Stephens v. Stephens, 2016 ONSC 367

In this case, Justice Raikes addresses whether a judge has the jurisdiction to rectify a mistake in a final Order.

Background

In this matter, the husband had a pension for which a valuation was obtained for equalization purposes. The husband’s pension plan administrator provided the parties with a Family Law Valuation in May 2013, which the parties relied on in negotiating their equalization settlement. Under this valuation, the husband’s pension was approximately $445,681 and the wife, at most, could receive one half which was approximately $222,840.

The parties eventually entered into Minutes of Settlement whereby the husband would pay $190,000 to the wife, based on the May 2013 pension valuation. The Minutes of Settlement were eventually subsumed into the final Order of Justice Nolan, dated October 23, 2013. The parties intended that the Minutes of Settlement and Order would fully and finally resolve all equalization issues between them.

In April 2015, the pension plan administrator advised the parties that the May 2013 pension valuation was incorrect. The correct calculation required a further transfer of $82,000 by the husband to the wife.

As such, the wife sought to have the final Order of Justice Nolan amended or varied in light of the errors in the pension valuation relied on by both parties.

Analysis

Rule 25(19)(b) of the Family Law Rules (FLR) permits a court, on motion, to change an order that contains a mistake. The wife assets that the parties had a mutual intention to equally divide the husband’s pension. If not for the mutual mistake of fact arising from the incorrect calculation, the amount payable to the wife would have been higher because the correct pension value was greater.

Referring to the leading case on the issue, Henderson v Henderson, Justice Raikes found that he agreed with Justice McDermot’s interpretation of Rule 25(19)(b) beyond correcting typographical and mathematical errors. Justice McDermot in Henderson had found that Rule 25(19)(b) also permitted the rectification of a court Order where:

(a) The Order does not reflect the common intentions of the parties due to a mistake;

(b) There are grounds to rectify the Order similar to those necessary to rectify a contract; and

(c) It is in the interests of justice to rectify the Order.

In the case at hand, the mistake was committed by both parties as they mutually misapprehended the value of the husband’s pension by relying on the pension plan administrator’s valuation. As such, Justice Raikes found that Rule 25(19)(b) bestowed the necessary authority for him to correct the ‘mistake’ as necessary to reflect the common intention of the parties.

In light of the parties’ clear intention to equally divide the husband’s pension and the absence of a grounds for unequal division of net family properties, Justice Raikes believed that the facts satisfied the test as set out by Justice McDermot for rectifying an Order under Rule 25(19)(b).

Justice Raikes further found the necessary authority in common law. According to West v West, the court has an inherent common law power to set aside or vary an order based on new or newly discovered facts if doing so would prevent a mischarge of justice. The test to do so is as follows:

1. The evidence presented at motion must:
   • Be clear and credible;
   • Be of such a nature that the original order would have been different if the evidence had been available;
   • Not have been in existence at the time the order was made or not discoverable by diligent effort by the party asking the court to change the order; and
2. The party asking for the order must have acted with diligence once the information came to light; and
3. The evidence must establish that action is needed to prevent a miscarriage of justice.

Justice Raikes found that that the case at hand satisfied the common law test since:

1. The evidence at trial was clear and cogent as it explained the circumstances as they transpired;
2. The evidence of the correct value of the husband pension was material to determining equalization, based on the parties’ intention, would likely have resulted in a different order if known at the time settlement.
3. The parties were entitled to rely on the plan administrator’s valuation based on common practice in family law disputes. As such, the evidence was not discoverable by the parties via reasonable diligence at the relevant time.
4. The wife acted as soon as the new information from the plan administrator came to light in 2015; and
5. If the Order were not amended, it would result in a substantial miscarriage of justice as the husband would gain an unintended and unexpected windfall at the expense and prejudice of the wife.

As such, Justice Raikes held that it was appropriate and necessary in the circumstances to amend the Order of Justice Nolan to rectify the mutual mistake of the parties. This rectification was absolutely necessary to ensure that the Order and its result would be consistent with the mutual intentions of the parties at the time of settlement.