Cheng v. Liu, 2017 ONCA 104

Cheng v. Liu

Ontario Reports

Court of Appeal for Ontario

Strathy C.J.O., MacPherson and Hourigan JJ.A.

February 8, 2017

136 O.R. (3d) 172 | 2017 ONCA 104

Headnote

Family law — Jurisdiction — Ontario court not having jurisdiction to grant corollary relief under Divorce Act after foreign court has issued valid divorce — Ontario court having jurisdiction under Family Law Act to determine issues of child support and equalization of net family property where foreign court issued valid divorce but did not deal with those issues — Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.) — Family Law Act, R.S.O. 1990, c. F.3.

Case Summary

The appellant, a Canadian citizen and resident, was married to the respondent, who resided in China and who had never been to Canada. They had one child, who lived with the respondent. The respondent brought a divorce application in the Ontario Superior Court in which she also sought spousal and child support and equalization of net family property. The appellant subsequently brought a divorce application in China seeking a divorce, custody of the child and equalization of property. The Ontario application was stayed on condition that the appellant undertake to abide by Chinese court orders. The Chinese court granted the divorce and awarded custody of the child to the respondent. Because the appellant had not made full financial disclosure, the Chinese court declined to determine support and equalization. The stay of the Ontario application was lifted so that those issues could be decided. On the threshold issue of jurisdiction, the court ruled that the Superior Court has jurisdiction to adjudicate a claim for corollary relief under the Divorce Act despite the fact that a valid divorce has been granted by a foreign court. The appellant appealed.

Held, the appeal should be dismissed, but the order below should be varied.

An Ontario court does not have jurisdiction to hear and determine a corollary relief proceeding under the Divorce Act following a valid foreign divorce. However, an Ontario court has jurisdiction under the Family Law Act ("FLA") to award child support and to adjudicate the issue of equalization of net family property where a foreign court has issued a valid divorce but has not dealt with those issues. The use of the FLA in circumstances where relief under the Divorce Act is unavailable does not engage the paramountcy doctrine, as there is no operational incompatibility between the federal and provincial statutes. The respondent did not submit that it was open to her to seek spousal support under the FLA, as there is no provision in the FLA that entitles a former spouse to claim support under that Act. The order below should be varied as follows: "The Superior Court of Justice has jurisdiction pursuant to the FLA to determine the issues of child support and equalization of net family property".

Cases Referred To

Okmyansky v. Okmyansky (2007), 86 O.R. (3d) 587, 2007 ONCA 427, folld

Emerson v. Emerson, 1972 CanLII 524 (ON SC), [1972] 3 O.R. 5; French v. MacKenzie, 2003 CanLII 2023 (ON SC), [2003] O.J. No. 1786; Morwald-Benevides v. Benevides, 2014 ONSC 699; Pageau v. Szabo, 1986 CarswellOnt 3651; Seary v. Seary, 1994 CanLII 3828 (ON SC), consd

Other Cases Referred To

Abernethy v. Peacock, 2009 CanLII 25128 (ON SC); Canadian Western Bank v. Alberta, 2007 SCC 22; Cheng v. Liu, 2010 ONSC 2221; Durso v. Mascherin, 2013 ONSC 6522; Gomes v. Gomes, 1985 CanLII 825 (BC SC); Multiple Access Ltd. v. McCutcheon, 1982 CanLII 55 (SCC); Rothgiesser v. Rothgiesser, 2000 CanLII 1153 (ON CA); Slattery v. Slattery, 1993 CanLII 1192 (BC SC); Smith v. Kozakevich, 1988 CanLII 5138 (SK KB); Stefanou v. Stefanou, 2012 ONSC 7265; V. (L.R.) v. V. (A.A.), 2006 BCCA 63; Van Breda v. Village Resorts Ltd., 2010 ONCA 84; Ward v. Spear, 1999 CanLII 13988 (ON CJ)

Statutes Referred To

Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.)

Family Law Act, R.S.O. 1990, c. F.3

Appeal

APPEAL from the order of Price J., [2016] O.J. No. 3764, 2016 ONSC 3911 (S.C.J.) on jurisdiction.

Steven M. Fehrle, for appellant.

Christopher P. Goldson, for respondent.

The judgment of the court was delivered by

HOURIGAN J.A.:

Overview

1The issue on this appeal is whether an Ontario court has jurisdiction to award child support, spousal support and equalization of net family property after a foreign court has issued a divorce.

2The trial judge ruled that the Superior Court had jurisdiction to adjudicate a claim for corollary relief under the Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.) despite the fact that the parties' divorce had been validly granted by a foreign court. In so ruling, he distinguished the case from Okmyansky v. Okmyansky (2007), 86 O.R. (3d) 587, 2007 ONCA 427, where this court reached the opposite conclusion.

3I accept the submission of the appellant that the trial judge erred in finding jurisdiction based on the Divorce Act and in distinguishing Okmyansky. However, for reasons that I will explain below, I am of the view that the Ontario Superior Court has jurisdiction to determine the issues of child support and equalization of net family property pursuant to the Family Law Act, R.S.O. 1990, c. F.3 (the "FLA"). There is, in my view, no jurisdiction under that legislation, or otherwise, for the Superior Court to order spousal support in this case.

Facts

4The factual circumstances of this case are unusual and are relevant to the issue of the jurisdiction of the Superior Court. Accordingly, they merit a detailed recitation in order to place the legal issues in context.

5The appellant is a Canadian citizen who has resided in Mississauga since at least 2005. He is an engineer, and all of his assets, property and sources of income are in Canada.

6The respondent resides in Tai'an City in China, where she works as an office clerk. She has never been to Canada.

7The parties were married in China on August 7, 2006. A daughter ("Chang") was born on February 3, 2007 and has resided with the respondent in China her entire life. The parties separated either on December 14, 2007 (the appellant's claim) or January 15, 2008 (the respondent's claim). For most of the marriage, the appellant was in Canada and the respondent in China. If there was a period of cohabitation, it was extremely short.

8The respondent brought a divorce application in the Ontario Superior Court on March 28, 2009. She sought a divorce, as well as spousal support, child support and custody of Chang ("corollary relief") pursuant to the Divorce Act, and equalization of net family property pursuant to the FLA.

9On January 26, 2010, the appellant brought a divorce application in China, seeking a divorce, custody of Chang and equalization of property.

10Meanwhile, in Canada the respondent brought a motion in front of Quigley J., who, on February 17, 2010, ordered the appellant to pay temporary child support of $825 monthly.

11On April 15, 2010, the appellant brought a motion in front of Baltman J., seeking to have the matrimonial proceeding stayed in Ontario so that it could be heard in China. The respondent sought to have the application heard in Ontario. Baltman J. concluded [Cheng v. Liu, [2010] O.J. No. 1557, 2010 ONSC 2221 (S.C.J.)] that the Ontario court had jurisdiction to hear the application, as the husband had been resident in Ontario for the year immediately preceding the commencement of the proceeding. However, she noted that the issues of custody and access would necessarily have to be determined in China, where Chang resided. Thus, if the respondent were successful on the motion, there would have to be two court cases.

12Additionally, given the brevity of the marriage, Baltman J. found that the pivotal issue was child support, and logically child support should be decided in the same forum as custody and access. Thus, Baltman J. concluded that China was the more appropriate forum for the matrimonial proceeding, and that the application in Ontario should be stayed.

13Baltman J. was concerned to ensure that any child support order made in China could be enforced against the appellant and his Canadian assets. She stated [at para. 26]: "[t]he husband will be held to his undertaking to this court to abide by Chinese court orders". The court ordered the respondent's application stayed on the following terms:

(a) The appellant shall comply promptly with all procedural orders and rules of the courts of China in the case now pending there between the parties, as it may be amended or reconstituted, including orders and rules relating to disclosure of documents and information and submission to questioning in China for purposes of a motion or preparation for trial.

(b) The appellant shall comply promptly with all substantive orders of the courts of China in the case now pending there between the parties, as it may be amended or reconstituted, including orders relating to custody, access, child support, spousal support, ownership of property, liability for debts, division of matrimonial property and debts, and the granting of divorce.

(c) If the appellant does not comply with the above terms, the respondent may move in this court on five working days' notice to the appellant to lift the stay imposed by this order.

14The proceeding advanced in China. The Chinese family court granted the divorce and awarded custody of Chang to the respondent. The respondent was also granted sole ownership of the real property she had purchased in China prior to the marriage. Because of the way disclosure works in the Chinese legal system, the respondent did not learn that the appellant had not made full financial disclosure until the release of the judgment in China.

15The Chinese family court stated, "This court ordered the applicant (i.e. the husband) to fully disclose, within a timeframe, his properties and income in Canada. However, the applicant failed to disclose and he only provided a Declaration. In the Declaration, the applicant claimed that his income in Canada was $150 per month." While the Chinese court noted that the appellant should pay child support, there was no evidence of the appellant's income and properties in Canada, and consequently no basis to make a support order. The respondent also argued that such claims were best resolved in Canada.

16The court thus declined to exercise its jurisdiction and determine support and equalization. It directed that if the parties could not reach an agreement on these issues, an application could be brought in Canada.

17The appellant appealed the decision of the Chinese family court. The Chinese Appeal Court released its decision on September 7, 2012, holding that

All of the assets and properties in dispute are located in Canada. Because the court was not able to determine the true income of [the husband], the child support amount could not be determined. In addition . . . the trial court has agreed to [the wife's] claim that the Chinese court is not the best forum to decide this issue.

18The appellant next applied to the Chinese Court of Appeal for a retrial. The Chinese Court of Appeal dismissed the application on December 25, 2013. It held:

All disputed assets are located in Canada, and the courts could not determine the actual income of [the husband]. Therefore the child support amounts could not be determined . . . Therefore, the judgments of the trial court and the Court of Appeal with respect to the child support and family assets are correct.

19Following this, the respondent brought a motion in Ontario Superior Court to lift the stay of the Ontario application, arguing that the stay should be lifted because the appellant had breached the orders of the Chinese court to make full financial disclosure, and breached the undertaking and terms in Baltman J.'s stay order. Ultimately, a consent order was entered, which lifted the stay without prejudice to the issue of retroactive support.

20A trial management conference was held on June 19, 2015. The Superior Court, on its own initiative, ordered the trial bifurcated, so that the threshold issue of jurisdiction could be determined first. If the court determined that it had jurisdiction, a trial on the merits would be held on the issues of spousal support, child support and equalization.

21On August 4, 2015, the respondent amended her application so that her claims for spousal and child support were made pursuant to the FLA in addition to the Divorce Act. The appellant consented to the amended application. The trial on jurisdiction proceeded before the trial judge.

Decision of the Trial Judge

22The trial judge described the issue before him as whether the Superior Court was precluded from assuming jurisdiction in light of Okymansky, or whether the facts of the instant case were so different that the court could entertain the respondent's application for support and equalization, notwithstanding the Chinese divorce.

23The trial judge provided several reasons why this case was distinguishable from Okymansky and thus why the Superior Court could assume jurisdiction, notwithstanding Okymansky. At the end of his judgment, at para. 47, the trial judge provided a summary of five bases on which Okmyansky was distinguishable:

(1) The respondent commenced her proceeding in Ontario before the appellant commenced his proceeding in China and well before the court in China granted him a divorce.

(2) The court in Ontario stayed the respondent's application provisionally, on conditions that the appellant later breached.

(3) The appellant procured his foreign divorce in a proceeding in which he misled the court in China by making a false declaration as to his income, and thereby prevented that court from determining the issue of support.

(4) The court in China explicitly declined to exercise its jurisdiction over economic issues, including support and division of property, and explicitly left those issues for the court in Canada to determine.

(5) Without the court in Canada assuming jurisdiction over the issues of support and division/equalization of property, the respondent will be left without any forum in which to make her claims.

24The text of the trial judge's order was [at para. 49]: "The Superior Court of Justice of Ontario has jurisdiction to determine the issues of child support, spousal support, and equalization of net family property."

Issues

25The appellant concedes that the Ontario courts have jurisdiction under the FLA to adjudicate the issue of equalization of net family property. The respondent does not submit that she can seek spousal support under the FLA.

26Thus, the appeal raises the following issues:

(1) Does an Ontario court have jurisdiction to hear and determine a corollary relief proceeding under the Divorce Act following a valid divorce in a foreign jurisdiction?

(2) Does an Ontario court have jurisdiction under the FLA to determine the issue of child support after a foreign court has issued a divorce?

Analysis

(i) Divorce Act

27I accept that the facts of the present case are significantly different then the facts of Okmyansky. Notably, the respondent's application in Ontario predated the Chinese application, whereas in Okmyansky the Ontario application was commenced after the foreign divorce was issued. However, the court's analysis in Okmyansky was based on an exhaustive review of the legislative history of the Divorce Act, and not on the particular facts of the case. Having undertaken that analysis, Simmons J.A. concluded, at para. 33, that there is "nothing in the legislative history of the Divorce Act to indicate that Parliament intended the 1993 amendment to confer jurisdiction on Canadian courts to hear and determine a corollary relief proceeding . . . following a valid divorce in a foreign jurisdiction".

28Okmyansky is clear and unequivocal authority that an Ontario court does not have jurisdiction to hear and determine a corollary relief proceeding under the Divorce Act following a valid foreign divorce. Simmons J.A. held, at para. 38, that without a divorce granted in Canada, a support order could not properly be viewed as "corollary relief".

29Various superior court cases have followed Okmyansky in the last ten years. Thus, the court in Stefanou v. Stefanou, 2012 ONSC 7265 held, at para. 170, that "[i]f the divorce is not granted pursuant to the Divorce Act, then there is no divorce to which corollary relief may be incidental". The British Columbia Court of Appeal came to the same conclusion in V. (L.R.) v. V. (A.A.), 2006 BCCA 63, holding that the Supreme Court of British Columbia has no jurisdiction under the Divorce Act to grant corollary relief founded upon a foreign divorce.

30In my view, the trial judge erred in law when he attempted to distinguish this case from Okmyansky. That case was binding authority, and nothing in the unique circumstances of this case serves to confer jurisdiction where the statute does not provide jurisdiction. Simply put, there is no jurisdiction for an Ontario court to grant corollary relief under the Divorce Act after a foreign court has validly issued a divorce.

31In his reasons, the trial judge also relied on the forum of necessity doctrine, as described by Sharpe J.A. in Van Breda v. Village Resorts Ltd., 2010 ONCA 84. This doctrine allows a forum to take jurisdiction despite the absence of a real and substantial connection, where there is no other forum in which the plaintiff could reasonably seek relief. In my view, this doctrine is not applicable to this case. Ontario does have a real and substantial connection in this case by virtue of the appellant's residence in Ontario. In my view, if the Ontario court has jurisdiction, it is clear that Ontario is an appropriate forum.

32Given my conclusion on the absence of jurisdiction under the Divorce Act, it is unnecessary to decide the point, but there may also be constitutional issues underlying the inability of courts to award corollary relief pursuant to the Divorce Act without a valid Canadian divorce. As noted by the British Columbia Court of Appeal in V. (L.R.), it is arguable that if Parliament extended the jurisdiction to Canadian courts to grant corollary relief pursuant to the Divorce Act based on foreign divorces, this would be an unconstitutional invasion of provincial jurisdiction over property and civil rights.

(ii) FLA

33The appellant does not dispute the jurisdiction of the Ontario courts to adjudicate the issue of equalization of net family property under the FLA, notwithstanding the foreign divorce. There was a clear finding to this effect in Okmyansky, at para. 43.

34The respondent does not submit that it is open to her to seek spousal support under the FLA. In Okmyansky, at para. 42, the court, relying upon Rothgiesser v. Rothgiesser, 2000 CanLII 1153 (ON CA), noted that there is no provision in the FLA that entitles a former spouse to claim support under that Act.

35The question that remains is whether an Ontario court has jurisdiction under the FLA to award child support after a foreign court has issued a divorce. This is an issue that was not considered in Okmyansky.

36Recall that in the respondent's initial application, dated March 28, 2009, she sought spousal and child support pursuant only to the Divorce Act. However, in her amended application dated August 4, 2015 she sought spousal and child support pursuant to both the Divorce Act and the FLA.

37The only case dealing with the jurisdiction of an Ontario court to order child support following a foreign divorce is Morwald-Benevides v. Benevides, 2014 ONSC 699, at para. 18. In that case, the court distinguished Okmyansky on the basis that the wife was not seeking corollary relief, but rather was seeking child support as a matter of provincial law under the FLA.

38There is also a line of jurisprudence developed in the trial courts that holds that where a court in a province has issued a divorce, but has not dealt with child support, then the courts in another province have jurisdiction to order child support pursuant to provincial legislation. The case law is mostly older, as the importance of this issue decreased following the 1993 amendments to the Divorce Act. Prior to these amendments, the only court with jurisdiction to hear a claim for corollary relief was the court of the province that had granted the divorce. Following the amendments, the courts of any province where one of the former spouses has resided for at least a year have jurisdiction to hear a corollary relief claim, as do the courts of any province to which both spouses attorn.

39An example of this line of authority is Seary v. Seary, 1994 CanLII 3828 (ON SC). There, LaForme J. (as he then was) quoted, at para. 5, the earlier case of Pageau v. Szabo, 1986 CarswellOnt 3651 for the proposition that "so long as the divorce court has not in any way adjudicated on the matter of child support, it is open to a party thereafter to invoke provincial law for relief".

40In Pageau, James J. conducted a lengthy review of the jurisprudence on this question. He held, at para. 9, that following a divorce, the court that granted the divorce would have exclusive jurisdiction over child support in the following situations:

(a) whenever the divorce court has granted child support, no matter how nominal or how limited in time;

(b) whenever the divorce court, after considering the question of support, has refused to grant it or rejected the prayer to grant it; or

(c) whenever the divorce court has reserved its right to make subsequent pronouncements on support.

(Emphasis in original; citations omitted)

41According to James J., in any such situation, a court acting under the provincial statute would be barred from dealing with the issue of child support. Where, however, the divorce court has not dealt with child support in one of these three ways, then there is scope for the operation of provincial law, even if the divorce court has exercised its jurisdiction in making a custody order.

42Similarly, in French v. Mackenzie, 2003 CanLII 2023 (ON SC), at para. 8, Kennedy J. explained that "[i]f there has been a divorce but no child support order was made under the Divorce Act, the option exists to bring child support proceedings under either federal or provincial legislation". In that case, there had been a divorce granted, but no adjudication on child support, as there had been an informal agreement between the parents. Kennedy J. held that the mother had the option of bringing her child support application under the FLA, or as a corollary relief proceeding under the Divorce Act. This case was cited most recently in Durso v. Mascherin, 2013 ONSC 6522. Chappel J. noted, at para. 14:

[T]he parties were divorced on May 18 2001, in the context of a Divorce Application that did not include any child support claims. The court dealing with the divorce did not in any way adjudicate on the matter of child support. In such circumstances, either party had the right at a later time to commence a new proceeding to advance child support claims under either the Divorce Act as a separate corollary relief proceeding, or pursuant to the Family Law Act.

[Footnote omitted]

43This line of jurisprudence is helpful in the analysis of the issue in the present case. It stands for the proposition that where a court issuing a divorce has not adjudicated the issue of child support, provincial legislation is a valid means of seeking a child support remedy.

44In my view, the principles developed in the case law are analogous to a situation where a foreign court grants a valid divorce, but does not deal with child support. In the present case, while there is a valid divorce in place issued by the Chinese court, that court has expressly ruled that the issue of child support is better determined by the Ontario courts.

45There is also no statutory prohibition against utilizing the FLA in such circumstances. Indeed, the use of the FLA to provide a remedy is entirely consistent with the statuary objective of ensuring that parents provide support for their dependent children.

46Counsel for the appellant does not argue that there is any impediment in the FLA to the court assuming jurisdiction after the issuance of a foreign divorce. His argument is that relief under the FLA is not available due to the constitutional doctrine of paramountcy. According to the appellant, given that the respondent initially sought an order for child support under the Divorce Act, a remedy under the FLA is not available. I would not accede to this argument for the following reasons.

47The appellant's understanding of the doctrine of paramountcy is outmoded and inconsistent with the law that has developed over the last 30 years. In the past, when a divorce was claimed, support had to be claimed and awarded under the Divorce Act, as Parliament had "occupied the field" of support upon divorce. Provincial legislation that might also have provided support upon divorce was rendered inoperative pursuant to the doctrine of paramountcy. This changed when the Supreme Court fundamentally altered the doctrine of paramountcy in the early 1980s, so now provincial legislation is rendered inoperative only if the federal and provincial legislation are operationally incompatible: Canadian Western Bank v. Alberta, 2007 SCC 22, at paras. 69-75; Multiple Access Ltd v. McCutcheon, 1982 CanLII 55 (SCC).

48The case law makes clear that there is no operational incompatibility between the Divorce Act and provincial family law legislation. Child support can be claimed under provincial legislation following a divorce. Thus, in Gomes v. Gomes, 1985 CanLII 825 (BC SC), the court decided that there was no conflict between the Divorce Act and the British Columbia provincial legislation in terms of child support. It held, at para. 34:

When the order can be made under either Act a judge will make his or her order under the Divorce Act in preference to the Family Relations Act, but if the judge finds an obstacle in making the order under s. 11 of the Divorce Act there is nothing to preclude the judge from making the order under the Family Relations Act[.]

49Likewise, in Abernethy v. Peacock, 2009 CanLII 25128 (ON SC), discussing the context of varying a FLA support order following a divorce proceeding being initiated, the court held, at paras. 20-21:

[T]he jurisdiction of the provincial court would only be superseded by the doctrine of paramountcy if support were ruled on in the divorce proceeding.

A court can apply provincial legislation even if there is federal legislation in the field as long as applying the provincial legislation is not operationally incompatible with the federal legislation. Thus if there is a support order under the Family Law Act and no support order under the Divorce Act, there is no operational incompatibility.

50See, also, Ward v. Spear, 1999 CanLII 13988 (ON CJ); Slattery v. Slattery, 1993 CanLII 1192 (BC SC); and Smith v. Kozakevich, 1988 CanLII 5138 (SK KB).

51In the present case, no court has adjudicated in a manner that has operationalized the Divorce Act, either in granting a divorce or granting corollary relief. Indeed, the appellant has argued vociferously that there is no jurisdiction under the Divorce Act to award child support. It would be a perverse result if he could at the same time argue that a mere reference to that legislation in the original application of the respondent prevents a court from exercising its authority to award child support under the FLA. In that regard, I wholly endorse the sentiments expressed in Emerson v. Emerson, 1972 CanLII 524 (ON SC). In that case, the wife sought child support under the provincial legislation in Ontario, while the husband objected that only New Brunswick had jurisdiction to award such support, as it had granted the divorce. The court held, at paras. 24-25:

[I]n the matter of the future and welfare of infants, there need be no absolutes or imperatives. It would be a great pity if constitutional doctrine had to be so applied as to prevent a court, able to help a child, from doing so.

It is the rule of common sense that I should hear this application.

52Ontario courts have authority to award child support under s. 33 of the FLA. There is nothing in the legislation that restricts that authority in situations where a divorce order has been granted outside of Canada. The use of the FLA in circumstances where relief under the Divorce Act is unavailable does not engage the paramountcy doctrine, as there is no operational incompatibility between the federal and provincial statues. To the contrary, the two statutes are operating harmoniously to ensure that a remedy for child support is available.

Disposition

53I would dismiss the appeal but vary the order below as follows:

The Superior Court of Justice has jurisdiction pursuant to the FLA to determine the issues of child support and equalization of net family property.

54The respondent as the successful party is entitled to costs of the appeal, which I would fix at $11,000, inclusive of fees, disbursements and taxes.

Appeal dismissed.

Vous trouverez la traduction française à la p. 184, post.

End of Document