Court File and Parties
COURT FILE NO.: 37781/15 DATE: 2018 07 05 ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN: ANTE KARLOVIC Applicant – and – ZELJKA KARLOVIC Respondent
COUNSEL: V. Lailla Pavicevic, for the Applicant Philip Viater, for the Respondent
HEARD: June 11, 2018
REASONS FOR JUDGMENT
KURZ J.
1The Applicant husband, Ante Karlovic (“the husband”), brings a motion for temporary spousal support some 13 years after the parties agree that they finally separated with no intention of resuming their cohabitation. The Respondent wife, Zeljka Karlovic (“the wife”) brings a cross-motion for summary judgment, seeking to dismiss the remaining claim in this proceeding, spousal support. In the alternative, she seeks security for costs.
2The key issue in these motions is the effect of the husband’s delay on his claim to temporary and final spousal support. While the husband moved first, it makes logical sense to me to first consider the summary judgment issue. If there is no genuine issue for trial regarding spousal support, there is no reason to consider the other issues.
3For the reasons that follow, I find that there is no genuine issue for trial regarding the husband’s claim for spousal support and dismiss his application.
Background
4The parties married on May 20, 1990. Their marriage was a rocky one, punctuated by a number of separations and attempts at reconciliation. They separated for about two years in the late 1990’s. They did not finally separate until August, 2005. In all this was a 13 year marriage, although the parties were not together for all of those years.
5One indication of the precariousness of their relationship is the fact that both parties listed themselves as single in their tax returns since the early 1990’s.
6Despite the separation, the husband’s primary residence remained in the matrimonial home, sleeping on the couch unless he was away for work. He did so until Gray J. granted the wife an order of exclusive possession of the home on March 23, 2016. At various times between separation and Gray J.’s order, the husband travelled out of town and even out of the country for work for weeks and even months at a time.
7The parties have two children who are now adults, Franjo Karlovic, born September 30, 1993 (“Franjo”) and Martin Karlovic, born July 9, 1991 (“Martin”). Franjo still resides with the wife while the husband has resided with Martin since the March 23, 2016 order of Gray J.
8After separation, the wife remained the primary caregiver and financial support for both children. She continued in that role until they attained adulthood. The wife never sought child support from the husband and he never paid any. He also never sought spousal support from the wife until he brought this application. The husband denies the wife’s claim that there was an informal agreement that neither would seek support from the other. Yet that was the result for about ten years until the husband commenced this application and then another year until he brought this motion (which was then delayed for approximately another two years).
9The husband claims that he directly paid for some of the children’s expenses after the separation, but offers no details, let alone independent evidence of such payments.
10The husband concedes that he never sought spousal support before he commenced this application. He is not seeking spousal support for any period of time prior to the commencement of this proceeding. Further, he is only seeking prospective temporary support in this motion.
Husband’s Work History
11The husband worked as a self-employed sub-contractor in the building industry. He was a taper, a position in the dry wall process that involves some physical activity. He comes from Croatia, where he attained a high school degree and credentials as a millwright.
12While the Husband’s pre-separation tax returns showed an income at about the minimum wage level, the wife stated that he worked long hours and received cash payments. She speaks about him holding large amounts of cash in the home. She also says that he refused to pay taxes to CRA. That refusal ultimately led to his bankruptcy. He does not refute these allegations.
13After the parties separated, the husband cashed pay cheques at a restaurant/bar partially owned by a close cousin, Bozo Peric. However the husband has produced no record of those cashed cheques. He did produce a letter from one of the subsequent owners of the restaurant/bar. Unfortunately that unsworn, double hearsay letter is of no evidentiary value. The husband’s counsel states that the husband ate at that bar regularly and used his pay cheque to pay his tab. He was given the balance of his pay after the restaurant/bar tab was deducted.
14The wife says that this shows three things: that he was hiding income, that he was living an independent life following separation, and that he was able to afford to frequently eat meals in restaurants. Each of those arguments aligns with the acknowledged facts.
15The husband is not working now. The wife argues that he is intentionally under or unemployed. However he has a number of physical ailments arising out of repetitive strain injuries and a torn rotator cuff. He says that those injuries impact on his ability to work as a taper. There is no evidence that he suffered from those aliments during the marriage or at the time of separation.
16The husband was originally denied WSIB benefits, but has now appealed the denial. On appeal, he was granted benefits for about six months in 2016. The WSIB has not at this time accepted any other claim. However the appeal tribunal left open the possibility of him obtaining further benefits. However it could take many months, if not longer, to determine whether it will accept any other claim.
17The wife points out that the husband participated in an international pool tournament in Las Vegas and actually won $1,000.
18The husband filed for bankruptcy the year following the parties’ separation. From the materials, it appears that his biggest creditor was CRA. He was discharged from bankruptcy in 2017.
Wife’s Work History
19The wife is an assistant registrar at the University of Toronto Mississauga campus. She held various administrative jobs during the marriage. In 2004 she earned just under $61,000. She does not have her 2005 records but the parties acknowledge that her income that year was likely about the same as the previous year. Starting in 2006, the year following the parties’ separation, the wife returned to school to update her qualifications. That part-time process took her about six years. By the time that she completed her studies in 2012, the wife was entitled to a substantially increased salary. She presently earns close to $100,000 per year.
Matrimonial Homes
20The parties have held separate bank accounts since the early 1990’s. However they did own a previous matrimonial home as joint tenants. The husband decided to transfer his share of that home to the wife to judgment proof himself, particularly against the CRA.
21In 2003, the wife used funds from that home as well as her own funds to purchase her current home. She purchased it from the husband’s cousin, Mr. Peric. Primarily because of the husband’s debt problems, that home was placed in the wife’s exclusive name.
22Mr. Peric claims that he sold the house to the wife for $50,000 less than its market value because he believed that it was being purchased for both parties. However neither Mr. Peric nor the husband offers an independent valuation of the home at the time of sale in order to demonstrate the discount.
23The husband claims to have conducted “extensive renovations” to the home prior to separation. He is supported in that claim by Mr. Peric. Other than the broad allegations in the supporting affidavit of his close relative, the husband offers no objective evidence of this alleged work or its value. None of that work was performed subsequent to the parties’ separation.
24The husband brought this application well after the six-year limitation period for equalization claims called for in s. 7(3) of the Family Law Act. He also made a trust claim with regard to the home. However, he abandoned all of those claims as part of a partial settlement on January 23, 2017. It is still left to me to assess the costs of that portion of this proceeding.
History of Delays in this Proceeding
25While the husband commenced this proceeding on April 29, 2015, this motion did not come before the court for hearing for more than three years.
26The most obvious area of delay in both the motion and the proceeding is the husband’s ten-year wait before commencing this case. The husband offers little that would explain that delay other than the feeling that the parties were somehow still financially intertwined. Yet he concedes the 2005 separation date, which implies the finality of their relationship at that time. He can only point to the fact that he slept on the couch of the matrimonial home some of the time, post-separation. The parties shared no bank accounts and no money passed between them following their separation.
27The delays continued even as the husband contemplated this proceeding. He issued his notice of application on April 29, 2015. Yet he relied on an affidavit that he swore over six months earlier, on October 17, 2014, in support of a request to file his financial statement without his notices of assessment. Clearly, he swore that affidavit in contemplation of this proceeding. Yet he waited over six further months to commence it.
28The wife served the husband with her motion materials, seeking exclusive possession of the home, on February 24, 2016. That was about ten months after this proceeding had commenced. By that point, the husband had yet to move for temporary spousal support. The husband did not even seek temporary spousal support in his responding materials to the motion. He simply attempted to resist the exclusive possession motion. Gray J., granted the wife’s motion on March 23, 2016.
[29] In granting that relief, Gray J noted that it was not in dispute that: a. The wife had made all of the mortgage payments on the matrimonial home. In fact, she paid the mortgage off. b. She paid all of the costs of maintaining the home. c. While the husband had remained in the home to some extent for ten years, he has spent significant amounts of time outside the home. Some of that time was spent at the home of his 25 year old son, Martin.
30Speaking in the present tense, Gray J. found that the husband makes regular deposits to his bank accounts and cashed some cheques at his cousin’s restaurant/bar. I note that this finding was made about three years after the husband opened his own bank account.
[31] Gray J added that: a. There was tension in the home. b. As the Applicant made no contribution to the maintenance of the home, there is little reason he should have the benefit of occupying it. c. He was not convinced that the husband was unable to afford alternative accommodations. The husband could stay with Martin, at least temporarily.
32Gray J. ordered the husband to pay the costs of the motion, which he fixed at $5,000. Those costs were ultimately paid on his behalf by Mr. Peric, with a cheque drawn on the account of his restaurant/bar.
33Only following Gray J.’s order did the husband move for temporary spousal support, in a motion dated August 7, 2016. It was returnable four days later. The motion was accompanied by about 1 ½ inches of materials. In response, the wife brought her summary judgment motion. Those are the motions presently before me.
[34] The motions were not heard until now, about a year and three quarters later, for a variety of reasons. They include the facts that:
- this is a long motion and the motions were originally scheduled for ordinary (less than one hour) motion dates,
- the parties settled their property issues on the January 23, 2017 motion date but did not argue the support issue,
- the motions judge had to recuse himself on November 21, 2017, and
- the motion had not been properly confirmed on December 5, 2017.
35The net result is that this motion for temporary support is being heard almost three years after the application was brought. While not all of the fault for those delays can be laid at the feet at the father, he must bear some of that responsibility.
Is there a Genuine Issue for Trial?
Law Regarding Motions for Summary Judgment
36Under r. 16 (1) of the Family Law Rules (“FLR”), either party may bring a motion for summary judgment for a final order without the requirement of a trial. That motion can be brought on all or part of any claim made or defence presented in the case. The test for such a motion is whether the evidence discloses a genuine issue requiring a trial of a claim or defence.
[37] The term "no genuine issue for trial" has been variously interpreted to reflect the notion that the responding party cannot possibly succeed, even if granted the right to a full trial. Among the terms that have been used to describe the test are the following: a. "no chance of success", or b. "plain and obvious that the action cannot succeed", or c. "manifestly devoid of merit", or d. “the outcome is a foregone conclusion”, or e. no realistic possibility of an outcome other than that sought by the applicant.
38The party making the motion shall serve an affidavit or other evidence that sets out specific facts showing that there is no genuine issue requiring a trial.
39Each party to a motion for summary judgment has an obligation to “‘put its best foot forward’ with respect to the existence or non-existence of material facts that have to be tried”.
40The onus for proving that there is no genuine issue for trial rests with the moving party.
41In response to the evidence of the moving party, the responding party may not rest on mere allegations or denials but shall set out in affidavit or other evidence, specific facts showing that there is a genuine issue for trial. In the oft-repeated maxim of Justice Coulter Osborne, then of the Ontario Court of Appeal, the responding party to a motion for summary judgment must “lead trump or risk losing”.
42In other words, once the moving party discharges the burden of showing that there is no genuine issue for trial, the onus shifts to the responding party. That party must then provide evidence of specific facts showing that there is a genuine issue requiring a trial. An adverse inference may be drawn from a failure to support the allegations or denials in a party’s pleadings.
43On a motion for summary judgment, the court is required to take a hard look at the merits of the case. If there is no genuine issue requiring a trial of a claim or defence, the court shall make a final order. If the only genuine issue is a question of law, the court shall decide the issue and make a final order accordingly.
44If the court does not make a final order, or makes an order for a trial of an issue, the court may also specify what facts are not in dispute. It may further state the issues and give directions about how and when the case will go to trial, and impose conditions, if appropriate.
45In determining whether there is a genuine issue for trial, the court shall consider the evidence submitted by the parties. In addition, it may use its expanded powers under subrule 16 (6.1), which reads as follows:
Powers
In determining whether there is a genuine issue requiring a trial, the court shall consider the evidence submitted by the parties, and the court may exercise any of the following powers for the purpose, unless it is in the interest of justice for such powers to be exercised only at a trial:
Weighing the evidence. Evaluating the credibility of a deponent. Drawing any reasonable inference from the evidence.
46In exercising its expanded powers, the court may hear oral evidence from one or more of the parties, with or without time limits, in the form of a mini-trial.
[47] In Hryniak v. Mauldin, 2014 SCC 7, the Supreme Court of Canada set out the process to be followed in applying the expanded civil summary judgment rules: a. The court will first consider whether there is a genuine issue for trial based only on the evidence before the court. This decision is made without exercising the court’s expanded powers. b. But if there appears to be a genuine issue for trial, the court shall then determine whether the need for a trial can be avoided using those expanded powers. That decision is a discretionary one. But the court shall not exercise its discretion if doing so would be against the interests of justice. c. The exercise of the expanded powers will not be against the interests of justice if it would lead to a fair and just result; one that serves the goals of timeliness, affordability and proportionality in light of the litigation as a whole.
48These new rules expand the number of cases in which there will be no genuine issue requiring a trial. They do so by permitting motion judges to weigh evidence, evaluate credibility and draw reasonable inferences. I have considered the principles articulated in paras. 44 - 78 of Hryniak.
49In keeping with the principles set out in Hryniak, the court must also consider subrules 2 (2) - (5) to ensure that a case is dealt with justly. It does so by ensuring that the procedure is fair to all parties, saves time and expense and that the case is dealt with in ways that are appropriate to its importance and complexity.
50The case law dealing with summary judgment under the Rules of Civil Procedure also apply to such motions under FLR r. 16. In fact, as Justice Emery of the SCJ stated in Afolabi v. Fala, 2014 ONSC 1713, reflecting on the application of the Hryniak principles to family law before the expansion of judicial powers under r. 16:
If anything, family law in Ontario cries out for the summary disposition of issues in appropriate circumstances as much as in any other area of law. This accessibility to timely, affordable justice is as important to the parties in conflict as it is to the confidence of citizens in our court system that cases will be adjudicated efficiently and effectively according to law.
51One further note regarding summary judgment: subrule 16 (6) is mandatory when it states:
If there is no genuine issue requiring a trial of a claim or defence, the court shall make a final order accordingly.
52Karakatsanis J. called for summary judgment rules to be interpreted broadly, “… favouring proportionality and fair access to the affordable, timely and just adjudication of claims.”
Claims for Spousal Support Under the Divorce Act
53The Husband’s claim for support comes under s. 15.2 (1)-(3) of the Divorce Act, which reads as follows:
Spousal support order
15.2 (1) A court of competent jurisdiction may, on application by either or both spouses, make an order requiring a spouse to secure or pay, or to secure and pay, such lump sum or periodic sums, or such lump sum and periodic sums, as the court thinks reasonable for the support of the other spouse.
Interim order
(2) Where an application is made under subsection (1), the court may, on application by either or both spouses, make an interim order requiring a spouse to secure or pay, or to secure and pay, such lump sum or periodic sums, or such lump sum and periodic sums, as the court thinks reasonable for the support of the other spouse, pending the determination of the application under subsection (1).
Terms and conditions
(3) The court may make an order under subsection (1) or an interim order under subsection (2) for a definite or indefinite period or until a specified event occurs, and may impose terms, conditions or restrictions in connection with the order as it thinks fit and just.
54Under s. 15.2(4) of the Divorce Act, the court faced with a claim for spousal support must consider the condition, means, needs and other circumstances of each spouse, including:
Factors
(4) In making an order under subsection (1) or an interim order under subsection (2), the court shall take into consideration the condition, means, needs and other circumstances of each spouse, including (a) the length of time the spouses cohabited; (b) the functions performed by each spouse during cohabitation; and (c) any order, agreement or arrangement relating to support of either spouse.
55Subsection 15.2(6) of the Divorce Act charges me to consider four objectives of spousal support order. It states:
Objectives of spousal support order
(6) An order made under subsection (1) or an interim order under subsection (2) that provides for the support of a spouse should (a) recognize any economic advantages or disadvantages to the spouses arising from the marriage or its breakdown; (b) apportion between the spouses any financial consequences arising from the care of any child of the marriage over and above any obligation for the support of any child of the marriage; (c) relieve any economic hardship of the spouses arising from the breakdown of the marriage; and (d) in so far as practicable, promote the economic self-sufficiency of each spouse within a reasonable period of time.
Delay in Bringing an Application for Support
56It has been oft repeated that there is no limitation period for an application for spousal support. However extreme delay in bringing the application can defeat or diminish such a claim. As Chappel J. of this court put it in Fyfe v. Jouppien, following an exhaustive review of the relevant factors in determining whether delay should defeat or reduce a spousal support claim:
…excessive delay in seeking spousal support by a party may raise questions as to whether there was an ongoing reasonable expectation of support, and whether there was actual need on the part of the claimant spouse.
57Chappel J. set out a number of important factors that a court must consider in the face of extreme delay. They include financial need arising after separation, financial interdependence, both before and particularly after separation, and the length of the delay in making the claim.
58While delay may indicate that the parties have taken steps to unravel their financial interdependence, that is not always the case. As Chappel J. stated at para. 54(d):
On the other hand, the passage of time may be given less weight in the analysis of entitlement if, despite the passage of a number of years, the parties have not effected a clean break, and their relationship continues to be characterized by mutuality and interdependence. In such circumstances, an objective analysis of the situation may lead to the conclusion that the expectation of mutual support and dependency arising from the marriage relationship has continued.
59In Fyfe v. Jouppien, 2008 ONSC 2008, Chappel J. found entitlement after a six year delay in seeking spousal support for three main reasons: the marriage was a long term one, the recipient had developed cancer following separation, and in the interim the parties were “quite simply, mutually working their affairs out.”
60In two other cases that the husband relies upon, Kapunovic v. Cukotic-Kapunovic and Philp v. Philp, a lengthy delay can also be explained by a serious mental illness, particularly in the absence of prejudice.
61In Walker v. Greer, 2003 ONSC 64331, Tucker J. of this court gave little effect to a ten year delay in seeking support. He stated, without reference to any authorities that:
The law provides time delay does not bar a claim for support provided that there is reason for the delay and the events that have transpired since the delay.
62That statement appears to imply that as long as there is a reason for the delay or the events since the delay occurred, the delay will not affect the claim. While the effect of delay on a spousal support claim is a discretionary decision, the case law shows that the applicant for support must offer more than a reason for the delay. That party must offer a compelling reason for the delay.
[63] In Walker v. Greer, each party had a high school education and each was very involved with their children. However the court found that the mother was the child’s primary caregiver. Each had the children stay with him for an extended period following separation. The factors that appear to have most influenced the court to grant spousal support after a ten year delay were:
- An implicit judicial notice that women in our society earn less than men,
- The fact that the husband made a fair bit more than the mother. But as the court pointed out, that was in part because she made voluntary lifestyle choices that adversely affected her income but reduced her expenses. She moved out of Toronto but could have earned more had she stayed there.
- The wife feared that the Husband would make an equalization claim if she sought spousal support, and
- The wife she wanted to “make it” on her own.
64This case points out the extent to which the exercise of discretion can influence the issue of entitlement in a delayed claim for spousal support. Having said that, the court ordered very limited lump sum retroactive support and what appears to be a significantly reduced amount of prospective spousal support.
65In van Rythoven v. van Rythoven, 2009 ONSC 45844, Gray J., of this court granted the wife spousal support twelve years after the expiration date for limited term support set out in their separation agreement. Gray J.’s order came eleven years after the dismissal of a motion to vary the separation agreement’s termination date. The agreement called for a total of four years of support after a thirteen year marriage in which the parties had two children. Gray J. found that the delay was only one factor to be considered in the context of factors set out in s. 15.2 of the Divorce Act.
66In van Rythoven, the wife’s physical and mental condition following the separation agreement drastically and unexpectedly worsened. At the time of the motion, she was living in poverty, surviving on less than $8,000 per year in ODSP payments. At the time, the husband earned $95,000 per year.
67Critically, Gray J. found that the separation agreement did not meet the Miglin v. Miglin, 2003 SCC 24 test, particularly the second stage of that test. That stage required Gray J. to determine, as he put it, whether “… the substance of the agreement remains in conformity with the principles of s. 15.2 of the Divorce Act today.”
68Gray J. made a prospective order at the upper end of the SSAG range. But because of the delay, he chose not to make his order retroactive.
69In Howe v. Howe, the wife was unable to offer a satisfactory explanation for a 24-year delay in seeking spousal support after a 13-year marriage. W.J. MacPherson J. found that the wife’s inability to become fully self-sufficient was not a result of the marriage. Her alcoholism was not accepted as an appropriate explanation, particularly in light of her failure to take steps to confront and ameliorate it.
70In trying to discern a consistent pattern in the case law, it seems that the determination of entitlement to support after a significant delay involves a discretionary balancing of the length of the delay and the reasons for it. The longer the delay, the greater the need to offer a compelling explanation for the delay because of the increasing presumption of financial independence and clean break.
71On the other hand, the more likely that the recipient was physically or emotionally unable to make an application for their support, or the greater the post separation financial interdependence, the more likely it is that the applicant will be entitled to make the claim.
72Even if entitlement is found, a long delay can affect quantum. That was the result in Walker v. Greer, and with regard to retroactivity, van Rythoven. In Quackenbush v. Quackenbush, MacKinnon J. of this court granted spousal support after a ten-year delay but reduced the quantum by 52 - 64% because of the delay. In that case there was a long marriage with financial dependency. The applicant wife offered a compelling explanation for her delay. She suffered from depression following the death of a child. She then subsisted on social assistance.
Application of Summary Judgment Rules to the Facts of this Case
[73] As set out above, I am entitled to assume that each party has put their “best for forward” and that I have available to me all of the evidence that each may be able to muster. In considering that evidence, I find that there is no genuine issue requiring a trial regarding the husband’s entitlement to spousal support. I find that he is not entitled to spousal support because:
- This was a medium term marriage;
- The parties have now been separated as long as they were married. Even then they were not together during the entire period of the marriage.
- The wife was the primary caregiver of the children, both before and after separation.
- The father has no compensatory claim for support. Any claim would be based on the relationship itself and any financial interdependence that arose between the parties during the course of that relationship.
- I have been provided with little evidence of that interdependence other than with regard to a previous matrimonial home. There the husband transferred his interest in the home to avoid his creditors, particular CRA. That is because he refused to pay his taxes. Had the husband not transferred his interest to the wife, only his creditors would have benefitted. He ultimately suffered no deprivation as a result of that decision.
- The wife did buy their final matrimonial home from the husband’s cousin, purportedly at a discount, However there is no independent evidence of a “family discount” in that price. The cousin’s uncorroborated evidence is of little value as he is clearly aligned with the husband and offers no objective proof that the sale price represented a discount.
- Nonetheless the wife paid off the balance of the mortgage on the home without assistance from the husband
- There was little financial intermingling between the parties. They had separate bank accounts long before they separated.
- There is no evidence that the father assumed any childcare responsibilities for the children.
- Following the separation, the husband paid absolutely nothing towards the support of the children. He claims to have made some payments towards expenses, but provides no details, let alone evidence of those payments.
- The husband’s injuries at work arose many years after the separation and are not connected in any way to the relationship. He was not injured at the time of separation. At that time he was able to work and did so.
- While the husband has been in litigation/ negotiations with WSIB for some time, there is no final resolution of those dealings. I can only go on what is before the court at this time. At present WSIB is only accepting his claims for a limited period of time that has now passed.
- There was nothing preventing the husband from making an earlier claim to spousal support. He suffered from no mental illness or emotional malady.
- It is very difficult to determine the husband’s pre and post-separation income because he was a self-employed subcontractor who failed to keep any semblance of books and records. He did not even start a bank account until 2013.Until then he was cashing many of his cheques, for which he is not able to account, at his cousin’s restaurant/bar. He continued to cash cheques with his cousin even after he started his bank account.
- Much of the wife’s post-separation increase in income came as a result of her own post-separation efforts. She took on this education as a supplement to her full time employment and her parenting duties. In other words, this increase in income was unrelated to the parties’ relationship or the roles of the parties during the relationship. In fact the education was undertaken despite the wife’s post separation responsibilities to care for and support their children.
- Perhaps equally important, while the parties were not financially interdependent after separation, the wife nonetheless offered the husband a modicum of in-kind support for over 11 years post-separation. She offered him room (albeit a couch) and to some extent, board during that time. She did so at a time that he was working and not obviously in need of support. She also did so despite a lack of financial contribution to the children’s expenses from the husband.
- If the wife had any non-compensatory spousal support obligations to the husband in the years following separation, which I do not find on the evidence, her gratuitous offering covered any such obligations. I say that particularly in light of the fact that she was the children’s sole support.
74In conclusion, I grant the mother summary judgment and dismiss this application.
75If the parties cannot agree regarding costs, Mr. Viater may provide written submissions of up to 3 pages, double spaced, 12 point font, along with bill of costs/costs outline, and any offers to settle/dockets/authorities that he wishes to submit, within 3 weeks. Ms. Pavicivic may do the same within a further three weeks.
Kurz J.