Bompas v. Henry, 2018 ONSC 7718

COURT FILE NO.: FC-11-2104-2 DATE: 2018/12/21 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

LINDA ELIZABETH BOMPAS Applicant – and – BRIAN BOWER HENRY Respondent

COUNSEL: Susan Arlitt, for the Applicant Self-represented

HEARD: April 5, 2018

REASONS FOR DECISION

D. SUMMERS J.

Introduction

[1] This case came to the court as a Motion to Change initiated by Mr. Henry. He seeks to set aside the order made by Justice S. Kershman on May 21, 2015 at an uncontested trial. He adds other relief with respect to changing terms of the parties’ Separation Agreement – relief the court does not have jurisdiction to grant on this motion.

[2] Ms. Bompas opposes the request to set aside the order. She also submits that she has a motion for summary judgment before the court. She asks for summary judgment dismissing his case on its merits.

Background Facts

[3] Mr. Henry and Ms. Bompas were married on May 23, 1981 and separated in September, 2006. Their two children lived with Ms. Bompas after separation. Both are now independent.

[4] On November 18, 2010, the parties entered into a Separation Agreement. Mr. Henry and Ms. Bompas each had independent legal advice.

[5] The Separation Agreement required Mr. Henry to make two monthly payments commencing August 1, 2008. The first payment was fixed at $800 per month for child support and payable until the youngest child completed her secondary school education. The second monthly payment of $700 was “for payment of debts and settlement of property”. The total amount owing was $109,500. The Agreement also stated that Mr. Henry’s failure to make payment for two consecutive months allowed Ms. Bompas to do two things: to garnish his wages; and to claim for an equal sharing of the value of his employment pension accumulated during the marriage. Otherwise, the parties released each other from all claims against their respective employment pensions.

[6] Mr. Henry did not honour his payment obligations under the Separation Agreement.

[7] In late 2011, Ms. Bompas filed the Separation Agreement with the court for enforcement by the Family Responsibility Office (FRO). By September, 2013, their records showed that Mr. Henry’s child support obligation was current. The property payment of $700 per month was not enforceable by FRO.

[8] In July, 2014, Ms. Bompas brought an application for divorce and corollary relief. She sought an order for child support and the orders necessary to divide Mr. Henry’s pension in accordance with the terms of the Separation Agreement. Mr. Henry did not file an Answer. The matter proceeded by way of an uncontested trial before Justice Kershman on May 21, 2015.

[9] Kershman J.’s order required that:

i) Mr. Henry pay child support of $268 per month to Ms. Bompas for the youngest child, retroactive to the period from September, 2013 to December 31, 2014, when she attended college in Toronto;

ii) Mr. Henry pay Ms. Bompas $503.98 per month for s. 7 expenses for the same period based on his annual income of $90,300;

iii) the pension plan administrator divide Mr. Henry’s pension and pay Ms. Bompas $1,875.59 each month until he reaches age 65 when the amount reduces to $1,547.03; and

iv) Mr. Henry pay costs to Ms. Bompas of $8,500.

[10] In July, 2017, Ms. Bompas filed a Statement of Arrears with FRO to collect child support for the period between August 1, 2008 and April 1, 2011 in the amount of $25,600. FRO is enforcing these arrears. The most recent FRO statement produced was dated December 15, 2017. The balance owing at that time was $27,907.45.

The Power to Set Aside

[11] The Ontario Court of Appeal in Gray v. Gray, 2017 ONCA 100, at para. 26 held that rule 25(19)(e) of the Family Law Rules (FLR’s) includes the authority to set aside an order. The rule states:

25(19) The court may, on motion, change an order that,

(a) was obtained by fraud;

(b) contains a mistake;

(c) needs to be changed to deal with a matter that was before the court but that it did not decide;

(d) was made without notice; or

(e) was made with notice, if an affected party was not present when the order was made because the notice was inadequate or the party was unable, for a reason satisfactory to the court, to be present.

[12] Mr. Henry argues that Kershman J.’s order contains a mistake relating to child support. For reasons I will give later, I disagree. The balance of Mr. Henry’s argument relates to subsection (e) of r. 25(19).

[13] Mr. Henry did not challenge service. He admits that he received proper notice of the application that resulted in Justice Kershman’s order. He said he was surprised to receive Ms. Bompas’ application, but he read it and somehow missed the provision advising that he had 30 days to respond. Mr. Henry also claims to have missed the Notice of Case Conference that was served with the application. He said he expected to receive notice of the date he was to appear in court.

[14] I do not accept Mr. Henry’s explanation for his failure to respond to the application in accordance with the rules. He was a career police officer. While he may have lacked familiarity with civil court matters, I find it implausible that he did not appreciate the import of receiving court documents and the need to act on them in some manner that was timely.

[15] It is my view that the inquiry should not end with r. 25(19)(e). Rule 2(2) of the FLR’s states that the primary objective of the rules is to enable the court to deal with cases justly. In consideration of what would be just, I refer to r. 19.08 of the Rules of Civil Procedure. That provides the court with the authority to set aside a default judgment on such terms as are “just”. The Ontario Court of Appeal considered that test in Mountain View Farms Ltd. v. McQueen, 2014 ONCA 194. It said that the ultimate task is to determine whether the interests of justice favour granting the order and five factors identified for consideration. The court further said that the factors were not to be regarded as rigid rules nor must all need be satisfied before the judge can grant relief. The factors are:

a) Whether the motion was brought promptly after the respondent learned of the default judgment;

b) Whether there is a plausible excuse or explanation for the defendant's default in complying with the rules;

c) Whether the facts establish that the respondent has an arguable defence on the merits;

d) The potential prejudice to the moving party should the motion be dismissed, and the potential prejudice to the respondent should the motion be allowed; and

e) The effect of any order the court might make on the overall integrity of the administration of justice.

[16] Addressing the first two factors, I find that Mr. Henry did not move promptly after he learned of Justice Kershman’s order. He does not dispute receiving the order yet he let almost two years pass before bringing this proceeding. Mr. Henry did not explain the delay nor, as found above, did he provide a plausible explanation for his failure to comply with the rules in the first instance.

[17] I will consider Mr. Henry’s arguments to set aside the order of Kershman J. in relation to his specific claims and in the context of r. 25(19) of the FLR’s and remaining three factors identified in Mountain View, as set out in c), d), and e) above.

Child Support

[18] Mr. Henry argues that Justice Kershman made a mistake when he ordered him to pay retroactive child support for the period that the youngest child attended college. He relies on the provision in the Separation Agreement that required him to pay child support only until she completed her secondary school education. He says there was never any intention to support either child beyond high school and for that reason, the order was a mistake and should be set aside.

[19] I interpret Mr. Henry’s argument as indicating his belief that the court did not have jurisdiction to award support beyond what the terms of the Separation Agreement provided.

[20] For two reasons, Mr. Henry’s argument cannot succeed. The first reason is this. The type of mistake capable of redress under rule 25(19)(b) is one that results from inadvertence or omission such as a typographical or mathematical error. The purpose of the rule is to allow the mistake to be corrected to ensure that the order accurately reflects the court’s intention. Clarke v. Clarke. The gist of Mr. Henry’s argument is that the court made an order for child support without the necessary jurisdiction and thus made an error in law. Challenging the correctness of an order, however, is the subject of an appeal, not of a motion under rule 25(19)(b). Gray v. Rizzi, 2011 ONCA 436.

[21] The second reason that Mr. Henry’s argument cannot succeed is this. Child support is the right of the child. The parties cannot relieve themselves of the obligation to support their child by contracting with one another to the contrary. Richardson v. Richardson, at para. 14. As long as the child who is the subject of the support order was entitled to support at the time of the application, the court has the jurisdiction to make that order.

[22] Mr. Henry’s alternative argument on the issue of child support is that Justice Kershman’s order should be varied because of a material change in circumstance. He claims that his income changed after the order was made.

[23] Section 17(1) of the Divorce Act governs variation claims. Subsection (1) states that a court may vary, rescind or suspend a support order or any provision of it, retroactively or prospectively. The power to vary is discretionary. Section 17(4) of the Divorce Act states that before the court can vary an order it must first be satisfied that a change in circumstances has occurred under the applicable Guidelines since the making of the last order before making a variation order. Section 14(4) of the Guidelines states that a change includes any change in circumstances that would result in a different child support order.

[24] In this case, Justice Kershman ordered Mr. Henry to pay retroactive child support only for the period between September 1, 2013 and December 31, 2014, when the youngest child lived in Toronto to attend college. For a change in income to have an impact on the support payable during this period, it must have occurred in 2013 and/or 2014. Mr. Henry did not provide any evidence of his income in 2013. His 2014 Notice of Assessment confirms Line 150 income of $93,623 – an amount slightly in excess of the income found by Justice Kershman. Mr. Henry has not proved a material change in circumstance. This claim must also fail.

[25] For these reasons, I find no basis to set aside the child support provisions of Justice Kershman’s order. The facts do not establish that Mr. Henry has an arguable case on the merits of this issue.

Mr. Henry’s Pension

[26] Mr. Henry argues that the pension division term in Justice Kershman’s order is prejudicial and, if allowed to stand, represents an unequal division of net family property in favour of Ms. Bompas.

[27] The pension term in the order is based on paragraphs 6 and 12 of the parties’ Separation Agreement dated November 18, 2010. The paragraphs read:

6. FINANCIAL PROVISION

(a) Commencing on August 1, 2008 and on the 1st day of each subsequent month to and including November 1, 2010, the husband will pay to the wife the sum of $1500 ($800 of which is child support and $700 of which is settlement of debt), to continue until the first day of the month in which title to the matrimonial home is transferred into the wife’s name alone. The said payments shall occur by automatic bank deposit to the Wife’s Royal Bank of Canada account number [XXXXXX] at the Royal Bank of Canada branch at Terry Fox Drive and Hazeldean Road, Kanata, Ontario (phone XXX-XXX);

(b) In the event that the husband fails to make payments for two consecutive months or more, the wife has the option to garnish his wages and pursue equalization of his employment pension. In that event, that portion of paragraph 12 preventing the wife from making a claim for equalization of the husband’s pension shall no longer be in effect. The balance of paragraph 12, barring the husband from making any claim against the wife’s pension(s), shall remain intact. The husband, by signing this Agreement, acknowledges that this penalty for late payments is a fair and reasonable one, and voluntarily agrees to it. [Emphasis added] Payments shall continue on the first day of each and every month until the total amount of One Hundred and Nine Thousand, Five Hundred Dollars ($109,500.00) with accrued interest has been paid in full. That amount represents the total debt accumulated by the husband to be paid in full by the wife. Both parties agree that the amount owing for payment of debts and settlement of property, being $109,500.

(c) Once the total amount of $109,500 has been paid in full, there shall be no further payments in the settlement of debts and property. The husband shall continue to pay child support in the amount of $800 per month for the benefit of Heather. The payments shall continue to be made on the first of each month thereafter until Heather has completed her post – secondary school education.

12. OTHER PENSIONS

(1) In the event that the husband fails to make payments specified in paragraph 6 above for two consecutive months or more, the wife has the option to garnish the husband’s wages for the same amount as the unpaid payments and claim for equal sharing of the value of the husband’s employment pension accumulated throughout the marriage.

(2) Except as provided in this agreement and in paragraph 12(1) above, neither the husband nor the wife may make a claim to share in any pension of the other, including but not limited to any company pension plans, deferred profit sharing plans, registered retirement savings plans and registered home ownership savings plans.

[28] Mr. Henry argues that the provisions that allow for the division of his pension were intended only as security in the event of his default – as a means for Ms. Bompas to enforce the $109,500 owed to her – not to give her an automatic right to receive half of his pension forever. He says he understood that she would receive part of his pension only for as long as it took to pay his debt in full. Mr. Henry claims that he would never have agreed to such a clause if he knew it could lead to a permanent division of his pension.

[29] Ms. Bompas disputes Mr. Henry’s interpretation of the Agreement. She points out that they each had experienced counsel advising them in 2010 when the Agreement was signed. She contends that the pension terms in Kershman J.’s order accurately reflect the purpose and intention of their settlement.

[30] Paragraph 6 of the Separation Agreement also contains a statement that says that by signing, the husband acknowledges that the “penalty for late payments is a fair and reasonable one…”

[31] Section 98 of the Courts of Justice Act allows a court to grant relief against penalties and forfeitures, on such terms as to compensation or otherwise as are considered just. In the recent case of Scicluna v. Solstice Two Limited, 2018 ONCA 176, there was a dispute over an aborted purchase of a condominium unit. There, the disparity between the value of the property forfeited and the damage caused by the breach was so manifest and grossly disproportionate that relief from forfeiture was awarded.

[32] Penalty clauses in domestic contracts attract the same analysis. If a penalty clause is to be enforced, there must be a relationship between the default and the amount of the penalty. Dundas v. Schafer, 2014 MBCA 92, at para. 58, Church v. Church (2003), Herskovits v. Herskovits, [2001] O.T.C. 447 (Ont. S.C.J.). The amount must be a genuine estimate of the likely loss to be suffered should the agreement be breached.

[33] Here, the penalty term in the Separation Agreement, as interpreted by Justice Kershman’s order, entitles Ms. Bompas to a life-long division of Mr. Henry’s pension even if he has made, by the other terms of the Agreement, the payments required of him to satisfy debts and to settle property. On the record before me, I cannot determine whether the penalty of a permanent and final division of Mr. Henry’s pension bears any proportionality to the amount he owed under the Separation Agreement. But, on its face, the duration and amount of the pension equalization may well far exceed a fair and reasonable estimate of the impact of Mr. Henry’s default.

[34] Mr. Henry also argues that his debt to Ms. Bompas has now been satisfied, if not overpaid. On the evidence provided, I am unable to determine whether that is the case or not. What the evidence does indicate is the potential double counting of child support arrears for the period between August, 2008 and October 31, 2010. Paragraph 8 of the Separation Agreement reveals that child support for these months was included in the calculation of the $109,500 amount owed to Ms. Bompas, however, the Statement of Arrears that she filed with FRO in July, 2017 covers those same months. The amount in issue is $22,400.

[35] I conclude that Mr. Henry’s interpretation of the Separation Agreement in relation to the order made to equalize his pension is an arguable one. If he is denied an avenue to seek relief on this issue, the potential prejudice to him is significant. Such an outcome on this motion would not be just. Any potential prejudice to Ms. Bompas may be addressed through costs.

Summary Judgment

[36] Ms. Bompas submits that she has a motion for summary judgment before the court and that Mr. Henry did not respond to it in any way. Had he responded, his omission to “put his best foot forward” by way of a complete evidentiary record would have been fatal. Ms. Bompas, however, did not assert this claim in her Notice of Motion nor did she make any reference to rule 16 of the FLR’s that governs summary judgments. The only reference she makes to this relief is in her affidavit sworn January 30, 2018. In my view, this is not sufficient. When a litigant is seeking this type of order dismissing the other party’s claim on its merits, the relief sought from the court must be clearly stated in the Notice of Motion. This is even more important when, as is the case here, the opposing party is a self-represented litigant and may well not be aware of the significance of the words in the affidavit. I decline to consider Ms. Bompas’ request for summary judgment as I find it was not properly before the court.

Conclusion

[37] On the record before me, I cannot determine whether the pension division terms of Justice Kershman’s order should be set aside. For these reasons, I order a trial of the issue to determine the meaning of paragraphs 6 and 12 of the Separation Agreement including the enforceability of the penalty clause. I further order the parties to obtain and exchange all financial statements and net family property statements that each prepared in the course of negotiating their Separation Agreement. They shall also obtain and exchange the pension valuations prepared for each of them as well as the correspondence between their counsel at the time that was relevant to the equalization of property and to the negotiation of the penalty clause.

[38] Also to be determined at trial is the issue of the potential double counting and enforcement of child support arrears for the period between August, 2008 and October 31, 2010.

[39] As a precondition to my order directing the trial of the issue, I order Mr. Henry to pay the costs awarded against him by Kershman J. forthwith, plus interest. If he fails to satisfy this condition within 30 days, Ms. Bompas may move to strike his pleadings and dismiss his motion to change.

[40] This matter shall be placed on the September, 2019 trial list. A settlement conference shall be held before April 30, 2019 and a Trial Management Conference shall be held before July 15, 2019.

[41] Costs of this motion are reserved to the trial judge.

Madam Justice D. Summers Released: December 21, 2018