Citation and Court Information

CITATION: Costa v. Costa, 2014 ONSC 7172 DIVISIONAL COURT FILE NO.: 376/14 DATE: 2014-12-10

ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT

BETWEEN:

MANUEL AUGUSTO DA COSTA Responding Party

– and –

JACINTA DE ARAUJO DA COSTA Moving Party

COUNSEL: Jan D. Weir for the Responding Party Avy Ben-zvi for the Moving Party

HEARD: November 27, 2014

BEFORE: THEN J.

Overview

[1] Mrs. Da Costa seeks leave to appeal to the Divisional Court from the order of August 12, 2014 made by Stewart J. whereby on a motion for summary judgment brought by Mr. Da Costa Mrs. Da Costa was granted an adjournment on condition that the divorce sought by her husband be severed from the corollary issues.

The Facts

[2] Mrs. Da Costa and Mr. Da Costa were married in 1978, separated in 2008 and have lived apart since the separation. They have two adult children both of whom are independent and self-sustaining. On January 25, 2009, Mr. Da Costa issued an application for equalization of net family property and related relief. Mrs. Da Costa filed an Answer and Claim claiming support and division of net family property.

[3] On March 8, 2010 the parties entered into a Med/Arb Agreement appointing Steven Grant a mediator-arbitrator and giving the arbitrator exclusive jurisdiction over all issues relating to the party’s financial claims and those arising out of any Separation Agreement including disputes arising after execution of any separation agreement.

[4] On August 12, 2010 a separation agreement was executed pursuant to the Med/Arb Agreement incorporating the arbitration jurisdiction by reference as Schedule “A”.

[5] On August 7, 2013, Mr. Da Costa filed an application for divorce. On October 23, 2013 Mrs. Da Costa filed an Answer seeking to set aside the Separation Agreement and seeking support including medical and life insurance claims, equalization of net family properties and freezing assets.

[6] Mr. Da Costa decided to proceed by way of two motions. In the first motion scheduled for May 29, 2014 he sought an order pursuant to Family Law Rule 12(6) splitting his claim for divorce from the collateral issues raised by Mrs. Da Costa in her Answer and Claim.

[7] In the second motion scheduled for August 12, 2014 he sought to deal with the corollary issues raised by Mrs. Da Costa by way of summary judgment.

[8] With respect to the first motion on May 29, 2014, seeking to sever divorce from the corollary issues Mr. Da Costa was unsuccessful as Paisley J. held:

Nevertheless in my view the outstanding issues should be resolved before severance is granted. The Applicant may renew his motion for severance after the summary judgment motion has been determined.

[9] With respect to the second motion for summary judgment on August 12, 2014, Mrs. Da Costa sought an adjournment in order to file an amended Answer based on new grounds alleging fraudulent concealment on the part of Mr. Da Costa. Mr. Da Costa opposed the request for adjournment but took the position that if an adjournment were granted it be on condition that the divorce application be severed from the summary judgment motion.

[10] In exercising her discretion to grant the requested adjournment to January 8, 2015 Stewart J. stated the following in her endorsement:

Despite the fact that at this stage the evidence of fraud/or non-disclosure appears rather flimsy, she is entitled to some indulgence to permit her to put her “best foot forward” to attempt to defend the summary judgment dismissal of her claim.

[11] In further exercising her discretion to sever the divorce application from the corollary relief claim Stewart J. stated the following:

Paisley J.’s order of May 29, 2014 was founded on an assumption that the motion would proceed today and that the Applicant could renew his motion for severance thereafter. Given the lengthy anticipated delay resulting from this adjournment and in light of the issues raised on the motion and the nature of the evidence relating thereto, I am of the view that the divorce sought by the Applicant ought to be severed from these corollary issues, and I so order.

(emphasis added)

[12] An application for leave to appeal an interlocutory order under s.19(b) of the Courts of Justice Act R.S.O. 1990 ch. 43 is governed by Rule 62.02(4) of the Courts of Justice Act which states:

(4) Grounds on which leave may be granted – Leave to appeal shall not be granted unless,

(a) there is a conflicting decision by another judge or court in Ontario or elsewhere on the matter involved in the proposed appeal and it is, in the opinion of the judge hearing the motion, desirable that leave to appeal be granted; and/or

(b) there appears to the judge hearing the motion good reason to doubt the correctness of the order in question and the proposed appeal involves matters of such importance that, in his or her opinion, leave to appeal should be granted.

[13] Mrs. Da Costa submits that the interlocutory decision of Stewart J. allowing for severance of the divorce conflicts with that of Paisley J. in the same proceeding.

[14] It is not clear from the terse endorsement of Paisley J. what principles were applied by him in holding that the divorce not be severed from the motion from summary judgment. His decision in that regard has not been appealed.

[15] However, it is clear that in granting severance of the divorce from the motion of summary judgment as a condition of the adjournment sought by Mrs. Da Costa, Stewart J. did so on the basis of extraneous factors i.e. the delay caused by the adjournment and in view of the allegation and the nature of the evidence of fraudulent concealment.

[16] Rule 12(6) of the Family Law Rules states:

Splitting Divorce From Other Issues

(6) The court may, on motion, make an order splitting a divorce from the other issues if,

a) neither spouse will be disadvantaged by the order; and

b) reasonable arrangements have been made for the support of any children of the marriage O. Reg. 114/99 C12

[17] There is no indication in Stewart J.’s endorsement that Rule 12(6) has been considered.

[18] First, Mr. Ben-zvi submits that no motion was brought pursuant to Rule 12(6). But, more importantly, Mr. Ben-Zvi submits that the granting of the divorce will change the respondent’s legal status disentitling her to spousal medical and life insurance benefits arising from her employment. Mr. Weir submits that the medical benefits survive the divorce by virtue of the separation agreement and that the insurance policies do not engage her interests. Apart from the fact that none of this material is before me, it was incumbent on Stewart J. to determine whether there was disadvantage or prejudice to Mrs. Da Costa as required by Rule 12(6) of the Family Law Rules. In the absence of a specific finding that there was no disadvantage or prejudice to Mrs. Da Costa I cannot assume that the discretion of the motion judge was properly exercised or that her decision does not conflict with that of Paisley J. in principle.

[19] Moreover, the approach codified in Rule 12(6) of the Family Law Rules conforms to the approach taken by the Court of Appeal in Collette v. Collette, 1992 7658 (ON CA), [1992] O.J. 1746 and by this court in Reiner v. Reiner, CarswellOnt 795. In my view it is desirable that leave be granted on the first branch of Rule 62.02(4).

[20] With respect to the second branch of the test under Rule 62.02(4) Mr. Ben-Zvi submits that there is good reason to doubt the correctness of the motion judge’s decision as it is open to serious debate. This is not a case of a different exercise of discretion with respect to an interlocutory order to produce a different result. As I sought to point out above, the motion judge has made an apparent error in principle by severing the divorce from the summary judgment motion without a specific determination of disadvantage or prejudice to the spouse as required by Rule 12(6) of the Family law Rules. I would also grant leave on the basis of the second branch of Rule 62.02(4) of the Rules of Civil Procedure.

[21] Mr. Ben-Zvi has also raised a concern about the apprehended bias of the motion judge. Prior to the motion for summary judgment the motion judge indicated that she had several years ago been a law partner of Stephen Grant who served as the mediator-arbitrator leading to the separation agreement in this proceeding. I am satisfied, based on the record before me, that not only was there no recusal request by Mr. Ben-Zvi, but also, that there is no basis to assert that the judgment of the motion judge in granting the adjournment conditional on severing the divorce was in any way influenced by any relationship between the motion judge and the mediator-arbitrator. In my view, an apprehension of bias cannot reasonably be asserted in the circumstances. I would not grant leave to appeal on this basis.

[22] Accordingly, for the reasons outlined above leave to appeal to the Divisional Court is granted. The motion for summary judgment is to take place on January 8, 2015. This proceeding has already been much delayed and I see no reason why the motion for summary judgment should not proceed. Upon determination of the corollary issues the motion for severance of the divorce can be renewed in accordance with the order of Paisley J. at which point Mrs. Da Costa may see fit to abandon the appeal to the Divisional Court.

[23] The parties have agreed that the successful party should be awarded $2,000 in costs and accordingly Mrs. Da Costa is awarded costs in the amount of $2,000 all inclusive.

THEN J.

RELEASED: December 10, 2014

CITATION: Costa v. Costa, 2014 ONSC 7172 DIVISIONAL COURT FILE NO.: 376/14 DATE: 20141210

ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT

BETWEEN:

MANUEL AUGUSTO DA COSTA Applicant/Responding Party

– and –

JACINTA DE ARAUJO DA COSTA Respondent/Moving Party

REASONS FOR JUDGMENT

THEN J.

RELEASED: December 10, 2014