Robar v. Arseneau, 2010 NSSC 175

IN THE SUPREME COURT OF NOVA SCOTIA Citation: Robar v. Arseneau, 2010 NSSC 175 Date: 20100428 Docket: 1201-061904 Registry: Halifax Between: Donna Marie Margaret (Arseneau) Robar Applicant and Joseph Pierre Arseneau Respondent Judge: Justice Lawrence I. O’Neil Heard: April 8 and 9, 2010, in Halifax, Nova Scotia Counsel: Sandra Barss, for the Petitioner Elizabeth A. Wozniak, for the Respondent By the Court : The Parties [ 1 ] Ms. Arseneau, hereinafter referred to as Ms. Robar, was 44 years of age when she married Mr. Arseneau. Mr. Arseneau was 53 years of age at the time. Both parties were divorced. Mr.

Arseneau did not have children living with him when they began cohabitation. Ms. Robar had primary care of her son, Ryan, for whom she received child support. [ 2 ] Ms. Robar and her son moved into a home owned by Mr. Arseneau. [ 3 ] At the time of their marriage, the parties were both employed by the Department of National Defence. Mr. Arseneau had served in the Canadian military for approximately three decades and Ms. Robar had more than 20 years of service as a civilian employee. [ 4 ] At the time of their separation in 2007, Mr.

Arseneau was retired from the military and was in receipt of his military pension.

Ms. Robar continues as a civilian employee and earns approximately the same amount as Mr. Arseneau receives as pension income. History of Litigation [ 5 ] Ms. Robar filed a Petition for Divorce on July 18, 2007. Mr. Paul Thomas issued the Petition on behalf of Ms. Robar. Mr. Arseneau was served July 19, 2007. Mr. Arseneau retained Ms. Wozniak. [ 6 ] In early 2008, Ms. Robar retained Ms. Barss to represent her. Ms. Robar then sought to set aside the November 2007 separation agreement.

A pre-trial and hearing on this issue was scheduled for early 2008. [ 7 ] Justice Dellapinna held an organizational pre-trial on February 15, 2010, to deal with the issues arising from the Divorce Petition. The parties agreed to

schedule a separate hearing on whether the parties’ separation agreement should be set aside. The ruling on that matter will determine whether the divorce will be concluded on the basis of the agreement. Issue [ 8 ] As stated, the parties began cohabiting in September 2001; married on August 12, 2004 and separated on July 1, 2007. They executed a separation agreement in November 2007. Ms.

Robar made an application to set aside the parties’ separation agreement, as provided by s.29 of the Matrimonial Property Act, R.S.N.S. 1989, c.275 and as permitted by an application of common law principles, in particular, those enunciated by the Supreme Court of Canada in Miglin v. Miglin , 2003 SCC 24 , [2003] 1 S.C.R. 303 . The question for the court to decide is whether that agreement should be set aside?

Legal Principles [ 9 ] The court’s authority to decide upon a corollary relief judgment at variance with the parties’ separation agreement often needs to be reviewed when the court is called upon to issue an original corollary relief judgment or to vary an existing corollary relief judgment. [ 10 ] Justice MacDonald in the recent decision of MacLean v. MacLean [2009] N.S.J. No. 328 , 2009 NSC 216 considered whether a separation agreement should be set aside. She identified eight factors relevant to determining the validity of the agreement.

This is often the first determination a court is called upon to make when a party seeks to set aside a separation agreement in part or in its entirety. [ 11 ] At paragraph 8 she wrote: 8 In Miglin v. Miglin , 2003 SCC 24 (S.C.C.) and Rick v. Brandsema , 2009 SCC 10 (S.C.C.), the Supreme Court of Canada has provided direction about the principles to apply when considering whether to set aside a separation agreement. The first issue to be examined is the validity of the agreement itself.

To do so the court must consider a number of factors such as: (1) the capacity or mental competence of the parties; (2) whether there has been complete disclosure of material information;

(3) whether the parties have been provided with independent legal or other independent advice and if so whether the party receiving the advice suffered from any particular vulnerability that might negate the usefulness of that advice; (4) whether each party understood the agreement and its effect; (5) whether the agreement meets the objectives of the legislation with which it purports to deal; (in this case the spousal support provisions of the Divorce Act and the requirements of the Matrimonial Property Act ); (6) whether the terms of the contract were unclear or uncertain; (7) whether a party signed the contract under duress or undue influence or was a vulnerable party under other influence or stress that may lead an individual to sign a document against his or her interest; (8) whether the agreement was signed under mistake or as a result of fraud or misrepresentation of a material fact. [ 12 ] Justice MacDonald went on to find the subject agreement invalid and set it aside.

At paragraph 30 she concluded: 30 I have found that all the circumstances surrounding the negotiation and execution of this agreement were fundamentally flawed and necessitate a finding that the agreement is invalid and must be set aside. [ 13 ] It is argued herein that the parties did not enter a binding agreement or that the agreement was not binding at the time it was entered. Faced with a similar issue, the Supreme Court of Canada in Rick v. Brandsema 2009 SCC 10 (CanLII) , [2009] S.C.J. 10 assessed the circumstances at the time the separation agreement was negotiated and signed.

Justice Abella, on behalf of the court, overturned an agreement because of incomplete disclosure by the husband. In the course of her discussion of the principles to be applied when the court is asked to set aside a separation agreement, Justice Abella referenced the Miglin decision and the guidance lower courts must take from it. [ 14 ] At paragraph 48, she stated: 48 . . . . . An agreement based on full and honest disclosure is an agreement that, prima facie , is based on the informed consent of both parties.

It is, as a result, an agreement that courts are more likely to respect. . . . . [ 15 ] There is authority for the proposition that the court’s considerations are the same when called upon to set aside a separation agreement regardless of whether the application arises at the time the original corollary relief judgment is being issued, or in the context of an application to vary a corollary relief judgment. At para. 91 in Miglin supra , the court stated: 91 Although we recognize the unique nature of separation agreements and their differences from commercial contracts, they are contracts nonetheless.

Parties must take responsibility for the contract they execute as well as for their own lives. It is only where the current circumstances represent a significant departure from the range of reasonable outcomes anticipated by the parties, in a manner that puts them at odds with the objectives of the Act , that the court may be persuaded to give the agreement little weight. As we noted above, it would be inconsistent if a different test applied to change an agreement in the form of an initial order under s. 15.2 and to variation of an agreement incorporated into an order under s. 17.

In our view, the Act does not create such inconsistency. We do not agree with the Ontario Court of Appeal when it suggests at para. 71, that once a material change has been found, a court has “a wide discretion” to determine what amount of support, if any, should be ordered, based solely on the factors set out in s. 17(7). As La Forest J. said in his dissent in Richardson, supra, at p. 881, an order made under the Act has already been judicially determined to be fit and just.

The objectives of finality and certainty noted above caution against too broad a discretion in varying an order that the parties have been relying on in arranging their affairs. Consideration of the overall objectives of the Act is consistent with the non-exhaustive direction in s. 17(7) that a variation order “should” consider the four objectives listed there. More generally, a contextual approach to

interpretation, reading the entire Act , would indicate that the court would apply those objectives in light of the entire statute. Where the order at issue

incorporated the mutually acceptable agreement of the parties, that order reflected the parties’ understanding of what constituted an equitable sharing of the economic consequences of the marriage. In our view, whether acting under s. 15.2 or under s. 17, the Court should take that into consideration. [ 16 ] Ms. Robar also relies upon the Matrimonial Property Act , R.S.N.S. 1989, c. 275 in support of her argument to have the separation agreement set aside. In particular, she cites s.29 of that Act , which provides as follows: 29.

Upon an application by a party to a marriage contract or separation agreement, the court may, where it is satisfied that any term of the contract or agreement is unconscionable, unduly harsh on one party or fraudulent, make an order varying the terms of the contract or agreement as the court sees fit. R.S., c. 275, s. 29. . . . . .

Section 12 and 13 of the Act deal with an application for unequal division of matrimonial assets. Ms. Robar is not seeking an unequal division of assets, she is arguing that an unequal division has already been achieved in Mr. Arseneau’s favour. Part of her argument is that this reality mitigates in favour of having the agreement set aside or varied “as the court deems fit”. Issue three: The Parties’ Separation Agreement/Minutes of Settlement [ 17 ] Clearly on the face of it, the parties agreed to have the terms of the separation agreement become the terms of the corollary relief judgment. This is stated in the recitals to the agreement; in clause 2(

e) and (f); clauses 5, 12 & 20: Recitals - para 4 AND WHEREAS the Husband and Wife intend that the agreement be a full and final settlement of all of their respective rights and liabilities against and to each other and to and with reference to the property and estate of the other arising out of their marriage to each other and pursuant to the provisions of the Divorce Act , 1985, the Maintenance and Custody Act and the Matrimonial property Act of the Province of Nova Scotia; . . . . . 2.

AGREEMENT AND INTENTION NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the promises hereinafter expressed and other good and valuable consideration, the receipt and sufficiency whereof is hereby acknowledged, the spouses desiring to determine all of their rights to the income, property and estate of each other arising from their marriage covenant, undertake and agree that: . . . . . (

e) This agreement shall constitute a separation agreement pursuant to the Matrimonial Property Act , R.S.N.S., 1989, c. 275 , as amended and any successor legislation and Minutes of Settlement of the corollary matters in any ensuing divorce proceeding and subject to the discretion of the Court, shall be incorporated in and form part of any Corollary Relief Judgment in any ensuing Divorce proceedings.

(

f) This agreement is a full and final settlement of all matters outstanding between the spouses arising from their marriage. This agreement may be pleaded as a complete defence to any action brought by either spouse to assert a claim to or in respect of any matter dealt with by this agreement, save with respect to the child or where a spouse has failed to disclose a circumstance with respect to his or her financial or asset position which circumstance could reasonably be construed as a significant circumstance which should have been raised during negotiation of this agreement. . . . . . 5.

DEEMED SETTLEMENT UNDER THE DIVORCE ACT, MATRIMONIAL PROPERTY ACT , FAMILY MAINTENANCE ACE AND PENSIONS BENEFITS ACT The parties acknowledge that this agreement represents a settlement of all rights and obligations in respect of each other arising out of the marriage under the Matrimonial Property Act , R.S.N.S., 1989, c. 275 , the Maintenance and Custody Act , R.S.N.S. 1989, c. 160 , the Pension Benefits Act , R.S.N.S., 1989, c. 340 Divorce Act , 1985, or similar legislation in any jurisdiction or any successor thereto or proceedings for Divorce in Canada or elsewhere, and this agreement shall constitute Minutes of Settlement with respect thereto.

In the event of Divorce proceedings, the parties hereby waive production of financial statements in respect of claims made in such proceeding and settled by way of this agreement and this provision is intended to constitute a waiver for the purposes of Civil Procedure Rule 57.13(3). . . . . . 12. PENSIONS The parties each hereby waive any right whatsoever to a claim for a division of pension benefits pursuant to the Pension Benefit Act or any successor thereto or under the provisions of the Pension Benefits Standards Act or the Pension Benefit Division Act .

The Husband and Wife covenant and agree that subsections (1) to (5) of

Section 61 of the Pension Benefits Act shall not apply to the parties hereto and for the purpose of Section 61(6) this agreement shall be deemed to constitute a division of assets pursuant to

Section 13 of the Matrimonial Property Act in settlement of the value to either spouse of any pension or other benefit under a pension plan which, by reason of the termination of the marriage relationship, that will lose the chance of acquiring. Nothing in that agreement shall disentitle, waive, encroach upon or affect in any way the statutory entitlement of the parties to seek a division of Canada Pension Plan credits and benefits of each other pursuant to the Canada Pension Plan Act , R.S.C. 1970, C.C.-5 as amended. . . . . . 20. Marriage Contract and Release Under the Matrimonial Property Act (

a) The Husband and Wife covenant and agree that this agreement shall constitute a Marriage Contract within the meaning of s.23 of the Matrimonial Property Act . (

b) The Husband and Wife hereby release to each other all of their respective present, past and future rights and claims under the Matrimonial Property Act . [ 18 ] The exchange of benefits that the separation agreement represented is somewhat typical.

[ 19 ] The parties both received independent legal advice and understood the full nature and effect of the agreement and his or her rights and obligations. This is stated in clause 29 of the agreement itself and no evidence has been led to suggest that this is not so. In fact, certificates of independent legal advice are attached to the agreement. Oral evidence of Mr. Thomas and Ms. Robar in this proceeding confirmed her advice and her understanding of it.

She chose to not follow it. [ 20 ] Further at clause 29, the parties agree that they entered into the agreement voluntarily and have voluntarily executed the agreement. No credible evidence has been led to suggest that this was not so. Ms. Robar does argue that her circumstances caused her to sign the agreement. These circumstances included a sense of financial pressure; a sense of being or feeling intimidated by Mr. Arseneau and the state of over all stress she was experiencing as part of the separation. Decision [ 21 ] Ms.

Robar argues that the separation agreement should be set aside on the basis of her having been subject to extreme emotional and financial stress at the time of its execution. She also argues that Mr. Arseneau did not provide disclosure prior to the execution of the agreement and it should be set aside for this reason. Finally, she implies without plainly saying so that her entitlement was greater than she received under the agreement. [ 22 ] Although the focus of Ms.

Robar’s challenge to the validity of the agreement are the circumstances that gave rise to the agreement, she implies that the agreement is unfair and should be set aside on that basis as well. - Financial Stress [ 23 ] Ms. Robar was earning approximately $50,000 at the time of her separation from Mr. Arseneau. In addition, she was receiving in excess of $400 per month as child support. I find that she had sufficient income to facilitate her transition to a new home. Her financial circumstances were not extreme.

A lifestyle adjustment was required. [ 24 ] In contrast to the many spouses who must re-establish new homes following their separation, Ms. Robar was in a very manageable situation. [ 25 ] She did not give satisfactory answers when asked to explain how she was spending her money. It appears that she is not a good money manager. [ 26 ] While she lived with Mr. Arseneau, she also had significant flexibility when managing her income. - Disclosure [ 27 ] Clause 29(IV) and (

V) provides as follows: 29. LEGAL ADVICE AND FAIR AGREEMENT iv) has fully and completely disclosed to the other the nature, extent and probable value of all his or her significant assets and all his or her significant debts or liabilities existing at the date of separation and in addition to this disclosure is satisfied with the information and particulars received from the other and acknowledges that there are no requests for further information or particulars that have not been met to his or her complete satisfaction; and (

v) acknowledges that the provisions of this agreement are equitable in all circumstances and believes that the provisions of this agreement adequately discharge the present and future responsibilities of the parties to one and other.

[ 28 ] Clause 12 of the agreement is an explicit waiver of pension division. In addition, the issue was the subject of discussion between Ms. Robar and Mr. Thomas, her counsel. [ 29 ] Ms. Robar was satisfied that she knew enough about Mr. Arseneau’s financial circumstances to proceed to a settlement. She now complains that she was unaware of the true value of his pension. However, he was in receipt of pension income when they separated. She was aware of that. She judged that she was sufficiently informed on that matter.

This she was free to do and in all of the circumstances, this was a reasonable judgment for her to make. [ 30 ] Mr. Thomas advised her not to proceed until she had the details of Mr. Arseneau’s pension confirmed. This was prudent advice. However, given what has since been learned about the pension, there is nothing to suggest Ms. Robar’s judgment was in error, even in hind sight. - Emotional Stress [ 31 ] Ms. Robar testified that the separation from Mr. Arseneau was very difficult emotionally and that she was fragile. She said she felt compelled by her circumstances to settle the matrimonial issues.

She alleged that Mr. Arseneau was abusive to her when they lived together and intimidated her after they separated. She testified that it was within this history and context that she agreed to settle the parties’ property issues. [ 32 ] Mr. Paul Thomas testified. He described his client during the period of his representation of her in 2007. Mr. Thomas testified that Ms. Robar appeared uncomfortable in the presence of lawyers and to be made anxious by the legal process she was experiencing. He acknowledged the stress on Ms. Robar through this period. [ 33 ] On cross examination, Mr.

Thomas confirmed that in his view Ms. Robar was capable of understanding the separation agreement, the advice he provided to her and he did not question her capacity to decide whether to proceed. [ 34 ] He recommended that she not sign the separation agreement principally because he felt she should not do so, prior to receiving complete formal disclosure from Mr. Arseneau. [ 35 ] Medical evidence was not presented in support of Ms. Robar’s claim.

A letter from her family physician, Doctor Lee, dated August 20, 2008, was not received into evidence, given that the doctor was not available for cross examination. [ 36 ] Ms. Robar’s evidence on the state of her health at the relevant time, was not reliable. She was generally emotional in giving her evidence and seemed stressed by the proceeding before me. Such a presentation is frequently the case when parties must endure litigation, and a hearing, including direct and cross examination.

There was no suggestion made to the court that how she presented as a witness could be taken as evidence of her not having the ability to fully participate in the proceeding. I find that she did in fact have an understanding and ability to fully understand the proceeding before me. [ 37 ] She testified that after her separation she missed work. Even this evidence, however, was lacking in detail and precision. Ms. Robar generalized her description of her emotional health but provided the court with little evidence, other than her recollections, and these were not convincing. [ 38 ] I am satisfied that Ms.

Robar did experience stress and emotional upset because of the separation. However, I find that her experience was within the range of what one would anticipate when a marital break down occurs. I conclude that she was capable of exercising sound judgment in response to the legal issues she was confronting and in fact, I find that she did. Clients are free to reject their lawyer’s advice and frequently do. It is common for litigants to settle so that they can move on. A personal decision of that nature is common.

[ 39 ] Ms. Robar had a very good understanding of the marital issues. She was well represented by a senior practitioner of matrimonial law. She acknowledged her understanding in her e-mail dated August 7, 2007 to Mr. Arseneau, herein and she proposed terms for settlement. - The Merits of the Settlement [ 40 ] Mr. Thomas advised her not to settle until she had full disclosure. The principal subject for disclosure was the value of Mr. Arseneau’s pension. However, Ms. Robar knew what Mr. Arseneau was receiving in pension income. This is not a case of her not knowing of his pension.

Clearly, she was satisfied with the knowledge she possessed and judged it sufficient to permit her to settle. [ 41 ] This is not surprising. Her willingness to not seek division of his pension for the period they lived together may well have been to her advantage. She knew she would probably be required to divide her pension as well. Mr. Arseneau contributed to his pension for approximately two and one half years and she contributed to her pension for the entire period of their cohabitation.

Consequently, her pension entitlement earned while the parties were together may well have been greater. [ 42 ] She was not imprudent in settling because she was confident that she had the information she needed. [ 43 ] In her testimony, she spoke of dividing pension value earned over the period of the parties’ cohabitation, although she could have applied to divide their pre-cohabitation pension entitlements. [ 44 ] The proposal of Ms. Robar would have resulted in Mr. Arseneau paying $76,000 in cash to her and assuming identified matrimonial debt.

In the end, he paid her $66,000 and he assumed thousands of dollars of matrimonial debt. Given all of the circumstances, this was a reasonable outcome. [ 45 ] I am satisfied that Mr. Arseneau responded to Ms. Robar in an appropriate way when faced with her departure from their home. He too was upset, hurt and adjusting to their separation. I was impressed with his evidence. He was frank and honest. Conclusion [ 46 ] I am satisfied that Ms. Robar has not met the burden on her to warrant setting aside the parties’ separation agreement.

In coming to this conclusion, I have considered the: (1) strong, unambiguous language of the agreement arrived at after extensive negotiation; (2) the fact of legal representation by both parties at the time the agreement was signed; (3) the sophistication of the parties and their understanding of the agreement; (4) the value of this agreement to both parties; (5) their respective emotional states at the time of signing and the absence of duress, or coercion;

(6) the extent of disclosure; (7) the extent to which the agreement is consistent with the objectives of the Divorce Act and the Matrimonial Property Act ; and (8) the absence of mistake, fraud and misrepresentation. [ 47 ] The application to set aside the separation agreement is therefore dismissed. J.