Court of Appeal for Ontario
Date: 2019-12-13
Docket: C66918
Judges: Rouleau, Huscroft and Nordheimer JJ.A.
Between
Mark Edward Richardson Applicant (Respondent)
and
Sylvia H.C.C. Richardson Respondent (Appellant)
Counsel
For the Appellant: Jenna Beaton and Deborah Perkins-Leitman
For the Respondent: Michael Zalev and Samantha Eisen
Heard: October 16, 2019
On Appeal
On appeal from the order of Justice James Ramsay of the Superior Court of Justice, dated April 8, 2019, and from the costs order, dated April 25, 2019, with reasons reported at 2019 ONSC 2601.
Reasons for Decision
Rouleau and Huscroft JJ.A.:
A. OVERVIEW
[1] This is an appeal from the orders of the trial judge varying the terms of a previous custody and access order, and awarding costs to the respondent. The trial judge ordered that the children's primary residence remain in the Niagara region with the respondent and gave him final decision-making responsibility.
[2] Unusually, this appeal concerns not only the trial judge's ultimate decision, but also his decision to hear and decide the case at all. That is so because during the course of the trial, the parties negotiated Minutes of Settlement (the "proposed settlement") which, if accepted by the court, would have resolved their dispute. The proposed settlement provided that the children would move from their home in the Niagara region to live primarily with the appellant in Ottawa. The agreement that the children move to Ottawa was, however, subject to a number of conditions, including that the respondent would be responsible for making final decisions concerning the children. Had the trial judge accepted the proposed settlement, there would have been no need to complete the trial, and no trial decision to appeal.
[3] But the trial judge refused to accept the parties' proposed settlement and gave no reasons for doing so. The parties went on to complete the trial, and the trial judge found that it was in the best interests of the children for their primary residence to remain with the respondent in the Niagara region, and varied the terms of the order in his favour accordingly.
[4] The appellant appeals, arguing that the trial judge's refusal to accept the parties' proposed settlement was contrary to the best interests of the children, the principles of fundamental justice, and is indicative of bias. She also appeals from the trial judge's decision to award costs to the respondent in the amount of $40,000.
[5] We conclude that the trial judge had the authority to reject the proposed settlement if he found that it was not in the best interests of the children. Although he erred in failing to provide reasons for his decision to reject the proposed settlement, there is no basis for this court to interfere with the decision the trial judge reached following trial. The findings he made confirm that the custody and access order he made was in the best interests of the children. Accordingly, we dismiss the appeal, other than to vary the costs order.
B. BACKGROUND
[6] Sylvia Richardson (the appellant) and Mark Richardson (the respondent) were married on August 3, 2003. They separated in 2012 and divorced in 2015. Both parties have since remarried.
[7] They have two children: a daughter (currently 14 years old) and a son (currently 8 years old).
[8] In 2015, the parties consented to participate in an assessment pursuant to s. 30 of the Children's Law Reform Act, R.S.O. 1990, c. C.12. The appellant was seeking to have the children move with her to Ottawa, where she planned to relocate. The assessor, however, agreed with the respondent and recommended that the children stay in the Niagara region and that the parties have joint custody. The parties accepted this recommendation and settled the matter. The settlement was accepted by Carpenter-Gunn J., and a consent order dated June 14, 2016 was issued on these terms.
[9] In 2016, both parties had residences in the Niagara region. However, the appellant was then dividing her time between the Niagara region and the Ottawa area, where she maintained a residence with her new spouse.
[10] In July 2017, the appellant was appointed as a Justice of the Peace in the Ottawa region, moved to Ottawa as planned, and sold her Niagara residence. She brought a motion to change the consent order on the basis that it would be in the children's best interests to reside primarily with her in Ottawa. The parties could not settle the matter and it proceeded to trial on April 1, 2019.
C. THE REJECTION OF THE PROPOSED SETTLEMENT
[11] On the second day of the trial, the parties' counsel advised the trial judge that they were attempting to negotiate a settlement. The trial judge granted the parties an adjournment to negotiate, but informed them that the trial would have to proceed the following morning, regardless of whether negotiations were continuing.
[12] The following morning, April 3, 2019, counsel for the parties presented the proposed settlement to the trial judge. Among other things, the proposed settlement provided that the children would move from their home with the respondent in the Niagara region to Ottawa, where they would live with the appellant. However, the proposed settlement also provided that the respondent would have final decision-making authority concerning the children.
[13] The trial judge reviewed the proposed settlement but refused to approve it. The following exchange occurred:
THE COURT: Thank you for giving me a copy of the minutes of settlement. I have read them. I do not accept them. You may call your next witness. I'm not prepared to sign off on it so let's carry on. And I can't really say why. I just have to hear all the evidence. Do you want a few minutes?
[Counsel]: Yes, sir.
THE COURT: Yeah. I'll be back in 10 minutes.
[14] Counsel did not seek any clarification and raised no objection to the trial judge's decision to reject the proposed settlement and continue with the trial. The trial resumed following a short break and continued to its conclusion the next day.
[15] The trial judge released his decision on April 8, 2019, denying the appellant's requested change and largely accepting the respondent's proposal.
D. THE TRIAL JUDGE'S DECISION ON THE MERITS
[16] The trial judge found that the growth of the children did not constitute a change of circumstance that was unforeseen when the original custody and access order was made. Although the daughter's expressed wish to attend high school in Ottawa could constitute a change in circumstances, the trial judge found that the appellant failed to meet her burden to establish that it did, noting that the daughter had expressed different wishes at various times over the years.
[17] The trial judge found that the respondent was essentially credible but expressed concerns about the appellant's credibility and motivations. He considered it unreasonable of her to think that the children could share residence between parents who lived so far apart, and found that she had made demands the respondent could not possibly meet. The trial judge described the appellant's attempt to justify some of her actions as "baffling" and stated that her "strong desire to win seems to have clouded her judgment".
[18] The trial judge detailed several incidents that concerned him. He was particularly concerned with the appellant's decision to ask the police to carry out a welfare check when the children were with the respondent and her involvement of the Children's Aid Society without having any legitimate basis for doing so.
[19] The most important finding made by the trial judge concerned the daughter and her expressed wish to move to Ottawa. The trial judge found that this wish arose primarily out of the parental conflict rather than from independent considerations. He found, further, that her real wish was to end the conflict between her parents, and that she understood – correctly in the trial judge's view – that the appellant was the source of the conflict. As a result, the trial judge concluded that the appellant had not established that there had been a change in circumstances and dismissed her motion.
[20] The trial judge then considered the respondent's request for changes to the schedule established in the 2016 order. He found that the respondent had established a change in circumstances: the appellant's move had made equal sharing impractical; the children had undergone too many tiring trips; and they had missed too much school. The trial judge described the respondent as "essentially under siege", which had weakened his ability to fulfil the needs of the children.
[21] The trial judge conducted a fresh inquiry into the best interests of the children, concluding that their principal residence in the Niagara region should not change. The children had lived in the Niagara region since birth; they were physically and emotionally close to their paternal relatives, who also reside in the region; they were well established at school and with friends; and they were doing well academically. The trial judge found that school had become the daughter's refuge from family conflict and that it would be a bad time to uproot her.
[22] In summary, the trial judge concluded that a move to Ottawa was not in the best interests of the children, but that a change to the access schedule was. He adopted more or less the respondent's draft proposal. The children would remain in the Niagara region. Their primary residence would be with the respondent. However, the trial judge made several amendments to the respondent's draft proposal, namely in the provision for time sharing so as to reduce travel. This had the effect of reducing the appellant's access to the children.
[23] The trial judge awarded the respondent costs in the amount of $40,000, which he characterized as "an amount that would have reasonably been contemplated for almost full indemnity."
E. DISCUSSION
[24] The thrust of the appellant's argument concerns the trial judge's rejection of the proposed settlement. The appellant says that the trial judge erred in rejecting the proposed settlement, in failing to give reasons for rejecting the proposed settlement, and in hearing the trial rather than recusing himself after having rejected the proposed settlement. As a result of these errors, she submits, the trial judge's decision cannot stand. In response to a question from the bench, the appellant confirmed that she would not directly address the merits of the trial judge's reasons for the order he made.
(1) The rejection of the proposed settlement
[25] There is no dispute about the importance of settlements in family law. Settlements are to be promoted and encouraged, as our colleague Nordheimer J.A. explains.
[26] Nevertheless, it is well established that judges have the authority to review settlements and to reject them if they are not in the best interests of the children: Martin v. Martin, 1981 CarswellBC 773 (C.A.), at para. 7; C.T.G. v. R.R.G., 2016 SKQB 387, 86 R.F.L. (7th) 312, at para. 11; and Harper v. Harper (1991), 78 D.L.R. (4th) 548 (Ont. Gen. Div.), at p. 553. This authority must be exercised with caution. Mere disagreement with the terms of a settlement affords no basis for courts to intervene: see e.g., F.J.V. v. W.K.S., 2019 BCCA 67, 18 R.F.L. (8th) 255, at paras. 26, 29. Further, whether a settlement is in the children's best interests should take into account more than just the settlement terms. It should also consider the general benefits to children that flow from parents resolving their disputes through compromise rather than litigation.
[27] If a judge rejects a settlement, the reasons for rejecting the settlement should be provided. Moreover, if the judge does not take any steps to facilitate settlement – such as sending the parties away with some direction as to the aspects of the agreement that are of concern, or arranging a settlement conference either with him or her or with another judge – the reason for this should also be provided. Without explaining the basis upon which the parties' settlement is rejected, the judge leaves the parties with no way of knowing, what, if anything, they could do to address the court's concerns. The concerns may have been of a nature that could be addressed, but in the absence of reasons the parties will have no opportunity to address them.
[28] This said, the situation in this case is exceptional. The proposed settlement was reached and rejected in the midst of a short four-day trial. In such circumstances, reasons need to be carefully crafted, and could be very brief. This is to avoid the appearance that the judge prejudged the case, which would preclude the judge from continuing to hear the case. Depending on the judge's concerns, the reasons may do little more than advise the parties that, at that stage of the proceeding, and without hearing the balance of the trial, he or she is not prepared to find that the settlement is in the best interests of the children. More complete reasons could then be provided at the end of the trial.
[29] In short, the trial judge's decision to continue the trial without providing reasons for rejecting the proposed settlement undermined the settlement process and the court's duty to help the parties settle their case: Family Law Rules, O. Reg. 114/99, r. 2(5)(c). But in our view, the findings of the trial judge, which were made after a full hearing on the merits and are not contested on appeal, make clear that sound bases exist for rejecting the proposed settlement.
[30] The appellant also argues that the trial judge acted contrary to Charter values in rejecting the proposed settlement and that the rejection of the proposed settlement constitutes an infringement of the parties' liberty that engaged s. 7 of the Canadian Charter of Rights and Freedoms. In our view, these submissions are fundamentally misconceived and without merit. As Miller J.A. recently explained in McKitty v. Hayani, 2019 ONCA 805, Charter values and Charter rights are distinct juridical concepts that are subject to different rules governing their use in different contexts. The analysis required in this case depends on the best interests of the children, not Charter values or Charter rights.
[31] To conclude on this point, we agree with the appellant that the trial judge should have provided reasons for his decision to reject the proposed settlement. However, it does not follow that the proposed settlement should now be accepted. What, if anything, flows from the trial judge's error must be considered in light of the fact that the trial continued to completion and the trial judge made findings as to the best interests of the children. We turn now to that issue.
(2) The appeal of the decision on the merits
[32] The appellant argues that the trial judge's error in rejecting the proposed settlement without reasons provides a basis for setting aside his trial decision on the merits. She contends, further, that having been privy to the proposed settlement, the trial judge was disqualified from hearing the case. Finally, she maintains that the rejection of the proposed settlement and her previous dealings with the trial judge created a reasonable apprehension of bias. In her view, this tainted the whole trial process that followed.
[33] As we will explain, these arguments must be rejected.
(i) The trial judge was not disqualified from continuing with the trial after he rejected the proposed settlement
[34] The starting point in the analysis is r. 17(24) of the Family Law Rules, which provides that "A judge who conducts a settlement conference about an issue shall not hear the issue". The only stated exception concerns child protection cases: r. 17(25). Moreover, settlement confidentiality is required by the rules. None of the material prepared for the settlement conference, the briefs, nor any statement made during the conference may be disclosed to any other judge, except where the statement or information is contained in an agreement that emanates from the conference or an order made thereafter: r. 17(23). See also r. 17(22), which specifies that case conference briefs do not form part of the continuing record and shall be returned to the parties or destroyed after the conference.
[35] In this case, the trial judge did not conduct a settlement conference, and as a result r. 17(24) does not apply. Nor does r. 17(22) apply, as he was not privy to any case conference briefs. Accordingly, nothing in the Family Law Rules precluded the trial judge from hearing the matter. Nor did his knowledge of the proposed settlement require him to recuse himself of his own motion.
[36] In our view, the parties at trial must be taken to have come to the same conclusion. Both parties were represented by counsel, and neither party objected to the trial judge proceeding with the trial after he rejected the proposed settlement.
[37] This is no small matter. Counsel had several options once the trial judge rejected the proposed settlement. They could have sought an adjournment. They could have asked for reasons for his rejection of the proposed settlement. They could have asked the trial judge to recuse himself. Either party could have advised the trial judge that they wished to appeal the rejection and asked the trial judge to adjourn until after the appeal: see e.g., F.J.V.
[38] They did none of these things.
[39] The only conclusion possible in these circumstances is that counsel for both parties were content to proceed to trial, or at least willing to acquiesce in the trial judge's decision to do so, after he rejected the proposed settlement. The trial judge's decision to continue to hear the trial cannot now be impugned.
[40] The appellant's "ineffective assistance of counsel" allegation does not assist her.
[41] Although ineffective assistance of counsel can be argued as a ground of appeal in civil as well as criminal cases, it is granted more rarely in civil contexts than criminal. Stratas J.A. canvasses the relevant considerations in Mediatube Corp. v. Bell Canada, 2018 FCA 127, 156 C.P.R. (4th) 289, at paras. 27-44.
[42] The ineffective assistance of counsel argument was not pressed seriously in this case, nor could it be. Putting aside concerns about the adequacy and fairness of the procedure followed in raising this complaint, neither component of the test can be established on the facts of this case. There is no evidence that the alleged incompetent representation caused a miscarriage of justice – that the appellant was prejudiced as a result of the representation she received: see Children's Aid Society of the Regional Municipality of Waterloo v. C.T., 2017 ONCA 931, [2018] 4 C.N.L.R. 31, at para. 96, leave to appeal refused, [2018] S.C.C.A. No. 51. Nor is there any evidence that counsel provided incompetent representation – that counsel's actions were unreasonable in the circumstances as they existed at that time: R. v. Archer (2005), 202 C.C.C. (3d) 60 (Ont. C.A.), at para. 119. In fact, there is no evidence as to the advice provided by counsel or the instructions given to counsel by the appellant.
[43] In any event, we see no basis for concluding that the trial judge's review of the proposed settlement compromised his ability to determine the matter at trial. The trial judge is presumed to be impartial and that presumption has not been rebutted.
[44] Regardless of what he learned from reading the proposed settlement, the trial judge was required to reach a decision following trial as to the best interests of the children. We are satisfied that he did so, and again we emphasize that his reasons for so concluding are not directly challenged by the appellant. If anyone's position was potentially undermined by the trial judge's knowledge of the proposed settlement, it was the respondent's. The respondent's trial evidence was that the children's best interests were served by their continued residence in the Niagara region but the trial judge now knew that, for whatever reason, he had agreed to allow the children to move to Ottawa, as advocated by the appellant. Yet, following trial of the matter, the trial judge reached the conclusion that it was in the best interests of the children to remain with the respondent in the Niagara region, rather than move to Ottawa with the appellant.
(ii) There is no reasonable apprehension of bias
[45] The appellant argues that the trial judge's rejection of the proposed settlement demonstrates that he prejudged the central issue of where the children should reside.
[46] We disagree.
[47] As we have said, the trial judge was required to review the proposed settlement and to reject it if he concluded that it was not in the best interests of the children. His error lies in failing to provide reasons for rejecting the proposed settlement, but that error does not give rise to a reasonable apprehension of bias. It cannot be concluded, as the test in Committee for Justice and Liberty et al. v. National Energy Board et al., [1978] 1 S.C.R. 369, at p. 394, per de Grandpré J. (dissenting) requires, that "an informed person, viewing the matter realistically and practically – and having thought the matter through … [w]ould … think that it is more likely than not that [the trial judge], whether consciously or unconsciously, would not decide fairly" either because of his rejection of the proposed settlement or his failure to provide reasons for rejecting the proposed settlement. Moreover, as noted above, the trial judge's knowledge of the proposed settlement could serve to undermine only the respondent's position, not the appellant's.
[48] The appellant submits that her bias allegation is supported in part by the trial judge's assessment of the evidence. She argues that his reasons demonstrate an uneven weighing of the evidence. We do not accept this argument. The trial judge's reasons fully explain his assessment of each party's credibility and the contradictory evidence presented at trial. There is no basis for the appellant's claim that his assessment of the evidence is indicative of bias.
[49] Finally, there is no basis for the appellant's suggestion that the trial judge's prior dealings with her as a counsel – a matter about which no concern was raised by the parties when it was disclosed by the trial judge at the outset of the trial – support the existence of a reasonable apprehension of bias.
[50] In summary, the appellant has not met her burden of establishing a reasonable apprehension of bias. In any event, it is far too late in the day to claim a reasonable apprehension of bias. It is well established that bias claims must be raised at the earliest practicable opportunity: Canada (Human Rights Commission) v. Taylor, [1990] 3 S.C.R. 892, at pp. 941-43, 971-72, citing Re Human Rights Tribunal and Atomic Energy of Canada Ltd., [1986] 1 F.C. 103 (C.A.). This rule not only avoids problems by affording the adjudicator an opportunity to determine the matter in a timely way, but also ensures that parties alleging bias do not seek to preserve appeal grounds in the event that they receive an unfavourable decision on the substantive matter in dispute. As we have noted, the appellant's counsel was content to continue the trial after the trial judge rejected the proposed settlement. If the appellant wanted to raise a bias concern about the trial judge hearing the case, she had to raise it before the trial resumed and ran until its conclusion – long before an unfavourable judgment was rendered.
(iii) The trial judge made no errors in his decision on the merits that would permit this court to intervene
[51] It is well established that the key consideration that should determine the outcome of this appeal is the best interests of the children, as the Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.) makes plain. The best interests of the children is the only consideration relevant to deciding custody and access or their variation: see Divorce Act, ss. 16(8), 17(5). In thorough reasons, the trial judge explained why it was in the children's best interest that they continue to reside in the Niagara region. His decision is owed considerable deference on appeal and cannot be interfered with absent a material error, a serious misapprehension of the evidence, or an error of law: Van de Perre v. Edwards, 2001 SCC 60, [2001] 2 S.C.R. 1014, at paras. 11, 13; Perron v. Perron, 2012 ONCA 811, 113 O.R. (3d) 600, at para. 25, leave to appeal refused, [2013] S.C.C.A. No. 26. As noted above, the appellant did not directly address the merits of the trial judge's reasons. No error in the trial judge's findings and conclusions regarding the children's best interests has been identified.
[52] The trial judge heard evidence from the parties and made findings of fact and credibility. He found that the respondent was essentially credible, but that the appellant was not. He found her point of view to be "basically unreasonable", described some of her actions as "baffling", and determined that her "strong desire to win seems to have clouded her judgment". Those findings are entitled to deference, and the appellant has failed to establish any basis that would allow this court to interfere with them.
[53] The trial judge concluded that it was in the children's best interest that they remain in the community where they were born and raised, and enrolled in the schools they currently attend. The trial judge made no error in doing so. The best interests of the children require that the order be upheld and the appeal dismissed.
[54] It remains open to the parties to seek a consent order varying the terms of the trial judge's order, should they consider it appropriate to do so in light of their experience with the children since the trial judge's order. There is, however, no basis for this court to intervene on appeal.
(3) Fresh evidence
[55] Both parties brought motions to tender fresh evidence addressing how the children have progressed since the trial decision. In light of our conclusion that the appeal ought to be dismissed, we would not admit the fresh evidence. Nothing contained in the fresh evidence raises any concerns as to the correctness of the trial judge's order.
(4) The costs appeal
[56] The trial judge erred in principle in his costs order. There was no basis for the respondent to be awarded trial costs on an elevated scale. The appellant was entitled to seek a variation in the previous custody and access order and should not be punished for having done so. Her conduct was not "worthy of sanction": Net Connect Installation Inc. v. Mobile Zone Inc., 2017 ONCA 766, 140 O.R. (3d) 77, at para. 8. While the appellant did not expressly seek leave to appeal the costs order, she did raise the issue of costs directly. We would grant leave in the circumstances and reduce the costs award to $30,000, inclusive of taxes and disbursements.
F. CONCLUSION
[57] The motion to admit fresh evidence and the appeal are dismissed.
[58] The costs appeal is allowed. The costs order is set aside and an award of $30,000, inclusive of taxes and disbursements is substituted.
[59] The parties bear their own costs of the appeal.
Paul Rouleau J.A.
Grant Huscroft J.A.
Nordheimer J.A.: (Dissenting)
[60] I have read the reasons of my colleagues and find myself unable to agree with their disposition of this appeal. In my view, the conduct of the trial judge with respect to his rejection of the parties' settlement, without reasons, so tainted the conduct of the proceeding that his disposition cannot be allowed to stand. To do otherwise fundamentally undermines the need for court proceedings not only to be fairly conducted but, as importantly, be seen to have been fairly conducted.
[61] I would allow the appeal and give effect to the Minutes of Settlement.
A. THE TRIAL JUDGE ERRED IN REJECTING THE SETTLEMENT WITHOUT REASONS
(1) The Importance of Settlement
[62] The importance of settlement in the overall litigation process cannot be overstated. It is especially so in the family law context. Indeed, the Family Law Rules, O. Reg. 114/99, directly provide that it is one of the ways in which the court promotes the primary objective. Rule 2(5) provides, in part:
The court shall promote the primary objective by active management of cases, which includes,
(b) encouraging and facilitating use of alternatives to the court process;
(c) helping the parties to settle all or part of the case[.]
[63] The importance of settlement is heightened when dealing with children. A settlement brings closure to the matter. It helps the parties refocus on the children's best interests. It ends (or at least reduces) the present conflict and leads the way for the non-litigious resolution of future disputes. Further, it may benefit the children in that they will, hopefully, understand that the arrangements were agreed upon by their parents, rather than imposed by a court. This point was made by Tysoe J.A. in F.J.V. v. W.K.S., 2019 BCCA 67, 18 R.F.L. (8th) 255, at para. 29:
It may not have been a perfect settlement, but as counsel for the respondent explained to the judge on January 7, it is sometimes better to resolve most issues than none at all. A settlement of parenting issues does not have to be perfect in order for it to be in the best interests of the children. The court must also consider the effects on the children of not having a settlement and, respectfully, the judge failed to consider those effects. [Emphasis added.]
[64] Parents also know their children in a way that no trial judge (or external assessor) possibly could. Consequently, when parents negotiate a settlement on parenting issues, a judge must have clear and compelling reasons to reject it. If present, those reasons must be articulated to the parties so that they will understand the concerns and have an opportunity to respond. There may be any number of facts, of which the judge is unaware, that would explain why the parties agreed to the terms of the settlement.
(2) The Error of the Trial Judge
[65] In this case, not only were there no clear and compelling reasons to reject the settlement, there were no reasons offered by the trial judge at all. The parties were left without any idea what terms of the settlement were of concern to the trial judge. It follows from that fact, of course, that the parties were not given the opportunity to explain to the trial judge why they agreed to the settlement, nor were they provided with the opportunity to provide additional evidence to allay any concerns that the trial judge may have had. They were also denied the opportunity to present a modified settlement agreement to the court that responded to any concerns that the trial judge had while preserving the many benefits of settlement.
[66] In my view, my colleagues fail to give proper effect to what occurred through the way in which the trial judge dealt with the settlement. Simply put, there is neither excuse nor justification for the trial judge's treatment of the settlement. If he was not prepared to approve it, he was required to tell the parties why and provide them with an opportunity to respond. The trial judge's actions, in rejecting the settlement without explanation, fundamentally undermine the whole settlement process and its importance to the overall functioning of the litigation process, especially family litigation. His actions also deeply undercut the authority of the Family Law Rules, and of judges generally, in urging parties to resolve their disputes. For a judge to reject a settlement on parenting issues without explanation undermines one of the most important messages to the public in the context of family law: settling your dispute is in your children's best interests.
[67] Further, parties, both in the family law context and in civil proceedings generally, must be able to rely on the courts enforcing settlements freely reached so that they will have confidence that their efforts in pursuit of settlement are worthwhile. On this point, I would adopt the following observation of J. Mackinnon J. in Quesnel v. Nadon-Quesnel (2001), 24 R.F.L. (5th) 89 (Ont. S.C.), where she said, at para. 18:
First, there is a strong policy in favour of the parties settling their own affairs, if possible. The exchange of offers to settle is to be encouraged. Litigants need to know that the terms of an accepted offer will be binding and enforced by the court.
[68] The respondent suggested that the trial judge may have been unwilling to give reasons for rejecting the settlement because his views on the settlement terms might, in some fashion, compromise his ongoing role as the trial judge. Indeed, my colleagues appear to implicitly adopt that possible explanation: at para. 28. They also appear to minimize the conduct of the trial judge by finding that the situation here was "exceptional".
[69] I do not accept any of that effort as justifying the trial judge's actions. First, there is nothing exceptional about parties reaching a resolution of their dispute, either immediately before a trial starts, or after it has commenced. Experience demonstrates that many cases resolve "at the courtroom door" or soon after a trial commences. The immediacy of the moment does not excuse this judge's handling of the settlement.
[70] Second, and as I shall explain more fully below, given what occurred, the trial judge ought not to have continued to hear the trial and render a decision. His position as the trial judge was irretrievably compromised as a result of his knowledge of the terms of settlement to which the parties had agreed.
[71] Third, even if one could accept that as the rationale for the trial judge's actions, it does not explain why the trial judge did not provide reasons for rejecting the settlement when he rendered his decision after the trial's conclusion.
B. THE TRIAL JUDGMENT CANNOT STAND
[72] As I have just said, in my view, the trial judge ought not to have continued with the trial once he became aware of the parties' negotiated settlement. His knowledge of the terms of the settlement compromised the fundamental requirement that he decide the case based only on the evidence that he heard, and that he be seen as having done so.
[73] The primary objective of the Family Law Rules includes "ensuring that the procedure is fair to all parties": r. 2(3)(a). In making that point, I am mindful of the fact that there are also other considerations that impact on the way in which a proceeding may be conducted including saving expense and time, dealing with a case in ways that are appropriate to its importance and complexity, and giving appropriate court resources to cases while taking account of the need to give resources to other cases: r. 2(3). All of these considerations have a role to play.
[74] In my view, however, the trial judge's decision to proceed with the trial, after rejecting the settlement, so fundamentally undermined the appearance of fairness to the parties that it cannot be salvaged by such other considerations.
[75] I accept that courts have the power to remedy procedural flaws: Rules of Civil Procedure, R.R.O. 1990, Reg. 194, r. 2. I am also aware that trial judges are familiar with the concept of having to put aside evidence that they have heard, after concluding that it is inadmissible. We trust judges to do that. But those situations are the exception to the general rule that a judge, who is privy to resolution positions and discussions, ought not to then hear and determine the dispute that is in issue.
[76] For example, the Family Law Rules reflect this general rule by incorporating an absolute prohibition against a judge, who has conducted a settlement conference, from hearing an issue that was the subject of the settlement conference. Rule 17(24) states: "A judge who conducts a settlement conference about an issue shall not hear the issue, except as subrule (25) [an exception for child protection cases only] provides."
[77] My colleagues say that r. 17(24) does not apply and thus there was nothing in the Family Law Rules that precluded the trial judge from hearing the matter: at para. 35. While technically correct, that conclusion ignores the clear principle that underlies r. 17(24) which is that a judge, who is privy to the settlement discussions of the parties, ought not to then hear and decide their dispute. The reason behind the principle is clear. It is so the parties can pursue settlement while having confidence that the judge will decide the issue on the evidence and not on any extraneous information such as what position one party or the other took when settlement was discussed. This court has held as much in the context of civil pre-trials: Royal Bank of Canada v. Hussain, 2016 ONCA 637, 133 O.R. (3d) 355, at para. 20.
[78] My colleagues go further and say that "Nor did his knowledge of the proposed settlement require him to recuse himself of his own motion.": para. 35. I disagree. In my view, a judge who has received, but rejects, a settlement agreement is in an analogous position to a judge who has participated in a settlement conference. This was not a case where the trial judge became aware of peripheral information relating to the dispute. Here, the trial judge knew of the agreement that the parties had reached on the central issue that he was to determine, that is, where the principal residence of the children would be. One cannot equate that knowledge with a trial judge becoming aware of a piece of extraneous information that ought not to have made its way into the trial process. Here the trial judge's knowledge went to the core issue in dispute. There is a fundamental difference between those two situations.
[79] The trial judge must also consider the impact on the losing party of him proceeding with the trial armed, as he was, with the parties' resolution position. This is especially so when, at the time that the settlement was presented, the trial judge had heard one side's evidence (in this case the appellant's) but not the other side's evidence. In that situation, to then continue with the trial, armed with the knowledge of the settlement, and find against the party whose evidence had been heard, could reasonably raise in the mind of the losing party (the appellant) that the judge had closed his mind. With respect, my colleagues' conclusion, that only the respondent's position could have been undermined by the trial judge knowing the settlement terms (at para. 44), ignores this salient point.
[80] I would add that there was no significant harm that would have been occasioned to the parties had the trial judge recused himself. The trial had just begun. Less than two days of evidence had been heard. There was nothing stopping the trial judge from recusing himself from the trial and arranging for another judge to recommence the trial the following day. The disruption and cost to the parties would have been minimal.
[81] I appreciate that neither counsel objected to the trial judge continuing with the trial. Neither counsel asked the trial judge to recuse himself nor did either counsel ask for a mistrial. My colleagues place great emphasis on counsel's failures to raise any objection as being sufficient to dispose of the problem. While, in some instances, the failure to object can be fatal to a later complaint, this court has said that we will relieve against the failure to object where the interests of justice require it: Marshall v. Watson Wyatt & Co. (2002), 57 O.R. (3d) 813 (C.A.), at para. 15. The actions of the trial judge, in his approach to the settlement, were so misguided, and so seriously undermined a fundamental principle of our legal process, that this court cannot ignore it, nor can we fail to remedy it, simply because of the omissions of trial counsel.[^1]
[82] I also do not see how the fact that the trial judge went ahead and completed the trial, and rendered a decision, can immunize his decision from the impact of what the trial judge did, and knew, about the settlement. If the fact that a trial judge proceeds to complete the trial, in these circumstances, could excuse the error, then there would never be a remedy for this type of conduct.
[83] The fact remains that the trial judge's required appearance of objectivity and impartiality was irreparably compromised by his knowledge of the settlement, the timing of receipt of that knowledge, and of his reaction to it. Among other things, the losing party cannot be satisfied that that knowledge did not impact on the trial judge's views of the evidence or on his conclusions. That reality taints the trial judge's conclusions and renders them suspect. Consequently, the trial judge's conclusions are not entitled to any deference by this court.
[84] My colleagues say that "No error in the trial judge's findings and conclusions regarding the children's best interests has been identified": at para. 51. That conclusion overlooks the striking fact that the parents of the children had mutually agreed to a resolution that involved a diametrically opposite result for their children. That would appear to be a most powerful reason to doubt whether the result arrived at by the trial judge was actually in the best interests of the children. In that regard, courts have long recognized that parents are generally in the best position to decide what is in the best interests of their children: B. (R.) v. Children's Aid Society of Metropolitan Toronto, [1995] 1 S.C.R. 315, at para. 83.
C. REMEDY
[85] For the reasons above, I would allow the appeal. Given this conclusion, the issue becomes what is the appropriate remedy. Section 21(5) of the Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.), authorizes an appellate court allowing an appeal to "(i) render the judgment or make the order that ought to have been rendered or made, including such order or such further or other order as it deems just; or (ii) order a new hearing where it deems it necessary to do so to correct a substantial wrong or miscarriage of justice." I would set aside the order below and substitute an order approving the Minutes of Settlement for the following reasons.
[86] In my view, the trial judge ought to have approved the parties' negotiated settlement. A judge contemplating a variation order in respect of a custody order must take into consideration the best interests of the children only: Divorce Act, s. 17(5). The outcome that was the best for the children in this case was for the trial judge to give effect to the settlement. An order approving the settlement would have put into place the resolution that both parties agreed to. In reaching the settlement that they did, both parents had the best interests of the children in mind. Putting those agreed arrangements in place enforces those best interests and enforces the wishes of the parents as they were then expressed. I do not say that a settlement agreement between parents will always be in the best interests of the children, but I am confident that this is the case here. The traveling issues that appear to have so bothered the trial judge constitute an insufficient basis to reject a settlement that the parents carefully worked out.
[87] At the same time, I am mindful of the reality that time has since passed, and the children have now begun a new school year. That reality is not a sufficient ground, though, to order a new trial for two reasons. First, is the time, expense, and prolonged uncertainty that such an order would visit on both parties. Second, is the reality that very little time has passed since the settlement was reached, particularly when one realizes that the settlement did not contemplate any change in the principal residence for the children until July of this year. Consequently, the disruption associated with the settlement, if now approved with effect from the end of the school term in January 2020 (as requested by the appellant), involves a period of about four months.
[88] Consequently, a new trial is not the appropriate remedy. The appropriate remedy is to give effect to the Minutes of Settlement, as the trial judge should have done.
D. CONCLUSION
[89] I would allow the appeal and set aside the order below. I would grant an order approving the Minutes of Settlement, dated April 3, 2019, with those terms coming into effect as of the end of the children's school term in January 2020. If problems arise regarding access, and the travel time related thereto, I would expect that the parties will be able to reach an agreement to address those issues. They have shown, through their Minutes of Settlement (both here and in 2016) that they are capable of coming to an agreement, when it is in the best interests of their children to do so. However, should agreement among themselves prove elusive, then the parties should employ a parenting co-ordinator to assist them in reaching an agreement. If the parties do not do so, or if the issues remain, then I would order that they shall arrange through the appropriate court office for a case management conference to resolve the matter.
[90] I would award the appellant her costs of the appeal fixed in the amount of $10,000 inclusive of disbursements and HST. The appellant does not seek the costs of the trial and I would not order costs with respect to it. It follows that the costs order that was made below is set aside.
Released: December 13, 2019
Paul Rouleau J.A.
Grant Huscroft J.A.
Ivan Nordheimer J.A.
[^1]: None of the counsel on appeal were counsel at trial.
