• by Samantha Rich
Originally published in the OFLM 2024-03 edition
Overview
The decision of Patel v. Patel (2024 ONSC 49) canvasses the legal framework and grounds upon which an order may be set aside by the court. In Patel, the Applicant brought a motion to set aside certain provisions of a final order which was made on consent based on minutes of settlement. The Respondent opposed the motion. The Applicant’s reasons for moving to set aside portions of the order included lack of independent legal advice, lack of understanding, unconscionability, lack of judicial oversight, fraud and mistake. The Applicant did not advance sufficient evidence to meet the threshold to have the order set aside and Justice Hilliard dismissed the motion. Ultimately, Justice Hilliard found that the Applicant entered into the minutes rashly and simply regretted signing them.
Background of Patel v. Patel
The parties married in India in 1996 and had one child. They separated in January 2015 and eventually signed the minutes of settlement setting out the terms of their agreement. The parties both signed waivers regarding exchanging financial statements and receiving independent legal advice, which were attached to the minutes of settlement (at para. 9).
The parties attended a case conference on January 23, 2017. They were both self-represented and appeared in person before Justice Thompson.
Justice Thompson questioned both parties about their failure to file financial statements and about their understanding of their rights and obligations. His Honour specifically indicated to the parties that he did not think they understood their legal rights and what they were agreeing to. The Applicant responded that he did understand his rights and confirmed that he was giving the Respondent the matrimonial home for her and their child to reside at.
Only after questioning the parties on their understanding and agreement with respect to the proposed settlement, did Justice Thompson endorse the minutes of settlement and make a final order on consent (at para. 12).
Pursuant to the terms of the order, the Applicant transferred both vehicles the parties owned during the marriage to the Respondent. He also cooperated in the transfer of the parties' property in Alberta and the matrimonial home to the Respondent.
The Applicant moved back to India for a period of time. However, when he moved back to Canada, the Respondent permitted him and his new wife to move back into the former matrimonial home. The Applicant built a separate unit for himself and his new family and pursuant to an arrangement between the parties, he contributed to the mortgage payments (at para. 15).
Family Law Rules
Rule 2(2) of the Family Law Rules states that the primary objective of the Rules is to enable the court to deal with cases justly.
Rule 2(3) of the Rules states that dealing with a case justly includes:
- ensuring that the procedure is fair to all parties;
- saving expense and time;
- dealing with the case in ways that are appropriate to its importance and complexity; and
- giving appropriate court resources to the case while taking account of the need to give resources to other cases.
Rule 25(19) of the Rules sets out the statutory framework for changing an order:
The court may, on motion, change an order that,
- was obtained by fraud;
- contains a mistake;
- needs to be changed to deal with a matter that was before the court but that it did not decide;
- was made without notice; or
- was made with notice, if an affected party was not present when the order was made because the notice was inadequate or the party was unable, for a reason satisfactory to the court, to be present.
Justice Monahan in Sarrafian v. Leksikova (2021 ONSC 2838) affirmed that Rule 25(19) of the Rules has a relatively limited scope of application:
The relatively limited scope of Role 25 (19) is appropriate and necessary given the need for finality and certainly in family law litigation … a party who is dissatisfied with a court order may undertake an appeal in the normal course. But absent an appeal or the limited circumstances provided for in Rule 25 (19), parties are entitled to proceed on the basis that a court order is binding and may be relied upon. Moreover, Rule 25 (19) should not [be] regarded as a form of supplementary or shadow appeal process, to deal with events arising subsequent to the court order. Utilizing Rule 25(19) in this fashion would not only produce needless uncertainty, it would also frustrate parties' efforts to settle disputes, for fear that the matter would be re-opened later because a party had become dissatisfied with the terms of the order. Any such efforts would be inconsistent with the "primary objective" of dealing with cases justly, as set out in Rule 2 (2) and 2 (5). (at para. 38)
Thus, an attempt by a litigant to mask an appeal as a motion under Rule 25(19) of the Rules will not likely be successful and a litigant will undoubtedly need to place sufficient evidence to sway the court in their favour.
Factors to be considered in setting aside a consent order
Justice Hilliard in Patel v. Patel cited Justice Sheard’s decision of Ciraolo (Litigation Guardian of) v. Ricci (2022 ONSC 420), which summarized the factors to be considered in setting aside a consent order:
- The court has discretion to set aside a settlement where, in the totality of the circumstances, it would not be appropriate to enforce the parties' agreement. However, as a matter of public policy, a settlement ought to be enforced by the court unless enforcement would create a risk of clear injustice …
- The fact that a settlement has been implemented by a consent order does not preclude the court from exercising its discretion respecting enforcement of the settlement and a party may move to set aside the court order on a ground set out under rule 59.06 (2);
- Attempts to reopen matters that are the subject of a final judgment must be carefully scrutinized and the moving party must demonstrate circumstances that warrant deviation from the fundamental principle that a final judgment, unless appealed, marks the end of the litigation …
- A consent order may be set aside on any ground that invalidates the underlying settlement agreement or on a material change in circumstance after the order was made. Such grounds include common mistake, misrepresentation, fraud, or any other ground which would invalidate contract (sic) or, a material change in circumstance occurring after the consent order …
- The court in Joshi also endorsed the principle that a consent judgment is binding and final, and that finality is important in litigation because the parties reached their bargain on the premise of an allocation of risk and the implicit understanding that they would accept the consequences of the settlement. For those reasons, r.59.06 limits the avenues to set aside a settlement and consent dismissal;
- Even where a material change in circumstances is established, the court has discretion to refuse to set aside the order based on factors such as prejudice to the other parties or unreasonable delay in bringing the motion …
- In all cases, the onus is on the moving party to show that circumstances warrant making an exception to the fundamental rule that final Judgments are, in fact, final.
Justice Hilliard affirmed that all court orders are assumed to be correct, “Other than in the circumstances set out in FLR 25(19) and the caselaw regarding setting aside consent orders, a judge has no jurisdiction to review the order of another judge at the same level of court. A motion to set aside a consent order must not be allowed to become an appeal in disguise.” (at para. 21)
Her Honour acknowledged that it has long been established that the test to set aside consent orders differs from the test to set aside an order where that has been judicial adjudication of one or more issues. As Justice Patrick Monahan in Sonia v. Ratan (2022 ONSC 6340) at paragraph 29 stated, "Because the basis for a consent order is simply the parties' agreement, such an order may also be set aside on the same grounds as the underlying agreement that gave rise to it."
Justice Hilliard affirmed that the starting point remains that a final order is final, subject to the moving party demonstrating, with evidence, that the order should be set aside based on the legislation and case law. She stated that, “It is only in exceptional circumstances that a court order should be set aside. Courts have long recognized the importance of upholding agreements reached by parties based on the need for finality in litigation.” (at para. 23)
Decision in Patel v. Patel
The Applicant’s reasons for moving to set aside portions of Justice Thompson’s order were based on arguments relating to lack of independent legal advice, lack of understanding, unconscionability, and lack of judicial oversight (at para. 24).
Justice Hilliard held that a lack of independent legal advice is not a ground upon which a consent order can be set aside. Moreover, the Applicant specifically advised Justice Thompson that he did not wish to obtain legal advice before the minutes of settlement were endorsed (at paras. 25-26).
The Court held that the failure to exchange financial disclosure alone also cannot form the basis upon which a consent order can be set aside, failing evidence to demonstrate fraud or mistake. Again, Justice Thompson questioned the parties extensively regarding the lack of financial disclosure exchanged and the parties’ understanding of the agreement prior to endorsing the minutes of settlement.
The Applicant also tried to advance an argument that the Respondent made a false statement regarding her pension. Justice Hilliard found that there was no evidence for this allegation that could form a case for the order being set aside on the basis of mistake or fraud (at para. 28).
Her Honour affirmed that in order for an agreement to be set aside on the basis of unconscionability, “There must be an aspect of inequality between the parties and that inequality must have been utilized by one party to prey upon the other.” On the evidence, no unconscionability was found between the parties (at paras. 29-30).
Justice Hilliard also did not accept the Applicant’s argument that there was minimal judicial oversight. Justice Thompson took time to review the minutes of settlement with the parties and ensured that they understood their legal rights as well as the agreement reached, prior to endorsing the minutes.
Ultimately, Justice Hilliard found that the Applicant entered into the minutes of settlement rashly and simply regretted signing the agreement. The Applicant did not advance sufficient evidence to set aside the order, on the basis of unconscionability, mistake, or fraud. Accordingly, she dismissed the Applicant’s motion and held that Justice Thompson’s order shall remain final.
Conclusion
Patel v. Patel is a good illustration of how the court applies the statutory framework and case law regarding setting aside an order, particularly an order reached by consent.
Justice Hilliard assessed the Applicant’s claims of a lack of judicial oversight, a lack of understanding, unconscionability, not receiving independent legal advice, fraud and being pressured to sign the agreement.
The decision of Patel reaffirms the court’s unwillingness to set aside final orders in the absence of sufficient evidence supporting one of the grounds upon which an order may be set aside.
We see the court uphold the principles of autonomy and finality in family law settlements and endorse the high threshold required to be met in order to have an order set aside, particularly an order reached by consent. The notion of justice plays an integral role in assessing whether an order should be set aside.
Challenging final orders is a particularly delicate exercise. While the court appreciates that family law litigation is stressful, the court will not set aside agreements unless there is sufficient evidence to show that the agreement was in fact obtained by fraud, mistake, duress, etc. Spurious claims unfounded on evidence will not likely be successful.
The court will also not assist a party with settlement remorse to set aside an agreement, as this would be contrary to the principles of autonomy and finality.
To paraphrase Justice Hilliard, Patel was a case of “buyer’s remorse” where a party made some “rash decisions” and simply regretted the agreement made.
Therefore, counsel with similar cases should carefully review, not just their client’s motivations and the full background behind a purported claim, but also the evidence supporting the claim. This way, counsel’s advice will not only be sound and thoughtful, but will also help a client to avoid a futile attempt at fixing their own wrong.