Zavarella v. Zavarella, (2013) 313 O.A.C. 137 (CA)

• Judge: Gillese, Juriansz and Strathy, JJ.A.
• Court: Court of Appeal (Ontario)
• Case Date: September 25, 2013
• Jurisdiction: Ontario
• Citations: (2013), 313 O.A.C. 137 (CA);2013 ONCA 720

Zavarella v. Zavarella (2013), 313 O.A.C. 137 (CA)

MLB headnote and full text

Temp. Cite: [2013] O.A.C. TBEd. DE.001

Rony Zavarella (applicant/respondent) v. Filomena Zavarella (respondent/appellant)

(C54236; 2013 ONCA 720)

Indexed As: Zavarella v. Zavarella

Ontario Court of Appeal

Gillese, Juriansz and Strathy, JJ.A.

November 28, 2013.

Summary:

About two weeks before she was married, a future wife, with debts of $49,838.70, made an assignment into bankruptcy. Within months of the marriage, the wife was discharged without having made any payments on her debt. The couple separated. Family property litigation ensued. The trial judge, inter alia, held that the wife had to include the $49,838.70 as her date of marriage debt in net family property calculations. The wife appealed.

The Ontario Court of Appeal, Juriansz, J.A., dissenting, allowed the appeal in part. The majority held that the wife's date of marriage debt should be valued at $0. The court held further that trial judge erred in removing $10,000 from the wife's assets, which had been already considered in a settlement agreement. The trial judge made no error in calculating the husband's date of marriage debt or in ruling on how the couple's joint line of credit was used post-separation.

Family Law - Topic 868.2

Husband and wife - Marital property - Distribution orders - Debts (incl. contingent liabilities) - [See both Family Law - Topic 868.3 ].

Family Law - Topic 868.3

Husband and wife - Marital property - Distribution orders - Equalization payments - About two weeks before she was married, a future wife, with debts of $49,838.70, made an assignment into bankruptcy - Within months of the marriage, the wife was discharged without having made any payments on her debt - The couple separated - Family property litigation ensued - The trial judge held that the wife had to include the $49,838.70 as her date of marriage debt in net family property calculations - The wife appealed - The Ontario Court of Appeal held that the wife's date of marriage debt should be valued at $0 - Such debt was to be valued based on the reasonable likelihood that the debt would ever be paid - Here, the debt was extinguished without any payments ever having been made on it - In the circumstances, it was an error to attribute any value to the wife's date of marriage debt - See paragraphs 13, 14 and 27 to 42.

Family Law - Topic 868.3

Husband and wife - Marital property - Distribution orders - Equalization payments -The Ontario Court of Appeal stated that "... that the debt a spouse brings to the marriage will affect that spouse's entitlement in the equalization calculation. This makes sense because it can be assumed that the spouses paid off that debt during the course of the marriage and the family assets were diminished accordingly. However, if the evidence does not support this assumption, the court cannot simply insert the face value of the debt into the NFP [net family property] calculation. To do so could undermine the objective of equalization, which is to divide equally between the spouses the net wealth accumulated from the date of marriage to the date of separation. Instead, in my view, the court must make a meaningful determination of the value to attribute to the date of marriage debt" - The court stated further that "... in order to fairly calculate equalization, the court must make a realistic determination of the value of debt in an NFP calculation, and that determination is based on the reasonable likelihood that the debt will ever be paid" - See paragraphs 32, 33 and 39.

Family Law - Topic 890.2

Husband and wife - Marital property - Considerations in making distribution orders - Settlements - A couple separated and family property litigation ensued - Prior to trial, the parties entered into an agreement settling a number of matters, including an agreement that the wife brought a car with a value of $10,000 into the marriage - During trial, it became apparent that the wife did not own the car, but rather had leased it - The trial judge, considering that the parties had made a common mistake, removed the $10,000 from the wife's date of marriage assets - The wife appealed - The Ontario Court of Appeal held that the trial judge erred in going behind the parties' agreement in respect of the car - Settlement agreements should not be interfered with, except in narrowly circumscribed circumstances - If the agreement was to be considered by the court, it was the agreement as a whole that had to be reviewed, not some isolated part of it - Further, the doctrine of common mistake was neither available nor properly applied, in the circumstances of this case - See paragraphs 15 to 18 and 43 to 61.

Mistake - Topic 604

Mistake of fact - General - Mutual mistake - What constitutes - [See Family Law - Topic 890.2 ].

Cases Noticed:

Greenglass v. Greenglass (2010), 276 O.A.C. 62; 2010 ONCA 675, refd to. [paras. 29, 86].

Poole v. Poole, [2001] O.T.C. Uned. 535; 16 R.F.L.(5th) 397 (Sup. Ct.), refd to. [paras. 35, 86].

Miller Paving Ltd. v. Gottardo (B.) Construction Ltd. (2007), 227 O.A.C. 45; 2007 ONCA 422, refd to. [para. 45].

Fletcher v. Manitoba Public Insurance Co., [1990] 3 S.C.R. 191; 116 N.R. 1; 71 Man.R.(2d) 81; 44 O.A.C. 81, refd to. [para. 65].

Skrlj v. Skrlj (1986), 2 R.F.L.(3d) 305 (Ont. H.C.J.), refd to. [para. 79].

Serra v. Serra (2009), 246 O.A.C. 37; 93 O.R.(3d) 161; 307 D.L.R.(4th) 1; 2009 ONCA 105, refd to. [para. 79].

Buttar v. Buttar (2013), 309 O.A.C. 222; 116 O.R.(3d) 481; 2013 ONCA 517, refd to. [para. 80, footnote 2].

Da Silva v. Da Silva (2004), 1 R.F.L.(6th) 108 (Ont. Sup. Ct.), refd to. [para. 90].

Seneshen v. Seneshen, [2006] O.T.C. Uned. 592 (Sup. Ct.), refd to. [para. 90].

Thibodeau v. Thibodeau (2011), 277 O.A.C. 359; 104 O.R.(3d) 161; 2011 ONCA 110, refd to. [para. 100].

Schreyer v. Schreyer, [2011] 2 S.C.R. 605; 418 N.R. 61; 268 Man.R.(2d) 154; 520 W.A.C. 154; 2011 SCC 35, refd to. [para. 100].

Dembeck v. Wright (2012), 299 O.A.C. 166; 114 O.R.(3d) 44; 2012 ONCA 852, refd to. [para. 105].

Juvatopolos v. Juvatopolos (2005), 202 O.A.C. 1; 19 R.F.L.(6th) 76 (C.A.), refd to. [para. 112].

Statutes Noticed:

Family Law Act, R.S.O. 1990, c. F-3, sect. 4 [para. 31]; sect. 4(1) [para. 97]; sect. 5 [para. 30].

Authors and Works Noticed:

Hainsworth, T.W., Ontario Family Law Act Manual (2nd Ed. 2003), p. 5-1.02 [para. 78].

Counsel:

Jerry J. Chaimovitz, for the appellant;

Deborah Barfknecht, for the respondent.

This appeal was heard on September 25, 2013, before Gillese, Juriansz and Strathy, JJ.A., of the Ontario Court of Appeal. The following decision was released by the court on November 28, 2013, including the following opinions:

Gillese, J.A. (Strathy, J.A., concurring) - see paragraphs 1 to 74;

Juriansz, J.A., dissenting - see paragraphs 75 to 113.