Court of Appeal for Ontario
Date: 2017-05-31
Docket: M47723 and M47795 (C62911)
Epstein J.A. (In Chambers)
Between
Yakov Eitan Berman Appellant
and
Alissia Berman Respondent
Counsel
Kristy Maurina, for the appellant
Dani Frodis, for the respondent
Heard: May 3, 2017
On Appeal
On appeal from the judgment of Justice L.E. Fryer of the Superior Court of Justice, dated June 16, 2016, with reasons reported at 2016 ONSC 6249.
Reasons for Decision
[1] There were two motions in front of me in this family law dispute. In the underlying appeal, the appellant/father seeks to vary the trial judge's decision in relation to custody and access, equalization and child support, as well as costs. Against that background, the father moves for an order extending the time to perfect the appeal. At the same time, the respondent/mother seeks an order for security for costs for both the appeal and the unsecured costs awarded at trial.
[2] For the reasons that follow, I grant the father's motion and award an extension of time to perfect the appeal. I dismiss the mother's motion for security for costs.
Facts
[3] The parties were married on July 31, 2011. Their daughter Eliana was born in February 2013. They separated on December 20, 2013. The matrimonial home was sold in February 2014, and the proceeds placed in trust. In July 2014, Rogers J. ordered that Eliana would reside primarily with the mother, but that the father would have parenting time every Monday and Wednesday from 4 p.m. to 7 p.m., and every second weekend from Friday at 4 p.m. to Sunday at 5 p.m. This schedule remained in place until the trial.
[4] The mother is a dental hygienist. She left work briefly following the separation, but returned to working full time in October of 2014. For many years the father worked selling cars. During the marriage, the father left his position at a used car dealership, and decided to start a custom kitchen business. This business was not a success, and was wound up within a year. The father initially declined to return to work following the separation. Around October 2015, the father returned to selling cars, although the question of whether he was underemployed was a matter of dispute at trial.
Decision Below
[5] The trial judge first dealt with custody. The mother sought sole custody in her favour. The father initially sought joint custody, but changed his position to sole custody in his favour during the course of the trial. The trial judge held that joint custody would not be appropriate, as the parties lacked a significant history of effective cooperation. An order for sole custody was necessary to ensure that decisions could be made for Eliana in a timely and effective way. Based on the evidence she had heard, the trial judge determined that it was in Eliana's best interests for the mother to have sole custody. The mother had shown herself to be, for the most part, child-focussed, and prepared to involve the father in the decision-making process.
[6] The trial judge next turned to parenting time. The father sought shared parenting, while the mother proposed that Eliana reside in her primary care, with the father's having weekly access. The trial judge noted that while the mother worked regular day-time hours, the father often had to work evenings and weekends. Eliana had been in the primary care of the mother since birth, and it was important for her to have stability and routine. Accordingly, a shared custody regime would not be in Eliana's best interests at this time. The trial judge ordered Eliana to remain in the primary care of the mother, however with weekly overnight time with the father, as well as every second weekend.
[7] The trial judge then dealt with child support. The father provided highly inconsistent evidence as to his income, and failed to produce timely disclosure, making it impossible to reach a determination of his income as required by the Federal Child Support Guidelines, S.O.R./97-175 (the "FCSG"). Accordingly, the trial judge was required to impute an appropriate income to the father, pursuant to s. 19 of the FCSG. The father took the position that his annual income was $40,000, the amount by which he had been calculating his child support obligations since separation.
[8] The trial judge held that this was a reasonable income for 2014, as had the father re-entered the car sales industry in that year he would have required time to re-build his sales. However, the father's position that he was still only capable of earning $40,000 was not reasonable. The father had a track record as a successful car salesman, earning more than $100,000 in some years. He should have obtained employment in the car sales field immediately after separation, rather than delaying. Accordingly, the trial judge imputed an income of $75,000 to the father for each year since 2014. Pursuant to the FCSG, the father was ordered to pay $682 in monthly child support, and an additional $6,014 in arrears.
[9] Finally the trial judge turned to property equalization. The father claimed a $120,000 interest on the date of marriage in the car dealership he worked for at that time. The trial judge found that the evidence only supported a $46,000 interest. The trial judge also found there to be no evidence to support the father's claim of having $50,000 in cash at the date of marriage. He claimed to owe significant money to various friends at the date of marriage, but did not call these friends to testify. The evidence only supported the father's having $25,000 in debt to his friends at the time of marriage. Accordingly, the mother was ordered to make an equalization payment of $44,569.26 to the father. The mother sought an unequal division of net family property, pursuant to s. 5(6) of the Family Law Act, R.S.O. 1990, c. F.3. However, these facts did not reach the extremely high bar of unconscionability required for such an order.
[10] In a later costs decision, the trial judge awarded the mother costs of $132,000 plus HST. The Family Responsibility Office ("FRO") was ordered to collect $30,000 plus HST, as an incident of child support. This cost award was stayed pending appeal.
Father's Motion
[11] The trial judgment was released on June 16, 2016. The father sought an extension of time in which to perfect the appeal. The delay was a modest one, and was explained by the fact that the issued and entered trial and cost orders had not yet been received from the trial court. It is clear that this motion should have gone on consent. In front of me, counsel for the mother agreed that there was no principled basis on which to oppose the motion. Accordingly, the extension of time is granted.
Mother's Motion
[12] The mother sought security for costs for the appeal in the amount of $30,000, as well as security for the trial costs in the amount of $30,841.35.
[13] It is agreed by both parties that a significant portion of the $149,100 in costs awarded at trial (after HST) is already secured. The amount of $33,900 is enforceable through the FRO as an incident of child support. There is $46,443.97 belonging to the father remaining in trust from the sale of the matrimonial home. And the equalization payment ordered at trial remains outstanding and can be off-set. Accordingly, more than 70 percent of the costs awarded at trial are secured.
[14] The court's authority to order security for costs flows from r. 61.06 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. The mother relies on subsection (1)(a), which provides that:
(1) In an appeal where it appears that,
(a) there is good reason to believe that the appeal is frivolous and vexatious and that the appellant has insufficient assets in Ontario to pay the costs of the appeal;
a judge of the appellate court, on motion by the respondent, may make such order for security for costs of the proceeding and of the appeal as is just.
[15] To award security for costs under r. 61.06(1)(a), there must be good reason to believe both that the appeal is frivolous and vexatious, and that the appellant has insufficient assets in Ontario to pay the costs of the appeal. However, even if I were to find that both requirements are satisfied, I retain the discretion to refuse to order security for costs. The overarching principle to be applied is the justness of the order sought: Pickard v. London Police Services Board, 2010 ONCA 643, 268 O.A.C. 153 (in Chambers), at paras. 17-18. The terms "frivolous and vexatious" were defined in Pickard, at para. 19. According to Watt J.A., "a frivolous appeal is one readily recognizable as devoid of merit, as one having little prospect of success…A vexatious appeal is one taken to annoy or embarrass the opposite party, sometimes fuelled by the hope of financial recovery to relieve the respondent's aggravation."
[16] In my view, the father faces a steep uphill battle in this appeal. Especially on the equalization and child support grounds, much of what he challenges are factual findings or findings of mixed fact and law, which cannot be overturned absent palpable and overriding errors by the trial judge. However, I am not prepared to say that it appears that there is good reason to believe that the entirety of the appeal is frivolous and vexatious.
[17] In addition, the record does not support a finding that there is good reason to believe that the father "has insufficient assets in Ontario to pay the costs of the appeal".
[18] The father, in his affidavit, swears that he has the ability to pay the costs of the appeal. The record supports this position. The trial judge imputed father's income as being $75,000 a year. As the trial judge noted, at paras. 105-106, "[the father] has a track record as a successful car salesman earning in excess of $100,000 per year… [the father] is currently employed in this field. He is in good health, and there was no evidence to suggest that he could not work full time and quickly return to his former level of income". I note that at this point in time the father has been back selling cars for several years.
[19] I also note that payment of a percentage of the costs of the appeal can be secured through the Family Responsibility Office as an incident of child support, as occurred with the costs at trial.
[20] An order for security for costs on appeal pursuant to r. 61.06(1)(a) is not a routine order. Discretion to make such an order exists only where the respondent (here, the mother) establishes both of the criteria set out in the rule. While this is a close call, I am not satisfied that either part of the test has been met. The mother's motion for security for costs is therefore dismissed.
Result
[21] The father's motion for an extension of time to perfect the appeal is granted. In the light of my conclusion that the father should not have been put to the expense of bringing a motion for an extension of time, I order the mother to pay the father's costs of this motion in the amount of $1,000 including interest and HST.
[22] The mother's motion for security for costs is dismissed. The mother is ordered to pay the father's costs of the motion in the amount of $2,000 including interest and HST.