ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: (Ottawa) FC-09-805
DATE: 2012/07/26
B E T W E E N:
James Douglas Lacey
Self represented
Applicant
- and -
Kanella Tsarrouhas Lacey
Self represented
Respondent
HEARD: April 4, 2012
RULING ON MOTION
Johnston, J.
[ 1 ] This is a motion to confirm the Order agreed to by the parties on the day set for commencement of Trial on December 6, 2011. Each party has drafted a version of the Order, purporting to follow the hand written Minutes of Settlement. A hearing was held on April 4, 2010 to settle terms of the Order.
[ 2 ] At the time the Minutes of Settlement were entered into, the Applicant, Dr. Lacey was represented by counsel, Mr. Levencrown and Ms. Lacey was self represented, but had her sister and friend with her in court and during the settlement negotiations. The agreement was reached over a number of hours of negotiation at the court house. Ms. Lacey had previously been represented by counsel and was able to discuss the terms of the proposed agreement with her former lawyer by telephone, before signing the agreement on December 6, 2011.
[ 3 ] The parties now disagree on certain terms of the Minutes of Settlement and cannot agree on the wording of the final Order. Each party is now self represented and has filed their own version of the Order they seek to have issued. I received affidavit evidence and factum from the parties, as well as hearing oral argument on April 4, 2012.
[ 4 ] The issue to determine in this motion is whether the parties reached an agreement and if so what are the terms. For clarity I will refer to the hand written Minutes of Settlement signed by the parties on December 6, 2011 as document ‘A’; Ms. Lacey’s version of the Order as document ‘B’ and Dr. Lacey’s version of the Order as document ‘C’.
[ 5 ] Dr. Lacey’s position on most of the disputed paragraphs of the Order is that the exact wording of the Minutes of Settlement should be used. Ms. Lacey takes the position that changes need to be made, because certain alterations were made without her approval, certain provisions were drafted improperly because of the time constraints in which this was negotiated and some intended provisions were omitted by oversight. I propose to deal with each paragraph of the draft Oder separately.
[ 6 ] Paragraph 1 : The Minutes, document ‘A’ begins with child support. The quantum of $ 3,000.00 per month is stipulated; but not the income attributed to Dr. Lacey, the payor, nor the start date. I find the changes in Ms. Lacey’s version of the draft Order, document ‘B’ is procedural in nature, to the extent it sets out the commencement date and income upon which the child support is based. Dr. Lacey takes no serious disagreement. Accordingly, I find paragraph 1 in ‘B’ is appropriate and shall become paragraph 1 of this Order.
[ 7 ] Paragraph 2: The Minutes, ‘B’ deals with spousal support payable by Dr. Lacey to Ms. Lacey in the amount of $ 6,000 per month. For the same reasons as outlined in the first paragraph, I find it is appropriate to adopt Ms. Lacey’s version in ‘B’ as paragraph 2 of this Order, except remove the last two sentences of the paragraph starting: “On an annual basis, on August 1 st ………..” This reporting of income requirement is dealt with in a later paragraph.
[ 8 ] Paragraph 3 : Both parties have produced a version similar to the Minutes in ‘A’. Ms. Lacey’s version adds the words: ‘he shall arrange for the documentation to be produced and bear the cost’. I find these additional words simply confirm the intention of the parties that Dr. Lacey is to receive the assets named therein and he is to be responsible for the cost of preparing any documents necessary to carry out the transfer. Accordingly, I Order paragraph 3 to contain the wording of paragraph 3 of Ms. Lacey’s version, ‘B’.
[ 9 ] Paragraph 4 : Paragraph 4 of the Minutes deals with the matrimonial home. Both parties’ versions use the same wording as the handwritten Minutes. Dr. Lacey later in his oral argument seeks an order requiring Ms. Lacey to remove his guarantor on the home mortgage. I find this was not agreed to by the parties on December 6. There is no reason to deviate from the Minutes of Settlement. For ease of reference I incorporate paragraph 4 of Ms. Lacey’s version; ‘B’ as paragraph 4 of the Order herein.
[ 10 ] Paragraph 5 : There is no dispute between the parties. Paragraph 5 of Ms. Lacey’s version, ‘B’ is incorporated into paragraph 5 of the Order herein.
[ 11 ] Paragraph 6 : There is a significant dispute between the parties with reference to this paragraph. Ms. Lacy has created two paragraphs in her version, paragraphs 6 and 7 of ‘B’. Two issues are in dispute in this paragraph.
[ 12 ] First, Ms. Lacey seeks to add a clause: “The Applicant will obtain releases of the Respondent from all third party lenders to whom the Respondent has provided guarantees on behalf of the three businesses (JDLMPC, OHTC and 2074323 Ontario Ltd.)”.
[ 13 ] Second; Ms. Lacey in her paragraph 7 stipulates that liabilities in relation to O.H.T.C. since the date of separation shall be assumed by Dr. Lacey.
[ 14 ] In ‘A’, the handwritten Minutes of Settlement paragraph 6 reads:
Applicant shall assume all liability with respect to the companies JDLMPC , 2074323 Ontario Limited and shall save the Respondent harmless from any liability. The Applicant shall assume all liabilities incurred from the date of this agreement with respect to OHTC.
[ 15 ] Ms. Lacey takes the position the wordings in the Minutes of Settlement “the Applicant shall assume all liabilities incurred from the date of the agreement with respect to OHTC” was added without her approval or knowledge. Ms. Afroditi Vihtari, sister of Ms. Lacey was present when the Minutes were negotiated and was the ‘scribe’ for the purposes of completing a written agreement. She states that words were added to the agreement, not in her handwriting and changed the meaning of the agreement. Ms. Vihtari states in paragraph 7 of her affidavit: “The modifications changed what had been agreed at the conference and my sister advised me, and I believed her that she did not agree to this modified clause. James Lacey initialed the modified clause, my sister did not.”
[ 16 ] A friend of Ms. Lacey, Ms. Sybil Thuns was also present on December 6, 2011 and she provided an affidavit with her recollection of the dispute with respect to liabilities of OHTC, stating at paragraph 11:
[ 17 ] “Kelly was also adamant on another point regarding the businesses, namely that if she were to transfer her company shares to Dr. Lacey, he would assume all liability for the businesses from date of separation and not from the time of the Agreement. At no time during the negotiation was there any discussion with Mr. Levencrown regarding changes to this point.”
[ 18 ] Ms. Lacey stated that her initials were inserted at the top of page 3 of the Minutes of Settlement where the words “the respondent harmless” were scratched out. On page two at the bottom the following words were also scratched out: “since date of separation ……..” Also the disputed words are inserted at the bottom of the page in different ink and different handwriting. Dr. Lacey’s initials appear at the bottom of page 2.
[ 19 ] Ms. Lacey’s initials at the top of page 3 do not make sense if she is simply agreeing to removal of the words, “the respondent harmless”. Clearly the words scratched at the top of page 3 are the end of the paragraph from page 2. I therefore find that Ms. Lacey did initial the changes in the handwritten Minutes of Settlement Paragraph 6. I have no doubt that Ms. Lacey and her supports felt stressed at times on December 6, 2011. That said, I am satisfied on Ms. Lacey’s own evidence that she had an opportunity to review the handwritten agreement before signing and she obtained at least telephone advice from her own lawyer before signing the agreement. The issues of Net Family Property division were the subject of significant disagreement between the parties. It is not uncommon for parties to agree to changes in the course of settlement discussions in order to reach agreement. I find as a fact this was the situation here.
[ 20 ] In argument before me on April 4, 2012, I asked Ms. Lacey if she was in agreement to a change to her version of the Order. She replied that she could not provide an answer to the question without speaking to her legal advisor (who I note was not present in court on April 4).
[ 21 ] I have filed with the Record a letter from Mr. Levencrown, who as an officer of the court states that no changes were made to the Agreement without Ms. Lacey’s approval. This letter is not in the form of sworn evidence, but I accept the letter in counsel’s capacity of an officer of the court and an individual who has a duty to not mislead the Court. This is not to suggest Ms. Lacey is intentionally misleading the Court. For reasons stated, I find that she did approve the change and initial the change.
[ 22 ] I find the intention of the parties was that The Applicant would be responsible for debts the Respondent may incur; but not require the additional step of obtaining third party releases. This may or may not be possible, as third parties may not be prepared to provide such a release. Document “A” does not provide this additional step and I find it was not part of the agreement on December 6 th .
I therefore Order that paragraph 6 shall read : Applicant shall assume all liability with respect to the companies JDLMPC , 2074323 Ontario Limited and shall save the Respondent harmless from any liability. The Applicant shall assume all liabilities incurred from the date of this agreement with respect to OHTC.
[ 23 ] Paragraph 7 : Paragraph 7 of the Minutes states: “The parties shall pay section 7 expenses on a pro rata basis”.
[ 24 ] This wording requires explanation and provision of a foundation for calculating the expenses. Ms. Lacey’s version of the paragraph is located in ‘B’ at paragraph 8. Dr. Lacey’s version simply recites the words in the handwritten Minutes. In argument provided in this motion, Dr. Lacey proposes the percentage share of Section 7 child care expenses be stipulated, he proposes on a 70% to 30% basis. Ms. Lacey proposes 74% to 26% prorated split of Section 7 expenses.
[ 25 ] It is agreed that Dr. Lacey’s income for purposes of calculating child and spousal support is $280,000; Ms. Lacey has no income except for her support payments received. I therefore conclude on the evidence and Order that Dr. Lacey pay to Ms. Lacey 72 % of Section 7 expenses, based upon his income of $280,000 per year. I agree a time deadline is reasonable in this clause, but I would expand the time to 30 days; therefore I Order paragraph 7 to read:
“The Applicant and the Respondent shall pay Section 7 expenses for the children on a pro rata basis; currently the Applicant shall pay 72 % and the Respondent shall pay 28 %. Receipts exchanged between parties will require that the alternate party reimburse the other within 30 days.”
[ 26 ] Paragraph 8 : Paragraph 8 of the handwritten Minutes of Settlement deals with joint custody of the children as per the report of Sally Bleeker with some changes. Ms. Lacey initially drafted a version of this paragraph (paragraph 9 of ‘B’). She now withdraws changes she sought in her paragraph 9 (g) and (h).
[ 27 ] Ms. Lacey has requested (f) which was scratched out of paragraph 8 (f) be reinstated because she did not initial the change. Dr. Lacey argues that this provision was covered in the Bleeker report and was taken out of the Minutes and should remain out, because there was no agreement to allow the provision to remain. I find as a fact that Ms. Lacey did approve the wording of 8 (e) in the Minutes, including the words ‘unless they are away for the weekend.’ Also 8 (f) was struck because it was in contravention of the Bleeker report. I find the parties common intention was to strike this provision from the Minutes.
[ 28 ] Dr. Lacey agreed during argument to Ms. Lacey’s 9 (c)).
[ 29 ] Accordingly. the Order in paragraph 8 shall read:
The Applicant and Respondent shall have Joint Custody of the children as per the report of Sally Bleeker with the following changes:
(a) During the months of January through April the Applicant and Respondent shall each have the children for a one week vacation subject to the parent who has the children over the March Break week, the alternate parent will have an additional week
(b) A Parenting Coordinator Lena Jones or Marianne Cuhaci shall be consulted should the Applicant and Respondent be unable to make a decision for the children. Costs of a parenting coordinator shall be shared proportionally by both parties.
(c) The Respondent shall have Greek Easter with the children each year, including Good Friday, Easter, and Easter Monday. The Applicant shall have Christian Easter each year. Every fourth year where both parties have the same Easter, the Respondent will have the children over that weekend where the Applicant my pick up the children on Easter Sunday at 1 pm to have them over Easter Monday and back to school Tuesday.
(d) The Applicant and Respondent shall have 1\2 day access to the children on the children’s birthdays. The Applicant shall have the children on the Applicant’s Birthday and the Respondent shall have the children on the Respondent’s Birthday if they so wish.
(e) The children shall attend Greek School each Saturday regardless of which parent they are with, unless they are away for the weekend.
[ 30 ] Paragraph 9 : Paragraph 9 of the Minutes of Settlement (‘A’) addresses the issue of insurance. The handwritten Minutes did not specifically name the various insurance policies owned by Dr. Lacey. It is appropriate that the Order specifically refer to the policies and their respective numbers. Dr. Lacey opposes Ms. Lacey’s version of this paragraph (paragraph 10 of ‘B’). In part, Dr. Lacey argues he does not know of an RBC policy and therefore disagrees that the Order to specify the RBC policies. Ms. Lacey states the policies and their numbers were seen by her and recorded and properly should be part of the Order. I find it was the clear intention of the parties that life insurance existing on the date of the agreement, December 6, 20011 owned by Dr. Lacey should be maintained in full force and effect. I find the intended purpose was to secure Dr. Lacey’s financial obligations to pay support for his children, in the event of his death. I will include the RBC policies in this Order. If it is determined that no such policies existed on December 6, 2011; then this portion of the Order will be of no force and effect. Second; I find the agreement entered into by the parties related to life insurance and not disability insurance or critical illness insurance. The purpose of this clause is to address child support in the event of death. In the event the payor becomes disabled or suffers a critical illness the issue of child support would be dealt with at that time by way of a Motion to Change in the event of a material change in circumstance. The designation of beneficiary shall be irrevocable for so long as Dr. Lacey is required to pay child support. Dr. Lacey shall be required to provide proof of his compliance with this Order. Accordingly, paragraph 9 shall read:
The Applicant shall maintain in full force and effect Life Insurance policies in place as of December 6, 2011, for so long as he is required to pay child support or any of the children, including: Transamerica 1402533 in the amount of $ 250,001 and BMO/AIG 7291 in the amount of $ 250,000 RBC policy 10703427 in the amount of $ 325,000 and RBC policy 10121388 in the amount of $ 165,000. The Respondent shall be named as irrevocable and only beneficiary of each policy. The Applicant shall within 60 days of the Order provide proof o the designations and shall provide yearly proof of the continued irrevocable designations.
The Applicant shall provide Medical and Dental Insurance for the children during the period he is obligated to pay child support. The Applicant agrees to provide Medical Insurance for the Respondent during the period he is obligated to pay Spousal Support.
[ 31 ] Paragraph 10 : Paragraph 10 of the Minutes of Settlement (‘A’) is vigorously disputed by the parties. The intention of the clause was to confirm to FRO no arrears owing, upon payment by Dr. Lacey of certain monies. Both parties agreed to withdraw from FRO enforcement, but now mutually agree to continue FRO enforcement. On December 6, 2011, Dr. Lacey’s counsel, Mr. Levencrown asserted that in addition to regular child support payments, Dr. Lacey had been garnished $ 12,000. I accept Ms. Lacey’s evidence that in fact the additional $ 12,000 was not paid to Ms. Lacey; she did received the regular child support payment. Dr. Lacey argues there were no arrears and his counsel was mistaken when he argued that $ 12,000 had been paid. I find that it was clear on December 6, both sides proceeded to negotiate paragraph 10 of ‘A’ on the basis that Dr. Lacey paid $ 12,000. I find that it was oversight by the parties not to include a provision in the Agreement stipulating that if the monies were in fact not paid, this would be payable. I find the $ 6,000 paid in the day or days before December 6 was for on-going support and not part of the $ 12,000 asserted by counsel. Dr. Lacey cannot rely upon his assertion now that his counsel was in error. Clearly the assertion of payment was made to persuade all in the court room that day that nothing further should be paid retroactively. Paragraph 10 was entered into by both sides believing that an additional $ 12,000 had been paid, when in fact it had not. Accordingly, I order that Dr. Lacey pay to Ms. Lacey the sum of $12,000 and upon receipt of payment, Ms. Lacey shall provide a letter to the Director of FRO confirming that as of December 6, 2011 there were no child support arrears.
[ 32 ] Paragraph 10 of the Order now shall read:
The Applicant shall forthwith pay to the Respondent $12,000.00 for support. Upon payment of same, the Respondent shall provide a letter to F.R.O. stating that, as of December 6, 2011, no support arrears owed by the Applicant to the Respondent.
[ 33 ] The remaining portions of the Minutes of Settlement and draft versions of the Final Order from both parties are basically undisputed.
[ 34 ] It is ordered that the Divorce Order be granted upon the Applicant completing the necessary filing with the Court and payment, if any, of fees. Upon completion of all necessary steps, the Divorce Order shall issue.
[ 35 ] The Applicant shall provide the Respondent with a reference letter and further follow up as may be required in order for the Respondent to find employment.
[ 36 ] The Applicant and Respondent shall exchange financial information each year including copies of their personal Income Tax Returns, together with all supporting documentation and Notices of Assessment and/or Re-Assessment, by no later than May 31 each year. Financial Statements of Corporations owned in whole or in part by either party shall be exchanged with the other by no later than September 30 each year.
[ 37 ] I further order, “Unless the support order is withdrawn from the office of the Director of the Family Responsibility Office, it shall be enforced by the Director and amounts under the support order shall be paid to the Director who shall pay them to the person to whom they are owed.”
[ 38 ] Finally this Oder bears interest at the percentage rate as prescribed by the Courts of Justice Act.
[ 39 ] Costs of this motion may be argued in writing; limited to three double space pages. The Respondent shall serve the opposing party and file her cost submissions within 21 days and the Applicant shall have the right of reply within 21 days; submissions to be served on the opposing party and then filed at the Ottawa Court.
MR. JUSTICE JOHN M. JOHNSTON
Released: July 26, 2012
COURT FILE NO.: (Ottawa) FC-09-805
DATE: July 26, 2012
ONTARIO SUPERIOR COURT OF JUSTICE
B E T W E E N:
James Douglas Lacey Applicant
- and –
Kanella Tsarrouhas Lacey Respondent
RULING ON MOTION
Johnston, J.
Released: July 26, 2012