In Van Eck v. Pham, the applicant brought a motion for bifurcation of the issues in the parties’ matrimonial matter. The application sought to have the proceeds of the parties’ matrimonial home which are currently held in trust by a real estate lawyer. The respondent claimed entitlement to 50% of the funds held in trust, spousal support, and an equalization payment. She also asserted a beneficial interest in the applicant’s property owned by virtue of a constructive trust and pleaded that 3 domestic contracts entered into by the parties be set aside.
The parties’ separation date was also disputed because the applicant claimed an initial trial should be conducted solely on the issues of the validity of the domestic contracts signed by the parties. He argued if the contracts were upheld, there would no longer be a need to ascertain the correct date of separation. Only if the contracts were set aside would a 2nd trial be required for the date of separation issue. Furthermore, he argued bifurcation could save the parties significant time and costs. The respondent opposed the motion, arguing bifurcation would cause her serious prejudice and would not be in the interest of justice.
Contracts at Issue
There were 3 domestic contracts at hand, and the 1st was a marriage contract executed prior to the marriage. This contract contained a mutual waiver of spousal support and equalization and stated neither party would be entitled to a share of any property or the value of any property owned by the other, including any equitable interest in the property by a constructive or resulting trust. It also contained comprehensive releases of each other’s estates from claims pursuant to the Succession Law Reform Act.
The 2nd contract was executed over 7 years into the marriage and it rescinded and replaced the 1st marriage contract. The property provisions were substantially similar to the 1st contract, mutually releasing each other from any claims to an interest in the other’s property or the property’s value in law or in equity. It provided for spousal support payable by the applicant to the respondent upon separation, with $1,000 per month for a fixed period of 12 months, provided the respondent remained in Canada and lived in rental accommodation. An additional lump sum payment of $1,500 per year for each year of marriage was payable as spousal support upon a divorce order being granted.
The 3rd contract was a Jointly Acquired Asset Agreement executed after the completed construction of a house in Vietnam. It provided for equal sharing of net proceeds of the sale of the Vietnam property in the event of their separation unless the respondent bought out the applicant’s interest at fair market value within 1 year of separation.
The Family Law Act
The applicant relied on s. 56(4) of the Family Law Act, which permits the court to set aside a domestic contract based on the following:
- If a party has failed to disclose significant assets or liabilities which existed when the contract was made
- If either party did not understand the nature and consequences of the contract when it was made
The judge noted having the authority pursuant to Rule 12(5) of the Family Law Rules to order bifurcation of this proceeding. Rule 12(5) states: "If it would be more convenient to hear two or more cases, claims or issues together or to split a case into two or more separate cases, claims or issues, the court may, on motion, order accordingly." The judge also relied on case law which stated the court’s power to split a case pursuant to Rule 12(5) is discretionary.
However, the multiplicity of proceedings is generally to be avoided, so the power to bifurcate is narrowly exercised only in the clearest of cases. The moving party bears the onus of satisfying the court, on a balance of probabilities, there would be clear time and expense benefits to be gained from the bifurcation and determination of the threshold issue and that no meaningful prejudice would be caused to either party.
The judge relied on the analytical framework as established in the Superior Court case of Simioni v. Simioni, which includes:
- Whether the issues in the proposed first trial are straightforward
- The extent to which resources have already been devoted to all issues
- Whether the 1st trial will likely put an end to the action, significantly narrow the remaining issues, or significantly increase the likelihood of settlement
- Whether bifurcation could result in duplicative proceedings--in other words, whether the issue(s) to be addressed in the first trial are discrete and clearly divisible from the issue(s) in the second trial; e) whether bifurcation could cause undue delay
- Any advantages or prejudice the parties are likely to experience if the trial is bifurcated
The judge noted since the issues to be determined in a proposed 1st trial are not simple nor straightforward, the 1st trial alone would require a significant dedication of resources and time. However, since the parties have not already devoted substantial resources to all of the issues, the potential costs savings of a split trial favours bifurcation. Nonetheless, the judge noted these issues were intertwined and would thus not maximize limited judicial recourses.
Delay would also be caused due to the inevitability of a 2nd trial. The judge also stated the applicant would be required to advance her arguments about the unconscionability of the spousal support and property provisions in the contracts without a determination of the correct separation date, which determines the length of the parties’ cohabitation. This is a significant factor in assessing unconscionability. Ultimately, the judge dismissed the applicant’s motion because it was not clear whether there would be time and expense benefits gained from bifurcation given the interdependence of the issues.
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