Court File and Parties

CITATION: Feinstat v. Feinstat, 2011 ONSC 4870

COURT FILE NO.: DC-11-00331-ML

DATE: 20110819

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Donna Dvorah Feinstat, Applicant AND: Jacob Menachem Feinstat, Respondent

BEFORE: The Honourable Madam Justice C.A. Gilmore

COUNSEL: Ms. Evelyn Rayson, for the Applicant Mr. S. Lawrence Liquornik, for the Respondent

HEARD: August 11, 2011

Endorsement

MOTION FOR LEAVE TO APPEAL

Background

[1] The Appellant seeks leave to appeal the Orders of the Honourable Madam Justice Ferguson dated January 21, 2011 and March 15, 2011. Specifically, the Appellant seeks to appeal the following portions of Her Honour’s Orders:

(a) The Respondent (Appellant) shall reinstate the life insurance naming the Applicant as beneficiary of $400,000.00 within 60 days;

(b) In the event the Respondent takes the position that he is unable to work because of his medical condition and is thereby unable to afford the premiums he shall travel to Ontario, Canada and attend at a medical examination arranged by the Applicant by a doctor of her choosing within a further 60 days, the cost of which shall be paid for by the Respondent;

(c) If there is a failure to comply with this Order, the Respondent’s pleadings shall be struck and the Applicant shall be free to proceed with an Affidavit for uncontested trial;

(d) The Respondent shall pay costs to the Applicant in the amount of $5,000.00 payable in five monthly instalments of $1,000.00 per month commencing April 1, 2011.

[2] The Appellant also seeks an Order for the stay or in the alternative, a partial stay of the Orders of Ferguson J. dated January 21, 2011 and March 15, 2011.

[3] The Appellant also sought an order for extending the time for service and arguing of the motion herein. At the argument of the motion, counsel for the Respondent conceded that they were not going to oppose the arguing of the motion for leave to appeal based on short service.

[4] The parties were married on October 19, 1982 and separated on or about November 1, 2001.

[5] There are five children of the marriage, namely Rivka Feinstat born April 3, 1985; Rachel Feinstat born March 19, 1987, Moshe Feinstat born November 20, 1989, Batsheva Feinstat born May 22, 1991 and Chaya Feinstat born November 22, 1993. Moshe Feinstat is 18 years old and is developmentally delayed and suffers from ADHD. He was a crown ward with Jewish and Family Child Services. He now resides in a group home and lives at home on weekends with the Respondent. The child Rachel is also developmentally delayed and lives full-time with the Respondent. Batsheva also has some health issues including Anorexia Nervosa, Bulimia and Oppositional Defiance Disorder. Batsheva resided with the Respondent until mid-2010 when she moved out on her own. Chaya resides with the Respondent and attends school full-time.

[6] The Appellant has had some serious difficulties with his health and in February 2006 suffered a heart attack. He received angioplasty and suffered further medical difficulties requiring hospitalization and treatment. The Appellant has failed to provide adequate proof that his ongoing medical difficulties prevent him from working.

[7] The Appellant resides in Israel with his partner and seven month-old child. He is supported by his partner and his family because he is unable to work due to his heart-related difficulties. The Respondent questions the Appellant’s financial circumstances and maintains that she has never received any information concerning the ability of the Appellant’s partner and family to support him.

[8] On June 14, 2006, Perkins J. ordered the Appellant to pay ongoing child and spousal support. On January 31, 2007, Wildman J. ordered the Appellant to designate the Respondent (Applicant) as beneficiary of $900,000.00 in life insurance coverage. The Appellant consented to the designation of his wife as beneficiary of $400,000.00 in life insurance. By way of further non-consensual order, the Appellant was ordered to irrevocably designate the wife as beneficiary of a further $500,000.00 of life insurance as trustee for the five children of the marriage.

[9] On March 11, 2009, the order of Rogers J. suspended all ongoing child and spousal support payable by the Appellant from February 2008 onward. It should be noted that this was an interim order. The order was made as a result of the Respondent losing his employment and the Appellant gaining employment which exceeded the income earned by the Appellant. On March 11, 2009, the order of Rogers J. also reduced the arrears of support and fixed them at $56,253.28. The Appellant submits that he has entered into an agreement with the Family Responsibility Office and is paying $1,500.00 a month towards the arrears of support. The Respondent disputes this, arguing that she is unaware of any such agreement and has never received any funds from the Family Responsibility Office.

[10] The Appellant concedes that he subsequently defaulted on his life insurance obligations following the order of Rogers J. and admittedly failed to co-operate in facilitating the ability of the wife to independently obtain information concerning the life insurance coverage. He could not afford the premiums and his support obligation had been dramatically reduced/suspended by Rogers J. on March 11, 2009.

[11] The Appellant takes the position in the ongoing family court litigation that the Respondent owes him an equalization payment.

Motion for Leave to Appeal

[12] On December 9, 2010, a motion was brought before Ferguson J. by the Respondent, seeking an order striking the Appellant’s pleadings based on his breach of the life insurance obligations. The Appellant brought a cross-motion returnable on the same date, seeking a suspension/reduction in his life insurance obligations based on the March 11, 2009 order which varied his support obligations.

[13] On January 21, 2011, Madam Justice Ferguson found the Appellant to be in contempt of his life insurance obligations as ordered by Wildman J. in January 2007. However, she granted the Appellant partial relief by reducing his life insurance obligation to $400,000.00 on the basis that he had previously consented to this amount.

[14] Rules 1(7), 38(1) of the Family Law Rules and Rule 62 of the Rules of Civil Procedure govern the Appellant’s motion to leave to appeal from the Order of Ferguson J. The test for granting leave to appeal an interlocutory order in a Family Law proceeding is the same as the test in a civil proceeding. That is:

(a) The Appellant must establish that there is a conflicting decision and it is desirable that leave be granted; or

(b) There is good reason to doubt the correctness of the decision and the appeal entails matters of importance.

The Appellant submits that both grounds are satisfied in this case.

[15] When assessing whether the decision below is correct, the appropriate standard of review is not whether the decision is “clearly wrong” or exceeds the ambit of discretion. The appropriate standard of review is simply whether or not the decision is correct at law; see Canada Life Assurance Co. v. Spago Ristorante Inc., (1990), 46 C.P.C. (2d) 166 (Ont. Gen. Div.) at paragraph 24, tab 5.

[16] The proposed appeal must entail matters of importance that transcend the parties’ immediate interest and must entail matters relevant to the development of the law. On considering a motion to stay in the Family Law context, the court must adopt a flexible approach and should consider the grounds of appeal, the parties’ position at trial and the general circumstances of the case. The Appellant need not establish a probability of success on the appeal as to require the establishment of such success at a preliminary stage would be to pre-judge the appeal.

[17] The decision on appeal may not be considered wrong or probably wrong in order to find that there is “good reason to doubt the correctness” of the decision. The court should ask itself whether the decision is open to “very serious debate” and if so the decision warrants resolution by a higher level of judicial authority; see Wood v. Wood, 2001 CarswellOnt. 167, S.C.J. at para. 9.

[18] In assessing whether the matter being appealed involves general public importance relevant to the development of law and administration, the court must determine “Matters of such importance” in rule 62.02(4)(b) are to be interpreted as matters of general importance, not matters of particular importance relevant only to the litigants. General importance relates to matters to public importance and matters relevant to the development of the law and administration of justice.

The Position of the Appellant

[19] The Appellant argues that there is good reason to doubt the correctness of Ferguson J.’s Order. The crux of the motion for leave to appeal is that the Appellant is required to carry life insurance of $400,000.00 but the arrears as fixed by Rogers J. are only $56,253.28.

[20] The Appellant refers to section 34 of the Family Law Act. That section relates to the jurisdiction of the court to make interim or final orders relating to child support may be paid or secured. Specifically, section 34(1)(i) sets out that:

34. (1) In an application under section 33, the court may make an interim or final order,

(i) requiring that a spouse who has a policy of life insurance as defined under the Insurance Act designate the other spouse or a child as the beneficiary irrevocably;

[21] In this case, spousal support is not an issue, only child support. The Appellant raises the question of whether or not the court can force a person to obtain life insurance if they do not have a support obligation. The Appellant argues that the Respondent’s position that the insurance ordered is to ensure a “future fund” where no existing support obligation exists is legally incorrect and not in accordance with the provisions of section 33 and 34 of the Family Law Act.

[22] The Appellant takes the position that the Respondent will, in effect, receive a windfall even if he dies without repaying the entire amount of the fixed arrears. This is not the intent of having life insurance to secure a child support obligation.

[23] The Appellant argues that Ferguson J.’s Order related to the Appellant’s inability to pay the life insurance premiums because he is unable to work and requiring him to travel to Ontario and attend at a medical examination was misapprehended. The Appellant’s counsel submits that whether or not the Appellant is working in immaterial. The fact is that the Appellant has a severe heart problem and cannot qualify for insurance. An alternative would be to require him to send medical records rather than coming to Canada.

[24] The Appellant’s counsel does not dispute that his client was found in contempt. Although the Appellant was given an opportunity to purge his contempt by putting the life insurance in place, such a remedy is designed to fail from the start. That is, if the Appellant cannot qualify for life insurance, he can no longer comply with the order and if cannot afford to come to Canada to comply with paragraph 2 of Justice Ferguson’s Order dated January 21, 2011, he will also be unable to purge his contempt.

[25] The Appellant argues that there are no decisions on point and that this is a matter of general public interest which goes beyond simply this Appellant and Respondent. The motion for leave for appeal should be granted and a stay of Justice Ferguson’s Order should be imposed pending the hearing of the appeal.

The Position of the Respondent

[26] The Respondent argues that the order of Wildman J. from January 2007 requiring the Appellant designate his wife as beneficiary of $400,000.00 in life insurance was made on consent, the Appellant did not dispute or appeal that portion of the order. He had a policy of insurance in place at the time, but refused to provide particulars. The March 11, 2009 order of Rogers J. required the Appellant to provide particulars of his life insurance, he still did not do so. The Respondent argues that the Appellant has maintained a callous disregard of both Justice Wildman and Justice Ferguson’s previous Orders. Further, there is no evidence that the Appellant is actually unable to comply with the order to reinstate life insurance as there is only vague references that he is sick and has no income. There is no proof of same.

[27] The Appellant resides in Israel. The Respondent described three of the five children as being disabled. That may not be entirely accurate as Batcheva and Moshe reside with the Respondent only on weekends. It does appear, however, that Rachel is dependent on the Respondent. Justice Ferguson, in her endorsement, also alludes to the fact that certain of the children are unable to withdraw from parental control and the life insurance was to provide a future fund. The Respondent questions how a court is to deal with a child who is disabled and a parent who is unable or unwilling to pay support.

[28] Given that the Appellant did not appeal the contested portion of Wildman J.’s 2007 order, he cannot now bring his cross-motion in this case in the guise of what should have been a previous appeal. The Appellant counters that he did not bring an appeal of Wildman J.’s order because he had a support obligation up to March 11, 2009.

[29] Counsel for the Respondent also notes that Justice Rogers’ Order was a temporary one, not a termination of support. Support was suspended pending further information or a change in the Appellant’s circumstances, neither of which has been forthcoming.

Ruling

[30] I find that this is a case that meets the required test for leave to appeal in that it is a decision open to “very serious debate” and warrants resolution by a higher level of judicial authority. I am satisfied that there is reason to doubt the correctness of the order sought to be appealed. More specifically, I have reason to doubt that the Appellant can be required to secure a support obligation which no longer exists. Whether the support was terminated or suspended is immaterial in my view. I remain unconvinced that the law is clear that a litigant may be required to secure life insurance as a “future fund” for child support without an existing child support obligation.

[31] It may be that at some future point a trial is held in this matter, income imputed to the Appellant, or information provided to more fully determine his income, but at this stage in the proceedings, the Appellant’s obligation to pay support is not intact.

[32] With respect to the second part of the test related to matters of general importance relevant to the development of the law and the administration of justice, counsel were unable to point me to any authorities on point. A review of section 33 of the Family Law Act makes it clear that the provisions of section 34 relate to the jurisdiction of the court where an order has been made under section 33. In this case the order under section 33 has been suspended and therefore, the jurisdiction to make an award under section 34 requiring the litigant to obtain life insurance is in question.

[33] I agree with counsel for the Appellant as well that there is some basis to doubt the correctness of the requirement the Appellant should have to travel to Ontario and attend at a medical examination if he is unable to afford the premiums. Of course this provision becomes relevant only if the Appellant is required to reinstate his life insurance.

[34] I agree that this is a case where the orders of Ferguson J. should be stayed pending the appeal given that there is a serious issue to be decided and compliance with the order, more particularly, the payment of costs, the reinstatement of life insurance and the travel to Ontario may cause irreparable harm to the Appellant in that it invites the possibility of further contempt.

[35] The Respondent quite rightly raised the issue that the Appellant has failed to pay costs of $2,500.00 which were ordered by Mullins J. on December 16, 2009. The Appellant argues that he is making payments towards the fixed arrears amount of $1,500.00 a month. In my view, the Appellant must continue to show good faith by ensuring there are no outstanding costs orders before he can be permitted to proceed with his motion for leave to appeal. Therefore, based on all of the above, I order as follows:

(a) The motion for leave to appeal is granted;

(b) The orders of Ferguson J. dated January 21, 2011 and March 15, 2011 are hereby stayed.

[36] The Appellant shall pay the costs order by Mullins J. on December 16, 2009 forthwith, and in any event, before he can obtain a date to argue the appeal in this matter.

Costs

[37] There has been clear success by the Appellant in this matter, however, if the parties are unable to agree on the issue of costs, they may provide written submission of no more than two pages in length, exclusive of any Offers to Settle or Bill of Costs, on a seven-day turnaround, commencing with the Appellant on August 31, 2011.

C.A. Gilmore J.

Released: August 19, 2011