Case reference: Psarros Estate v. Cook, 2017 ONSC 3903
This historical case summary discusses the decision identified above. Later decisions and legislative changes may affect how it applies today. Obtain legal advice about your circumstances.
P and C were married in 1992. Before their marriage, they purchased a house, taking title as tenant in common. They entered into a marriage contract in which C released her claims under the Succession Law Reform Act. The marriage contract mistakenly stated that P and C owned the house as joint tenants. P died without a will. His estate offered to sell, and C agreed to purchase, the estate’s interest in the house, but C subsequently changed her position. She challenged whether the house was held jointly or by way of tenancy in common and challenged the validity of her release of claims under the SLRA. The estate brought an action seeking a declaration that C was bound to purchase the estate’s interest in the property, occupation rent and other relief.
Held, the action should be allowed.
The mistake in the marriage contract did not constitute an appropriate basis for setting aside C’s release of her SLRA claims under s. 56(4) of the Family Law Act. C had clearly not been under the impression that she actually owned the entire house on P’s death and had originally been willing to buy the estate’s half interest in the house until the estate took a hard line on other issues. In any event, the error in the marriage contract did not extend to the SLRA release. C had not established that she and P intended for her to have the house on P’s death.
While the estate was entitled to occupation rent, the occupation rent that was owing was wholly offset by the estate’s share of expenses that C had been paying. Section 56(4)(c) of the FLA provides that a court “may” set aside a provision of a domestic contract in accordance with the law of contract. The estate argues that the Court of Appeal has made clear that even if s. 56(4) of the FLA is engaged, the contract is not automatically rendered a nullity, but the trial judge must determine whether it is appropriate to set aside the contract in the circumstances. This is an exercise of discretion: LeVan v. LeVan (2008), 90 O.R. (3d) 1, [2008] O.J. No. 1905, 2008 ONCA 388, at para. 33.
*source: Ontario Reports
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