Kovachis v. Kovachis

2013 ONCA 663

The parties in this case signed both a marriage contract and a separation agreement. The wife signed both of these agreements after receiving financial disclosure from her husband and independent legal advice. In March 2010, she tried to set aside both the marriage contract and separation agreement and assert support and property claims.

The wife’s basis for setting the agreements aside was that the husband failed to disclose material financial information at the time they were signed. The issue of the wife’s motion was whether the husband’s pleadings could be struck for non-disclosure. The motion judge ruled in the wife’s favour. The husband appealed and his pleadings were reinstated.

The issue on appeal is whether the motion judge fairly applied the well-established principle that “in a family law case, pleadings should be struck only in exceptional circumstances, and where no other remedy would suffice”. The appeal judge explained that the motion judge did not give effect to this principle. Striking the husband’s pleadings was not warranted for the following reasons:

  1. The husband had already given substantial disclosure. Although he had not provided every piece of ordered disclosure, the motion judge did not consider the fact that he made significant disclosure “in the face of what can reasonably be characterized as a very broad, if not overly broad, disclosure demand”.
  2. The motion judge failed to list what disclosure the husband had not provided, and even counsel for the wife was unable to itemize the missing disclosure. To strike one party’s pleadings was not justified when neither the motion judge who made the order, nor the party who asked for it, could not advise what disclosure should have been provided.
  3. The original disclosure order required the husband to use “his best efforts” to comply. However, there was no evidence that the husband wilfully disobeyed any of the disclosure orders or that he failed to use his best efforts to provide the disclosure.
  4. Striking the husband’s pleadings was not a proportional remedy (proportionality is a fundamental principle of all civil proceedings in Ontario). Although full disclosure is a necessary component of family law litigation, exhaustive disclosure is not always necessary. In this case, both parties intended both the marriage contract and separation agreement to be complete and final structures governing their affairs. Striking the husband’s pleadings would deny him the opportunity to participate in litigation that could significantly impact his personal circumstances. His conduct was not so egregious so as to warrant such a harsh sanction.
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