COURT FILE NO.: DC-05-075547-00

DATE: 2006/04/10

DIVISIONAL COURT

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: ANDREINA DICIAULA (Applicant/Appellant)

AND: GIUSEPPE MASTROGIACOMO (Respondent)

BEFORE: CUNNINGHAM, ACJ, HEROLD AND WHALEN, JJ

COUNSEL: Lorna M. Yates and Haley Gaber-Katz, for the Appellant

Frank A. Mendicino, for the Respondent

HEARD: March 13, 2006 at Newmarket, Ontario

On appeal from the judgment of Justice Roger Timms of the Family Court of the Superior Court of Justice dated April 21, 2005

E N D O R S E M E N T

[1] The issues in this appeal involve a consideration of the Family Law Rules, (O. Reg. 114/99 as am.), and in particular, Rule 2(2) and Rule 15(14).

[2] Rule 2(2) states that the primary objective of these rules is to enable the court to deal with cases justly. It goes on to provide in paragraphs (3) and (4), as follows:

(3) Dealing with a case justly includes,

(a) ensuring that the procedure is fair to all parties;

(b) saving expense and time;

(c) dealing with the case in ways that are appropriate to its importance and complexity; and

(d) giving appropriate court resources to the case while taking account of the need to give resources to other cases.

(4) The court is required to apply these rules to promote the primary objective, and parties and their lawyers are required to help the court to promote the primary objective.

[3] The first endorsement in this file was made on December 21, 2001, providing for temporary access. Within two months thereafter, the first motion to strike the respondent’s pleadings was scheduled, access had been suspended and then ordered to continue only if supervised. The respondent has from time to time been represented by counsel (his most recent counsel, who argued this appeal on his behalf, was retained only very recently and did not have the luxury of accessing all of the voluminous material in the file and in prior counsels’ files). Attendance before us to argue the appeal on March 13, 2006, was the eighteenth court appearance and, whether the order made by Justice Timms is overturned or upheld it is clear that the case is far from completed.

[4] A great deal of the delay has been caused by the respondent’s failure or inability to provide necessary disclosure and a failure on his part to accept (whether he agrees with it or not) the order for temporary supervision of access and the terms that have been imposed to permit that issue to be re-visited. There is also a significant degree of animosity and mistrust between the parties including, among other things, the wife’s reluctance to accept the possibility that the husband may not be intentionally underachieving financially, to some extent fuelled by the fact that he has an MBA and a CA designation and has earned substantial income in the past.

[5] On July 23, 2002, Justice Perkins ordered that the husband’s pleadings were to be struck and that the wife was to proceed to trial based on affidavit evidence alone. The husband moved before Justice Nelson on November 26, 2003, and before Justice MacKInnon on February 8, 2004, to reinstate his pleadings. Justice Nelson refused the request to reinstate pleadings and awarded costs to the wife in the amount of $3,000.00 which have never been paid. Justice MacKinnon dismissed the husband’s motion to reinstate the pleadings but did so without prejudice to his right to reapply once certain conditions had been met. Costs of $1,000.00 were ordered against the husband which have not been paid. A third informal request to reinstate the pleadings was made orally by the husband to Regional Senior Justice Shaughnessy at a trial scheduling court on July 27, 2004, and that request was dismissed by Justice Shaughnessy who was of the opinion that the terms set out in Justice MacKinnon’s order had not been complied with.

[6] As the respondent continued to be in default and his pleadings had not been reinstated, the applicant was at liberty to move without notice for an uncontested trial. She did so filing a substantial affidavit in Form 23(c) sworn November 19, 2004. The material was put before Justice Wildman on November 25, 2004, and she made final orders with respect to custody (sole custody of the children to the wife), access (supervised), child support (based on an imputed income for the husband), spousal support, arrears of spousal support, enforcement and costs. She declined to make an order with respect to the equalization of net family property pending receipt of further information which was sought from and provided by the applicant. Based upon on that information, Justice Wildman on December 14, 2004, ordered that there was no equalization payment owing from one party to the other. Both of these final orders were entered on January 20, 2005.

[7] At approximately the same time that Justice Wildman’s orders were being entered and served, the respondent was bringing yet another motion to set aside the order striking his pleadings. This motion was brought on the respondent’s behalf by counsel who had represented him at the Assignment Court before Justice Shaughnessy in July 2004, relying on an affidavit which was allegedly sworn by the respondent in July 2004, but for some unexplained reason neither served nor filed until January 2005. This motion was originally before Justice Perkins on January 26, 2005, the notice was subsequently amended to include a request to set aside the final orders of Justice Wildman and eventually after some confusion with respect to scheduling and the location of materials, the matter got before Justice Timms for argument on April 21, 2005. It is Justice Timms’ order of April 21, 2005, which is the subject matter of this appeal. The basis upon which the respondent brought his motion before Justice Timms was said to be Rule 15(14) and the inherent jurisdiction of the Superior Court.

[8] Rule 15 of the Family Law Rules is headed up “Motions to Change a Final Order or Agreement” and the relevant portions thereof provide as follows:

15. This rule applies,

(a) to motions to change an agreement for support filed under section 35 of the Family Law Act;

(b) to motions to change a final order, except a final order in a child protection case that is reviewable under section 64 of the Child and Family Services Act.

(14) The court may, on motion, change an order that,

(a) was obtained by fraud;

(b) contains a mistake;

(c) needs to be changed to deal with a matter that was before the court but that it did not decide;

(d) was made on a motion without notice; or

(e) was made on a motion with notice, if through accident or inadequate notice an affected party did not appear on the motion.

[9] The appellant/wife argues that Rule 15(14) deals only with motions to change and not motions to set aside final orders or agreements. The appellant/wife further argues that even if Rule 15(14) applies (she argues it does not) the facts of this particular case do not fit within any of the five bases set out therein permitting a court’s intervention. The appellant/wife goes on to argue that the more appropriate way to deal with the husband’s objection to Justice Wildman’s final orders would have been by analogy to Rule 19.08 of the Rules of Civil Procedure (“setting aside default judgment”) as is permitted by Rule 1(7) of the Family Law Rules. The appellant/wife further argues that even if resort had been made by analogy to Rule 19.08, the conditions the courts have required the moving parties to establish under that rule have not been satisfied. Finally, the appellant/wife argues that the husband’s proper course of action was therefore to appeal the orders of Justice Wildman.

[10] Both counsel before us agree, as is obvious, that Rule 15(14) does not on its face deal with motions to set aside, as opposed to motions to vary, final orders. Counsel for the husband, however, argues that a liberal interpretation should be given to the rule and we should read into the rule the authority to set aside as well as to change; counsel for the wife argues that the rule should be strictly construed. This question is one which has been considered by many with varying results. See, by way of example only, the very helpful analyses of the question in S.M. v. J.S. 2004 ONCJ 164, [2004] O.J. No. 3610 (Katarynych, J.), Chambers v. Johnson 2002 61138 (ON CJ), [2002] O.J. No. 1649 (Little, J.), and Clarke v. Clarke (2002), 2002 78088 (ON SC), 32 R.F.L. (5th) 282 (Olah, J.).

[11] The Family Law Rules are comprehensive and carefully drafted. They are the result of much careful consideration, based upon input from many and varied interested parties, by the Family Law Rules Committee. The concept of setting aside orders or the registration thereof is not foreign to the Committee. Of the many examples where this power might be found in the rules, see Rule 14(6)(g) and Rule 15(6)(a),(b),(c). It would be a disservice to the Family Law Rules Committee to suggest that the failure to include the words “set aside” in Rule 15(14) was a mere oversight which should be corrected by reading in those words. Rather it is far more likely that the omission was intentional, particularly if one recalls on whom the onus lies and the nature of the onus in seeking an order de novo as opposed to varying an existing order. In our respectful view, Rule 15(14) does not apply to motions such as the one brought before Justice Timms and to the extent that he relied on it to support his order, he was in error.

[12] Counsel for the appellant/wife also argued that even if Rule 15(14) gave Justice Timms the authority to consider a motion to set aside a final order, none of the tests set out in paragraphs (a) through (e) thereof have been met. It is common ground there was no fraud and Justice Timms finds no mistake other than his suggestion that Justice Wildman’s failure to give reasons with respect to the final issue, the equalization payment, could be considered to have been a mistake. A mistake such as Rule 15(14)(b) appears to contemplate is one which leads to the making of the order and not the manner in which the reasons were or were not conveyed. Paragraph (c) does not apply to the facts of this case on anyone’s version of the events. Paragraph (d) applies – the motion was made without notice before Justice Wildman. It was made without notice because the respondent’s pleadings had been struck, he was noted in default, and according to the Rules he was not entitled to any notice. Setting aside an order on the basis that notice had not been given where the Rules provide that notice need not be given would clearly be an error. It is not clear, however, that that was the basis on which Justice Timms proceeded. It is clear that Justice Timms was of the mistaken opinion that the order made striking the husband’s pleadings was made without notice. It was not. Notice was given substitutionally, as had been ordered by Justice Loukidelis earlier, and at no time has the husband ever alleged that he was not served with any documents which were substitutionally served on him. What is not clear is what, if any, impact this error had on the final result of the motion before Justice Timms. Paragraph (e) does not apply because the motion before Justice Wildman was not on notice – it did not have to be.

[13] Even if one were to conclude that a failure to give reasons is a mistake as referred to in Rule (15)(14)(b), that paragraph was only invoked by Justice Timms with respect to the December 14, 2004, final order with respect to equalization. It is now conceded by the respondent that since he is an undischarged bankrupt, the issue of equalization (at least to the extent that he has a personal interest in it as opposed to any interest his trustee might have) is moot.

[14] Justice Timms, did not, as the appellant suggested he might have done, look by analogy to Rule 19.08 of the Rules of Civil Procedure. If, however, he had done so, the appellant argues – and we agree – that the usual tests for setting aside a default judgment, including particularly the demonstration of a genuine issue for trial and the usual tests set out, for example, in Lenskis v. Roncaioli (1992), 11 C.P.C. (3d) 99, [1992] O.J. No. 1713 (Ont.Gen.Div.), page 4; aff’d 45 C.P.C. (3d) 57 (Ont. C.A.), have not been satisfied.

[15] It would appear from a careful reading of Justice Timm’s reasons that he accepted the husband’s argument that he had inherent jurisdiction to set aside the orders of Justice Wildman. The question of the court’s inherent jurisdiction is not resorted to explicitly by Justice Timms, but he does say in setting aside that portion of the orders dealing with access that he did so because it “is simpler and fairer to set aside the default order as it relates to access, as opposed to holding that the respondent must move to vary that term”. It is trite law that custody and access are determined on the basis of what is in the best interests of the children and it, therefore, follows that orders with respect to custody and access are variable right up until the time the children are no longer children of the marriage. The court’s inherent jurisdiction, however, should not be invoked simply to do what may appear to him or her invoking it to be simpler and fairer. Justice Perkins in West v. West 2001 28216 (ON SC), [2001] O.J. No. 2149 (Ont.Sup.Crt.), para. 23, explained the use of the court’s inherent jurisdiction very well, as follows:

The jurisdiction to set aside or change an order to prevent a miscarriage of justice is ancient. It goes back to the old common law writ of audita querela: see Holmested and Gale on the Judicature Act of Ontario and Rules of Practice, r. 529, s. 2; Blackstone, William, Commentaries on the Law of England (1765), vol. 3, pp. 405-6. It forms part of the inherent jurisdiction of the Court. The cases have laid down a fairly stringent test before it will be exercised: see cases digested in Holmested and Gale, r. 529, s. 10, and Holmested and Watson Ontario Civil Procedure, r. 59, s. 10[5]. The evidence presented on the motion must be clear and credible; it must be of such a nature that the original order would have been different if the evidence had been available; it must not have been in existence at the time the order was made or not discoverable by diligent effort by the party asking the Court to change the order; the party must have acted with diligence once the information came to light; and the evidence must establish that action is needed to prevent a miscarriage of justice.

[16] Justice Timms appears in part to have based his order on what he perceived (incorrectly in our view) to be a failure on the part of the wife to make full and complete and accurate disclosure to Justice Wildman. Of particular concern to him was the extent to which the husband’s employment history had been disclosed or not disclosed to Justice Wildman in order to enable her to impute income. Paragraph 9 of the wife’s affidavit filed for the uncontested trial gives some considerable detail but then goes on to incorporate specifically by reference an earlier and even more complete affidavit contained in the continuing record. Justice Timms finding of a failure to make complete disclosure in this regard was a significant factual error.

[17] For all of these reasons, we are satisfied that Justice Timms was not correct in applying Rule 15(14) to the motion before him, and that in considering the motion he made several palpable and overriding errors which led to the order which he made. The appeal is allowed, the order of Justice Timms dated April 21, 2005, is set aside and the final orders of Justice Wildman dated November 25, 2004, and December 14, 2004, are restored.

[18] We hope that the husband will realize and appreciate when considering the impact of these reasons that this really gives him a fresh start in the litigation. Rather than attempting to continue to attack the order made for supervised access and to attack the orders which were made striking his pleadings and refusing to reinstate them, he can now treat the final orders of Justice Wildman as orders which are subject to variation upon demonstration of a material change in circumstances. The most significant issue from the father’s perspective, and understandably so, is the question of access to his children. It is clear from a careful reading of all the material in this file that both the father and the children wish to re-establish a relationship in order to express the love they clearly have for one another. It should also be clear from the material that circumstances have changed materially since the original order for supervised access was made. Just what changes there have been and how they impact on a future access order are not questions for us to consider at this time – we simply note that the best interests of the children will be far better served if the questions of access and child support are dealt with on a motion to vary rather than to continue along the path on which this litigation has for several years been derailed.

[19] The second most significant issue of interest to the husband is the question of support and again, because the final order is based on imputed income, a motion to vary in which he makes the full and candid and complete disclosure which he has to date been reluctant or unable to make is available to him.

[20] The appellant/wife, having been successful on this appeal, is entitled to her costs of the appeal. She has filed a bill of costs on a substantial indemnity basis seeking costs on the motion for leave to appeal in the amount of $8,245.65, inclusive of fees, G.S.T. and disbursements, and on the appeal itself in the amount of $16,847.53, inclusive, but not including the full day spent arguing the appeal. There is no basis in law or in fact for an award of substantial indemnity costs and even an award of partial indemnity costs in the full amount sought would be crippling to the respondent. This is not to say that the amount sought is in any way otherwise inappropriate – it is clear from the volume and quality of the material filed on this appeal that all of the work claimed as having been done was in fact done and it was necessary. Considering all of the relevant factors, however, we are satisfied that a total award of costs in the amount of $12,500.00 is appropriate and the respondent shall pay to the appellant her costs of the motion for leave to appeal and the appeal fixed in this total amount of $12,500.00, all inclusive. This order for costs shall be enforceable by the Family Responsibility Office as an incident of support, and a Support Deduction Order shall issue accordingly.

Cunningham, ACJ

Herold, J.

Whalen, J.

DATE: April 10, 2006

COURT FILE NO.: DC-05-075547-00

DATE: 2006/04/10

DIVISIONAL COURT

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: ANDREINA DICIAULA (Applicant/Appellant)

GIUSEPPE MASTROGIACOMO (Respondent)

BEFORE: CUNNINGHAM, ACJ, HEROLD and WHALEN, JJ

COUNSEL: Lorna M. Yates and Haley Gaber-Katz, for the Applicant/Appellant

Frank A. Mendicino, for the Respondent

ENDORSEMENT

CUNNINGHAM, ACJ, HEROLD and WHALEN, JJ

DATE: April 10, 2006