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DOMESTIC CONTRACTS AND SEPARATION AGREEMENTS - Consensus, lack of

Wednesday, January 23, 2019 @ 7:39 AM  


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Application by the wife to set aside a 2015 Final Consent Order and to vary the provision respecting spousal support. The parties married in 2006 and separated in 2010. Each party was represented by legal counsel at various times, including during the negotiation of the Separation Agreement and the Settlement Agreement leading up to the Consent Final Order. A 2011 Separation Agreement purported to resolve issues respecting custody, child support, spousal support, and division of property. The husband then commenced a claim for variation of parenting arrangements, a reduction in child support and termination of spousal support. The wife sought a reduction of the husband’s parenting time and to increase child support retroactively and prospectively, along with other relief. The Consent Final Order required the husband to pay $74,200 in satisfaction of all claims for child support and spousal support from the date of the Separation Agreement to May 2015. Spousal support was terminated, and child support was increased from $1,162 to $1,331 per month, subject to future review pursuant to the provisions of the Separation Agreement. Other terms of the Separation Agreement were cancelled, varied or clarified. Otherwise, the husband’s claim to vary the Separation Agreement was dismissed. Subsequently, the wife commenced a second family law action in October 2015 for an order requiring the husband to fully disclose assets acquired and owned during the marriage and for equal division of family property and family debt. The wife now sought to vary the property division effected by the Separation Agreement due to non-disclosure and fraud by the husband and to quash the provision of the Consent Final Order pertaining to child support. The husband did not disclose his up-to-date employment income before the Separation Agreement was executed, and the support amounts payable were based on his 2009 income. He also did not disclose all the stock he owned.

HELD: Application dismissed. There was no basis for setting aside the Consent Final Order. The Order clearly embodied the Settlement Agreement. It had the effect of affirming the Separation Agreement subject to the revisions specified. Neither the Settlement Agreement nor the Consent Final Order was obtained as a result of deceit or material non-disclosure on the part of the husband. The wife and her counsel were well aware of the true state of the husband’s finances at the time settlement was reached. No undue influence or duress was at play and there was no evidentiary basis to find that the Agreement was in any way unconscionable. While complete disclosure of each party's financial affairs at the time of the Separation Agreement might not have occurred, both parties were aware that the Schedules to the Agreement were not an entire listing of assets and liabilities. Any non-disclosure that might have occurred was mostly remedied before the Consent Final Order. While the husband did not make document discovery at that time to the same extent made during the ongoing litigation following the Consent Final Order, there was more than sufficient disclosure on his part, and discovery opportunity on behalf of the wife, to obtain an accurate history of his assets and finances to June 2015, including his income during that period. Before finalizing the Settlement Agreement, the wife was well aware that even though non-disclosure concerns continued, she already had enough information to know an unequal division of family property had occurred. She was represented by experienced family law counsel at the relevant time. Division of assets and potential claims by both parties for redistribution of assets was expressly considered and taken into account by both parties in the settlement embodied in the Consent Final Order. Whether on the basis of cause of action estoppel, issue estoppel or abuse of process arising out of inconsistent factual and legal positions in different proceedings, the wife was estopped from advancing her claims in the present action.

Chan-Henry v. Liu, [2018] B.C.J. No. 6800, British Columbia Supreme Court, N.P. Kent J., December 4, 2018. Digest No. TLD-January212019006