ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: FS-11-0061
DATE: 2012-01-10

B E T W E E N:

NORMAN WILLIAM BAKER,

Not represented

Applicant

• and -

LESLIE MICHELLE CSORI,

Not represented

Respondent

HEARD: January 5, 2012, at Thunder Bay, Ontario

Mr. Justice D. C. Shaw

Reasons On Motions

[ 1 ] Ms. Csori brings two motions, dated July 6, 2011, and December 22, 2011, respectively, for an order incorporating the terms of an offer to settle made on behalf of Mr. Baker. Mr. Baker brings a motion, dated December 13, 2011, for summary judgment, dismissing Ms. Csori’s claim for equalization of their net family property.

[ 2 ] Both parties are unrepresented. Until September 15, 2011, Mr. Baker was represented by Mr. Timothy Henderson.

[ 3 ] The property issue in dispute concerns the parties’ pensions.

[ 4 ] On May 12, 2011, Mr. Henderson, on behalf of Mr. Baker, sent Ms. Csori an e-mail in which he stated:

“This shall confirm our discussion at the Case Conference of this matter on May 9 th , 2011. In an effort to resolve this matter, as discussed, Mr. Baker is prepared to settle on the basis of the following:

(1) You will receive 50% of the value of Mr. Baker’s contributions to his HOOPP pension, between the dates of November 4 th , 2000 (Date of Marriage) and February 26 th , 2007 (Date of Separation), less 50% of the value of your contributions to your pension with OLG for the same dates. This will be achieved by a payout and-or rollover form the pension, to be decided in Mr. Baker’s sole discretion;

(2) You will then immediately withdraw your Answer so that Mr. Baker can complete the divorce.

(3) This offer may be accepted without costs if accepted on or before 5:00 pm on May 24 th , 2011 .

As discussed at the Case Conference, this offer is only open for acceptance for until May 24 th , 2011 (a period of 15 days from the Case Conference), at which time it is revoked and of no further force or effect. This is due to the fact that Mr. Baker will then need to incur further legal cost in preparing court documents to respond to your Claim by Respondent, which he has to have completed by June 9 th , 2011….”

[ 5 ] On May 20, 10221, Ms. Csori sent an e-mail to Mr. Henderson in which she said she “… would like to look over the papers before I sign them.” When Mr. Henderson’s office asked by e-mail about what papers Ms. Csori was referring to, Ms. Csori sent a second e-mail on May 20, 2011 stating, “The agreement about how much for pension and how it would be paid out and if it would be taxed before I received it.”

[ 6 ] On May 24, 2011, Ms. Csori spoke by telephone with Mr. Henderson’s assistant and was told that Mr. Henderson would be contacting Ms. Csori within the next couple of days and “… you will be given an extension of time to respond to the proposal (do not worry about the deadline of 5:00 pm today to respond).”

[ 7 ] Following this, there was an exchange of e-mails and telephone conversations between Mr. Henderson’s office and Ms. Csori. The thrust of the exchange was that Ms. Csori wanted to see Minutes of Settlement so that she could review with a lawyer what it was she was being asked to sign, while Mr. Henderson wanted written confirmation from Ms. Csori that she was accepting Mr. Baker’s settlement proposal before he went to the time and expense of drafting Minutes of Settlement.

[ 8 ] On June 14, 2011, Mr. Henderson sent an e-mail to Ms. Csori which stated:

“Further to your e-mail to Evelyn this afternoon, I will try to set out the two options that we discussed with respect to Norm’s pension. Any division of pension must be done in accordance with legislation governing such. Some of this is set out in the Pension Statement from HOOPP which we sent to you this morning.

An “if and when” pension is the type described on page 2 of the HOOPP Statement. You will not receive benefits until Norm’s pension is “in pay” (i.e. he retires) and you would not get a one-time lump sum payout; it would be a (likely) small monthly amount.

The second option I mentioned would only become possible IF Bill 133 comes into force as law with the necessary Regulations and IF the legislation applies to your situation and Norm’s pension. We could state that if both parties are agreeable and Bill 133 becomes an option, you could resolve the matter by that method at any time.

If you require more information, please advise. If you consult a lawyer about this, you may also have your lawyer contact me.”

[ 9 ] On June 14, 20911, Ms. Csori e-mailed Mr. Henderson to say that she had an appointment to see a lawyer on Monday and asked if she could have until Tuesday to respond. Mr. Henderson replied by e-mail on June 15, 2011 saying “That will be satisfactory, provided that you have your response to me no later than Tuesday, June 21, 2011.”

[ 10 ] On June 20, 2011, Ms. Csori sent an e-mail to Mr. Henderson confirming that she was prepared to sign Minutes of Settlement but that she needed to review the document with a lawyer before signing. She advised that the appointment she had with a lawyer had to be rescheduled and that she would advise Mr. Henderson of the timeline she needed once she was provided with the Minutes of Settlement.

[ 11 ] On June 22, Mr. Henderson sent an e-mail to Ms. Csori in which he stated:

“(1) With respect to the Minutes of Settlement, if we go with an “if and when” pension division (i.e. the first option set out in my e-mail correspondence of June 14 th ), we will need to have the wording approved by HOOPP, to ensure that it will properly operate in the future when it is required (at the time of Norm’s retirement). Before we got to the time and expense of going through all of this (i.e. both parties agreeing on wording for Minutes of Settlement, then sending that wording to HOOPP and waiting for their response), we need to know that the terms of settlement have been accepted by you (subject to the drafting of mutually acceptable Minutes of Settlement – which means you must approve the way it is ultimately worded prior to your signing of any documents). The terms of settlement were set out in my e-mail correspondence to you on June 14 th , 2011 (at 4:25pm). I basically need to know that you agree to resolve this matter on a full and final basis as follows:

(a) an “if and when” division of the portion of Norm’s pension which accrued from Date of Marriage to Date of Separation (as per Statement from HOOPP, dated May 20, 2011 and my e-mail of June 14 th ) with the option of later resolving this under Bill 133, if available and both parties agree- this would be a full and final settlement of all claims of both parties as to property issues, all claims of both parties as to equalization of Net Family Property, and all claims of both parties as to any other issues;

(b) your Answer will be withdrawn immediately once both parties sign the Minutes of Settlement; and

(c) Norm will then complete the divorce.”

[ 12 ] There was a further exchange of e-mails and telephone conversations between Ms. Csori and Mr. Henderson. Ms. Csori wanted to see draft Minutes of Settlement prepared by Mr. Henderson, but Mr. Henderson wanted to have Ms. Csori confirm in writing that she accepted the settlement before he went to the trouble of preparing Minutes of Settlement. This issue was never resolved. Minutes of Settlement were not drafted.

[ 13 ] In my view, although it is clear that Mr. Baker made an offer to settle in Mr. Henderson’s e-mail of May 12, 2011 to Ms. Csori, that offer to settle was not accepted by Ms. Csori. Also, in my view, the proposals to resolve the pension issue by way of an “if and when” pension division or by way of a division under Bill 133, referred to in the June 14, 2011 and June 22, 2011, e-mails from Mr. Henderson, were not accepted by Ms. Csori. The proposals in those e-mails were quite different than the proposal contained in the May 12, 2011 e-mail from Mr. Henderson. These various methods of settling, which were under discussion, indicate to me that the parties never did come to a meeting of the minds on how to resolve the pension issue, whether it was to be by way of a 50% division of Mr. Baker’s contributions to his plan after subtracting 50% of the contributions that Ms. Csori had made to her plan, or by way of an “if and when” division, or by way of a division under Bill 133. Although the parties certainly discussed the possible resolution of the pension issue, there was no conclusion of an unambiguous, binding settlement. I cannot say, by looking at all the discussions and e-mails referred to in Ms. Csori’s affidavits, including the key discussions and e-mails set out in these Reasons, that the parties reached an agreement. The proposed Minutes of Settlement were essential to the formation of a binding contract. Without a binding contract, there was no settlement.

[ 14 ] Mr. Baker’s motion concerns the issue of what effect his bankruptcy has on Ms. Csori’s equalization claim.

[ 15 ] The parties were married on November 4, 2000. They separated in 2007. In 2008, Mr. Baker made an assignment in bankruptcy. He was subsequently discharged.

[ 16 ] This issue is conclusively determined by the Supreme Court of Canada’s decision in Schreyer v. Schreyer, 2011 SCC 35 (S.C.C.) and by the Ontario Court of Appeal’s decision in Thibodeau v. Thibodeau, 2011 ONCA 110 (C.A.).

[ 17 ] In Ontario, the property of spouses who have separated is addressed by the equalization model. Family property is valued and there is an accounting to determine the net family property of each spouse. The net family property is divided equally. The valuation and division gives rise to a debtor-creditor relationship between the spouses. If the debtor spouse becomes a bankrupt, the spouse to whom the equalization payment is owed has a claim that is provable in bankruptcy under the Bankruptcy and Insolvency Act (“ BIA ”).

[ 18 ] The effect of the BIA on an equalization claim is set out by the Supreme Court of Canada, in Shreyer , expressly following the comments of Blair J.A. in Thibodeau :

“ 20 As a consequence, the interpretation of the BIA requires the acceptance of the principle that every claim is swept into the bankruptcy and that the bankrupt is released from all of them upon being discharged unless the law sets out a clear exclusion or exemption. As I will explain below in greater detail, the appellant’s equalization claim was provable in the respondent’s bankruptcy. In light of the provisions of the BIA , it is therefore difficult, subject to one minor reservation concerning terminology used, to find fault with the Court of Appeal’s holding that the equalization claim had been “extinguished” by the respondent’s discharge. That holding appears to be faithful both to the words of the FPA and to the provisions of the BIA . In this respect, given that Ontario is also an equalization province, it is worth mentioning that the Ontario Court of Appeal recently espoused this reasoning in Thibodeau v. Thibodeau , 2011 ONCA 110 , [page 617] 104 O.R. (3d) 161. I agree with the following comments by Blair J.A.:

Separating spouses are not entitled to receive a division of property. Rather they are entitled (generally speaking) to receive one-half of the value of the property accumulated during the marriage. An equalization payment is the chosen legislative default position. On the bankruptcy side, unsecured creditors are to be treated equally and the bankrupt’s assets to be distributed amongst them equally subject to the scheme provided in s. 136 of the BIA . Parliament has not accordance any preferred or secured position to a claim for an equalization payment. While it has recently chosen to amend the BIA to give certain debts or liabilities arising in relation to claims for support and/or alimony a preferred status, Parliament has made no such provision for equalization claims in relation to family property. [Underlining added; para. 37.]

21 The only reservation I have with the decision of the Court of Appeal in the case at bar relates to its numerous statements that the operation of s. 178(2) BIA has the effect of “extinguishing” the equalization claim. With respect, this provision does not purport to extinguish claims that are provable in bankruptcy pursuant to s. 121 BIA , but “releases” the debtor from such claims: see, on this point, Re Kryspin (1983), 1983 1703 (ON SC) , 40 O.R. (2d) 424 (H.C.J.), at pp. 438-39; and Ross, Re (2003), 2003 64260 (ON SC) , 50 C.B.R. (4 th ) 274 (Ont. S.C.J.), at para. 15 . As is clear from the words of s. 178(2) BIA , the discharge operates to release the bankrupt from all claims provable in bankruptcy. For creditors, the discharge means that they “cease to be able to enforce claims against the bankrupt that are provable in bankruptcy” (L. W. Houlden, G. B. Morawetz and J. Sarra, Bankruptcy and Insolvency Law of Canada (4 th ed. (loose-leaf)), vol. 3, at p. 6-283.)”

[ 19 ] Ms. Csori’s claim against Mr. Baker for an equalization payment was provable in his bankruptcy. Based on the reasoning in Shreyer and Thibodeau , Mr. Baker is released from Ms. Csori’s claim by the provisions of the BIA . Ms. Csori is unable to enforce her claim for an equalization payment against Mr. Baker.

[ 20 ] For the reasons given, Ms. Csori’s motions are dismissed and Mr. Baker’s motion is granted. This case is dismissed. There will be no order of costs.

_______ ”original signed by”_ ___

The Hon. Mr. Justice D. C. Shaw

Released: January 10, 2012

COURT FILE NO.: FS-11-0061

DATE: 2012-01-10

ONTARIO SUPERIOR COURT OF JUSTICE B E T W E E N: NORMAN WILLIAM BAKER Applicant - and – LESLIE MICHELLE CSORI Respondent REASONS ON MOTONS Shaw J.

Released: January 10, 2012

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