Issue: Whether a separation agreement can be set aside after divorce.
The Facts: The parties were married 29 years and had 5 children. Complete Decision. They were each represented by lawyers for their divorce and used mediators during the negotiation of their separation agreement. A year after the divorce, the wife asked that the separation agreement be set aside because the husband exploited the wife’s mental instability during negotiations and had deliberately concealed or under‑valued assets.
Decision: The Supreme Court of Canada held that the husband’s failure to make full and honest disclosure, his knowledge that the negotiations were based on erroneous financial information, as well as his exploitation of what he knew to be his wife’s profound mental instability, resulted in a negotiated equalization payment that was $649,680 less than the wife should have received. The court set aside the separation agreement and the ex-husband was ordered to compensate the wife said amount for the loss caused by the unconscionable bargain.