Court File and Parties

Oshawa Court File No.: FC-10-1809-00 Date: 2019-04-10 Ontario Superior Court of Justice Family Court

Between:

Erin O’Dacre, Applicant – and – Joel Cross, Respondent

Counsel: Anna Zajkowski, for the Applicant Joel Cross, In-Person

Heard: April 4, 2019

Reasons for Decision

Charney J.:

[1] This motion for summary judgment is brought by the respondent father (the respondent) for various relief on the basis of “Undue Hardship”. His Notice of Motion requests a reduction of his s. 7 expenses obligations, full disclosure of the financial records of the applicant’s new spouse, and retroactive repayment of s. 7 expenses already paid.

[2] The matters raised by the respondent in this motion for summary judgment were all dealt with in Minutes of Settlement signed by the parties less than three months ago, on January 14, 2019. The respondent was represented by counsel at the mediation/arbitration when he signed the Minutes of Settlement. The respondent does not argue that there has been a material change of circumstances since he signed the Minutes of Settlement. Rather, he argues that he now regrets signing them. He alleges that he was suffering from depression when he signed the agreement, and signed only because he planned to take his own life and never really expected to be bound by the terms of the agreement.

[3] The respondent also alleges that the mediator “intimidated and berated” him, and that he signed the minutes under duress. He states that he signed the Minutes of Settlement even though his lawyer advised him not to sign them.

[4] While the respondent’s mental health issues are not behind him, he is now seeing a counsellor and addressing “a decades long cannabis addiction” and attempting to reach out to family and friends to build stronger connections with those around him.

[5] The applicant mother (the applicant) takes the position that the respondent’s motion for summary judgment is an abuse of process and should be dismissed [1].

Facts

[6] The parties began cohabiting in 1995 and separated in 2008. They never married. They have two children. The eldest is now 21 years of age, and the youngest is nearly 19 years of age. Both attend university.

[7] These family law proceedings have been on-going for nearly nine years. Their first separation agreement was signed on January 12, 2011.

[8] In 2018 the applicant mother brought a motion to change.

[9] On August 2, 2018 the parties consented to a temporary order. Both parties were represented by counsel. The temporary order required the respondent father to pay child support and s. 7 expenses on a without prejudice basis.

[10] Pursuant to para. 4 of the consent order, the respondent acknowledged that he was not proceeding with a claim for “undue hardship”, and the parties agreed that “neither party shall be required, at any future time, to disclose the income or asset position of their new partners with whom they cohabit”.

[11] Paragraph 11 of this order provided that if the parties were not able to settle all issues within 30 days of the order, the parties would proceed to mediation/arbitration before Mr. Robert Snell or another mediator agreed to by the parties. Once the parties entered into the mediation/arbitration, the court proceeding was to be put in abeyance, subject to further court order.

[12] On November 15, 2018, an order was granted placing the proceeding in abeyance pending the results of the mediation/arbitration, in accordance with the August 2, 2018 Order.

[13] Robert Snell conducted the mediation and the parties agreed to a settlement of all issues by way of Minutes of Settlement dated January 14, 2019. The Minutes of Settlement dealt with the respondent’s support arrears and provided a formula to calculate the parties’ proportionate contributions to the children’s post-secondary educational expenses. In the event of a material change in circumstances related to tuition and fee costs, the parties contributions could be varied by way of submissions to Mr. Snell. The parties agreed that they would not be liable to contribute to the children’s post-secondary education costs beyond a first degree or 5 years of post-secondary education, whichever came first.

Motion for Summary Judgment

[14] Rule 16 of the Family Law Rules sets out the procedure for motions for summary judgment. Rule 16(6) provides: “If there is no genuine issue requiring a trial of a claim or defence, the court shall make a final order accordingly.”

[15] Rule 16(6.1) sets out the court’s powers on a motion for summary judgment:

(6.1) 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:

1. Weighing the evidence.
2. Evaluating the credibility of a deponent.
3. Drawing any reasonable inference from the evidence.

[16] Rule 16(6.1) is now identical to rule 20.04(2.1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194.

[17] The court’s powers on summary judgment motions were extensively reviewed by the Supreme Court of Canada in Hryniak v. Mauldin, 2014 SCC 7, where it laid out a two-part roadmap for summary judgment motions. Given the similarity between the Family Law Rules and the Rules of Civil Procedure, the Supreme Court’s roadmap in Hryniak is now applicable to summary judgment motions under the Family Law Rules. The Court stated, at para. 66:

On a motion for summary judgment under Rule 20.04, the judge should first determine if there is a genuine issue requiring trial based only on the evidence before her, without using the new fact-finding powers. There will be no genuine issue requiring a trial if the summary judgment process provides her with the evidence required to fairly and justly adjudicate the dispute and is a timely, affordable and proportionate procedure, under Rule 20.04(2)(a). If there appears to be a genuine issue requiring a trial, she should then determine if the need for a trial can be avoided by using the new powers under Rules 20.04(2.1) and (2.2). She may, at her discretion, use those powers, provided that their use is not against the interest of justice. Their use will not be against the interest of justice if they will lead to a fair and just result and will serve the goals of timeliness, affordability and proportionality in light of the litigation as a whole.

[18] Rule 16(6.2) of the Family Law Rules, like rule 20.04(2.2) of the Rules of Civil Procedure, permits the judge hearing the motion to order that oral evidence be presented by one or more parties (a “mini-trial”).

[19] Even with these extended powers, a motion for summary judgment is appropriate only if the material provided on the motion “gives the judge confidence that she can find the necessary facts and apply the relevant legal principles so as to resolve the dispute” (Hryniak, at para. 50).

[20] In Hryniak, the Supreme Court held (at para. 49) that there will be no genuine issue for trial when the summary judgment process “(1) allows the judge to make the necessary findings of fact, (2) allows the judge to apply the law to the facts, and (3) is a proportionate, more expeditious and less expensive means to achieve a just result.”

[21] To defeat a motion for summary judgment, the responding party must put forward some evidence to show that there is a genuine issue requiring a trial. A responding party may not rest on mere allegations or denials of the party’s pleadings, but must set out—in affidavit material or other evidence—specific facts establishing a genuine issue requiring a trial.

[22] The motion judge is entitled to assume that the record contains all of the evidence that would be introduced by both parties at trial. A summary judgment motion cannot be defeated by vague references as to what may be adduced if the matter is allowed to proceed to trial.

[23] Pursuant to rule 16(5) of the Family Law Rules (like rule 20.02(1) of the Rules of Civil Procedure) affidavits may be made on information and belief, but “if a party’s evidence is not from a person who has personal knowledge of the facts in dispute” the court may, if appropriate “draw conclusions unfavourable to the party”.

[24] If the court does not make a final order, or makes an order for the trial of an issue, rule 16(9) provides that the court may:

(a) specify what facts are not in dispute, state the issues and give directions about how and when the case will go to trial (in which case the order governs how the trial proceeds, unless the trial judge orders otherwise); (b) give directions; and (c) impose conditions (for example, require a party to pay money into court as security, or limit a party’s pretrial disclosure).

[25] These powers are in addition to the courts powers under rule 1(7.2) of the Family Law Rules, which provides a long list of procedural conditions and directions that a court may impose in any family law proceeding.

[26] It is now well settled that “both parties on a summary judgment motion have an obligation to put their best foot forward” (see Mazza v. Ornge Corporate Services Inc., 2016 ONCA 753, at para. 9). Given the onus placed on the moving party to provide supporting affidavit or other evidence under Rule 16(4) (the equivalent to rule 20.01 of the Rules of Civil Procedure), “it is not just the responding party who has an obligation to ‘lead trump or risk losing’” (see Ipex Inc. v. Lubrizol Advanced Materials Canada, 2015 ONSC 6580, at para. 28).

[27] An applicant (or respondent) bringing a motion for summary judgment does not thereby reverse the onus of proof or alleviate his onus to prove the elements of his claim. The initial burden of proof is on the party who moves for summary judgment. Only after the moving party has discharged its evidentiary burden of proving that there is no genuine issue requiring a trial for its resolution does the burden shift to the responding party. See for example, Sanzone v. Schechter, 2016 ONCA 566, at paras. 30-32, confirming the initial evidentiary obligation borne by the moving party (in that case the defendant) on a summary judgment motion.

[28] On a summary judgment motion, a motion judge may grant judgment in favour of the responding party, even in the absence of a cross-motion for such relief: Meridian Credit Union Limited v. Baig, 2016 ONCA 150, at para. 17, citing King Lofts Toronto I Ltd. v. Emmons, 2014 ONCA 215, at paras. 14-15, and Kassburg v. Sun Life Assurance Co. of Canada, 2014 ONCA 922, at paras. 50-52. However, there must be an evidentiary record on which such judgment can be granted for either moving party or respondent: Clearway Construction Inc. v. The City of Toronto, 2018 ONSC 1736, at para. 6.

[29] While Rule 16(6.1) provides the court hearing a summary judgment motion with “enhanced forensic tools” to deal with conflicting evidence on factual matters, the court should employ these tools and decide a motion for summary judgment only if it can do so fairly: Eastwood Square Kitchener Inc. v. Value Village Stores, Inc., 2017 ONSC 832, at paras. 3-6 (and cases cited therein).

[30] The Court of Appeal has cautioned against granting motions for partial summary judgment where there is a risk of re-litigation of issues and inconsistent outcomes. In Baywood Homes Partnership v. Haditaghi, 2014 ONCA 450, the Court held that although the summary judgment rules now permit the fact-finding process to be staged, the court is obliged to assess the advisability of a staged summary judgment process in the context of the “litigation as a whole” (paras. 33-35).

[31] Finally, subrule 14(4) of the Family Law Rules, which generally requires a case conference before a motion can be heard, does not apply to motions for summary judgment under Rule 16: see subrule 14(6)(c).

[32] Neither party filed a factum in this case. An important distinction between the summary judgement provisions of the Rules of Civil Procedure and the Family Law Rules is that the former requires the filing of a factum (Rule 20.03), while the latter does not.

[33] That said, the Consolidated Practice Direction Concerning Family Cases in Central East Region §43 does require factums (maximum 20 pages) for long motions (motions expected to take more than one hour), but not for short motions. Since most motions for summary judgment will be long motions, a factum will usually be required.

[34] In the present case the motion was argued in less than an hour. While the motion proceeded in accordance with the rules and practice direction, I have in the past, and do again today, question the advisability of proceeding on a summary judgment motion of this nature without a factum (see: Moussavi v. Moussavi, 2018 ONSC 2165, at para. 51). The legal and factual issues raised by this motion are complex and were barely touched on in oral argument. Both sides would have benefited from filing a factum.

Analysis

[35] Section 56(4) of the Family Law Act, R.S.O. 1990, c. F.3, permits a court, on application, to set aside a domestic contract or a provision in it,

(a) if a party failed to disclose to the other significant assets, or significant debts or other liabilities, existing when the domestic contract was made; (b) if a party did not understand the nature or consequences of the domestic contract; or (c) otherwise in accordance with the law of contract.

[36] A domestic contract includes a separation agreement (s. 51).

[37] In the case of Hartshorne v. Hartshorne, 2004 SCC 22, the Supreme Court of Canada confirmed that the courts should respect private agreements reached between spouses particularly when the parties had independent legal advice. The Court further stated at para. 36:

…Conversely, in a framework within which private parties are permitted to take personal responsibility for their financial well-being upon the dissolution of marriage, courts should be reluctant to second-guess the arrangement on which they reasonably expected to rely. Individuals may choose to structure their affairs in a number of different ways and it is their prerogative to do so.

[38] In LeVan v. LeVan, 2008 ONCA 388, leave to appeal to SCC refused, 3 S.C.R. viii (note), at para. 51, the Ontario Court of Appeal set out a two part test for determining whether a domestic contract should be set aside under s. 56(4) of the Family Law Act:

First, the court must consider whether the party seeking to set aside the agreement can demonstrate that one or more of the circumstances set out within the provision have been engaged. Once that hurdle has been overcome, the court must then consider whether it is appropriate to exercise discretion in favour of setting aside the agreement.

[39] Accordingly, the onus is on the respondent, who is seeking to have the Minutes of Settlement set aside, to prove that he falls within one of the criteria set out in s. 56(4) of the Family Law Act. Moreover, since this is a motion for summary judgment, he must persuade the court that there is no genuine issue requiring a trial.

[40] A domestic agreement cannot be set aside simply because one of the parties to the agreement now regrets having signed it. As Spence J. stated in McCall v. Res, 2013 ONCJ 254, at para. 23:

I do appreciate that parties, in their understandable desire to finalize litigation, will sometimes enter into a consent that they afterwards wish to tweak, or that they later feel does not adequately address all of their concerns. However, in the absence of a subsequent consent, it is not open to the court to change those orders simply because one parent or the other later experiences buyer’s remorse. And, as I have discussed, in the absence of a material change in circumstances, which is the case here, the parties must live with the existing order.

[41] In his affidavit the respondent reviews the history of these family law proceedings since 2008. He reargues the merits of the January 14, 2019 Minutes of Settlement. All of the arguments he makes were made before Mr. Snell. The merits of the Minutes of Settlement are not the issue before this court. The only issue on this motion is whether the Minutes of Settlement should be set aside under s. 56(4) of the Family Law Act.

[42] In my view, the affidavit evidence filed by the respondent on this motion falls short of proving that one or more of the circumstances set out in s. 56(4) apply to this case.

[43] The respondent argues that s. 56(4)(a) applies because he did not have disclosure of the applicant’s new partner’s financial records.

[44] The respondent cannot ask that the Minutes of Settlement be set aside on the basis of non-disclosure because para. 4 of the Consent Order of August 2, 2018 expressly provided that “neither party shall be required, at any future time, to disclose the income or asset position of their new partners with whom they cohabit”. Having agreed to this term of the Court Order, the respondent cannot now challenge the validity of Minutes of Settlement because of the non-disclosure of the applicant’s new partner’s income or assets: Quinn v. Epstein Cole LLP, 2008 ONCA 662, at para. 4.

[45] Nor can the respondent succeed under s. 56(4)(b). His affidavit evidence is not that he did not understand the nature or consequence of the agreement, but that he did not care what the consequences were because he did not intend to be bound by its terms. The respondent’s mental health is a very serious matter, but the evidence provided does not rise to the level required to establish that he did not understand either the nature of the Minutes of Settlement or its consequences: Ward v. Ward, 2011 ONCA 178, at para. 29.

[46] Section 56(4)(c) of the Family Law Act permits a court to set aside a domestic contract “in accordance with the law of contract”, which would include grounds such as unconscionability, duress, uncertainty, undue influence, mistake and misrepresentation (Ward, at para. 21).

[47] The respondent argues that he was subject to duress. He alleges that Mr. Snell advised him that “it may get worse for you” if he did not agree to the Minutes of Settlement. The respondent also indicates his concern that if he did not agree to the Minutes he might incur an additional $10,000 to $15,000 in legal costs if the matter proceeded to arbitration.

[48] In my view the financial pressures described by the respondent do not meet the requirements of “duress”. In Taplin v. Walsh, 2016 ONSC 2998, Woodley J. set out the following definitions of duress in the context of a s. 56(4) case:

Duress is present where there is coercion of the will of one party or where one party feels that they have no other realistic alternative but to sign the agreement. While one party might feel pressured and trapped by the circumstances into signing an agreement, this does not mean that the other party exerted undue pressure or subjected the party to duress (Balsmeier v. Balsmeier, 2016 ONSC 950, at para. 135).

The circumstances that will constitute duress must be quite extreme; antagonism and stress do not qualify as duress or economic duress. The burden is on the party alleging duress to prove that duress existed (Mayerovitch v. Breslin, 2012 ONSC 5192, at paras. 336, 344).

[49] The affidavit evidence presented by the respondent does not disclose that duress of the nature and quality required existed. The economic and personal pressures described by the respondent are the types of pressures commonly felt by one or both parties involved in the negotiation and settlement of domestic financial disputes. Such negotiations are almost always stressful; parties are forced to make difficult financial decisions with long-term implications for themselves and their children. The costs consequences of litigation are an inherent pressure faced by all litigants. The threat of potential increased legal costs if a settlement is not reached is intended to put pressure on both parties to arrive at a negotiated settlement. These inherent pressures cannot be used as a basis for setting aside a negotiated agreement.

[50] In addition, most settlements contain some element of compromise, and the caution that “it may get worse for you” if the case proceeds to arbitration or court is a fair and usually accurate warning to a recalcitrant party.

[51] There is no suggestion by the respondent that the applicant was aware of his suicidal thoughts, or that she deliberately took advantage of or exploited him in these circumstances. There is no suggestion that the respondent sought an adjournment of the mediation to accommodate his mental health issues. The applicant participated in the mediation and agreed to the Minutes of Settlement in good faith.

[52] Finally, while the respondent indicates that he was suffering from depression and addiction issues when he signed the Minutes of Settlement, there is no suggestion in his affidavit evidence that he lacked legal capacity to enter into an agreement at that time.

Conclusion

[53] The respondent has not met his initial evidentiary onus to show that the Minutes of Settlement should be set aside under any of the criteria set out in s. 56 of the Family Law Act.

[54] Accordingly, the motion for summary judgment must be dismissed, and the respondent’s claim to set aside the Minutes of Settlement must be dismissed.

[55] The applicant is presumptively entitled to costs for this motion. If the parties cannot agree on costs, the applicant may file written submissions of no more than 3 pages plus costs outline and any offer to settle by April 30, 2019, and the respondent may file reply submissions on the same terms by May 15, 2019.

Justice R.E. Charney

Released: April 10, 2019

Footnote:

[1] The applicant’s counsel initially took the position that the motion should be dismissed, or in the alternative, should be adjourned. I advised counsel that she could either seek an adjournment of the motion or ask that it be dismissed, but she could not take the position that she was prepared to argue the motion only if she won, but request an adjournment if she lost. Given this choice, she abandoned her request for an adjournment and chose to address the motion on its merits.