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What is Pain and Suffering Worth?

The objective of a judge assessing damages in a personal injury case is to restore the victim to the position he or she would have been in if the accident had not happened.  For monetary losses, such as loss of income or the cost of future care, making the victim whole means awarding damages to the victim equal to the amount of the loss they have suffered or will suffer.  In theory, awarding compensation for monetary losses is relatively straightforward, although it can be difficult in practice.

 

What should the Court award a victim of a personal injury for their pain and suffering?  In Canada damages for pain and suffering are awarded on a "functional basis", meaning that the Court awards the victim of a personal injury money to provide them with reasonable "solace" for their misfortune.  Money is awarded to make up for what has been lost in the only way possible, accepting that what has been lost is incapable of being replaced in any direct way. 

 

Where damages are assessed by a judge, the starting point is a review of the amounts awarded to other victims with similar injuries in previous cases.  Set out below are various cases dealing with discrete injuries to particular body parts that a judge may look to for guidance:  

 

Case Injury Damage for Pain & Suffering
Leighton v. Best[i]

 

Broken jaw $35,000
Gregorowicz v. Lee[i]

 

Broken ankle $30,000

Miller v 2085337 Ontario Limited (Hampton Inn By Hilton) [iii]

 

Broken wrist $22,000

Dragatis v. McPherson[iv]

 

Dog bite $7,000

 

Although previous cases are the starting point for a judge assessing damages, the personal circumstances of the victim always need to be taken into account.  A broken wrist in one case may result in more pain and suffering than in another case.  A broken wrist in one case may not heal as well as in another case.  A broken wrist may affect one victim more than another victim.  For example, all other things being equal, a broken left wrist would have a bigger impact upon a left handed person than a right handed person.  All of these factors may lead a judge to award more or less damages to a particular victim than was awarded in a previous case involving a similar injury. 

 

One factor that is typically given little or no weight is how the injury occurred.  An award of damages relating to a broken arm should usually be the same whether the injury was the result of an assault or a slip and fall.  An important exception to that general rule is that injuries arising from a motor vehicle accident are usually subject to a deductible of about $30,000. 

   

The upper limit of damages for pain and suffering as of September 2016 is $367,000.  The upper limit was set by the Supreme Court of Canada in its 1978 decision in Andrews v. Grand & Toy Alberta Ltd.[v]  The Andrews case was decided at a time when damage awards for pain and suffering were increasing well beyond historical norms, following a similar trend in the United States.  Justice Dickson of the Supreme Court said that it was necessary to impose a cap on damages for pain and suffering:   

 

"In particular, this is the area where the social burden of large awards deserves considerable weight. The sheer fact is that there is no objective yardstick for translating non-pecuniary losses, such as pain and suffering and loss of amenities, into monetary terms. This area is open to widely extravagant claims. It is in this area that awards in the United States have soared to dramatically high levels in recent years. Statistically, it is the area where the danger of excessive burden of expense is greatest. It is also the area where there is the clearest justification for moderation."

 

In the Andrews case the Supreme Court of Canada awarded $100,000 to a plaintiff who was rendered a paraplegic in a motor vehicle accident.  With inflation, the maximum award for damages for pain and suffering is now $367,000.   

 

Fil Mendes is a civil litigator at Madorin, Snyder LLP whose practice includes personal injury claims.  Madorin, Snyder LLP is a full service law firm servicing Kitchener, Waterloo, Cambridge, Guelph and the surrounding area.  

    

The information contained in this article is provided for general information purposes only and does not constitute legal or other professional advice. Readers are advised to seek specific legal advice in relation to any decision or course of action contemplated.


[i] Leighton v. Best, 2009 CanLII 25972

[ii] Gregorowicz v. Lee, 2010 BCSC 478

[iii] Miller v 2085337 Ontario Limited (Hampton Inn By Hilton) 2014 CanLII 27662 (ON SCSM)

[iv] Dragatis v. McPherson, 2006 NBQB 233 (CanLII)

[v] Andrews v. Grand & Toy Alberta Ltd., [1978] 2 SCR 229, 1978 CanLII 1 (SCC)

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A Short Introduction to Canada's Medical Assistance in Dying Legislation

Canada's Medical Assistance in Dying legislation ("MAID") came into effect on June 16, 2016.  According to my recollection, most of the media coverage focused on the June 6th, 2016, deadline to pass legislation imposed by the Supreme Court of Canada in Carter v. Canada (Attorney General) [1] and the drama surrounding Justin Trudeau's "manhandling" of opposition whip Gord Brown before a debate of the legislation.  Relatively little attention was paid to the legislation itself. 

 

Set out below is a short introduction to the MAID legislation.    

 

A candidate for medically assisted death must be an adult resident of Canada who suffers from a "grievous and irremediable medical condition".  Pursuant to subsection 241.2(2) of the Criminal Code, a person is considered to have a "grievous and irremediable medical condition" if they meet all of the following criteria: 

  1.  they have a serious and incurable illness, disease or disability;
  2.  they are in an advanced state of irreversible decline in capability;
  3.  that illness, disease or disability or that state of decline causes them enduring physical or psychological suffering that is intolerable to them and that cannot be relieved under conditions that they consider acceptable;
  4.   their natural death has become reasonably foreseeable, taking into account all of their medical circumstances, without a prognosis necessarily having been made as to the specific length of time that they have remaining.

The medical practitioners who administer medically assisted deaths are the gatekeepers of the process.  A medical practitioner may be a licensed physician or, in some provinces, a nurse practitioner.  A patient initiates the process by submitting a written request to a medical practitioner.  According to subsection 241.2(3) of the Criminal Code, the medical practitioner must satisfy themselves:

  1.  That the written request has been signed by two independent witnesses;  
  2.  That the patient has been informed that he or she may withdraw the request at any time;
  3.  That the candidate meets all of the criteria of a "grievous and irremediable medical condition"; and
  4.  That another independent medical practitioner has provided a written opinion confirming that the candidate meets all of the criteria of a "grievous and irremediable medical condition". 

After the request in writing is made, the medical practitioner must wait 10 clear days before administering a medically assisted death.  Immediately before performing the procedure, the medical practitioner must give the patient an opportunity to withdraw their request and ensure that the person gives express consent to receive medical assistance in dying.

 

Informed consent of the patient is the cornerstone of the MAID legislation.  The MAID legislation does not allow, for example, someone with a power of attorney for personal care to request a medically assisted death on behalf of another.  The MAID legislation also prohibits a medically assisted death if the patient loses the capacity to give informed consent before the procedure is administered.  Currently, the MAID legislation does not allow a patient to authorize a request for a medically assisted death in advance, although this is the topic of an independent review announced by the government on December 13, 2016. 

 

The MAID legislation is still in its infancy.  Time will tell whether it strikes the right balance between death with dignity, on the one hand, and preventing abuses, on the other. 

 

[1]  Carter v. Canada (Attorney General), 2015 SCC 5

 

Steve Grant is a lawyer at Madorin, Snyder LLP, a full service law firm serving Kitchener, Waterloo, Cambridge, Guelph and the surrounding area.  The information contained in this article is provided for general information purposes only and does not constitute legal or other professional advice. Readers are advised to seek specific legal advice in relation to any decision or course of action contemplated.

 

 

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A Simple Example of How the Basic Holdback Works

One of the foibles of Ontario's Construction Lien Act (“Act") is that it does not take project scale into account:  The same rules apply to a bathroom renovation as they do to a multi-million dollar infrastructure project.  In particular, the obligation to retain a holdback applies to all construction contracts regardless of their size or complexity.  While not exactly rocket science, most homeowners and small contractors do not administer the basic holdback properly.  Here is a simple example of how the basic holdback works. 

 

Our example involves an addition to an existing home.  The contract price is $200,000 plus HST.   The contract requires the Owner to pay 30% of the contract price upon the completion of the foundation, 30% when the addition is closed-in, and pay the balance upon completion.  The contract further provides that all invoices are due and payable within 30 days.  

 

Section 22 of the Act requires each "payor" on a construction contract to hold back 10% of the price of the services or materials as they are actually supplied under the contract until all liens that may be claimed against the holdback have expired.  The obligation to maintain the basic holdback applies despite any wording in the contract to the contrary. 

 

When the foundation is complete, the value of the services and materials supplied by the Contractor is 30% of the contract price, or $60,000.  The Contractor should deduct 10% for the basic holdback (i.e. $6,000), apply HST to the balance of $54,000 (i.e. $7,020), and invoice the Owner for a total of $61,020.  The Owner should pay the invoice within 30 days. 

 

When the addition is closed in, the value of the services and materials supplied by the Contractor since its last invoice is $60,000.  Again, the Contractor should deduct the 10% basic holdback (i.e. $6,000), apply HST to the balance of $54,000, and invoice the Owner for a further $61,020.  The Owner should pay the invoice within 30 days. 

When the addition is complete, the value of the services and materials supplied by the Contractor since its last invoice is $80,000.  The Contractor should again deduct the basic holdback of 10% (i.e. $8,000), apply HST to the balance of $72,000 ($9,360), and invoice the Owner for $81,360.  The Owner should pay the invoice within 30 days. 

 

Finally, the Contractor should issue a separate invoice to the Owner for the holdback.  The amount of the holdback is 10% of the contract price, or $20,000.  The Contractor should apply HST to the value of the holdback (i.e. $2,600), and invoice the Owner for $22,600. 

 

Unlike the other invoices, and despite the contract language that invoices are due and payable 30 days after they are rendered, the holdback invoice is payable by the Owner after any construction lien that may be claimed against the project has expired.  All construction liens will have expired 45 days after the contract is complete unless a claim for lien is preserved by registering a claim against title.  Therefore, the Owner should have their lawyer review title to the property on the 46th day after the contract is complete.  If no claims for lien have been registered against title on or before the 46th day after the contract is complete, then the Owner should pay the basic holdback to the Contractor.  If a claim for lien is made before the 46th day, then the Owner should not pay anything further to the Contractor and seek further advice from their lawyer.  

 

Ted Dreyer is a construction lawyer at Madorin, Snyder LLP. Madorin, Snyder LLP is a full service law firm serving Kitchener, Waterloo, Cambridge, Guelph and the surrounding area.  Please visit our construction law page.

 

The information contained in this article is provided for general information purposes only and does not constitute legal or other professional advice. Readers are advised to seek specific legal advice in relation to any decision or course of action contemplated.

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Parents Should Consider the Status of Student Liability Insurance

For many parents, sending their children off to University or College is a busy time. They have a lot on their mind as they check and double check to make sure their children have everything they need to venture away from the nest. Often overlooked, however, is whether or not their child is covered under any liability insurance policy in their new home.

 

Residential Liability Insurance is a method of protecting not only the personal belongings of the insured, but also any accidents in which the insured has responsibility. For example, if a student were to cause a fire in their apartment and someone were to be hurt, this liability insurance would protect them in a negligence action against them.

 

In many cases, a parent's Residential Insurance policy will cover students who are living away from their parent's homes while away for studies at a college or university. There will, however, be circumstances where students living away from home will not be covered.

 

Residential Insurance Policies generally contain a definition of the term "insured" which includes not only the named insured, but also individuals living in their "household". On a plain reading of the word, it is not clear whether students living away from home for school are members of the insured's household, or not. For this reason, the courts have adopted a contextual approach in determining whether or not a student is considered to be a part of the parents' household after they have left for school. Some of the common factors considered in determining whether or not students are covered under their parents' insurance policy include:

 

  • whether or not student returns home for summers and holidays,
  • whether the student intends to return home after their studies,
  • the level of communication between the student and parent(s),
  • the self-sufficiency of the student,
  • whether or not the student still has possessions at their parents' home,
  • whether or not the parents maintain a room for the student at their home,
  • whether the student is covered under any other insurance policy,
  • the level of control exercised by the insured over the student.

Many insurance providers offer policies for tenants to cover their activities and belongings in a rental unit. Parents who are unsure about whether or not their children are covered under their Residential Insurance Policy may consider contacting their insurance agent or broker for advice.

 

The information contained in this article is provided for general information purposes only and does not constitute legal or other professional advice. Readers are advised to seek specific legal advice in relation to any decision or course of action contemplated.

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Is My Ganja Insured?

The Liberal government is poised to introduce legislation that will legalize marijuana for recreational use in Canada.  One hopes that the Liberals will have the good sense to regulate the cultivation of marijuana, but it is within the realm of possibilities that legal home grow operations proliferate under the new law.  If the black market prices for marijuana are sustained in the open market, then home grow crops could be among the most valuable assets in some households.  That begs the question of whether home growers will be compensated by their home insurers if their crops are stolen or damaged in a fire.

 

Maybe not.  The cultivation of marijuana for medical use is already legal in Canada, and at least one insurance claim arising from the loss of a marijuana crop has come before the Court.

 

Stewart v. TD General Insurance Company is a 2014 decision of the Ontario Divisional Court that involved a claim for compensation for the loss of a marijuana crop.  Mr. Stewart was licensed to possess and cultivate medical marijuana for his own consumption.  He had an outdoor grow operation at his home.  Just when his crop was ready to be harvested, thieves ripped the plants out of the ground and made off with them.  Mr. Stewart estimated the cost of replacing the plants and the crop was just under $50,000.  He asked his home insurer to compensate him for the cost of replacing the plants and the value of the lost crop.  However, the Insurer only approved the claim pursuant to a limited extension of coverage that applied to trees, shrubs and plants.   The wording of the extension provided as follows: 

 

"15. Trees, shrubs and plants

Trees, shrubs and plants being part of your landscaping on your premises. We will pay up to 5% of the limit of insurance applicable to your dwelling, subject to a maximum of $1,000 for any one tree, shrub or plant including debris removal. You are insured against loss cause (sic) by fire, lightning, explosion, impact by aircraft or land vehicle, riot, vandalism or malicious acts, theft or attempted theft."

                                                      

As set out in the extension, the policy limit for coverage for trees, shrubs, and plants was $1,000 per plant.  The Insurer paid Mr. Stewart a total of $11,000.  Mr. Stewart sued his Insurer to recover the balance of his loss.  He alleged that the loss of the marijuana fell within the coverage for ‘personal property’ to which much higher policy limits applied.  The policy wording for ‘personal property’ coverage is set out below:    

 

"COVERAGE

Coverage B – Personal Property (contents)

1. We insure the contents of your dwelling and other personal property you own, wear or use while on your premises which is usual to the ownership or maintenance of a dwelling." 

                                                            

The Divisional Court dismissed Mr. Stewart’s claim.  While all personal property inside Mr. Stewart’s home was covered, personal property outside of his home was only covered if it was “usual to the ownership or maintenance of a dwelling.”   The Court heard evidence that only one third of one per cent of Canadians cultivated marijuana in their homes.  The Court found that the plants were not “usual to the ownership or maintenance” of a dwelling and ruled that the loss of the plants did not fall within the personal property coverage in the policy.  The Court agreed with the Insurer that the only coverage for the marijuana in the policy was the extension pertaining to trees, shrubs and plants.  Therefore, Mr. Stewart had already been paid everything he was entitled to.  

 

The lesson to be drawn from the Stewart case is not that loss or damage to a marijuana crop will never be fully covered by a home insurer.  The outcome in the Stewart case might have been different if Mr. Stewart’s crop had been grown indoors or if the loss had occurred in the future when home grow operations are more widespread.   Furthermore, policy wording does vary from insurer to insurer, and Mr. Stewart may have had a different outcome if he had been insured by another insurer.  

 

The moral of the Stewart case is simply that home growers cannot take it for granted that their ganja is insured, and they should talk to their agent or broker to ensure that they have coverage for their crops.

 

Ted Dreyer is a construction and insurance lawyer at Madorin, Snyder LLP. Madorin, Snyder LLP is a full service law firm serving Kitchener, Waterloo, Cambridge, Guelph and the surrounding area.  Please visit our construction law page.

 

The information contained in this article is provided for general information purposes only and does not constitute legal or other professional advice. Readers are advised to seek specific legal advice in relation to any decision or course of action contemplated.

 

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Can a Subcontractor Be Held Responsible for Improper "Work Done By Others"?

With the exception of the excavator, the work of a subcontractor will usually build upon work done by other subcontractors.  Furthermore, the performance of any given subcontractor's work will usually depend upon the proper performance of work by other subcontractors.  Can a subcontractor be held responsible for the failure of its work if the failure is caused by deficiencies in the preparatory work performed by others?

 

It depends.  It is an implied term of any construction contract that the work will be done in a workmanlike manner.  Performing work in a workmanlike manner requires, among other things, that a subcontractor refuse to do work which he knows or ought to know cannot be performed correctly because the preparatory work is deficient. 

 

Stavely Community Centre c.o.b. Stavely Community Association v. L & D Masonry Enterprises Ltd.[1] is a case that considered the problem.  A community centre hired a masonry contractor to build a wall.  The plans called for metal dowels to be installed in the foundation wall.  The wall was to be installed upon the dowels.  It was the responsibility of others to install the dowels.  When the masonry contractor came to perform its work, the dowels had not been installed.  The mason installed the wall anyway.  The wall was damaged by wind.  The absence of the dowels was a contributing cause of the damage.  The Court said that the mason ought to have refused to proceed with the work unless and until the dowels were installed as called for in the plans.  The mason was ordered to pay for the damage to the wall. 

 

Performing work in a workmanlike manner does not mean that a subcontractor is the guarantor of the performance of work done by others.  The key to the Stavely case is that the deficiency in the work done by others was obvious.  A reasonable mason ought to have recognized that the dowels were missing.  The outcome of the Stavely case would likely have been different if the deficiencies in the work done by others was not reasonably apparent to the mason upon an inspection of the work.   

 

Ted Dreyer is a construction lawyer at Madorin, Snyder LLP. Madorin, Snyder LLP is a full service law firm serving Kitchener, Waterloo, Cambridge, Guelph and the surrounding area.  Please visit our construction law page.

 

The information contained in this article is provided for general information purposes only and does not constitute legal or other professional advice. Readers are advised to seek specific legal advice in relation to any decision or course of action contemplated.

 

[1] Stavely Community Centre c.o.b. Stavely Community Association v. L & D Masonry Enterprises Ltd (1983) 2 CLR 46 

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Peter Madorin Reminisces About the Royal Inquiry into the Flood of 1974

On May 17, 1974, the Grand River burst its banks as one month's worth of rain fell in 24 hours.  Before the waters had even receded, people were asking who was to blame.  The Province appointed Mr. Justice Wilfred Leach to conduct a Royal Inquiry into the flood. 

 

A lot was at stake.  The losses claimed in connection with the flood were in excess of $6,700,000, which is $32,000,000 in today's dollars.  The City of Cambridge was particularly hard hit. 

 

Peter Madorin, Q.C. was at the centre of the 44 day inquiry.  "Gore Mutual insured the Grand River Conservation Authority and various  municipalities along Grand River.  I was appointed by Gore Mutual to represent the GRCA and the municipalities they insured at the inquiry."

 

According to Peter Madorin, the various reservoirs operated by the GRCA were already at full capacity before the unexpected rainfall hit.  This was to ensure that there was enough water to 'flush' the river during the summer months. "The reservoirs were at risk of overflowing.  The GRCA had no choice but to release water from the reservoirs to prevent them from overflowing.  But opening the reservoirs made the flood worse downstream."   

 

Peter Madorin says that his objective was to prevent the various municipalities along the Grand River from criticizing each other.  "The GRCA was in the crosshairs at the inquiry, but it was also an issue whether the various municipalities had made the flood worse through improper storm water management.  I tried to discourage the various municipalities from pointing the finger at one another."  

 

In his report Justice Leach made various recommendations to prevent future flooding.  However, he found no fault with the GRCA's actions leading up to the flood. 

 

Fil Mendes is a civil litigator at Madorin, Snyder LLP whose practice includes the defence of municipal liability claims.  Madorin, Snyder LLP is a full service law firm servicing Kitchener, Waterloo, Cambridge, Guelph and the surrounding area.   

   

The information contained in this article is provided for general information purposes only and does not constitute legal or other professional advice. Readers are advised to seek specific legal advice in relation to any decision or course of action contemplated.

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Can an Employer Terminate an Employee for a Single Incident of Misconduct?

In this era of divided politics, few people would disagree with Donald Trump's decision to terminate Anthony Scaramucci as White House Communications Director.  Mr. Scaramucci's comments to a reporter from the New Yorker demonstrated an egregious lack of good judgment. 

 

Would an employer in Ontario faced with similar -stand-alone - incident of misconduct or negligence  be able to terminate an employee for cause?

 

One the one hand, the general rule is that a single incident of employee misconduct does not warrant summary dismissal.  On the other hand, a single act of misconduct may be sufficient to warrant the termination of an employee without notice in the right circumstances.  The cases go both ways.  Here are some examples:

  • In Ditchburn v. Landis & Gyr Powers Ltd. a Court found that a long term employee who was involved in a physical altercation with client was wrongfully dismissed. 
  • In Rifou v. Canadian Imperial Bank of Commerce the Court ordered that a bank manager be reinstated despite evidence that he falsified bank records outside of work.  
  • In Donovan v. New Brunswick Publishing Co. the Court determined that an employee who had told a customer to "shove it" was wrongfully dismissed. 
  • In Stevenson v. First Nations University of Canada Inc. the Court concluded that the employee's conviction for defrauding the Government of Canada warranted his dismissal for cause. 
  • In Rae v. Wascana Energy Inc. the Court found that the employee's failure to reimburse the company within 6 months for a personal expense paid with a company credit card justified the termination of the employee.  

Given the nature of Mr. Scaramucci's role as a public representative of the White House, his actions would clearly constitute just cause for termination without notice.  But as the examples cited above illustrate, a single incident of misconduct or poor judgment does not necessarily give an employer a right to terminate without cause. 

 

The information contained in this article is provided for general information purposes only and does not constitute legal or other professional advice. Readers are advised to seek specific legal advice in relation to any decision or course of action contemplated.

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Madorin Snyder LLP Remembers Joseph Lieberman

On June 15, 1991, after 59 years of practicing law in Ontario, Joseph Wolfe Lieberman received his L.L.B. degree from Osgood Hall Law School of York University.

Joe was called to the Bar in 1932, having studied law at Osgoode Hall. He began his career as a lawyer in Toronto, working for free on many occasions, just to gain experience. It was after all during the height of the Great Depression. After a few years in Toronto, Joe moved to the Timmins area, where he practiced law until 1951, when he, his wife Esther and their two children moved to Kitchener. Joe quickly became known in the Kitchener-Waterloo area as a tenacious advocate for his clients. His practice flourished.

 Joe was appointed Queen's Counsel in 1959, served as President of the Waterloo Law Association, and in 1982, after completing fifty years at the Bar, he was appointed a Life Member of the Law Society of Upper Canada.

And finally, after 59 years of "practicing law", Joe received his LLB degree. It's not that it took Joe that long to get it right. It's just that prior to 1960, Osgoode Hall students did not receive the degree of Bachelor of Laws upon completing law school. At a Special Convocation held on June 15, 1991, marking Osgoode Hall's centenary, lawyers from across the country who had graduated from Osgoode Hall prior to 1960 received their LLB Degrees.

With his degree in hand, Joe continued to practice law, finishing his career as Counsel to Madorin, Snyder in the late 1990's.

Joe loved the law and loved being a lawyer. Throughout his illustrious career which spanned more than sixty years, Joe practice law with dignity, integrity and a sense of humour. Joe was a tribute to the profession, exemplifying that practicing law was and is an honourable profession.

Joe passed away on June 6, 1998.

Stephen R. Grant is a solicitor at Madorin, Snyder LLP a full service law firm serving Kitchener, Waterloo, Cambridge, Guelph and the surrounding area.

The information contained in this article is provided for general information purposes only and does not constitute legal or other professional advice. Readers are advised to seek specific legal advice in relation to any decision or course of action contemplated.

 

 

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Are Marriage Contracts Enforceable?

Two of the more common financial issues to be sorted out when a married couple in Ontario gets divorced are entitlement to spousal support and the division of net family property. Spousal support is typically payable if there is a significant difference in the income between the former partners. Furthermore, the law provides that the value of any property that was acquired by a spouse during the marriage and still exists at separation must be divided equally between the spouses.

 

Married couples in Ontario can enter into marriage contracts (a.k.a domestic contracts or prenuptial agreements) that vary the rules for spousal support and the division of property in the event of a separation or divorce.

The default rule in Ontario is that marriage contracts are enforceable as they relate to spousal support and the division of property. However, section 56(4) of the Family Law Act allows a party to apply to set aside a marriage contract if the circumstances surrounding the negotiation and signing of the contract were unfair. Section 56(4) of the Family Law Act provides as follows:

 

56 (4) A court may, on application, set aside a domestic contract or a provision in it,

 

(a) if a party failed to disclose to the other significant assets, or significant debts or other liabilities, existing when the domestic contract was made;

 

(b) if a party did not understand the nature or consequences of the domestic contract; or

 

(c) otherwise in accordance with the law of contract.

 

Section 56(4)(c) codifies the common law position that ordinary contract principles apply to marriage contracts. Under the law of contract, contracts can be set aside if:

  • there was undue influence at the time of signing;
  • there was duress at the time of signing;
  • unconscionability;
  • there was a mistake as to an essential element of the contract;
  • there was fraud or material misrepresentation; or
  • there was a repudiation of a term in the contract.

Furthermore, with respect to spousal support, the Family Law Act also permits the Court to set aside a marriage contract that was fair at the time that it was entered into if the effect of the marriage contract as at the date of separation or divorce is unfair. Section 33(4) of the Family Law Act provides as follows:

 

Setting aside domestic contract

 

33(4) The court may set aside a provision for support or a waiver of the right to support in a domestic contract and may determine and order support in an application under subsection (1) although the contract contains an express provision excluding the application of this section,

 

(a) if the provision for support or the waiver of the right to support results in unconscionable circumstances;

 

(b) if the provision for support is in favour of or the waiver is by or on behalf of a dependant who qualifies for an allowance for support out of public money; or

 

(c) if there is default in the payment of support under the contract at the time the application is made.

 

The 2015 decision of the Ontario Superior Court of Justice in Shair v. Shair illustrates the application of these rules.

 

Shair v Shair involved a couple who married in 1996. The husband was Canadian. He met his future wife while travelling in Romania. He was 42 years old. She was 29. She was working as a cosmetician and pursuing a degree in social psychology. The couple got engaged and moved to Canada together. The husband operated a small mechanic’s shop and owned the property where the shop was located. Furthermore, he was twice divorced. The husband insisted that the couple enter into a marriage contract. Before the marriage, they entered into a marriage contract with the following terms that applied at the breakdown of the marriage:

  1. There shall be no equalization of net family property; and
  2. Each party released the other from spousal support.

In 2014 the husband applied for a divorce. The wife moved to set aside marriage contract.

 

On the one hand, the Court refused to set aside the marriage contract and permit the wife to pursue a claim for equalization of net family property. The marriage contract was valid at the time that it was entered into despite a number of red flags. First, the wife was a vulnerable party at the time the contract was signed, but the husband did not exploit her vulnerability. He arranged for her to get independent legal advice from a lawyer who advised her not to sign the contract. He also arranged for a Romanian interpreter to ensure that she understood the advice she was given. Second, the husband had failed to make adequate disclosure of his financial affairs. Having considered all the circumstances, however, the Court concluded that further financial disclosure would not have stopped the wife from signing the agreement. She would have signed the marriage contract even if she had adequate financial disclosure. Therefore, the marriage contract was valid at the time that it was entered into, and it was enforceable at the end of the marriage. The Court refused to permit the wife to pursue a claim for equalization of net family property.

 

On the other hand, the Court set aside the marriage contract to allow the wife to pursue a claim for spousal support. Section 33(4) of the Family Law Act required to the Court to look at the circumstances since the marriage contract was entered into. At the time that the parties entered into the marriage contract both assumed that the wife would re-establish herself in the workforce within a few years of the marriage. Instead, the parties had a traditional marriage where the wife was financially dependent upon the husband. Enforcing the terms of the marriage contract in those circumstances would be unconscionable. The Court set aside the release in the marriage contract as it related to spousal support and allowed to the wife to pursue a claim for support.

 

The Shair decision illustrates two broad generalizations concerning marriage contracts. As it relates to the division of property, a marriage contract in Ontario will usually be enforceable provided the circumstances at the time the contract was entered into were fair. However, as it relates to spousal support, a marriage contract will only be enforceable if the marriage contract was fair at the time it was entered into and the enforcement of the marriage contract after the breakdown of the marriage is not “unconscionable” or highly unfair.

 

The information contained in this article is provided for general information purposes only and does not constitute legal or other professional advice. Readers are advised to seek specific legal advice in relation to any decision or course of action contemplated.

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