Setting Aside a Separation Agreement for Non-Disclosure

The parties involved in the case of Giffin v Giffin began cohabiting in 1993, got married in 1996, and ultimately separated in 2013. The parties had three children together and the wife was a stay-at-home mother during the relationship.

At the time of separation, the two parties were owners of a 58% share in a forensic engineering firm. The husband was president of the firm. The wife gave up interest in the company as part of a separation agreement that was reached in July 2015.

In October 2015, the husband bought out his partner who had a 38% share of company. The wife claimed that the husband made material misrepresentations during negotiations leading up to the agreement, which entitled her to have the property and equalization sections of agreement set aside under s. 56(4) of the Family Law Act. The wife brought an application to set aside the separation agreement.

Case Analysis

The onus was on the wife to prove that s. 56(4) of the Family Law Act applied to the case. During the negotiations leading up to the separation agreement, the value of the company was a significant issue. Initially, the parties jointly hired a valuator to assign a value to the company. He assessed it at $2 million.

Subsequent to the husband’s purchase of his partner’s shares, the wife hired a valuator to assess the first evaluation. Her valuator found that it had been significantly undervalued and the company was in fact worth more than $4 million.

The wife decided to obtain a detailed valuation of the company instead of relying on a critique report and retained the same valuator who completed the critique. This time, the valuator valued the husband's company at approximately $6 million as of the date of separation, but indicated that it was worth significantly more at the time the trial was approaching.

The husband failed to disclose that at the time the parties were negotiating over the value of the company, two entities had made offers of $7,500,000 and of $7,800,000 for the company. The fact that 38% of the company was being purchased was material information in negotiations, both subjectively to the wife and objectively in the eyes of the court.

The information withheld by the husband would have been relevant to the wife's thought process and negotiation of other matters within the overall settlement. She made best efforts to inform herself before hiring a valuator and seeking disclosure from the opposing party.

The Court granted the wife’s application and the agreement was set aside.

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