




COURT OF APPEAL FOR ONTARIO

CITATION: Dowdall v. Dowdall, 2021 ONCA 260

DATE: 20210427

DOCKET: C68659

Feldman, Harvison Young and
    Thorburn JJ.A.

BETWEEN

Samantha Anne Dowdall

Respondent

and

Paul
    David Dowdall

Appellant

Aaron Franks and Gabrielle Pop-Lazic,
    for the appellant

Michael J. Ruhl and Ashley Timm, for
    the respondent

Heard: April 14, 2021 by videoconference

On appeal from the order of Justice Marvin Kurz of the Superior
    Court of Justice, dated November 12, 2020, with reasons reported at 2020 ONSC
    4944.

REASONS FOR DECISION


Overview

[1]

The appellant, Paul Dowdall (Mr. Dowdall),
    appeals the order denying his motion for judgment and declining to enforce the minutes
    of settlement for child and spousal support signed by the parties.

[2]

The motion judge held that he would not enforce the
    settlement agreement because, prior to accepting the offer in question, Mr.
    Dowdall engaged in intentional and material non-disclosure. In the motion
    judges view, Mr. Dowdall did not act in good faith and, moreover, enforcement
    of the settlement would lead to an unfair result. The respondent, Samantha
    Dowdall (Ms. Dowdall), was denied the opportunity to make an informed
    decision, including the opportunity to withdraw the open offer.

History of the Settlement Offer

[3]

The parties separated in April 2017. They had cohabited
    for 12 to 14 years, had been married for 7½ years, and they had two children
    together.

[4]

The short history of the settlement offer is as
    follows:

[5]

On January 31, 2018, the parties entered a consent
    order for property division, and interim child and spousal support. The issue
    of spousal support was not finally resolved, and the matter was scheduled for
    trial in October 2019.

[6]

On October 6, 2019, Ms. Dowdall sent Mr. Dowdall an
    offer to settle the litigation. The offer was to provide her $3,800 per month,
    fixed and non-variable spousal support, from November 2019 to September 2027. The
    offer would not be subject to future variation by either party regardless of
    their change in circumstances.

[7]

Through no fault of either party, the October trial
    did not take place and a mistrial was declared. The matter was rescheduled for
    some time around March 2020. In the meantime, Mr. Dowdall changed jobs. His
    salary increased from $199,530 to $200,000 (excluding a car allowance of
    $12,000), and he disclosed this change to Ms. Dowdall.

[8]

As the March 2020 trial date approached, the COVID-19
    pandemic intervened. The courts were suspended, and the matter was not called
    as scheduled. Around this time, Mr. Dowdalls salary was cut by 25%, to $150,000,
    due to COVID-19 reductions at his workplace, initially for eight weeks.

[9]

On May 12, 2020, Mr. Dowdall emailed a settlement
    offer to Ms. Dowdall. He informed her that his employer intended to extend his salary
    reduction and advised her that it does not leave [him] with much of a future.
    In his email, Mr. Dowdall did not disclose to Ms. Dowdall that he was in the
    process of negotiating a new, better paying, position. In fact, Mr. Dowdall had
    already been offered a position with a new employer at a salary of $225,000.

[10]

The next day, on May 13, that company improved its offer to $280,000, along
    with a discretionary bonus of 30%. Mr. Dowdall resigned from work on May 15
    and, on May 18, accepted the job offer.

[11]

On May 15, just after Mr. Dowdall had been offered a new job with a
    salary of $280,000, he accepted Ms. Dowdalls October 2019 offer to finally
    settle his support obligations.

[12]

At no point in these discussions did Mr. Dowdall inform Ms. Dowdall of
    the employment offer extended on May 13, 2020, his acceptance of that offer, or
    his resignation from his previous employer. In fact, Ms. Dowdall did not learn
    of Mr. Dowdalls new position until June 1, 2020, when her father spotted
    an online press release.

[13]

By May 2020, Ms. Dowdall had completed her early childhood educator
    qualification and was seeking employment. Mr. Dowdall says he did not know whether
    she had obtained employment. She had not.

[14]

In August 2020, Mr. Dowdall moved to enforce his acceptance of Ms. Dowdalls
    October 2019 offer.

The Motion Judges Decision

[15]

After a comprehensive review of the evidence, including an extensive
    review of the details of the offer to settle, the circumstances of the offer,
    the course of negotiations and the differences between Ms. Dowdalls October
    2019 settlement offer and Mr. Dowdalls May 2020 offer, the motion judge held
    that Mr. Dowdall engaged in intentional and material non-disclosure and
    declined to enforce the settlement.

[16]

The motion judge found that [t]he only credible implication of Mr.
    Dowdalls conduct is that, at the time he accepted the October 2019 offer, he
    knew he would be accepting a job that would pay him $280,000 per year.

[17]

He noted that Mr. Dowdall had an obligation to provide Ms. Dowdall with
    updated financial information under r. 13(15) of the
Family Law Rules
,
    O. Reg. 114/99, [a]s soon as [he] discover[ed] his last sworn financial
    statement setting out his income was inaccurate, since the difference in
    support obligations was material.

[18]

He found that his non-disclosure deprived Ms. Dowdall of the
    opportunity to withdraw her offer. Furthermore, he held that enforcing the
    resulting settlement would be unfair because Ms. Dowdall would likely be entitled
    to a substantially greater amount of support at trial. Under Ms. Dowdalls
    October 2019 offer, Mr. Dowdalls support obligations would be 54% less
    than suggested by the support guidelines for a person with an income of
    $280,000.

The Law

[19]

Conversion of an offer to settle into a court order is a discretionary
    remedy: see
Milos v. Zagas
(1998), 38 O.R. (3d) 218 (C.A.), at para. 15;
Magnotta v. Yu
, 2021 ONCA 185, at paras. 26-27.

[20]

This court has jurisdiction to hear an appeal of a discretionary order
    refusing to enforce a final settlement pursuant to r. 18(13)(a) motion under
    the
Rules
:
Courts of Justice Act
, R.S.O. 1990, c. C.43, s.
    6(1)(b). This is because a decision refusing to enforce a settlement agreement
    is final:
Capital Gains Income Streams Corp. v. Merrill Lynch Canada Inc.
,
    2007 ONCA 497, 87 O.R. (3d) 443, at para. 17.

[21]

Exercise of this discretion attracts deference. Where the relevant
    factors disclosed by the evidence are considered, an appellate court will not generally
    interfere with the motion judges decision to grant, or not grant, judgment in
    accordance with an accepted offer,
Milos
, at para. 19. In the family
    law context, this court has recognized that significant deference is owed,
    particularly in matters relating to support orders:
Ballanger v. Ballanger
,
    2020 ONCA 626, at para. 22.

[22]

In
Rick v. Brandsema
, 2009 SCC 10, [2009] 1 S.C.R. 295, at
    paras. 46-48, Abella J., writing for the court, outlined some of the important
    principles to be considered in reviewing discretionary orders in the family law
    context:

[C]ontractual autonomy  depends on the integrity
    of the bargaining process. Decisions about what constitutes an acceptable
    bargain can only authoritatively be made if both parties come to the
    negotiating table with the information needed to consider what concessions to
    accept or offer. Informational asymmetry compromises a spouses ability to do
    so[.]



[A] duty to make full and honest disclosure of
    all relevant financial information is required to protect the integrity of the
    result of negotiations undertaken in these uniquely vulnerable circumstances.



Such a duty in matrimonial negotiations anchors
    the ability of separating spouses to genuinely decide for themselves what
    constitutes an acceptable bargain. It also helps protect the possibility of
    finality in agreements. An agreement based on full and honest disclosure is an
    agreement that,
prima facie
, is based on the informed consent of both parties. [Internal
    citations omitted.]

[23]

Rule 13 of the
Family Law Rules
provides for extensive
    financial disclosure, and an ongoing duty to correct or update documents. Rule
    13(15) provides that 
[a]s soon as a
    party discovers that a document that he or she has served under this rule is
    incorrect, incomplete or out of date, the party shall serve on the other party
    and, if applicable, file, a corrected, updated or new document, as the
    circumstances require.

Analysis and Conclusion

[24]

In this case, the reasons of the motion judge clearly articulate why he
    exercised his discretion and refused to enforce the settlement. In his view, there
    was material non-disclosure on the part of Mr. Dowdall.

[25]

There is no reason to interfere with that decision.

[26]

Mr. Dowdall failed to disclose to Ms. Dowdall that he had received a
    job offer at a significantly higher salary just three days before signing the
    settlement offer. Instead, he advised Ms. Dowdall on the very day he received
    his new job offer, that his employer had decided to continue the salary
    reduction. This resulted in Ms. Dowdall operating on a misapprehension that Mr.
    Dowdall would earn $150,000 going forward. In fact, he already had been offered
    a new position at a salary of $225,000 (i.e., an increase of 50%) and would go
    on accept an offer of $280,000 (i.e., an increase of 86%).

[27]

The motion judge found that Mr. Dowdall knew, at the time he accepted
    the October 2019 offer, that he would soon earn a much greater salary. This
    finding is unchallenged and undisturbed on appeal. Given this finding, we agree
    with the motion judges conclusion that Mr. Dowdall did not act in good faith
    and breached the
Family Law Rules
, in particular r. 13(15), by failing
    to disclose the fact that he intended to accept a new job at a significantly
    higher salary before accepting the October 2019 offer.

[28]

On appeal, Mr. Dowdall argues that the fixed and non-variable character
    of Ms. Dowdalls October 2019 offer rendered any change to either partys financial
    affairs at the time of the offers acceptance immaterial. We disagree.

[29]

In making her October 2019 offer, Ms. Dowdall took the risk that either
    partys financial situation might improve or worsen
following its acceptance
.
    However, the terms of the offer would have reasonably been informed by Mr. Dowdalls
    disclosures. Moreover, in the event of a change in Mr. Dowdalls financial situation,
    Ms. Dowdall had the right to withdraw her offer at any time
prior to its
    acceptance
:
Family Law Rules
, r. 18(5). She was entitled to rely
    on Mr. Dowdalls ongoing disclosure obligations in determining whether or
    not to exercise that right. Mr. Dowdalls intentional and material
    non-disclosure deprived her of that option. In the circumstances, the motion
    judge properly exercised his discretion to decline to enforce Mr. Dowdalls
    acceptance of the October 2019.

[30]

In doing so, the motion judge found that enforcing the settlement would
    be unfair and unreasonable in the circumstances. Mr. Dowdall challenges this
    finding and seeks to adduce new evidence on appeal relating to Ms. Dowdalls
    current employment. Mr. Dowdall argues that this evidence shows that the
    financial consequences of enforcing the October 2019 settlement are less significant
    than the motion judge assumed.

[31]

We do not believe this is a proper case for the admission of new
    evidence. Ms. Dowdall had disclosed her employment in May, as well as the fact
    that she had graduated and was looking for a teaching job. The parties knew the
    range of salary she would be able to command as a teacher, which was in the
    range revealed by the new evidence. In short, this evidence, if admitted, would
    not change the picture already known.

[32]

Nor do we accept Mr. Dowdalls argument that acceptance of the October
    2019 offer was necessary to avoid costs-related risks at trial. Had Mr. Dowdall
    disclosed his salary negotiations to Ms. Dowdall before accepting her offer, he
    would have faced no costs-related risks.

[33]

Finally, we disagree with Mr. Dowdalls suggestion that setting aside
    the settlement agreement will promote litigation and encourage litigants to
    question, contest, and refuse to be bound by accepted offers without first
    asking more questions and demanding further disclosure.

[34]

On the contrary, as stated by Abella J. in
Rick
, disclosure is
    fundamental to the just resolution of familial disputes. Setting aside a
    settlement brought about through intentional and material non-disclosure protects
    confidence in r. 13 disclosure obligations, which in turn encourages settlement.
    Where both parties have access to the relevant and material information and
    full disclosure is provided, as required by the
Rules
, litigation will
    be minimized. Courts are not inclined to interfere with settlements reached
    between parties, so long as there has been full and frank disclosure and the
    opportunity to obtain independent legal advice.

[35]

We see no merit to the other grounds of appeal raised by Mr. Dowdall in
    his factum.

[36]

For these reasons the appeal is dismissed.

[37]

Costs to the respondent Ms. Dowdall, in the amount of $17,500 as agreed
    by the parties.

K.
    Feldman J.A.

A. Harvison
    Young J.A.

J.A.
    Thorburn J.A.


