



COURT OF APPEAL FOR ONTARIO

CITATION: Turk v. Turk, 2018 ONCA 993

DATE: 20181206

DOCKET: C64750

Watt, Miller and Nordheimer JJ.A.

BETWEEN

Jennifer Sandra Turk

Applicant (Appellant)

and

Stuart Bernard Turk

Respondent (Respondent)

Lorne H. Wolfson, for the appellant

Heather Hansen, Stephen Grant, and Jenna Beaton, for the
    respondent

Heard: November 14, 2018

On appeal from the order of Justice Carolyn J. Horkins of
    the Superior Court of Justice, dated November 28, 2017, with reasons reported
    at 2017 ONSC 6889.

REASONS FOR DECISION

[1]

The parties were married for nearly 19 years and had two children.
    Following their separation in 2008, they resolved all financial issues through a
    lengthy course of mediation in which both parties were represented. The
    resulting Separation Agreement was executed in April 2010 and the parties
    divorced approximately six months thereafter.

[2]

The terms of the Separation Agreement included provisions that the
    respondent, Stuart Turk, pay the appellant, Jennifer Turk, $10,000 per month in
    child and spousal support, and pay all of the childrens s. 7 expenses. The
    appellant agreed to pay the respondent an equalization payment of $181,578.

[3]

Four years later, the appellant sought an order setting aside the
    Separation Agreement under s. 56(4) of the
Family Law Act
, R.S.O.
    1990, c. F.3, on the basis that the respondent failed to disclose significant assets.
    Section 56(4)(a) states that a court may, on application, set aside a domestic
    contract or a provision in it if a party failed to disclose to the other
    significant assetsexisting when the domestic contract was made.

[4]

In place of the Separation Agreement, the appellant sought various orders
    equalizing net family property (NFP), imputing income to the respondent, and
    fixing increased spousal and child support.

[5]

The trial judge agreed that the respondent had failed to disclose interests
    in certain family businesses that he had acquired during the marriage. She
    found that he had also failed to disclose payments that he received on a
    shareholder loan and capital income he received from the sale of shares by a
    corporation he controlled. The trial judge concluded that the non-disclosure
    was blameworthy  part of the respondents on-going indifference to his
    obligations. Nevertheless, the trial judge dismissed the application. She found
    that although the value of the non-disclosed assets may have been considerable,
    they were not significant in the sense required by s. 56(4) in the context of
    the negotiation of the Settlement Agreement. The trial judge relied on two
    reasons in coming to this conclusion.

[6]

First, the trial judge accepted the evidence of the lawyer who
    negotiated the Separation Agreement on behalf of the appellant that the
    appellant had obtained a very favourable settlement: the respondent had agreed
    to provide spousal and child support far in excess of what the appellant could
    likely have achieved at trial based on the respondents actual income. Although
    the respondents annual income had averaged $421,000 over the three years prior
    to separation, by the time the marriage ended his business had failed and he
    was no longer earning any income. Although the parties agreed to support based on
    an income of $421,000, by that time the respondent was effectively living off
    of a $180,000 payment that his father gifted to him annually.

[7]

Second, the trial judge found that the respondent made substantial concessions
    in the mediation, such that it would not be reasonable to simply input the
    value of the non-disclosed assets and assess the impact on the equalization
    payment or support. In the trial judges words, too many monetary compromises
    were made during the mediation for this to be a realistic approach. The trial
    judge relied, for example, on the respondent not claiming deductions for the
    value of assets he brought into the marriage, not listing outstanding business
    loans from his father among his liabilities, and not requiring the appellant to
    include jewelry worth between $300,000 and $400,000 among her assets.
    Additionally, the trial judge was unwilling to assume that if the parties had
    introduced other assets into the negotiation, all other parts of the Separation
    Agreement would have remained unchanged. For example, the respondent may have
    been unwilling to agree to pay 100 percent of the substantial s. 7 expenses,
    may have insisted on imputing income to the appellant, and may not have
    continued the substantial gratuitous payments he made to the appellant even
    after the Separation Agreement was concluded.

[8]

The appellant argues the trial judge made multiple errors in her
    analysis under s. 56(4). We do not agree and, for the reasons set out below,
    dismiss the appeal.

[9]

The appellant argues that the trial judge erred by placing an onus on her
    to inquire as to the existence and value of the respondents assets. While
    incomplete disclosure rightfully attracts the risk that an agreement might be
    set aside, s. 56(4) makes it clear that failure to disclose even a significant
    asset does not necessarily attract that consequence.

[10]

The
    appellant also argues that the trial judge erred in determining whether the
    non-disclosed assets were significant.

[11]

The
    trial judge is said to have answered the wrong question  whether the
    non-disclosure was significant  instead of whether the non-disclosed assets
    were themselves significant. But this seems to be a purely semantic
    distinction. It is the significance of the non-disclosed assets that makes the non-disclosure
    itself significant. Determining the significance of non-disclosed assets is not,
    as the appellant argued, the purely mathematical exercise of comparing the
    value of the non-disclosed assets against the value of the disclosed assets. Rather,
    the trial judge appropriately relied on case law finding that the term
    significant must refer and be measured in the context of the entire
    relationship between the parties (see
Currey v. Currey
(2002), 26
    R.F.L. (5th) 28 (Ont. S.C.), at para. 17), and that significance should not be
    considered in isolation of all of the surrounding circumstances (see
Bruni
    v. Bruni
, 2010 ONSC 6568, 104 O.R. (3d) 254, at para. 102).

[12]

The
    most important circumstance, for the trial judge, was that more disclosure
    would not have changed the outcome for the appellant (para.  290). The trial
    judge found that the assets in question had no bearing on equalization. The
    non-disclosed assets were also irrelevant to support because the parties had
    agreed to a level of support that was not based on actual income, but on an
    amount much higher than what would be warranted by actual income.

[13]

These
    findings also provide a complete answer to the appellants other complaints:
    that the trial judge erred by considering each excluded asset in isolation
    rather than considering their collective value, and by failing to compare the
    value of the non-disclosed assets as against the value of the respondents
    total assets.

[14]

In
    short, the trial judge correctly stated and applied the law. She made no error
    in assessing the significance of the assets within the context of the
    surrounding circumstances that she detailed. She concluded that more disclosure
    would not have changed the outcome of the mediation for the appellant, and that
    the assets that the respondent did not disclose were not significant. That
    finding was available on the record before us, and there is no basis for us to
    interfere with it.

[15]

Furthermore,
    the finding of significance, as the trial judge correctly stated, is only the
    first step in a s. 56(4) analysis
: Virc v. Blair
, 2014 ONCA 392, 119
    O.R. (3d) 721, at para. 52. Once a party seeking to set aside a separation
    agreement has established that s. 56(4) applies, the court must still determine
    whether it should exercise its discretion to set aside the agreement. The
    criteria set out in
Dochuk v. Dochuk
(1999), 44 R.F.L. (4th) 97 (Ont.
    Gen. Div.), at paras. 18-19, provide a useful guide for this exercise of
    discretion. Although the trial judge did not proceed to this further step, and
    did not need to given her finding that s. 56(4) was not engaged, her conclusion
    on that question would be obvious from her treatment of the various
Dochuk
factors. In particular, her findings concerning the absence of duress and the substantial
    benefits that the appellant received under the Separation Agreement indicate
    that the trial judge would not have exercised her discretion to set aside the
    agreement.

DISPOSITION

[16]

The
    appeal is dismissed. Costs to the respondent in the amount of $25,000,
    inclusive of disbursements and HST.

David Watt J.A.

B.W. Miller J.A.

I.V.B. Nordheimer J.A.


