Court File and Parties

Court File No.: D72147/24 Date: November 10, 2015

Ontario Court of Justice

Re: Alexandra Pascal - Applicant And: Alexander Mostafev – Respondent

Before: Justice Roselyn Zisman

Counsel: Reide Kaiser, for the Applicant David Nuri, for the Respondent

Heard On: October 28, 2015

Endorsement on Motion

Introduction

[1] This is a motion by the Respondent, Alexander Mostafev ("the father") for an Order to change the default final order of January 29, 2015, pursuant to Rule 25(19) of the Family Law Rules ("FLR") to reduce his child support obligation. In the alternative, a motion to change or set aside the default order of January 29, 2015 pursuant to Rule 1(7) of the FLR and Rule 19.08 of the Rules of Civil Procedure ("RCP").

[2] The Applicant ("mother") requests that the motion be dismissed or that terms be imposed for the setting aside of the support provisions of the order that relate to financial disclosure. It is also submitted that the father has not disputed the terms in the default order for custody and ancillary orders and accordingly those terms should not in any event be set aside.

Background

[3] The parties were married on January 6, 2010 and separated in July 2013. They have one child, Edison Alexandrovitch Pascal born on June 1, 2011.

[4] The father only saw the child on a few occasions after the separation and has not seen the child at all since November 2013.

[5] The father deposes that he kept his whereabouts concealed because in the Fall of 2013 the mother's boyfriend threatened to harm him and his extended family if he ever came around the mother or child again. The father deposed that the person alleged that he had connections to Russian organized criminal organizations. As a result of the threat, he relocated to the province of Quebec and terminated all contact. The father deposes that he has resided in Quebec since 2013.

[6] The mother denies that anyone she knew ever threatened the father and that neither she nor anyone she knows has any connections to organized crime. She denies that she had a boyfriend in November 2013. The mother deposes that it is her belief that the father was hiding his whereabouts from her to avoid any child support obligations.

[7] The mother commenced an Application on December 2, 2014 for custody, child support and travel orders.

[8] On December 23, 2014 the mother swore an affidavit in support of a Form 14B motion for an order for substituted service. The mother deposed that a driver's license search revealed that the father's address was 139 Crooks Mill Crescent in Maple Ontario. The mother deposed that with the assistance of her friend Ms Gaydenko, she attempted several times to serve the father personally at that address. The mother also deposed that she was aware that this was the father's mother's address and that they visited there when the parties resided together and that the father and his mother were in contact with each other.

[9] The mother was granted an order to serve the father by ordinary mail at 139 Crooks Mill Crescent in Maple, Ontario. The affidavit of service confirms that the Respondent was served on December 24, 2014 by express post and a receipt from Canada Post confirms the documents were mailed.

[10] On January 29, 2015 the mother attended the first appearance court and filed a Form 23C affidavit for an uncontested trial. She requested that the father's income be attributed at $60,000 per year retroactive to the date of separation in July 2013. The mother deposed that the father worked as a truck driver during their relationship, he earned approximately $5,000 per month and since they did their tax returns together she was aware of his income. The mother also deposed that she had asked the father to support the child repeatedly and he paid nothing. Further, she deposed that after they separated he withdrew, from August to November 2013, the child tax benefit of $500 per month that was deposited to their joint account until she could change the deposits to her own account. The mother deposed that she was not able to start the court proceedings earlier as she was unaware of the father's address until the driver's licence search revealed his address. Further, she was initially hoping to resolve the issues without resorting to litigation.

[11] The mother deposed that the father contacted her in December 2013 when he asked to see the child for New Years and she agreed but he never followed through. He never called again to request access. However, they had some communication through Skype after this time as the father's car was registered in the mother's name for insurance purposes and as he was accumulating parking tickets she requested he change the registration. The father then deleted his contact information.

[12] The mother also deposed that she has been the child's primary parent, that the father has not sought contact with the child and in view of the fact that she has had no contact with the father since June 2014 that it would be impractical to attempt to obtain his consent to obtain the child's passport or his consent to travel with the child.

[13] On January 29, 2015 I granted a final order of custody to the mother, silent as to access to the father and permitting the mother to obtain a passport and travel with the child without the father's consent. I also ordered the father to pay child support of $546.00 per month as of July 1, 2013 based on an attributed income of $60,000.00.

[14] In support of this motion the father relies on his affidavit sworn June 30, 2015 and his affidavit of October 28, 2015 filed on the day of the motion and on the affidavit of his sister Victoria Gurshumov sworn August 29, 2015 and his financial statement sworn June 30, 2015.

[15] The mother relies on her previous affidavits filed in support of the uncontested order of January 29, 2015 and her affidavit sworn June 30, 2015.

[16] Both counsel filed facta with briefs of authorities.

Position of the Parties

[17] The father submits that had he been aware of the proceedings that he would have contested them as he has never earned $60,000 and that the mother has falsified his earnings. It is submitted that it is clear from his income tax returns and Notice of Assessments that he has now filed that his earnings in 2012 were only $12,000, in 2013 only $17,572 and in 2014 only $9,850. It is submitted that his child support obligation should be reduced to $63.00 per month.

[18] The father submits that he was unaware of the court proceedings on the basis that:

a. He kept his whereabouts concealed from the mother because of the threat made to harm him in the fall of 2013;

b. The address at which the mother served her materials is the home of his mother, Natalia Epshtain and he does not reside there; the "search" the mother conducted was not in Quebec;

c. He has not spoken to his mother for over a year and their relationship is not positive so that even if the documents had been served there it is unlikely that she would have alerted him;

d. His mother was not at her residence around the winter break when the documents were allegedly served as deposed in the affidavit of his sister;

e. He himself was overseas between the dates of December 25, 2014 to January 7, 2015 and he provided a copy of his airline ticket to Amsterdam and Belarus as corroboration; and

f. He only became aware of the court proceedings when his sister found correspondence from the Family Responsibility Office at his mother's home in April 2015.

Applicable Legal Principles

[19] The father has requested that the final default order be set aside pursuant to the provisions of the FLR or the RCP. Rule 25 (19) of the FLR permits a court to change an order in several circumstances including if the order was obtained by fraud, or if it was obtained in the absence of a party and such absence occurred because of reasons satisfactory to the court. The Rule states as follows:

Changing Order-Fraud, Mistake, Lack of Notice

(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.

[20] Some courts have interpreted this provision liberally to read "to change" to include or to mean "to set aside" and other courts have relied on the inherent jurisdiction of the court to control its own process recognizing the limitations of so doing in the Ontario Court of Justice as a statutory court. Other cases have relied on subrule 1(7) of the FLR that permits a court to refer to the Rules of Civil Procedure by analogy if the Family Law Rules do not cover a matter adequately.

[21] The Divisional Court in Diciaula v. Mastrogiacomo considered this issue in the context of a motion to set aside a final default order and stated at paragraph 11 as follows:

The Family Law Rules are comprehensive and carefully drafted. They are the result of much careful consideration, based upon input from many and varied interested parties, by the Family Law Rules Committee. The concept of setting aside orders or the registration thereof is not foreign to the Committee. Of the many examples where this power might be found in the rules, see Rule 14(6)(g) and Rule15(6)(a),(b),(c). It would be a disservice to the Family Law Rules Committee to suggest that the failure to include the words "set aside" in Rule 15(14) was a mere oversight which should be corrected by reading in those words. Rather it is far more likely that the omission was intentional, particularly if one recalls on whom the onus lies and the nature of the onus in seeking an order de novo as opposed to varying an existing order.

[22] The court further suggested that the motion judge could have resorted to applying the Rules of Civil Procedure by analogy to setting aside the default order.

[23] Applying this reasoning, the court can apply by analogy Rules 19.08, 38.11 and 59.06 (2) of the RCP. Those rules state as follows:

Setting aside a default judgment

19.08 (1) A judgment against a defendant who has been noted in default that is signed by the registrar or granted by the court on motion under rule 19.04 may be set aside or varied by the court on such terms as are just.

(2) A judgment against a defendant who has been noted in default that is obtained on a motion for judgment on the statement of claim under rule 19.05 or that is obtained after trial may be set aside or varied by a judge on such terms as are just.

(3) On setting aside a judgment under subrule (1) or (2) the court or judge may also set aside the noting of default under rule 19.03.

Setting aside judgment on Application made without notice

38.11 (1) A party or other person who is affected by a judgment on an application made without notice or who fails to appear at the hearing of an application through accident, mistake or insufficient notice may move to set aside or vary the judgment, by a notice of motion that is served forthwith after the judgment comes to the person's attention and names the first available hearing date that is at least three days after service of the notice of motion;

38.11 (2) A motion under subrule (1) may be made,

(a) at any place, to the judge who granted the judgment;

(b) at a place determined in accordance with rule 37.03 (place of hearing of motions), to any other judge;

(c) to the Divisional Court, in the case of a judgment of that court.

(3) On a motion under subrule (1), the judgment may be set aside or varied on such terms as are just.

Amending, Setting Aside or Varying Order

Amending

59.06 (1) An order that contains an error arising from an accidental slip or omission or requires amendment in any particular on which the court did not adjudicate may be amended on a motion in the proceeding.

Setting Aside or Varying

(2) A party who seeks to,

(a) have an order set aside or varied on the ground of fraud or of facts arising or discovered after it was made;

(b) suspend the operation of an order;

(c) carry an order into operation; or

(d) obtain other relief than that originally awarded, may make a motion in the proceeding for the relief claimed.

[24] In the case of Boivin v. Smith Justice Bondy thoroughly reviewed the case law relating to setting aside an order on the grounds of fraud as follows:

1. The fraud alleged must be proved on a reasonable balance of probability. The more serious the fraud, the more cogent the evidence required.

2. The fraud must be material, going to the foundation of the case.

3. The evidence of fraud must not have been known at the time of trial by the party seeking to rely on it.

4. The unsuccessful trial party is exposed to a test of due or reasonable diligence.

5. The tests are more stringent if the fraud is of a non-party and the successful party at trial is not connected with the fraud alleged.

6. The due diligence test is objective. The questions are what the party knew, and what the party ought to have known.

7. Delay will defeat a motion to set aside a trial judgment under rule 59.06.

8. Relief under rule 59.06 is discretionary. The conduct of the moving party is relevant.

9. The central question is as stated in Wentworth v. Rogers (No. 5) at 538 "it must be shown by the party asserting that a judgment was procured by fraud, that there has been a new discovery of something material, in the sense that fresh facts have been found, which, by themselves or in combination with previously known facts, would provide a reason for setting aside the Judgment."

[25] With respect to setting aside a final order pursuant to the RCP, Justice Sherr in the case of P.M. and S.M. reviewed the case law and set out the following factors for the court to consider in determining whether or not to set aside a default order or judgement:

a) The moving party must move promptly after learning of the order to have it set aside.

b) The moving party must provide an adequate explanation for the default.

c) The moving party must establish an arguable case on the merits.

d) The moving party must act in good faith.

e) The court should consider the prejudice that may be suffered by the responding parties to the motion.

f) The ultimate determination is whether the interests of justice favour setting aside the judgment.

[26] I find that it is also appropriate for the court to consider Rule 2.02 that promotes the overall policy objectives of the RCP "to secure the just, most expeditious and least expensive determination of every civil proceedings on its merits" as set out in subrule 1.04 (1) of the RCP. This objective is comparable to the primary objective set out in Rule 2 of the FLR to deal with cases justly.

Analysis

a) Should the order be changed or set aside for fraud?

[27] The father submits that the default order should be either changed pursuant to FLR 25 (19) or set aside pursuant to Rule 19.08 of the RCP on the basis that there was fraud, there was inadequate notice or that there would be a grave miscarriage of justice if the order for child support remained unchanged.

[28] As outlined previously, the case law is clear that there is a stringent test for changing an order pursuant to FLR 25 (19) based on fraud.

[29] I find there is no basis to change or set aside the order for fraud.

[30] The mother acted in good faith in assuming the father resided in Ontario. The father still had a valid Ontario driver's licence as of November 2014 and the fact that as of April 16, 2014 he obtained a Quebec licence is irrelevant to the mother's honestly held belief that he resided In Ontario.

[31] The mother acted reasonably in assuming that if the court documents were sent to the father's mother's address that they would come to his attention. When the parties resided together they visited the paternal grandmother and the father and his mother had a good relationship and therefore there would be no reason for the mother to assume they were no longer speaking. The father deposed that he has not spoken to his mother for over a year because she is critical of the mother but since the father and mother separated and he is also extremely critical of the mother his reasoning makes no common sense. Further, if he has no contact with his mother it makes no common sense that he would continue to use her address on his income tax returns and his driver's license as important government documents would then be sent to his mother's home.

[32] If in fact the father was no longer on good terms with his mother such that he believed that she would either not advise him of mail she received for him or forward his mail to him then the father should have changed his address on his driver's licence or his income tax return.

[33] Although the father's sister has sworn an affidavit that the paternal grandmother was out of the country during the Christmas holidays the court date was on January 29, 2015. I find that there is no credible evidence that the paternal grandmother would not have either advised or forwarded the documents to the father. The father's sister's affidavit does not clarify how often she went to her mother's home or what happened to the mail while her mother was away.

[34] I therefore find that the father had adequate notice of the court proceedings and it was only when the Family Responsibility Office notified him, at his mother's address, that they would be taking steps to enforce the Order that he came forward.

[35] I also do not find the mother acted fraudulently in alleging that she believed the father earned $60,000. Counsel for the mother concedes that the mother was mistaken in claiming that since the parties prepared their tax returns together that she was aware of the father's income as the father's tax returns only reveal minimum amounts of income. The implication of this statement by the mother is that the father's income tax return would have indicated income of about $60,000. However, the mother also deposes that the father frequently worked for cash and it was usual that he would earn at least $1,000 a week but that he was not always truthful or open about what he earned. Although the mother's evidence could have been stronger on this issue I do not find that there was a deliberate falsehood. The father has not produced sufficient financial evidence as to his earnings and seems content to rely on his Notices of Assessment and summaries of his income tax returns without explaining how he can support his lifestyle on the minimum income that he alleges he is making.

b) Should the default order be set aside pursuant to the Rules of Civil Procedure?

[36] In considering whether or not to set aside the order on other grounds, I have considered the following factors:

a) The father has acted in a timely manner to bring his motion;

b) The father's materials do not disclose a viable defence regarding custody which he does not contest. The father's materials also do not raise a viable defence as to access as he deposes that although he would like to exercise access he is not able to do so as he states that because of the alleged threat of harm he would not feel safe exercising access.

c) With respect to the issue of the father's income, the father's position that he should only pay child support of $63.00 per month based on his 2013 income of $13,200 is not credible. The father provided bank statements that show no car expenses or meals which would be expected of a truck driver. He deposes that he is only "on call" but provided no substantiation and although he admits that he works for cash he made no attempts to quantify the amount. He has not provided complete copies of his income tax returns so that his statement of business income and expenses was not provided. He has not explained how he could afford a holiday to Belarus for two weeks on his stated income. Despite the fact that he deposes he moved to Quebec, his bank statements show withdrawals from ATM machines in the vicinity of Maple where his mother resides. The father continued to use his mother's address to file his income taxes for 2014, filed his return in Ontario and not Quebec and claimed an Ontario energy and property tax credit and as of November 6, 2014 registered his address as 139 Crooks Mill Crescent in Maple Ontario. The father provided no supporting documentation, T-4s or business records with respect to his business. He provided no credible evidence as to why he would be continuing to work for less than minimum wages. In submissions when pressed by the court as to the father's lack of candour with respect to his actual income, counsel submitted that the father would be prepared to have $35,000 of income imputed to him but there was no evidentiary basis for this submission. The onus is on the father to come to court with clean hands and he failed to do so;

d) Based on the material before the court, I find that there would not have been a different outcome than the one ordered. It is inconceivable that the court would accept that the father's income was as stated on his income tax returns. The father's materials lack credibility. Although he alleges that the mother's friend made such a serious threat that he fled the jurisdiction and moved to Quebec, he never reported the alleged threat to the police. If in fact he is residing in Quebec then he filed false income tax returns with respect to his address and claimed credits to which he was not entitled. He will not reveal his current address again alleging that he is fearful of his safety without any basis whatsoever. He provides no reason for the fact that he has not paid an iota of child support;

e) I do not find that the father is acting in good faith. I find that he has attempted to avoid paying child support and that is the reason that he has concocted an alleged threat against himself to justify disappearing. Either he is using false and misleading information on his driver's license and income tax returns regarding his whereabouts or in fact he is residing at his mother's home, as either scenario is possible based on the father's refusal to provide any definitive proof as to his residence; and

f) I do not find that the interests of justice require the outstanding order to be set aside. The child support ordered is within the realm of what other truck drivers are capable of earning. If this level of income was not consistent with the earning capacity of truck drivers the onus was on the father to prove otherwise. Given the nature of the financial disclosure the father produced on this motion, it is clear there would be a drawn out court proceeding in order to obtain full and complete financial disclosure and that income would inevitable be imputed to the father. It would be highly prejudicial to the mother to set aside the default order and for her to be required to spend further time, expense and time in dealing with this case when the result would be a foregone conclusion.

Conclusion

[37] The father's motion to set aside or change the order of January 29, 2015 is dismissed.

[38] If the mother is seeking costs short written cost submissions not to exceed 3 pages along with a Bill of Costs to be submitted within 14 days and any response, not to exceed 3 pages, to be submitted within 14 days after being served with the Applicant's cost submission.

[39] I want to thank both counsel for their helpful presentation of their respective cases.

Justice Roselyn Zisman

Date: November 10, 2015