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DOMESTIC CONTRACTS AND SEPARATE AGREEMENTS - Consensus, lack of - Misrepresentation

Tuesday, January 14, 2020 @ 8:51 AM  

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Appeal by the wife from a decision of a chambers judge finding that the parties’ settlement agreement was binding. On the eve of trial, the parties reached an agreement resolving all the outstanding property and spousal support issues. Two weeks later, the wife claimed that a $310,000 asset in the husband’s possession was not accounted for in the settlement because of his alleged misrepresentation. The asset related to a shareholder loan that was accounted for differently by the husband’s accountant as of 2014. The wife claimed the agreement was vitiated and sought to reopen negotiations. She argued the husband failed to provide adequate disclosure regarding the $310,000 and failed to point out to her that she was undervaluing the shareholder’s loan during the negotiations. The chambers judge found the husband fully complied with his disclosure obligations.

HELD: Appeal dismissed. The chambers judge set out the correct standard for disclosure and then properly analyzed whether the husband met his obligations in this case. While there might have been a failure on the wife’s part to fully understand the disclosure regarding the shareholder’s loan or to appreciate its significance, that did not equate to a failure to disclose by the husband. He provided all the disclosure required for the wife to evaluate the value of the businesses and the shareholder’s loan. The shareholder’s loan issue was specifically flagged by her business valuator and an explanation was provided by the husband’s accountant with an invitation from him to ask any follow-up questions. The wife was able to discover the shareholder’s loan issue without the husband providing any additional documents or information. The potential issue was known to her well in advance of the settlement agreement being reached and was not obscured in a manner that prevented her from assessing her rights and making an informed choice. The doctrine of unilateral mistake did not apply. There was no evidence of an inadvertent drafting error, omission in the settlement agreement, or similar error. The alleged mistake was not the type of mistake that could be addressed through the principles of unilateral mistake. Common mistake also did not apply to this case. The parties negotiated and reached a global settlement for an amount that each was willing to settle for, which included the shareholder’s loan, having had the advantage of full disclosure, legal assistance and professional valuation advice.

Boechler v. Boechler, [2019] S.J. No. 460, Saskatchewan Court of Appeal, R.G. Richards C.J.S., N.W. Caldwell and J.A. Tholl JJ.A., November 18, 2019. Digest No. TLD-January132020004