CITATION: Da Costa v. Da Costa, 2016 ONSC 4107
DIVISIONAL COURT FILE NO.: 376/14 DATE: 20160620
ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT
MARROCCO A.C.J.S.C., M.R. DAMBROT and L.A. PATTILLO JJ.
BETWEEN:
Manuel Augusto Da Costa
Applicant
(Respondent)
– and –
Jacinta De Araujo Da Costa
Respondent
(Appellant)
Jan Weir, for the Applicant (Respondent)
Avy Ben-zvi, for the Respondent (Appellant)
HEARD at Toronto: June 20, 2016
L.A. PATTILLO, J. (ORALLY)
[1] This is an appeal by the Appellant, Jacinta De Araujo Da Costa, from the decision of Stewart J. (the “Motion Judge”) dated August 12, 2014 (the “Order”) wherein she granted an adjournment of the Respondent’s, Manuel Augusto Da Costa, motion for summary judgment of the Appellant’s cross-application (the “Cross-Application”) on terms that included that the Respondent’s application for divorce be severed from the summary judgment motion.
[2] Leave to appeal the Order was granted by Then J. on December 10, 2014 on the ground that it appeared that the Motion Judge failed to determine whether the severance would disadvantage or prejudice the Appellant in accordance with Rule 12(6) of the Family Law Rules. He declined to grant leave on the question of bias.
[3] The parties separated in 2008 after 30 years of marriage. There are two children of the marriage who are adults and independent. During the marriage, the parties had been very successful in business and had amassed both directly and through companies a number of properties both in Canada and Portugal.
[4] In February 2009, the Respondent commenced an application seeking equalization of net family property and a sale of the family property. In 2010, the parties entered into a mediation/arbitration agreement and, after three mediation sessions, entered into a Separation Agreement dated August 12, 2010 (the “Separation Agreement”). The Separation Agreement, which was lengthy and acknowledged that the parties had independent legal advice, divided all the parties’ assets and companies that they were involved in. Article 14.5 of the Separation Agreement provides that either party is at liberty to proceed with an application for divorce only and if there is a divorce, the terms of the Separation Agreement will continue.
[5] On August 7, 2013, the Respondent filed an application for a simple divorce.
[6] The Appellant filed an answer and the Cross-Application seeking, among other things, an order setting aside the Separation Agreement; an order that the Respondent maintain medical insurance for the Appellant and pay all her costs for medical and dental expenses; an order that the Respondent maintain the Appellant as beneficiary of his life insurance policies; and an order for retroactive and ongoing spousal support.
[7] In support of the Cross-Application, the Appellant filed an affidavit in which stated that the Respondent had failed to disclose significant assets at the time of the Separation Agreement. She also stated that the Respondent “had unilaterally cancelled the benefits [medical and dental] even prior to the divorce.” She also alleged that the Respondent had not complied with his obligation under the Separation Agreement to name the children/grandchildren as beneficiaries; that there was another policy of insurance that was not mentioned in the Separation Agreement and she was “not comfortable” with the Respondent’s company owning an insurance policy on her life.
[8] The Appellant’s financial statement on the applications discloses that she has a net worth of in excess of $19 million and an annual income of $345,000.
[9] The Respondent commenced a summary judgment motion to dismiss the Cross-Application.
[10] On May 29, 2014, while the summary judgment motion was pending, the Respondent brought a motion to sever the divorce and corollary issues. Paisley J., in a brief endorsement, concluded that the issues on the Cross-Application should be decided before severance is granted. Accordingly, he dismissed the motion on the basis it could be renewed after the summary judgment motion, which was scheduled to be heard August 12, 2014, was determined. On consent, he granted leave to question each party, limited to 2 1/2 hours each.
[11] The Respondent’s summary judgment motion came on before the Motion Judge on August 12, 2014. One hour into the Respondent’s submissions and without any notice, the Appellant’s counsel requested an adjournment on the basis that he had mistakenly filed the wrong version of the Appellant’s amended answer alleging a new ground of fraud and had forgotten the correct version which was at his office and not available.
[12] As noted at the outset, the Motion Judge, reluctantly in my view, granted the adjournment but on terms which included severing the divorce given the lengthy delay that would ensue. In doing so, she concluded that Paisley J.’s order was founded on the assumption the summary judgment would proceed on that date. She then stated:
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 (Respondent) ought to be severed from these corollary issues and I so order.
[13] All of the evidence from the motion before Paisley J. including the Separation Agreement was before the Motion Judge.
[14] In her reply factum, the Appellant submits the Motion Judge erred in granting severance on four grounds, which are effectively three grounds:
The severance issue had already been dealt with and decided by Paisley J. Specifically he ordered that the severance motion should only be renewed after the summary judgment motion had been determined;
There was no notice of motion requesting severance; and
The Motion Judge failed to consider the Rule 12(6) factors.
[15] Rule 12(6) of the Family Law Rules provides, in part, that the court may, on motion, make an order splitting 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 the children.
[16] The Appellant submits that the disadvantage to the Appellant in severance arises from the relief she seeks in the Cross-Application, specifically her claim relating to medical and dental benefits, life insurance and spousal support. In the reply factum (para. 8) she states: “And even if she will not be disadvantaged by the severance for the medical benefits she will be disadvantaged for the spousal and life insurance benefits, which may amount to millions of dollars.”
[17] The Separation Agreement, which was only produced in the Second Supplementary Appeal Book, specifically provides for continued medical and dental coverage through the Respondent’s company “until such coverage ceases to be reasonably available” (Article 5) and provides for the beneficiaries in various specifically designated life insurance policies to be the children/grandchildren (Article 6.1). It also provides in Article 6.2 that the life insurance on either party’s life will be retained by a company owned by the Respondent. Finally, the Separation Agreement states that it survives divorce and provides for a full and final settlement of all issues and obligations arising out of their relationship.
[18] I do not consider the absence of a notice of motion seeking severance to be an issue. The request for severance arose as a result of the Appellant’s request for an adjournment (for which there was no notice of motion). The Motion Judge’s discretion in considering the adjournment request and any terms was in no way restricted by the absence of a notice or notices of motion.
[19] Nor do I consider that the May 29, 2014 order of Paisley J. prevented the Motion Judge from ordering severance. As she noted, that order was up until the summary judgment motion on August 12, 2014 which had commenced before her. In the circumstances of the adjournment request, I do not consider that the Motion Judge was prevented from making the order she did by the order of Paisley J. In any event, procedural orders are always subject to revision if the circumstances change.
[20] Further, and prior to her decision to adjourn, the Motion Judge had heard submissions and considered the evidence on the Respondent’s summary judgment motion. She termed the Appellant’s evidence of non-disclosure “rather flimsy.” She had the Separation Agreement before her. She was aware of the Appellant’s net-worth and annual income. She clearly was aware of the situation between the parties. That she did not mention Rule 12(6) specifically does not in my view impact on her reasons. I am not satisfied that it was raised before her but beyond that it is clear in my view that in exercising her discretion to grant the adjournment, the Motion Judge balanced the interests of both parties. She was clearly aware of the issue of prejudice to both parties in respect of the adjournment. I do not think she failed to consider the Appellant’s circumstances and whether she would be disadvantaged by severance.
[21] Nor is there any evidence of prejudice or disadvantage to the Appellant. She still has her right to medical and dental benefits coverage under the Separation Agreement which survives divorce. There is no evidence she is entitled to any insurance or spousal support beyond what she got in the Separation Agreement (which was substantial). Even if she is, the court can so order on the Cross-Application as she has claimed it. There is no evidence she is unable to cover those items in the interim, in fact just the opposite. Nor is there any evidence that the Respondent would not be good for any judgment in the Cross-Application.
[22] This matter has gone on long enough. The Cross-Application needs to be resolved. The summary judgment must proceed. In order to enable that to occur, the divorce application needs to be severed. For the above reasons, I do not consider the Motion Judge erred in doing so. Appeal is therefore dismissed.
ACJ. MARROCCO
COSTS
[23] I have endorsed the appeal book and compendium as follows: “Appeal dismissed. Costs to the Respondent in the amount of $8,000 all in.”
___________________________ L.A. PATTILLO J.
MARROCCO A.C.J.S.C.
M. R. DAMBROT J.
Date of Reasons for Judgment: June 20, 2016
Date of Release: June 24, 2016
CITATION: Da Costa v. Da Costa, 2016 ONSC 4107
DIVISIONAL COURT FILE NO.: 376/14
DATE: 20160620
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
MARROCCO A.C.J.S.C., M.R. DAMBROT and L.A. PATTILLO JJ.
BETWEEN:
Manuel Augusto Da Costa
Applicant
(Respondent)
– and –
Jacinta De Araujo Da Costa
Respondent
(Appellant)
REASONS FOR JUDGMENT
L.A. PATTILLO, J.
Date of Reasons for Judgment: June 20, 2016
Date of Release: June 24, 2016