The Second Opinion: Ontario Court of Appeal Rejects Late-Breaking Request for Rectification

In its recent ruling in Stevens v. Stevens, 2013 ONCA 267, the Ontario Court of Appeal refused to grant a party's request that a document (a domestic contract) be rectified in his favour.  While the Court's decision may strike many as sensible in the circumstances, the precise doctrinal basis for the conclusion raises interesting questions.

The parties were husband and wife.  The wife was considerably wealthier than the husband.  During an effort to save the marriage, they had entered into a domestic contract.  It appears that the contract was intended to provide that, upon marriage breakdown, the husband would receive 50% of the value of the matrimonial home.  Unfortunately, owing to an apparent drafting error, the contract instead stated that the husband would receive 100% of the value of the home.

When the marriage broke down, the husband attempted -- at trial--  to enforce the contract as drafted.  Instead, the trial judge ordered that the entire matrimonial contract was void because it was unconsionable, did not represent a true meeting of the minds, and should be set aside under the provincial Family Law Act.

On appeal, the  husband changed course entirely.  Concluding that "half a loaf" was better than none, he took the position that the marriage contract should be saved by being re-written to reflect what he now claimed was the parties' true agreement -- i.e., that he should received 50% of the value of the home.

More specifically, the husband asked the Court of Appeal to grant the extraordinary equitable remedy of rectification (i.e., the judicially ordered, retroactively effective rewriting of a document so that it reflects the parties' true bargain).

Perhaps not surprisingly, the Court of Appeal dismissed the husband's request out-of-hand.

One might have expected the Court to explain that, as a discretionary equitable remedy designed to achieve fairness and justice, rectification was simply unavailable to a party who had knowingly sought to take advantage of the drafting error.  Interestingly, while that may have been a factor in the Court's thinking, that was not the focus of the Court's conclusion:

[8]          In our view, on this record and in the light of the position he took at trial, the remedy of rectification is not open to the appellant on appeal. If accepted, it would permit the appellant to take a fundamentally different position on appeal, one that is completely inconsistent with the position he took and the evidence he led at trial. To do so would be fundamentally unfair to the respondent.

[9]          ....The trial judge found as fact that the appellant was aware of the drafting error and that he knew that it needed to be clarified. The appellant refused to take steps to make the clarification and continued to insist that the agreement should be enforced as written. Simply put, he cannot ask this court to rectify an agreement to reflect terms he swore he did not agree to.

Thus, in addition to providing an interesting (albeit implicit) example of the maxim that a party who seeks equitable relief must come to court with "clean hands," the case may also be seen as representing an example of the estoppel doctrine sometimes called "the principle of approbation and reprobation" (i.e., a party with two inconsistent legal options, who clearly elects to pursue one, will generally be precluded from later resiling from that position, and seeking to pursue the second, inconsistent alternative in a proceeding).

The McCarthy Tétrault Opinions Group consists of members of the firm’s litigation department whose practices focus on written advocacy and the provision of strategic advice and opinions in the context of complex business disputes and transactions. The members of the Opinions Group are Anthony Alexander, Martin Boodman, Brandon Kain, Hovsep Afarian and Kirsten Thompson.

contracts Domestic/Marriage Agreeents Equitable remedies Estoppel Family law rectification



Stay Connected

Get the latest posts from this blog

Please enter a valid email address