ONTARIO SUPERIOR COURT OF JUSTICE

NEWMARKET COURT FILE NO.: FC-08-030704-00
DATE: 20120820

BETWEEN:

Michael Daniel Fishman

Applicant

— and —

Sharon Fishman (aka: Sharon Arluck)

Respondent

COUNSEL:

Ms. Ingrid van Weert for the Applicant
Ms. Lorna M. Yates for the Respondent

HEARD: April 05, 2012

H.K. O’Connell J.

REASONS

Nature of the Motions

[ 1 ] By notice of motion dated February 20, 2012, the applicant seeks the following orders:

An order that the respondent participate in the arbitration contemplated by the Mediation-Arbitration Agreement (hereinafter referred to as the Arbitration Agreement) between the parties, dated February 27, 2009, naming Daniel Melamed as Arbitrator; inclusive of the sending of a letter to Mr. Melamed to start the arbitration process and that the parties bear the costs of the initial fees of the arbitrator on an equal basis;

In the alternative an order that the respondent participate in the arbitration contemplated by the Arbitration Agreement with Bryan Smith as the Arbitrator; inclusive of the same terms as noted above;

And in the further alternative an order that the respondent participate in the arbitration contemplated by the Arbitration Agreement with Ronald Balinsky as the Arbitrator, inclusive of the same terms as noted above.

[ 2 ] Ms. Fishman brought her own motion seeking the striking or dismissing of Mr. Fishman’s motions dated October 27, 2011 [1] and his amended notice of motion dated February 20, 2012; or in the alternative that they be stayed until such time as he is in compliance with the Final Order of the Superior Court in Georgia,, as well as security for costs.

[ 3 ] I note here that the respondent is of the view that both Mr. Fishman’s Interjurisdictional Support Order Act [2] (ISOA) proceeding and his motion to force compliance with what he says is a binding arbitration agreement, are inextricably bound together, such that they should be considered the same proceeding.

[ 4 ] By way of very generic background the parties were married in Toronto in November 2001. The produced a child, Rachel, born October 22, 2004. They separated in either June of 2005 or June 2006 depending on which party is more accurate. Their parting of the ways became formalized in the judgment issued in Georgia, USA.

The evidence relied upon by the Applicant

[ 5 ] In support of the application the applicant relies upon his affidavit dated October 27, 2011. Amongst other attestations he notes that the Agreement does not involve child support issues, but centres on the issue of access to the one child, Rachel. Mr Fishman notes that: “a new access schedule is desperate necessary. To move this matter forward, I have accepted the arbitrator the Respondent proposed. There is absolutely no reason to further delay the arbitration and to leave this matter unsettled.”

[ 6 ] The applicant also relies upon his affidavit dated March 29, 2012 which is in response to Ms. Fishman’s affidavit, which will be referenced below. He notes that the Arbitration Agreement is a binding agreement. Any complaint by the respondent in relation to support is independent of the Agreement, and has nothing to do with the necessity of engaging in the arbitration as agreed. To quote the Applicant, he says that “the only issue on the motion is whether the respondent has grounds to avoid her contractual obligations.”

The evidence relied upon by the Respondent

[ 7 ] The respondent relies upon her affidavits sworn March 12, 2012, and April 02, 2012.

[ 8 ] The respondent sets out that she and the applicant were married in Toronto in November 2001, became parents with the birth of their daughter Rachel, and separated in June 2005. She describes her and the applicant as being in ongoing conflict which has continued since their separation. The respondent describes what she says is her perilous financial situation. The respondent is very suspicious of Mr. Fishman’s motives, and his agenda.

[ 9 ] The facets of the judgment issued in Georgia are set out inclusive of child support payable by the applicant. Ms. Fishman says the applicant has reneged on his agreement to pay child support by unilaterally decreasing and altogether not paying the support. As of February 01, 2012 the applicant finds himself in arrears of $65,140.00 on account of child support. The respondent sees the applicant as simply seeking to “wear me down, both financially and emotionally.”

[ 10 ] The respondent ascribes to the applicant a wilful failure to not comply with the terms of the Georgia judgment.

[ 11 ] Ms. Fishman also sets out her contact with the applicant in relation to their Mediation-Arbitration Agreement, inclusive of the motion heard by Mullins J. on December 16, 2009, which appointed Mr. Balinsky as the arbitrator. However Ms. Fishman has takenissue with Mr. Balinsky being the arbitrator based on her perception that he found himself in a conflict of interest, given some provisional contact between Mr. Balinsky and Mr. Fishman.

[ 12 ] In addition she attests that before arbitration can proceed the applicant is required to be in conformity with the judgment in Georgia.

[ 13 ] Ms. Fishman attests in her affidavit to “The Present Arbitration Dilemma” given that neither Mr. Smith nor Ms. Goldhart who are named in the Arbitration Agreement have resigned or had their appointment terminated, a condition precedent she argues to this court’s intervention in the process on this motion.

The Position of Ms. van Weert for Mr. Fishman

[ 14 ] Counsel for Mr. Fishman argues that this motion is about the requirement of both parties to follow their agreement to oblige their signed Arbitration/Mediation Agreement. The most germane issue in that agreement relates to access to the child. Ms. Fishman has primary custody. Mr. Fishman has access as described in the Georgia judgment as well as a mechanism to deal with access issues via the arbitration agreement.

[ 15 ] Both of the parties acknowledge problems with access. Ms. van Weert says the issue is simple. Both parties must engage the process that they agreed upon in their agreement to arbitrate. Her client is content with Mr. Smith as the arbitrator.

[ 16 ] In relation to costs, counsel submits that both parties are bound to pay their share of the costs. Although Ms. Fishman says Mr. Balinsky is tainted by conflict, the most recent court order of Mullins J. appoints him as arbitrator, however given that Mr. Fishman is content with either of Smith or Melamed, the issue is moot in relation to Balinsky. Ms. van Weert notes that the respondent requests Mr. Melamed as the arbitrator. Mr. Fishman is content with either Messrs. Melamed or Smith. Counsel notes that Ms. Fishman’s counsel suggested Mr. Melamed last year, but now says Mr. Smith has not resigned and therefore the court cannot appoint.

[ 17 ] Ms. van Weert strenuously emphasized that there is a positive obligation on both parties to participate in their agreement. In particular both waived their rights to litigate the contents of the Mediation/Arbitration Agreement. Once they agreed to arbitrate, and pursuant to section 7 of the Arbitration Act, the court can stay litigation and force arbitration. Section 6 of the Act sets out the very limited jurisdiction of the Court. In short the applicant is simply seeking compliance with the agreement as mandated by the Arbitration Act.

[ 18 ] This arbitration is primarily premised on access to the child. To not force the parties to comply with their own bargain would be contra the best interests of the child, Rachel. Furthermore, staying Mr. Fishman’s motion to resolve issues of child support which is the subject of other litigation, is not tenable.

[ 19 ] There is simply nothing in the affidavit of Ms. Fishman that speaks to how delaying of the contractual obligation to arbitrate could be in the best interests of the child. This case involves 7 year old Rachel, with chronic access issues for the father since she was three. It is clearly contra the best interests of the child to stay the applicant’s motion, or to strike it. In short the arbitration agreement stands alone. It is not dependent on the failure says Ms. Fishman, of Mr. Fishman to pay child support as required.

[ 20 ] In relation to the cost of participation in the arbitration process, counsel argues that the court can take judicial notice that it is cheaper than litigation. Indeed the costs to oppose this motion would be greater than those to get the arbitration process going. It is therefore immaterial that Ms. Yates argues that the cost of arbitration will be significant.

[ 21 ] In any event the lack of affordability to pay cannot be an excuse not to oblige a contract. Curiously Ms. Fishman can retain good counsel to oppose this motion and bring her own, and yet says she cannot pay her proportional share of her arbitration agreement obligations.

[ 22 ] Counsel also argues that there is no evidence that Ms. Fishman’s financial situation today is any different than it was when she signed the agreement. Her affidavit is rife with bald assertions.

[ 23 ] As for contribution to the costs of arbitration the agreement clearly defines the payment issues in its schedule. Indeed at mediation Ms. Fishman paid ½ the fees. However in August 2009 Ms. Fishman would not make a further deposit that caused Mr. Smith to resign. To quote Ms. van Weert, “that is where this all went off the rails.”

[ 24 ] The agreement is clear. Ms. Fishman must pay her share. She has not moved to set aside the agreement. She had independent legal advice at the time of execution. This is a contractual issue governed by the Arbitration Act. The onus is on the respondent to prove why she cannot meet her bargained for obligations.

[ 25 ] The fact that disputes have arisen in relation to the judgment from Georgia are for litigation elsewhere. That proceeding is ongoing and independent of the matters on this motion. In any event this motion is not about child support but rather access issues. It is that very issue that both parties agree has been problematic.

[ 26 ] Mr. Fishman’s offer to advance the fee for the arbitration, was out of frustration. The evidence is clear that Ms. Fishman rejected the proposal. There was never any overriding agreement for Mr. Fishman to pay the costs, such that the terms of the agreement were varied in this regard.

The Position of Ms. Yates for Ms. Fishman

[ 27 ] Ms. Yates acknowledges that she is not trying to set aside the agreement that the parties entered into. The issue is Mr. Fishman’s wanton non compliance with the judgment from Georgia. Non compliance with the judgment is substantial inclusive of the failure to pay prescribed child support; the failure of Mr. Fishman to transfer a portion of his retirement savings to his wife; the failure of Mr. Fishman to share his daughter’s non insured health, dental and vision expenses; and the failure of the father to honour his obligation to maintain life insurance.

[ 28 ] Arrears of child support stand at $69,963.33 as of April 01, 2012.

[ 29 ] Any delay in the arbitration process rests at the feet of Mr. Fishman. It was Mr. Fishman who communicated with Mr. Balinsky after the court appointment that raised the concern of Ms. Fishman.

[ 30 ] Ms. Yates agrees that section 6 of the Arbitration Act is the only relief that a court can provide. However Ms. Yates argues that Mr. Fishman is asking the court to essentially be the collection agency for the mediator.

[ 31 ] Given the failure of Mr. Fishman to comply with the judgment issued in Georgia he should not be allowed to get the relief he seeks on his motion.

[ 32 ] Ms. Yates reminds that child support is the right of the child. Ms. Yates referenced rule 1(8) of the Family Law Rules. She says that rule should militate against Mr. Fishman getting the relief that he wants on this motion. Ms. Yates as noted above tracked through the Georgia judgment issues, and what was said to be the failure of Mr. Fishman to abide by its terms. It is not so simple to suggest that the financial issues can be divorced from the best interests of the child in this case.

[ 33 ] In addition even if rule 1(8) were not to apply, this court has the right to control its own process. The father’s non-compliance with the judgment in Georgia is clear and well documented. Mr. Yates argues that Mr. Fishman has had ample time to comply with the judgment, but continues to engage in clear breaches. As such his pleadings should be struck. Ms. Yates recognizes that the striking of pleadings is a remedy to be invoked only sparingly, but should be invoked here as there is “clear evidence of deliberate default and a complete disdain for orders of the Court.”

[ 34 ] As an alternative argument, Ms. Yates implores the court to stay the motion of Mr. Fishman. In support of her corollary argument that the motion should be stayed, Ms. Yates argues that it would be an abuse of process to allow the motion to be determined, given the “floating of the Court’s orders” as contained in the Georgian judgment. Coupled with the consequence of Mr. Fishman’s failure to abide his obligation to settle property claims and in particular the failure to pay court ordered child support, this case should be seen as one of both inappropriate and unreasonable conduct on the part of Mr. Fishman.

[ 35 ] In relation to the arbitration agreement, it is argued that Ms. Fishman need not pay for the process.

[ 36 ] Ms. Yates also refers to the dilemma in this case as Mr. Smith has not resigned or had his appointment terminated.

[ 37 ] Reference is made to the high conflict paradigm that this former couple are embroiled in. The argument is made that in a case where each are not fully committed to arbitration, “med-arb can be disastrous on important parenting issues.”

[ 38 ] It is further submitted that “spending tens of thousands of dollars in a private process” cannot be justified given that Ms. Fishman is carrying the financial support of Rachel.

Reply Submissions

[ 39 ] The court is not being asked to be a proxy for a mediator to collect fees, but rather to enforce the clear terms of the agreement. The skepticism as to the income of both parties is a two way street. Mr. Fishman has a motion pending to vary the judgment in Georgia, via the ISOA proceedings. That proceeding is separate and distinct.

[ 40 ] The court should also consider that Mr. Fishman has offered to arbitrate all of the outstanding issues between him and Ms. Fishman. The optics if they need be considered, favour Mr. Fishman, not Ms. Fishman.

[ 41 ] Given that Mr. Fishman is not in breach of any other court orders, rule 1(8) does not apply. The court should not lose sight of the fact that the breaches of the judgment in Georgia were, on the evidence of Ms. Fishman, underway at the time that Ms. Fishman signed the arbitration agreement. It was not a new revelation to her. The agreement does not contain any conditions precedent to the requirement that it be fulfilled. Ms. Fishman could have insisted on conditions precedent but she did not.

Findings

[ 42 ] I concur with the position advanced by Ms. van Weert in whole. The proceedings before me relate to the need for both parties to mediate/arbitrate as they agreed to do. Theirs was a contractual relationship. That contract must be obliged. Both parties had independent legal advice. No suggestion is made that the agreement should be set aside. Meditation failed. Arbitration must now follow.

[ 43 ] I reject the submission of Ms. Yates that the ISOA proceedings are the same proceedings. They are separate, although I acknowledge that they bear some relation, given that the access issue is addressed in the judgment in Georgia and is also the raison d’etre to the Arbitration agreement.

[ 44 ] There is simply no reason to reach to rule 1(8) of the Family Law Rules to eject Mr. Fishman from the relief he seeks. Clearly the conflict between these parties is ongoing. However I cannot definitively find that the deficiencies in Mr. Fishman’s obligations under the judgment issued in Georgia are those of a recalcitrant party and a clear illustration of an attempt to avoid a court order. In short resort to rule 1(8) would be inappropriate, even if I were to assume that the arbitration agreement could be caught by its reach.

[ 45 ] It will be for the ISOA proceedings to shed light on the merit or lack of merit of Mr. Fishman’s attempt to vary the judgment issued in Georgia in the Ontario Superior Court. Those proceedings are underway.

[ 46 ] There is therefore no need for the court to exercise any jurisdiction outside of what section 6 of the Arbitration Act requires. As a result I dismiss the motion of Ms. Fishman to strike or stay the motion of Mr. Fishman.

[ 47 ] It is also clear to me that a plain reading of the mediation/arbitration agreement, infused as it was with independent legal advice, signed off on each page and premised as it is on issues involving Rachel and access, makes plain that the parties must comply with that mechanism for dealing with access in the context of the best interests of Rachel.

[ 48 ] For greater certainty I also reject the argument that the cost of arbitration will involve the expenditure of “tens of thousands of dollars.” If that result were to occur it would simply underline that one or both of these parents have placed their own passionate dislike of each other over that of the best interests of Rachel. In any event the likelihood of that occurring is remote given that arbitration is aimed at resolving the issue on a final basis.

[ 49 ] In any event the suggestion that this expense will be occasioned is purely speculative. I can safely assume that litigation is a more expensive proposition than an agreed upon mechanism to arbitrate the disputes involving access, rather than immersing those issues in court proceedings and the costs that that process entails. Litigation is regrettably notoriously expensive and with the positions taken by these parties, a recipe for the expenditure of significant funds.

[ 50 ] Both parties contemplated the utility of mediation/arbitration as it related to their young daughter, Rachel. It is no excuse now to say that one of the parties cannot afford that bargained for process. Nor am I impressed with the argument that given the high conflict, arbitration can be disastrous on important parenting issues. I remind again that arbitration was what these parties agreed to, and it is clearly the most expeditious venue to arrive at a conclusion to the access issue, in keeping with the best interests of Rachel.

[ 51 ] I also find that the apportionment of costs is defined in the agreement. Both parties must share the cost. Nor is it an excuse for Ms. Fishman to say that she need not bear any costs because of an earlier offer by Mr. Fishman to jump start the process by suggesting that he would incur initial costs. His was, I find, an attempt to get the arbitration underway to deal with the seminal issue of access. It does not constitute a waiver of that term of the contract that deals with apportionment of costs. The parties, I repeat, are bound by their agreement.

Conclusion

[ 52 ] The best interests of Rachel in the context of this failed marriage and the conflict that has ensued, demands immediate compliance with the agreement that the parties constructed.

[ 53 ] The mediation–arbitration agreement is binding. Mr. Michael Smith is content, as I understood it from information provided on the motion date, to engage his services provided he is retained. In any event Mr. Fishman is not disputing the utilization of either arbitrator Smith or Melamed, in the event that Ms. Fishman prefers one over the other.

[ 54 ] My reasons on this motion should not be read to suggest that I find any favour with the reasons offered up by Mr. Fishman for his failure to comply with the provisions of the judgment in Georgia. Rather, as noted, that issue is for the other proceeding commenced by Mr. Fishman in the context of his motion to vary the judgment from Georgia in the courts of Ontario.

[ 55 ] Nor should these reasons be read to suggest that Mr. Fishman’s offer to arbitrate all issues between the parties is relevant to this motion. Ms. Fishman is entitled, subject to a variation of the terms of the Georgia judgment, to expect that the judgment will be honoured. She need not acquiesce in an offer to arbitrate matters outside of the agreement.

[ 56 ] I therefore grant the orders requested in the motion of Mr. Fishman dated February 20, 2012, at paragraph 4 therein, sections (a)-(c) inclusive, given that Mr. Smith is prepared to arbitrate. I do not wish the issue of access to Rachel to languish going forward. If there is any further dispute between the parties involving the naming of the arbitrator, which I fully expect is now moot, I am prepared to deal with that issue.

[ 57 ] The parties must both set aside their clear contempt for each other, and must arbitrate the parenting issue commencing immediately and in good faith, as they are bound to do. Nothing less will pay sufficient tribute to the best interests of young Rachel.

[ 58 ] If the parties cannot settle the issue of the costs of this motion, the applicant is to file his costs submissions limited to 2 pages, exclusive of bill of costs and any offers to settle by September 05, 2012, with the respondent to reply by September 12, 2012 on the same terms. Submissions to be sent to the attention of my assistant Ms. Joan Russell, via fax: 905-743-2801, care of Superior Court Judges Reception, 150 Bond Street East, 6 th floor, Oshawa.

The Honourable Mr. Justice H.K. O’Connell
DATE RELEASED: August 20, 2012

[1] Mr. Fishman at the time of hearing of this motion had commenced proceedings under the Interjurisdictional Support Orders Act, 2002 S.O. c.13 (ISOA), seeking to change the final judgment of The Honourable Robert J. Castellani of the Superior Court of the State of Georgia dated March 6, 2008. At the time of hearing of this motion, that proceeding had not yet been heard in Newmarket Superior Court.

[2] Interjurisdictional Support Orders Act, 2002 S.O. c.13