DATE: 20060425
DOCKET: C44703
COURT OF APPEAL FOR ONTARIO
GILLESE, BLAIR AND LAFORME JJ.A.
B E T W E E N :
JOYCE IVY LINETT
Gary S. Joseph for the appellant
Applicant (Appellant)
- and -
MARC HARRY LINETT
Kenneth A. Cole and Sharon R. Shore
for the respondent
(Respondent)
Heard: April 5, 2006
On appeal from the order of Justice Alison Harvison Young of the Superior Court of Justice dated June 15, 2005, and the costs order dated September 23, 2005.
GILLESE J.A.:
[1] This appeal turns on whether a party can, by means of a motion, seek to compel performance of a settlement agreement concluded in the course of matrimonial litigation.
BACKGROUND
[2] The parties were married on August 12, 1973, and separated in December of 1997. They have four children, all of whom have reached the age of majority. The marriage ended by the divorce judgment of Sachs J. on May 2, 2004, pursuant to a petition for divorce. Corollary relief proceedings were commenced by a statement of claim in a separate court action.
[3] After almost six years of difficult litigation, settlement negotiations between the parties resulted in a separation agreement dated November 21, 2003 (the “Agreement”). The Agreement contemplated a number of corporate, trust and real estate transactions that were to be affected simultaneously on closing. Among other things, the Agreement provides that: Mr. Linett will transfer to Ms. Linett his interest in the matrimonial home and a Florida condominium in exchange for consideration from Ms. Linett; Ms. Linett will pay Mr. Linett an equalization payment; $250,000 will be maintained in the Linett Family Trust for the benefit of the adult children; and $600,000 will be distributed from the trust in accordance with agreed terms. Although each party is entitled to receive $300,000 from the trust, the Agreement provides that Ms. Linett’s share is to be transferred to Mr. Linett in partial satisfaction of the money that she owes him.
[4] June 30, 2004, was set as the closing date.
[5] In March of 2005, Mr. Linett brought a motion to compel Ms. Linett to comply with the terms of the Agreement. Ms. Linett brought a cross-motion in which she requested relief in accordance with the terms of the Agreement. She did not, and has not, disputed the validity of the Agreement.
[6] By order dated June 15, 2005, Harvison Young J., the motion judge, granted Mr. Linett’s motion. The motion judge found that neither party was prepared to close in the spring of 2004 but that “since the summer of 2004, Ms. Linett has not cooperated in the closings pursuant to the Agreement”. She further found that Ms. Linett had had second thoughts about the Agreement, had taken no steps to set aside the Agreement and that nothing had been put before the court to suggest that the Agreement might not be valid.
[7] The motion judge ordered Ms. Linett to pay the amounts owing under the Agreement within four weeks of the date of the order. Those sums were to be held in escrow pending the completion of the related transactions. The order also requires Ms. Linett to: sign any documentation necessary to facilitate the closing, transfers and transactions set out in the Agreement; pay interest on the full amount owing from July 1, 2004; repay $12,000 that she removed from the trust; attend to accept the Ghet; and, facilitate Mr. Linett’s attendance at the matrimonial home and condominium to review their contents. In a cost order dated September 23, 2005, Ms. Linett was ordered to pay Mr. Linett costs of the motion.
[8] Ms. Linett appeals.
ISSUES
[9] Ms. Linett raises two issues on appeal. First, she says that the motion judge lacked jurisdiction to hear Mr. Linett’s motion because enforcement of a separation agreement can be done only by way of application, not motion. As the orders were made without jurisdiction, she contends they are nullities and the parties’ consent could not have conferred jurisdiction. Second, she argues that as the Agreement was silent as to interest, the motion judge erred in awarding interest to Mr. Linett.
JURISDICTION
[10] The Family Law Rules have applied to family law cases in the Toronto area, including cases involving the enforcement of separation agreements, since July 1, 2004. See rule 1(2)(b) of the Family Law Rules, O. Reg. 114/99. There is no disagreement between the parties that the Superior Court of Justice has the jurisdiction to enforce the Agreement. However, based largely on rules 8, 14 and 15 of the Family Law Rules, the appellant says that the court below had no jurisdiction to enforce the Agreement except by way of application.
[11] Rule 8(1) provides that to start a case, a person must file an application. Rule 8(1) reads as follows:
To start a case, a person shall file an application (Form 8, 8A, 8B, 8C, 8D or 8D.1) and, if required, a summary of court cases (Form 8E).
[12] The appellant contends that the respondent had to start a case to enforce the Agreement as the Agreement put to an end the action commenced for corollary relief. Thus, she says, the respondent had to bring an application in order to enforce the Agreement.
[13] I disagree. The action in which corollary relief was pursued has not been dismissed or otherwise ended. As the action continues and the court file remains open, the respondent was entitled to take steps within that action and to rely on the materials in the existing court file including orders, previous affidavits and the history of proceedings. Rule 8(1) does not require the respondent to begin afresh, by way of application. It would be time consuming, costly and inefficient to require the respondent to start a new proceeding for the enforcement of the Agreement when there is an existing action in respect of the same subject matter.
[14] Next, the appellant says that Rule 15(0.1) of the Family Law Rules provides that a party seeking to vary a support provision in an agreement may do so by way of motion but that all other matters regarding the interpretation or enforcement of a domestic contract must be commenced by application. The appellant points to rule 14(1) saying that it limits motions to the three matters listed therein.
[15] Rules 14(1) and 15(0.1) read as follows:
14.(1) A person who wants any of the following may make a motion:
A temporary order for a claim made in an application.
Directions on how to carry on the case.
A change in a temporary order.
15(0.1) This rules applies,
(a) to motions to change an agreement for support filed under section 35 of the Family Law Act;
(b) to motions to change a final order, except a final order in a child protection case that is reviewable under section 64 of the Child and Family Services Act.
[16] I agree that rule 15(0.1) contemplates that changes to an agreement for support may be brought by way of motion and that the respondent, through his motion, sought not to vary the Agreement but to enforce it. I do not agree, however, that rule 14(1) or some combination of rules 14(1) and 15(0.1) is intended to be exhaustive of the matters that can be brought by way of motion. By their wording, both rule 14(1) and rule 15(0.1) simply list matters that can be brought by way of motion. They do not purport to suggest that no other matters relating to separation agreements can be brought by way of motion.
[17] I am unable to locate any provision in the Family Law Rules that addresses proceedings for the enforcement of separation agreements. Consequently, in accordance with rule 1(7) of the Family Law Rules, the court may decide the practice by reference to the Courts of Justice Act, R.S.O. 1990, c. C.43 or the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. Rule 1(7) reads as follows:
1(7) If these rules do not cover a matter adequately, the court may give directions, and the practice shall be decided by analogy to these rules, by reference to the Courts of Justice Act, and the Act governing the case and, if the court considers appropriate, by reference to the Rules of Civil Procedure.
[18] The courts have relied on rule 49.09 of the Rules of Civil Procedure to enforce settlement or separation agreements, matters generally brought by way of motion. For example, in Bogue v. Bogue (1999), 1999 3284 (ON CA), 46 O.R. (3d) 1, this court upheld the decision of a motion judge in which he granted judgment in a matrimonial action in accordance with the terms of settlement that he found the parties had agreed upon.
[19] In any event, had I concluded that the respondent was in error in bringing the proceeding by way of motion, I would not have interfered with the order below. Rule 1(8) of the Family Law Rules provides that where the Rules have not been followed properly, the court may deal with that failure by making any order it considers necessary for a just determination of the matter.
1(8) The court may deal with a failure to follow these rules, or a failure to obey an order in the case or a related case, by making any order that it considers necessary for a just determination of the matter, on any conditions that the court considers appropriate, including,
(a) an order for costs;
(b) an order dismissing a claim made by a party who has wilfully failed to follow the rules or obey the order.
[20] In my view, the wording of rule 1(8) makes it clear that a failure to comply with the Family Law Rules is an irregularity and does not render a proceeding or step or order taken in a proceeding, a nullity. As an irregularity, the court may deal with the failure by making any order it considers necessary. In the circumstances, I do not consider an order to be necessary. By bringing a cross-motion for the enforcement of the Agreement and responding to Mr. Linett’s motion, Ms. Linett consented to the matter proceeding by way of motion.
[21] In a related argument, the appellant also claims that by virtue of proceeding by way of motion (as opposed to application) she was denied the right to effectively challenge the respondent’s assertion that it was she who was responsible for the delay in completing the Agreement. Assuming that the appellant is correct in her assertion that an application affords a party greater procedural rights than does a motion, I would not give effect to this ground of appeal. The appellant brought a cross-motion in which she sought the same type of relief, namely, enforcement of the Agreement. The appellant never sought to cross-examine the respondent on his affidavit. She did not ask to be allowed to lead oral evidence nor did she request that the motion judge direct the trial of an issue. In the circumstances, she cannot now claim prejudice by virtue of not having been afforded such rights.
INTEREST
[22] The appellant contends that because the Agreement was silent on the matter of interest, it was “inappropriate” for the motion judge to award interest. She relies on Bell v. Bell (1998) Carswell BC 2195 (S.C.) as support for this position. In Bell v. Bell, the application judge declined to award interest, saying at para. 41 that it was inappropriate because there was no provision in the minutes of settlement for the respondent to receive interest on his cash portion of the settlement.
[23] I see no error in the motion judge’s order in respect of interest. She had the power to award interest pursuant to s. 128 of the Courts of Justice Act, R.S.O. 1990, c. C. 43. In addition to the fact that Bell v. Bell is not binding on the courts of this province, there are two distinctions that render the reasoning in that case inapplicable to the case at bar. First, the application judge in Bell v. Bell made no reference to statutory authority. Here, as previously mentioned, the motion judge’s authority to award interest flows from provincial legislation. Second, the circumstances of this case are very different from those in Bell v. Bell. In the latter case, the decision not to award interest was made in the context of an application to decide a number of contentious items that remained unresolved by the parties. In the case at bar, there were no unresolved matters. The closing date under the terms of the Agreement had come and gone. The motion judge found that the delay in transfer of assets was attributable to the appellant. The motion judge awarded interest as a means of addressing Mr. Linett’s claims regarding the cost of the delays. Ms. Linett had enjoyed the benefit of the Agreement in that she had sole and exclusive use of the matrimonial home and the Florida condominium and she alone reaped the benefit of the significant increase in value of those properties that occurred after the date of signing the Agreement. Mr. Linett, on the other hand, had not received the benefit of the Agreement as Ms. Linett refused to make the payments to Mr. Linett for those properties as required by the Agreement.
DISPOSITION
[24] Accordingly, I would dismiss the appeal with costs to the respondent fixed at $10,000, inclusive of the costs of the motion for leave to extend time fixed by Simmons J.A. at $2,000, disbursements and GST.
RELEASED: April 25, 2006 (“EEG”)
“E. E. Gillese J.A.”
“I agree R. A. Blair J.A.”
“I agree H. S. LaForme J.A.”