Owers v. Owers, 2009 ONCA 296

CITATION: Owers v. Owers, 2009 ONCA 296

DATE: 20090409

DOCKET: C49481

COURT OF APPEAL FOR ONTARIO

Feldman, Gillese and Rouleau JJ.A.

BETWEEN

Carol Ann Owers

Applicant (Appellant)

and

Bruce Alfred Owers

Respondent (Respondent)

Philip M. Epstein, Q.C. and Michael Zalev, for the appellant

Bryan R.G. Smith, for the respondent

Heard: March 27, 2009

On appeal from the order of Justice P.B. Hambly of the Superior Court of Justice, dated September 16, 2008, and reported at 2008 CanLII 47479 (ON SC), 58 R.F.L. (6th) 209.

ENDORSEMENT

[1] On September 8, 2008, Hambly J. heard two motions in this family law proceeding. Carol Ann Owers (“Ms. Owers”) brought a motion in which she asked the court to implement the order of Taylor J. dated August 16, 2007 (the “Justice Taylor order”). The Justice Taylor order was based on a consent to mediation-arbitration agreement, dated August 13, 2007, that the parties had entered into through their counsel.

[2] For the purposes of this appeal, para. 3 of the Justice Taylor order is the key provision. It requires that all aspects of the matters in dispute between the parties, except their divorce, are to be resolved by means of binding mediation-arbitration. Paragraph 3 reads as follows:

This case shall be removed from the Ontario Superior Court of Justice and sent to binding mediation-arbitration with Terrence W. Caskie as (binding) Mediator-Arbitrator, with respect to all outstanding issues between the parties (including division of property, the matrimonial home in Chapala Mexico, equalization, and the costs of the mediation-arbitration). The Mediator-Arbitrator shall have exclusive jurisdiction over the Chapala, Mexico home and contents (ownership, possession and sale). The costs of the Mediation-Arbitration shall be funded equally by the Husband and Wife to its conclusion, subject to adjustment or re-allocation by the Mediator-Arbitrator. Any award or interim award of the Mediator-Arbitrator shall be made an order of this Court, on consent, upon Form 14B Motion by either party.

[3] In the other motion, Bruce Alfred Owers (“Dr. Owers”) sought a stay of all proceedings in Ontario, including the mediation-arbitration. Dr. Owers brought the motion, in part, because of delays in proceeding with the mediation-arbitration, which he saw as totally attributable to Ms. Owers and her lawyer (not Mr. Epstein). Given his age (72), health problems and other personal considerations, he wanted the matters in dispute to be resolved expeditiously and effectively. He was of the view that this could be accomplished only through the proceedings that Ms. Owers had commenced in Mexico.

[4] By order dated September 16, 2008, the motions judge dismissed Ms. Owers’ motion, granted Dr. Owers’ motion and ordered a stay of these proceedings (the “Order”).[^1] In ordering a stay of the proceedings in Ontario, the motions judge stated that there was no need to set aside the Justice Taylor order “since the application in which it was granted is stayed”.

[5] Ms. Owers appeals.

[6] For the reasons that follow, we would allow the appeal and order that the matter proceed to mediation-arbitration in accordance with the Justice Taylor order.

[7] No purpose can be served by setting out the tortured legal history of these proceedings, which include numerous forays into the Mexican and Ontario courts. In our view, the starting point for resolving this appeal is whether the motions judge erred by failing to deal with the Justice Taylor order before considering the request for a stay of proceedings here in Ontario.

[8] In our view, he did so err. As a court order, the Justice Taylor order stands and is binding, unless it is set aside or lawfully quashed: see Wilson v. R., 1983 CanLII 35 (SCC), [1983] 2 S.C.R. 594, at 599. Granting a stay of these proceedings without first determining whether the Justice Taylor order should be set aside amounted to an impermissible collateral attack on that order.

[9] Thus, the question becomes: ought the Justice Taylor order to be set aside?

[10] The primary argument advanced for setting it aside is that the consent on which it is based was signed, not by the parties, but by counsel for the parties. This, it is argued, contravenes the requirements of the Family Law Act, R.S.O. 1990, c. F.3 (the “FLA”). Amendments to the FLA in 2006 are such that when read with the Arbitration Act, 1991, S.O. 1991, c. 17, a “family arbitration agreement” must now be in writing, signed by the parties and witnessed, in order to be enforceable.

[11] We would not give effect to this argument. In Geropoulos v. Geropoulos (1982), 1982 CanLII 2020 (ON CA), 35 O.R. (2d) 763 (C.A.), this court considered a situation very similar to that of the present case. At the time that Geropoulos was decided, s. 54(1) of the Family Law Reform Act, R.S.O. 1980, c. 152, provided that a domestic contract was “void unless made in writing and signed by the persons to be bound”. The settlement agreement in question had been executed by counsel for the parties, rather than the parties themselves.

[12] Robins J.A., writing on behalf of the court, held that settlement agreements concluded by counsel which resolved outstanding claims in pending litigation were beyond the purview of s. 54(1). Accordingly, he found the settlement agreement to be binding. His reasoning can be found at p. 769:

In my opinion, the section plainly is not aimed at or intended to apply to authorized settlement agreements like the present, made with legal advice during the pendency of court proceedings which, to be effective, require the intervention of the court. Such agreements derive their effect from an act of the court; their authenticity is assured by the court’s supervision and control over them; and ample protection is afforded the parties to these agreements, wholly independent of the section. The court’s jurisdiction to enforce settlements or refuse to do so, notwithstanding any agreement between solicitors or counsel, is well established …

No purpose is to be served in compelling agreements of this kind to comply with the formalities of s. 54(1) and, if not, permitting parties to withdraw at will from compromises properly entered into by their legal representatives before trial of their action or … compromises concluded even during the trial of the action. It may well be that, given the nature of matrimonial litigation, prudence would dictate that lawyers ensure that settlement agreements are signed by the parties personally and witnessed. But I cannot construe the section as requiring that an otherwise valid compromise of an action must be rendered void and defeated on this ground alone, nor do I believe that the legislation could have contemplated or intended that result.

[13] In our view, the reasoning in Geropoulos is equally applicable in the present case. No purpose would be served by interpreting the legislation in a way that would permit parties to withdraw at will from agreements properly entered into by their legal representatives during the course of litigation.

[14] Having said that, we understand that s. 59.6(1) of the FLA imposes additional requirements related to the enforceability of family arbitration awards and the agreements on which they are based. Under s. 59.6(1)(a), a family arbitration agreement on which an award is based must be made in writing and must comply with regulations made under the Arbitration Act, supra. O.Reg. 134/07, enacted under the Arbitration Act, supra, provides certain requirements for family arbitration agreements and mediation-arbitration agreements made on or after September 1, 2007. (It will be noted that the mediation-arbitration agreement and the Justice Taylor order were made prior to that date.) Nothing in these reasons is intended to speak to whether the signatures of counsel alone are sufficient to render enforceable family arbitration agreements made after that date.

[15] Counsel for Dr. Owers offers a second reason for setting aside the Justice Taylor order. That order was based on the consent to mediation-arbitration agreement and the consent was entered into without disclosure by Ms. Owers that she had commenced family law proceedings in Mexico.

[16] We would decline to set aside the Justice Taylor order on this basis. Should Dr. Owers wish to pursue the matter, he can raise it with the mediator-arbitrator, Mr. Caskie, in whom the parties have entrusted all substantive and procedural matters necessary to resolve to their dispute (except for the divorce).

[17] To the extent that Dr. Owers asks the court to set aside the Justice Taylor order because of the delays caused by Ms. Owers and/or her counsel to the mediation-arbitration process, we decline to do so for two reasons. The first reason is that Mr. Epstein, counsel for Ms. Owers on this appeal, gave two undertakings to the court should the appeal be allowed. The first such undertaking is that Ms. Owers would, within thirty days, file with the Mexican courts a consent stating that she agrees to the filing with and enforcement, through the Mexican courts, of any court order flowing from the mediation-arbitration process. He candidly stated that the appeal should be dismissed should the consent not be filed within that time. The second undertaking given by appeal counsel for Ms. Owers is that no further action would be taken in the Mexican proceedings.

[18] The second reason for not giving effect to this ground of appeal is that Mr. Caskie has the ability to deal with a lack of co-operation by either party. We are confident that he can handle any attempts to further delay the mediation-arbitration.

[19] Having disposed of the appeal on the basis of the validity of the Justice Taylor order, it becomes unnecessary to decide the other issues raised by the parties.

DISPOSITION

[20] Accordingly, subject to para. 21 below, the appeal is allowed and paras. 1 and 2 of the Order are set aside. The companion costs order dated October 30, 2008, in which costs of the motions were awarded to Dr. Owers, is set aside as well. Ms. Owers’ motion to implement the Justice Taylor order is granted. We direct Mr. Caskie to proceed with the mediation-arbitration forthwith and order the parties to take all steps necessary to facilitate that process. Apparently there is or may be some disagreement about what regulations govern the mediation-arbitration. In the circumstances of this case, we are of the view that Mr. Caskie is bound by the regulations that governed arbitrations at the time he was appointed mediator-arbitrator.

[21] Our disposition of this appeal is predicated, in part, on the undertakings given by appeal counsel for Ms. Owers, described above in para. 17. This panel of the court will remain seized of this matter and if the undertaking to file a consent with the Mexican courts is not complied with, Dr. Owers is at liberty to return and ask that the appeal be dismissed.

[22] Costs of the appeal are ordered in favour of Ms. Owers, fixed in the amount of $10,000, inclusive of disbursements and G.S.T. If counsel are unable to agree on costs of the motions below, they may make brief written submissions on the matter, such submissions not to exceed three pages in length, which are to be filed with the court within thirty days of the date of release of these reasons. The time frame for filing costs submissions has been chosen to coincide with the undertaking to file a consent with the Mexican courts.

“K. Feldman J.A.”

“E.E. Gillese J.A.”

“Paul Rouleau J.A.”

[^1]: A different aspect of Ms. Owers’ motion was dealt with in para. 3 of the Order. No appeal is taken from that.