculated the amount of child and spousal support payable since 2010, and ordered the husband to pay ongoing spousal support of $7,452/month until the end of 2015 - The wife appealed, arguing that the application judge erred in time-limiting the spousal support award - The Ontario Court of Appeal dismissed the appeal - The application judge made the following clear factual findings which fully justified his decision to time-limit further spousal support: (1) the wife had received spousal support for 14 years; (2) the parties separated after 16 years of marriage; (3) the children were grown and no longer needed the wife's full-time care and attention; (4) the wife was relatively young (37) when the parties separated; (5) the wife was intentionally underemployed; (6) there was no evidence to suggest that the wife had limited employment opportunities; and (7) evidence of the wife's efforts to achieve financial self-sufficiency was lacking - See paragraphs 65 to 69.

Family Law - Topic 4022.1

Divorce - Corollary relief - Maintenance awards - To spouse - Extent of obligation - [See Family Law - Topic 4021.1 ].

Family Law - Topic 4027

Divorce - Corollary relief - Maintenance awards - Effect of income or potential income of claimant - [See first Family Law - Topic 4022.1 ].

Trusts - Topic 1907

Resulting trusts - General principles - Circumstances when not imposed - [See second Family Law - Topic 3386 ].

Trusts - Topic 1909

Resulting trusts - General principles - Bars - [See second Family Law - Topic 3386 ].

Cases Noticed:

Horner v. Horner (2004), 191 O.A.C. 28; 72 O.R.(3d) 561 (C.A.), refd to. [para. 23].

Miglin v. Miglin, [2003] 1 S.C.R. 303; 302 N.R. 201; 171 O.A.C. 201; 2003 SCC 24, refd to. [para. 28].

N.R. v. B.B. et al., [2009] 1 S.C.R. 295; 385 N.R. 85; 266 B.C.A.C. 1; 449 W.A.C. 1; 2009 SCC 10, refd to. [para. 29].

Virc v. Blair et al. (2014), 319 O.A.C. 359; 119 O.R.(3d) 721; 2014 ONCA 392, refd to. [para. 33].

Hickey v. Hickey, [1999] 2 S.C.R. 518; 240 N.R. 312; 138 Man.R.(2d) 40; 202 W.A.C. 40, refd to. [para. 66].

St. Jean v. Cheung et al., [2009] O.A.C. Uned. 4; 173 A.C.W.S.(3d) 984; 2009 ONCA 9, refd to. [para. 70].

Counsel:

Stephen Codas and Michael Zalev, for the appellant/respondent by way of cross-appeal;

Michael Stangarone and Ryan Kniznik, for the respondent/appellant by way of cross-appeal.

This appeal and cross-appeal were heard on September 11, 2015, before Gillese, Pepall and Lauwers, JJ.A., of the Ontario Court of Appeal. Gillese, J.A., delivered the following judgment for the court on November 16, 2015.