COURT OF APPEAL FOR ONTARIO
Laskin, Feldman and Simmons JJ.A.
BETWEEN
Nancy Jane Roberts
Applicant (Appellant)
and
Michael Gordon Miller
Respondent (Respondent)
Catherine Roberts and Helen E. Vukotic, for the appellant
Richard A. Wellenreiter, for the respondent
Heard: February 6, 2015
On appeal from the order of Justice Cheryl Lafrenière of the Superior Court of Justice, dated June 17, 2014.
A. introduction
1The main issue on appeal is whether the motion judge denied the appellant mother a fair hearing by refusing to adjourn a motion to change to permit the completion of questioning that had previously been ordered.
2The parties are former common law spouses. In December 2006, they signed Minutes of Settlement resolving all outstanding issues in a proceeding between them, and the Minutes were incorporated into a court order.
3In 2012, the father moved to reduce the child support and eliminate the spousal support payable under the 2006 order. In his financial statement filed on the motion to change, the father revealed that he had received a significant pension payout when he lost his job earlier that year.
4In her initial response to the motion to change, the mother simply asked that it be dismissed. Later, she filed an amended response, asking that income be imputed to the father and that the custody arrangements be changed.1 In September 2013, the father brought a motion to enforce an alleged settlement of the motion to change.
5In November 2013, the parties consented to an order permitting the mother to amend her response to the motion to change by adding a claim for a constructive trust over the father’s assets acquired during cohabitation. The order also permitted questioning and the filing of updated factums, with both steps to be completed by December 31, 2013.
6When the matter was called for hearing on January 14, 2014, mother’s counsel asked for an adjournment because the contemplated questioning had not been conducted and updated factums had not been filed.
7The motion judge refused the mother’s request for an adjournment. She ruled that questioning was unnecessary to address the father’s motions, and that the mother’s motion could be bifurcated – because the legal issue of whether the mother was entitled to pursue a constructive trust claim could be addressed without the need for questioning.
8Ultimately, the motion judge reduced the child and spousal support payable by the father and dismissed all other claims that were before her.
9The mother raises numerous issues on appeal. In my view, in all the circumstances of this case, the motion judge erred in failing to grant the requested adjournment.
10For reasons I will explain, I would allow the appeal, set aside the motion judge’s order, and order a new hearing on terms that questioning proceed forthwith on a schedule to be agreed upon by the parties or determined by the case management judge.
B. background
(1) The parties
11The mother and the father began living together around December 1994. They separated in April 2006. They have one child, a son, who was born in 1999. The mother also had a child from a previous relationship who lived with the parties for some time.
12While the parties lived together, the father worked for the City of Hamilton and the mother worked part-time, first in retail, later at Flamboro Downs racetrack.
(2) The mother’s August 2006 application
13Following the parties’ separation, the mother brought an application for child and spousal support. In her application, the mother also claimed “a constructive trust interest in all assets accumulated by the Respondent during the course of the relationship.”
14The father did not disclose any assets in his financial statement delivered in the 2006 application. However, he attached to his financial statement a pay stub and some income tax information forms, which showed that he had been making pension contributions for some time.
(3) The December 2006 Minutes of Settlement and court order
15In December 2006, the parties entered into Minutes of Settlement purporting to settle “all outstanding issues in these proceedings”. The Minutes provided:
the parties would have joint custody of their son;
the father would pay the mother $429 per month for child support based on an annual income of $46,500;
the father would pay the mother $371 per month for spousal support based on the mother’s estimated annual income of approximately $18,000;
spousal support was reviewable annually;
the mother would deliver up certain personal property to the father;
the father would assume responsibility for certain debts.
16The terms of the Minutes were incorporated into a final court order dated December 14, 2006. Neither the Minutes nor the order referred specifically to the mother’s constructive trust claim.
(4) The Father’s 2012 motion to change
17In July 2012, the father lost his 28-year employment with the City of Hamilton because of persistent absenteeism due to alcoholism. Later that year, the father brought a motion to change the 2006 order by eliminating spousal support and reducing child support to $202.24 per month based on an annualized income from employment insurance benefits of $25,220 ($485 per week).
18The father’s financial statement filed on the motion to change disclosed an RRSP valued at approximately $450,000, and indicated that it “was transferred from OMERS on termination of employment”. Income tax information attached to the father’s financial statement disclosed line 150 income for the years 2009, 2010 and 2011 as $47,500.73, $44,537.49, and $45,853.90, respectively.
(5) The mother’s response to the father’s motion to change
19In a November 20, 2012 response to the father’s motion to change, the mother asked that the motion be dismissed.
(6) The mother’s amended response to the father’s motion to change
20In February 2013, the mother amended her response to the father’s motion to change. She asked for sole custody of their son and requested that the father’s access be supervised. She also asked that the periodic support orders be amended to reflect increases in the father’s income since the 2006 order; and that income be imputed to the father because, in her view, he had the ability to work full-time.
(7) The father’s motion to enforce a settlement reached on March 20, 2013
21In September 2013, the father served a motion returnable October 18, 2013 to enforce a settlement of his motion to change. He claimed the parties reached an agreement on March 20, 2013 and that the motion to change was therefore removed from the long motions list at that time. In the alternative, he asked for an order restoring his motion to change to the next long motions list.
(8) The November 15, 2013 consent order
22The father’s enforcement motion was adjourned on consent to November 15, 2013. On that date, the parties consented to an order permitting the mother to amend her response to the father’s motion to change to claim a division of property and permitting questioning to take place. Questioning was to be completed by December 31, 2013, and updated factums were to be filed by the same date. The matter was placed on the long motions list for the trial sitting commencing January 6, 2014, not to be called during the first week of the sittings.
(9) The mother’s amended response to the father’s motion to change
23The mother delivered her amended response to the father’s motion to change on November 29, 2013. She claimed a constructive trust over the father’s property acquired during cohabitation based on unjust enrichment. She asserted that the father’s 2006 financial statement failed to disclose any assets – whereas his financial statements in the current proceedings disclosed a pension asset worth approximately $450,000.
24In a supporting affidavit, the mother stated that, throughout their cohabitation, the parties regarded themselves as married. They mutually agreed to have a child together. Further, the mother claimed that she enabled the father to pursue his employment with the City of Hamilton because she assumed responsibility for caring for their child and for household duties.
25Although the mother acknowledged that she was aware at the time of separation that the father had a pension, she claimed she “was not aware that it constituted an asset, nor did [she] have any idea how much [the] pension was worth.”
(10) The father’s reply to the mother’s amended response
26In an undated reply to the mother’s amended response, the father asserted that the mother’s claim for a constructive trust was without foundation for several reasons. First, the principle of res judicata applied. Second, the claim was statute barred. Third, the mother was always aware the father had a pension. Fourth, the mother did not meet the test for unjust enrichment in relation to the father’s pension and had not contributed either directly or indirectly to the pension. Finally, the claim was without merit and designed to cause the father to incur unnecessary costs.
(11) The parties fail to complete questioning; the matter is called for hearing January 14, 2014
27In December 2013, counsel for both parties cancelled dates proposed or scheduled for questioning. They explained their positions before the motion judge on January 14, 2014, the date on which the matter was called for hearing.
28According to mother’s counsel, at the November 15, 2013 hearing when the consent order for questioning was made, father’s counsel offered only December 16, 17 or 18 as available dates for questioning and counsel targeted December 18, 2013 as the date for questioning. Mother’s counsel relied on that date, but when she and father’s counsel spoke the week before December 18, he was no longer holding that date open. Mother’s counsel wrote a letter requesting documentary disclosure in an effort to avoid the need for questioning. However, father’s counsel served a notice of examination for December 27, 2013 without consultation. Mother’s counsel had to cancel that date because of a funeral for a close family friend. Father’s counsel then served a further notice of examination for January 6, 2014, but mother’s counsel had indicated, at the November 15, 2013 hearing, that she was unavailable the first week of January. Father’s counsel refused to produce his client on later January dates (January 10 and January 14) offered by mother’s counsel and took the position that the matter should proceed without questioning.
29Before the motion judge, father’s counsel relied on the fact that mother’s counsel failed to serve an appointment for questioning at any time before December 31, 2013. In any event, in his view, it was always contemplated that the hearing relating to the mother’s constructive trust claim would be bifurcated, with the issue of her entitlement to advance a claim being dealt with first – and that the issues for questioning were restricted to the quantum of any potential claim. He also emphasized that when mother’s counsel asked to postpone the December 27, 2013 date, she said she would be available in early January – she did not point out, and he did not recall, that she was not available during the first week of January. And she did not notify father’s counsel that she was not available on January 6, 2014 until January 3, 2014.
30In his submissions to the motion judge, father’s counsel initially did not respond directly to mother’s counsel’s submission that she had suggested later dates in January. Rather, he relied on the terms of the November 15, 2013 order, requiring that examinations be completed by December 31, 2013; the mother’s failure to serve a notice of examination within that time frame; his efforts to schedule questioning; and his view that the mother’s claim for a constructive trust was meritless and that her request for questioning related to valuing that claim. After further colloquy, he pointed out that counsel had agreed to extend the date for filing updated factums to January 8, 2014 — and that the dates proposed by mother’s counsel for questioning were after that date.
(12) The January 14, 2014 hearing
31On January 13, 2014, the matter was called for hearing on January 14, 2014. At the hearing, mother’s counsel requested an adjournment to conduct questioning and to prepare a factum based on a full record – and counsel provided their explanations for why questioning had not taken place. During the course of submissions and argument, mother’s counsel pointed out that, because questioning had not taken place, she had not come prepared to deal with the substantive issues. Further, it was her understanding that the motion to enforce the settlement had been abandoned because it was not argued on November 15, 2013 and had not been adjourned.
32The motion judge expressed concern over the length of time the matter had been outstanding. She concluded that she could deal with the father’s motions without questioning and that the mother’s cross-motion could be bifurcated. The first issue on the mother’s cross-motion was a legal issue: could the mother re-open the prior court order? If she was entitled to do so, she could then proceed with questioning.
C. The motion judge’s Decision
33On June 17, 2014, the motion judge released reasons reducing the child and spousal support under the 2006 order based on the father’s actual income from August 1, 2012 through to October 1, 2013 and dismissing all other claims that were before her except for costs.
34In dismissing the mother’s claim for a constructive trust, the motion judge found that, in the face of the 2006 order, the mother was estopped from advancing the claim based on the principle of res judicata. She also concluded that the mother had not established a basis for setting aside the 2006 order or the Minutes of Settlement on which the order was based. In light of these findings, the motion judge said it was unnecessary for her to consider the mother’s actual claim for a constructive trust. However, she observed that if the mother did have a claim against the father’s pension, it vested in her trustee in bankruptcy when the mother declared bankruptcy in 2009. She also indicated that it was unnecessary that she consider the limitation issue raised by the father, apparently because the issue was not fully argued.2
D. analysis
35The decision whether to grant an adjournment is highly discretionary. Nonetheless, a presiding judge who fails to take account of relevant considerations in balancing the interests of the applicant, the respondent and of the administration of justice in the orderly processing of cases on their merits may exercise that discretion unreasonably and thus, in a manner that justifies appellate intervention: Khimji v. Dhanani (2004), 2004 CanLII 12037 (ON CA), 69 O.R. (3d) 790 (C.A), per Laskin J.A. at paras. 14 and 18.
36In this case, in my view, the motion judge erred in failing to grant an adjournment because she jumped to the erroneous conclusion that questioning and updated factums were unnecessary to permit a proper consideration of the issues she identified could proceed – and she did so without allowing mother’s counsel to make full submissions on the question of whether the motions could proceed without questioning.
37The issues raised by the mother on the father’s motion to change included whether income should be imputed to the father because he was intentionally underemployed. The issues on the mother’s constructive trust claim included whether the father’s failure to make full financial disclosure concerning his pension in 2006 justified re-opening the 2006 order.
38The very nature of these issues suggests that the father would have information relevant to them that would not otherwise be available to the mother.
39That conclusion is supported by father’s counsel’s substantive submissions on the father’s motion to change. During those submissions, father’s counsel provided information, purportedly as an officer of the court, concerning the status of the father’s grievance over his loss of employment. Father’s counsel explained that this information was not before the court in an affidavit because he anticipated participating in questioning.
40Further, the motion judge’s written reasons determining the substantive issues belie her conclusion that questioning and updated factums were unnecessary.
41The motion judge’s reasons are about 30 pages long, and they refer to more than 35 authorities, most of which were not referred to by counsel in oral submissions (and one of which had been overturned on appeal3). Her reasons include the following findings:
the circumstances that led to the father’s 2012 dismissal from his longstanding employment were beyond his control – rather, they were due to his alcoholism, which is a disease;
the father was not intentionally unemployed or underemployed while he sought treatment for his alcoholism;
there was no evidentiary basis upon which to impute income to the father — the mother bears the onus and did not establish that the father should have been working during his treatment or that he could now earn at a level consistent with what he was earning while employed at the City of Hamilton;
there was no evidence of misinformation, misrepresentation, deliberate undervaluation of assets or deliberate failure to provide financial information.
42The motion judge’s findings of no evidentiary basis to support specific conclusions are particularly telling. The mother was deprived of the opportunity to establish an evidentiary basis through questioning the father in circumstances where an order for questioning had been made. Moreover, the finding that there was no evidence of misinformation, misrepresentation, deliberate undervaluation of assets or deliberate failure to provide financial information undermines the motion judge’s conclusion that the issue she identified for determination in relation to the mother’s trust claim presented a preliminary question of law.
43The motion judge did not find either the mother or her counsel at fault for the failure to complete questioning by December 31, 2013. On the record before her, such a finding would have been unreasonable.
44I conclude that the motion judge denied the mother a fair hearing in failing to grant her adjournment request. She not only deprived the mother unfairly of the opportunity to complete questioning that had been previously ordered, she denied the mother the ability to make proper submissions on issues her reasons demonstrate posed significant complexity. And as I have said, she did so without allowing the mother to make full submissions on whether the motions could proceed without questioning.4
45In reaching this conclusion, I am mindful of the father’s submissions that the mother faces significant hurdles in relation to her claim for a constructive trust. These include setting aside the 2006 order; a potential limitation issue; and the fact of the mother’s 2009 bankruptcy. However, as I have explained, the motion judge erred in failing to permit questioning before determining whether the 2006 order could be set aside – and she did not address the limitation issue. While the mother’s 2009 bankruptcy may affect the mother’s ability to make her claim at this time, in the absence of information about the mother’s debts when she declared bankruptcy, and the position of her trustee in bankruptcy, the effect of the bankruptcy on her claim cannot be determined on this appeal.
E. conclusion
46Based on the foregoing reasons, the order dated June 17, 2014 including the order for costs is set aside, and a new hearing is ordered before another judge on terms that questioning proceed forthwith on a schedule to be agreed upon by the parties or determined by a case management judge.
47I would add that, particularly in the light of the mounting costs, the parties would be well-advised to seek a judicial settlement conference to attempt to resolve the issues between them.
48Costs of the appeal to the mother fixed at $10,000 inclusive of disbursements and applicable taxes together with $3,500 ordered by Cronk J.A. on the motion dated December 12, 2014.
Released:
“JUL -7 2015” “Janet Simmons J.A.”
“KF” “I agree John Laskin J.A.”
“I agree K. Feldman J.A.”
Footnotes
- For ease of reference, later in these reasons, I have referred to the mother’s responses to the father’s motion to change as a motion or cross-motion.
- The motion judge’s reasons indicate that the limitation issue was fully argued. However, the full context in which this statement was made suggests the opposite: While the issue of a limitation problem was raised by the father, this issue was fully argued by the father. In the result, I need not consider whether or not the wife’s claim is barred by expiration of a limitation period.
- The motion judge relied on Virc v. Blair, 2012 ONSC 7104, 35 R.F.L. (7th) 194, for the proposition that there is an onus on the recipient of financial information, should he or she not accept the veracity of that information, to take steps to question it. That decision was overturned in Virc v. Blair, 2014 ONCA 392, 119 O.R. (3d) 721. This court found that the motion judge erred in her application of the test to set aside a separation agreement. In that case, the motion judge assumed there had been deliberate misrepresentation in financial disclosure. Having done so, she erred in shifting the onus to the recipient of the information to inquire as to its veracity. The burden was on the party who provided the information to establish that the recipient had actual knowledge of the falsehood.
- Early on in her adjournment request submissions, mother’s counsel attempted to explain why questioning was necessary. The motion judge cut off her, saying that she did not require any explanation as an order for questioning had been made. Later, during father’s counsel’s submissions, the motion judge appeared to accept his argument that certain issues could be addressed without questioning, and, ultimately, she adopted this view without giving mother’s counsel a full chance to respond.
