



COURT OF APPEAL FOR ONTARIO

CITATION: Ernikos v. Ernikos, 2017 ONCA 347

DATE: 20170501

DOCKET: C62677

Doherty, Benotto and Trotter JJ.A.

BETWEEN

Katherine Joanne Ernikos

Applicant (Appellant)

and

Anastasios Ernikos and Antonia Ernikos

Respondents (Respondents)

Frances Wood and Areesha Zubair, for the appellant

Jose Bento Rodrigues, for the respondent, Anastasios
    Ernikos

Howard W Reininger, for the respondent, Antonia Ernikos

Heard: April 26, 2017

On appeal from the judgment of Justice Meridith Donohue
    of the Superior Court of Justice, dated August 17, 2016.

ENDORSEMENT

Overview

[1]

The parties were married in 1997. They separated in 2006. In March 2007,
    they settled all matters arising out of their marriage and incorporated the
    terms into Minutes of Settlement. Pursuant to the terms of the Minutes of
    Settlement, the appellant (wife) transferred her ownership in the matrimonial
    home to the respondent (husband).

[2]

The parties reconciled at the end of May 2007. In August 2007, the wife
    received a $135,000 disability payment from her insurance company and deposited
    it into the husbands bank account. He, in turn, paid the household bills. In
    2010, the husband transferred ownership of the former matrimonial home to his
    mother (also a respondent).

[3]

The parties separated in 2013. The wife sought an equalization of net
    family property and an interest in the former matrimonial home on the basis of
    a resulting, implied or constructive trust.

[4]

The trial judge held that the Minutes of Settlement precluded any future
    equalization payment and that the wife had failed to establish any trust
    interest in the former matrimonial home.

[5]

On appeal, the wife argues that: (i) the trial judge erred in not
    considering the validity of the Minutes of Settlement because it was not
    pleaded; (ii) the trial judge erred in finding that the division of property
    under the agreement survived reconciliation; and (iii) the trial judge improperly
    dismissed her trust claim.

Amendment to pleadings

[6]

The wife alleges that the trial judge should
    have allowed her to amend her application to include a request to set aside the
    Minutes of Settlement. We reject this submission for two reasons.

[7]

First, the trial judge confirmed  on several
    occasions  that the wife was not challenging the validity of the agreement;
    rather, she was challenging whether it was complied with. Second, the wife
    presented no facts that would support a claim under s. 56(4) of the
Family
    Law Act
, R.S.O. 1990, c. F.3. That section sets out when
    a court can set aside a separation agreement and provides a two-step process:

Step 1: The court considers if there was
    non-disclosure; if a party did not understand the agreement; or if the
    agreement should be set aside otherwise in accordance with the law of contract.

Step 2: If any of the circumstances in Step 1
    exist, then the court determines if it is appropriate to exercise its
    discretion to set aside the agreement.

[8]

These criteria were not addressed in evidence.
    The wife was given the opportunity to amend her pleadings and present the
    evidence and chose not to. The validity of the separation agreement was
    therefore not in issue at trial and we see no error in the trial judges
    determination of this issue.

The equalization
    claim

[9]

The appellant submits that the trial judge erred
    in dismissing her equalization claim on the basis that  having upheld the
    validity of the Minutes of Settlement  there could be no further equalization.

[10]

The Minutes of Settlement provide that, upon
    reconciliation, the transfers or payments made would remain valid and that no
    party would be entitled to an equalization of net family property under the
Family
    Law Act
. In particular, the Minutes of Settlement state:

14.2: If [the parties] agree to try
    and reconcile their relationship but they cohabit for no longer than 90 days,
    the Agreement will not be affected. If they cohabit for more than 90 days, the
    Agreement will become void, except that any transfers or payments made to that
    time will not be affected or invalidated.

14.3: In the event that the parties
    try to reconcile their relationship and cohabit for more than 90 days, the
    parties agree that none of the property or debts in the name of [either party]
    will be included in the net family property of the parties as defined by the
    Family Law Act. If there should be a breakdown of the relationship or marriage
    of the parties, or if one of the parties dies, neither party shall be entitled
    to an equalization of net family property as calculated pursuant to the Family
    Law Act.

[11]

The common law rule is that a separation agreement
    becomes void upon reconciliation of the parties. In
Sydor v. Sydor
(2003), 178 O.A.C. 155, this court

determined
    that parties could contract out of the common law. If they specifically state
    their intentions to have a separation agreement survive reconciliation, the
    agreement is not rendered void. The wife submits that
Sydor
does not
    apply because paras. 14.2 and 14.3 of the agreement are not clear.  She submits
    that the phrase in para. 14.2 that the agreement will be void upon
    reconciliation is inconsistent with the provision in para. 14. 3 that there
    will be no future equalization. We do not agree. The two clauses, read
    together, indicate a clear intention to exclude all future property from
    equalization.

The trust claim

[12]

The appellant submits that the trial judge erred
    in not awarding her a 50 percent interest in the former matrimonial home, which
    is currently in the name of her mother-in-law. She bases her submission on her
    evidence that the disability payment she gave to her husband upon
    reconciliation was used to pay off the mortgage of $28,000 on the home and
    that, by operation of the presumption of resulting trust, she is an owner of
    the home.

[13]

We do not accept this submission. There is no
    evidence that the wife transferred money to the husbands mother. A claim for a
    resulting trust  if it exists at all  would be against the property in the
    husbands name. However, at trial the wife did not put forth a claim for a
    beneficial interest in the bank account or other property owned by the husband,
    nor did she present evidence to support it. There was no evidence of an
    intention on her part to retain a beneficial interest in the funds.

Disposition

[14]

The
appeal is dismissed with costs payable to the
    husband in the amount of $6,000 and to the husbands mother in the amount of
    $5,000. Both amounts are inclusive of disbursements and HST.

Doherty J.A.

M.L. Benotto J.A.

G.T.
    Trotter J.A.


