In Virc v. Blair et al. the wife brought an application to set aside a separation agreement with her husband on the grounds that he had materially misrepresented his financial disclosure for the parties’ equalization calculation.
The motion judge had concluded that even if the disclosure by the husband was deliberately false, there was no genuine issue for trial relating to the setting aside of the separation agreement, as the wife’s failure to examine the accuracy of the husband’s financial disclosure was detrimental to her case.
The Court of Appeal allowed the appeal. The Court held the motion judge had erred in shifting the onus to the wife to inquire as to the veracity of the husband’s financial disclosure. In situations of deliberate material misrepresentation, the burden is on the party disclosing, in this case the husband, to establish actual knowledge of the falsehood by the recipient, the wife. The motion judge also erred in granting summary judgment when relevant factors that required examination were left unanswered. There was a genuine issue requiring a trial concerning the wife’s state and scope of knowledge of the husband’s misrepresentation at the time the agreement was executed.