ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: 632-2011
DATE: 2012/12/18

BETWEEN:

Sonia Bargiel Applicant – and – Raymond Mainville Respondent

T. N. Sullivan, counsel for the Applicant
L. Mullowney, counsel for the Respondent

HEARD: November 30, 2012

pelletier, j.

REASONS FOR JUDGMENT ON THE RESPONDENT’S MOTION

TO SET ASIDE THE FINAL DEFAULT ORDER

OF MADAM JUSTICE MÉTIVIER, JUNE 22, 2012

[ 1 ] On June 22, 2012, the Court made, following an uncontested trial, a final order upon the Respondent’s default which provided as follows:

1. The divorce simpliciter is hereby severed from the corollary relief set out herein, with the balance of any corollary relief preserved and maintained in the Application.

2. The separation agreement dated March 1, 2011 is set aside.

3. The Applicant, Sonia Bargiel, shall have sole custody of the children, Dehlia Mainville (d.o.b. […], 2003) and Julia Mainville (d.o.b. […], 2005), effective this date.

4. Access shall be in accordance with the following schedule and on the following terms:

a) Between June 22, 2012 and August 29, 2012:

i. The Applicant shall have access July 6 to July 25 and August 3 to August 17.

ii. The Respondent shall have access June 26 to July 6, July 25 to August 3, and August 17 to August 28.

b) Access shall start at 4:30 pm. The party who is completing access shall drop off the Children at the residence of the parent who is commencing access.

c) During the school year, the Respondent shall have access on the following schedule:

Every other weekend from Friday after school until Sunday at 6:00 pm, starting Friday, September 7, 2012, and every Wednesday overnight, from after school until the start of school the next day, starting September 5, 2012.

d) The parties shall advise the other of any change of address.

e) The Children shall be entitled to communicate with the other parent with whom they are not having access by phone access, until 8:00 pm.

f) If a parent cannot care for one or both of the Children, the other parent shall be given the option to care for the child or Children for the period of time the offering parent cannot provide the care.

5. Child support for Dehlia Mainville (d.o.b. […], 2003) and Julia Mainville (d.o.b. […], 2005) shall be fixed at $2,000 per month as of July 1, 2012.

6. Arrears shall be fixed for 8 months, up to and including June 1, 2012, at $16,000 based on an estimated gross income of $148,900 on the part of the Respondent, Raymond Mainville, based on assets and lifestyle and not on declared income.

7. Spousal support shall be payable by the Respondent to the Applicant in the amount of $1,140 per month commencing on July 1, 2012 without prejudice to the Applicant seeking retroactive support.

8. Costs shall be payable by the Respondent to the Applicant in the amount of 6,000, plus HST.

9. Of the costs in clause 8, $3,000 plus HST shall be applicable and considered support.

10. Unless this support order is withdrawn from the office of the Director of the Family Responsibility Office, it shall be enforced by the Director and amounts owing under this support order shall be paid to the Director who shall pay them to the person to whom they are owed.

This order bears the post-judgment interest rate of 3 per cent per annum.

[ 2 ] By amended notice of motion dated September 20, 2012, the Respondent has sought the following orders:

1. An Order setting aside the Order of Justice Metivier dated June 22, 2012 made in the absence of the Respondent (the “Default Final Order”);

2. An interim Order providing the parties’ two children, namely Dehlia Mainville born […], 2003 age 9, and Julia Mainville born […], 2005, age 6 (the “children”) shall live with each parent equally on a week-on week-off basis in accordance with the pre Default Final Order parenting arrangements - Separation Agreement dated March 1, 2011 ;

3. An interim Order providing the parties will have joint custody of the children in regard to decision making in accordance with the pre Default Final Order parenting arrangements - Separation Agreement dated March 1, 2011 ;

4. If the Applicant consents, an Order setting aside the Separation Agreement dated March 1, 2011;

5. In the event that the Applicant does not provide her consent to an Order setting aside the Separation Agreement, an Order staying or suspending the child support terms of the Separation Agreement dated March 1, 2011, which was filed by the Applicant with the Court for enforcement, pending a determination of interim child support on its merits;

6. Costs on a full indemnity basis; and

7. Such further and other relief as this Honourable Court deems just.

[ 3 ] Prior to this motion being heard on November 30, 2012, the Applicant raised her objection to the motion being heard on procedural and jurisdictional grounds.

[ 4 ] Firstly, the Applicant argued that in the absence of a properly conducted case conference, the motion could not proceed, based on the provisions of Rules 14(4) and Rule 14(6) of the Family Law Rules. Rule 14(4) provides:

(4) NO MOTION BEFORE A CONFERENCE ON SUBSTANTIVE ISSUES COMPLETED – No notice of motion or supporting evidence may be served and no motion may be heard before a conference dealing with the substantive issues in the case has been completed.

[ 5 ] This Court ruled that the motion to set aside the default judgment could proceed without having been preceded by a case conference for the following 5 reasons:

1. The Family Law Rules do not provide a procedure dealing specifically with setting aside default orders obtained following uncontested trials. It has been held that in matters of family law, the Court may proceed on the basis of Rule 19.08 of the Rules of Civil Procedure, which permits a default judgment to be set aside on such terms as are just. Rule 1(7) of the Family Law Rules provides that where the Family Law Rules do not cover a matter adequately, the practice is to be determined by analogy to the Rules of Civil Procedure where appropriate.

Catholic Children’s Aid Society of Toronto v. S.(T.) (2002), 2002 Carswell ONT 798 (O.C.J.)

Dion v. Dion (2009), 2009 Carswell ONT 1947 (Ont. S.C.J.)

Rumbolt v. Cwalino (2011), 2011 Carswell ONT 14482 (S.C.J.)

2. It is not possible for a litigant to schedule a case conference in a matter involving the litigant’s default and a resulting default order, as no answer is filed, Rule 17(1) and Rule 17(4.1).

3. Although the Respondent, moving party to the present motion, has not relied specifically on Rule 25(19) of the Family Law Rules in bringing this motion, the present motion amounts to a motion to change an order made upon the moving party’s inability to be present at the time of the making of the order, as provided for in Rule 25(19)(e), which is listed in Rule 14(6)(a) as a circumstance in which a motion can be brought prior to a case conference.

4. Most significantly, the Court offered to the parties, on the day of the present motion, to convert the proceedings into a case conference in order to address the various objectives of a case conference including those listed at Rule 17(4), which provides as follows:

(4) PURPOSES OF CASE CONFERENCE – The purposes of a case conference include,

(a) exploring the chances of settling the case;

(b) identifying the issues that are in dispute and those that are not in dispute;

(c) exploring ways to resolve the issues that are in dispute;

(d) ensuring disclosure of the relevant evidence;

(d.1) identifying any issues relating to any expert evidence or reports on which the parties intend to rely at trial;

(e) noting admissions that may simplify the case;

(f) setting the date for the next step in the case;

(g) setting a specific timetable for the steps to be taken in the case before it comes to trial;

(h) organizing a settlement conference, or holding one if appropriate; and

(i) giving directions with respect to any intended motion, including the preparation of a specific timetable for the exchange of material for the motion and ordering the filing of summaries of arguments, if appropriate.

The parties were unable to agree to this.

5. Finally, I concluded that the issues and the circumstances alleged to have resulted in the matter proceeding, as it did, on an uncontested basis on June 22, 2012 were properly identified and that the motion could proceed.

[ 6 ] The Applicant was further opposed to the motion proceeding on the motion return date due to the perceived absence of necessary information, primarily in relation to the Respondent’s financial situation. The Applicant referred to the absence of a current and detailed financial statement, the absence of any documents supporting his current income level and debts, and the absence of income tax returns for 2009 and 2011. On this issue, I concluded that the matter could proceed based on the available information and the various affidavits, subject to the Court providing counsel an opportunity to supplement the record if it became necessary and obvious during the hearing of the motion. Such an opportunity has been provided to counsel on issues including the Respondent’s income, communications between counsel, the service of documents and certain concerns in relation to parenting abilities. These additional materials which were filed after the motion date have been received and considered.

[ 7 ] The Applicant raised as a final objection to the motion being heard the issue of whether one of the Respondent’s affidavits was properly before the Court. It was concluded that, having been in the Applicant’s possession for a considerable period of time, the affidavit and its contents could fairly be considered by the Court.

[ 8 ] Accordingly, and subject to the Court receiving further information on specific issues, the motion proceeded.

[ 9 ] Counsel are in agreement as to the applicable legal standard in relation to a motion to set aside a default judgment. Three issues must be examined:

1. Whether the motion to set aside the default judgment was made as soon as possible following the moving party’s discovery of the judgment;

2. Whether the moving party has established that there exists a sufficient explanation for the default;

3. Whether the moving party has set forth sufficient evidence to establish that there is at the very least an arguable case to present on the merits.

Page-Cole v. Cole (2009), 2009 Carswell Ont 639 (Ont. S.C.J.)

Lenshis v. Rencarthi (1992), 1992 Carswell Ont 345 (Ont. Gen. Div.) aff’d (1996) Carswell Ont 330 (Ont. C.A.)

[ 10 ] It has been held that the test is disjunctive however that the Court is required to consider each criteria in its assessment, contextually conducted, of how to best balance the interests of the parties.

Scaini v. Prochnicki (2007), 2007 ONCA 63 , 85 OR (3d) 179 (Ont. C.A.)

[ 11 ] To that, I would add that the Court, as always, must balance procedural fairness, the interests of justice generally, including, notably, the best interests where applicable of children where custody and access are at issue, and the obvious need to ensure that there is some finality to the proceedings, particularly where the Court detects a lack of diligence or the absence of a will to confront the issues in a timely and efficient manner.

[ 12 ] Briefly, the history of the parties and the proceedings to date is as follows:

The Applicant and the Respondent began cohabitating in 1999 at a time when the Applicant was 22 years of age and the Respondent was aged 53. They were together until the winter of 2011, having married in 2005. Two children were born of their relationship: Dehlia on […], 2003 and Julia, born […], 2005.

The parties signed a separation agreement on March 1, 2011. They both claim that the agreement was signed under duress. They both relied upon the services of a single lawyer who had assisted in certain of the Respondent’s business enterprises previously.

The agreement provides for joint custody, week about living arrangements and shared holidays and $2000 per month in child support payable by the Respondent to the Applicant. This, parenthetically, equates to the child support obligations of a parent of 2 children in Ontario with an annual income of $150,000 without taking into consideration the week about residency terms or the Applicant’s income, which, from my review of the transcript of the June 22, 2012 proceedings suggests was in the area of $65,000 a year. There were no provisions for spousal support in the separation agreement.

The present Application was issued March 16, 2012. No first appearance date was given on the return of the Application.

The Application was served personally March 21, 2012 on the Respondent, according to the affidavit and supplementary affidavit of the process server. The Respondent denies that he received personal service, claiming that he discovered the Application in his mailbox at the end of March or early April 2012. I have concluded that the respondent was served personally and has either forgotten or mislead the Court. In either event, the Respondent would be very well advised to measure more carefully the information provided in his affidavits and other sworn statements in any subsequent proceedings. The Application was filed, together with the original affidavit of service on March 22, 2012.

According to Rule 3(4)2, the Respondent was required to serve an answer no later than April 23, 2012, as April 21 was a Saturday. (Rule 3(4)4.)

The Respondent states that in the spring of 2012, he was actively involved in defending charges of threatening the Applicant and her friend Mario. The charges were laid on January 11, 2012 and related to offences alleged to have been committed in the spring and summer of 2011. The Respondent was released by promise to appear accompanied by an undertaking entered into before an officer in charge. He was required to abstain from attending her residence in Wendover. Those charges were resolved on May 23, 2012 following the withdrawal of the charges and the imposition of a recognizance to keep the peace for a term of 10 months. The conditions of the peace bond were as follows:

Abstain from communication or association directly or indirectly with Mario Gauthier and Sonia Bargial, except regarding issues of the children which will be made in writing or as provided by any family court order.

Not attend (their/his/her) place of residence, place of employment or any place (they/he/she) may be at, except for social activities of children or exchange of children regarding custody.

Abstain from possessing any weapons including but not limited to any knives, any firearms, crossbow, longbow, prohibited weapon, restricted weapon, prohibited device, ammunition, prohibited ammunition or explosive substance.

Counsel for the Respondent on the present family law Application represented the Respondent in the criminal proceedings. The Respondent states in his affidavit on this motion that he attempted to secure the services of counsel who had participated in the execution of the March 2011 separation agreement, Mr. Kurt Anders in order to have Mr. Anders represent him on the present family matter. The Respondent claims that it was decided in April 2012 that Mr. Anders may find himself in a conflict of interest if the legitimacy of the 2011 separation agreement was to be litigated.

The Respondent states that he was at the same time dealing with inquiries by the Children’s Aid Society concerning the well-being of the children, further complaints to the Ontario Provincial Police by the Applicant, cleared without charges, a series of civil proceedings culminating in judgments and default judgments exceeding $2,000,000.00 , and Revenue Canada inquiries.

On May 31, 2012, counsel for the Respondent presently, Mr. Mullowney, wrote to counsel for the Applicant, Mr. Sullivan. The letter reads as follows:

WITHOUT PREJUDICE:

Please be advised that my office acts for Mr. Raymond Mainville,

the Respondent in the above noted proceedings.

I am in receipt of instructions to deliver a response to the claims

made in your clients application. Accordingly, you can expect

to receive my client’s answer on or before July 2 nd , 2012.

The letter did not specifically invite counsel to respond or consent to what amounted to an extension of some 69 days for the filing of an answer.

It is apparent from correspondence between Mr. Mullowney and Crown counsel, dated May 8 th , 2012, and sent in connection with the merits of the criminal charges, that Mr. Mullowney, though not at that time retained on the family law file, was aware of the Application and its contents. Counsel for the Applicant suggests that a more prudent course of conduct would have been for Mr. Mullowney, in his May 31, 2012 letter to specifically seek a consent to late filing, as provided for in Rule 3(6). Be that as it may, there were no further conversations or correspondence between counsel until well after the uncontested trial was held on June 22, 2012. The uncontested trial resulted from counsel for the Applicant seeking a date for the hearing of the uncontested trial, on the defacto default of the Respondent, April 23, 2012. The notice of motion, returnable June 22, 2012 was pled June 20, 2012. Counsel for the Respondent was not made aware of this date. There is no legal requirement for notice to be given to a party in default.

There is no procedure in the Family Law Rules for a noting in default of a party. The time within which an answer is to be served determines whether a party is entitled to participate in a proceeding. Rule 10(5) provides as follows:

(5) NO ANSWER OR ANSWER STRUCK OUT – If a respondent does not serve and file an answer as this rule requires, or if the answer is struck out by an order,

(a) the respondent is not entitled to any further notice of steps in the case (except as subrule 25(13) (service of order) provides);

(b) the respondent is not entitled to participate in the case in any way;

(c) the court may deal with the case in the respondent’s absence; and

(d) the clerk may set a date for an uncontested trial.

There being no answer filed before April 23, 2012, the matter could proceed uncontested. The matter accordingly, and in strict compliance with the Family Law Rules proceeded in the Respondent’s absence.

The transcript of the proceedings on June 22, 2012 is attached to the present Reasons for Judgment, as Appendix “A”.

[13] It is against this procedural background that the Court must determine whether the criteria applicable to a motion to set aside a default judgment have been met.

[14] I have concluded that the motion to set aside the default judgment was brought as soon as possible after the Respondent became aware of the events of June 22, 2012. The evidence before me is that he called his counsel on the day he was served with the order; June 26, 2012. His counsel, though severely incapacitated at the time and throughout July, attempted, unsuccessfully to discuss the situation with the Applicant’s counsel, though there are no records to confirm this. In due course, a date for the present motion was set, and following two adjournments not directly attributable to the Respondent, the present motion was heard. There is little more that the Respondent could have done in the circumstances.

[15] Similarly, I am persuaded that the Respondent’s default is satisfactorily explained. Clearly, the Respondent was negligent in not responding more swiftly to the service of the Application at the end of March, 2012. That said, I am of the view that he did not ignore the process. The Respondent was actively engaged in defending criminal charges. He was in the midst of several civil proceedings. He was being investigated by the Children’s Aid Society, Canada Revenue and the O.P.P. The evidence before me is that he attempted to secure the services of Mr. Anders on the family law matter in April, determined that this was not possible, and hired Mr. Mullowney, who by then had achieved a very favourable outcome in the criminal proceedings. Mr. Mullowney wrote to Mr. Sullivan on May 31, 2012. The Respondent was already in default however no steps had yet been taken by the Applicant to move for judgement in the Respondent’s absence. The May 31, 2012 correspondence in my view is pivotal in this case. Mr. Sullivan was made aware that the Respondent had counsel and that, essentially, a period of 30 days grace was being requested. I fully agree with the Applicant’s counsel that the letter is more in the nature of a statement of fact rather than a humble request for a brief indulgence in a matter that was by no means urgent.

[16] Nonetheless, it informed the Applicant that the Respondent had counsel and that a response could be expected within a month. I note in passing that this is a very involved matter that concerns property issues, determination of income, custody, arrears, child support, spousal support, requests for restraining orders and the existence of a separation agreement. In my view, and as against the background of the Respondent’s multiple concerns at the time, a period of 30 days grace, notwithstanding the passage of the deadline to file an answer, was not exorbitant.

[17] The Court is very concerned with the Applicant’s decision to proceed to default judgment in these circumstances. It ignored the fact that the Respondent had hired counsel, and that a brief indulgence had been sought. The May 31, 2012 letter was simply ignored on the basis that it strictly was a statement of fact rather than a Rule 3 request to vary time lines. The contents of the letter while privileged as communicated “Without Prejudice”, nevertheless revealed that the Respondent had retained counsel and that such counsel operated with the expectation that responding materials could be forthcoming. Neither the letter, in its admittedly authoritative tone, nor the decision to ignore it completely would have happened in a case where counsel could work collaboratively and productively, bearing in mind only their clients’ interests. Counsel have stated to me, emphatically and repeatedly during submissions on this motion, that theirs is not that type of working relationship.

[18] I am further troubled by the Applicant counsel’s observations at the uncontested trial concerning the Respondent’s failure to participate in the Application. I question whether the Court would have proceeded ex parte had it been made known that the Respondent had hired counsel three weeks earlier and that counsel had informed the Applicant’s counsel that a response would be delivered by early July, some 10 days after the day on which this matter was heard as an uncontested trial. Uncontested trials are usually routine matters and seldom involve the number and complexity of issues present in this case. Madam Justice Métivier makes that very observation on the day of the hearing, expressing some concern about the volume of material, the very involved history of the parties and the extent of the orders sought. On two occasions, Her Honour is clearly given to understand that the Respondent has simply not responded.

[19] I would not want to be taken as concluding that the Respondent is without fault. By his own evidence, he was aware of these proceedings nearly 3 months before the uncontested trial and had not served an answer.

[20] I am however of the view that he was entitled to conclude by the end of May that he had counsel, that counsel had the materials and that no further steps would take place until early July. His default, in my view, is sufficiently explained in these very specific circumstances. I note as well that it is very regrettable that the Application did not specify a first appearance date. This is unusual and contrary to the practice in these counties. Cleary, counsel for the Respondent, even when Mr. Anders was being consulted, would have been aware of a return date upon which scheduling and time lines could have been discussed. Regrettably, neither counsel was given that opportunity and the result was a complete lack of communication and collaboration between counsel, that in the long run, operated to their clients’ detriment.

[21] On the final issue, I am easily persuaded that there exit issues that must be properly litigated, not the least of which is the living arrangements that best serve the children’s interests. For over a year, the parties observed the terms of the separation agreement in a week about arrangement. With the exception of different parenting approaches and possibly quite different financial resources, there does not appear to be any reason for the children spending less time with one parent. The parties live in the same village. The financial issues are complex and will require considerable effort and transparency by the Respondent. The financial information submitted by the Respondent following the hearing of the present motion presents a very complex scheme of financing, personal and business loans, use of credit, and very limited income. Source documents, accurate affidavits and various records, as previously ordered, will have to be obtained for the Court to have any comfort in reconciling the lifestyle enjoyed by the parties during their union with the amount of income stated.

[22] The orders that were made following the uncontested trial contemplated that certain issues remained in any event to be decided on another occasion. I have concluded that it is in all parties’ interests that all issues be examined, on proper notice with complete disclosure, so that a realistic, practical and productive result can be achieved, fair to the parties and consonant with the best interests of the two girls. While I would set aside the default judgment, the order respecting the children’s living arrangements will remain in effect in order to minimize any disruptions in the short term. The living arrangements following the Christmas break will have to be examined promptly by case conference and motion if necessary.

[23] The Respondent is aware, I gather, that any time lines established with regards to disclosure will require that those deadlines be observed, failing which the Applicant will be at liberty to obtain an order under Rule 10 striking his pleadings and essentially having the matter heard without his participation.

[24] For the reasons stated above, the following interim orders are made:

1. All orders of Madam Justice Métivier dated June 22, 2012 are set aside with the exception of the paragraph 4 in relation to the living arrangements of the children and access by the Respondent, and subject to the following holiday schedule:

The Respondent shall have the children in his care from December 25 th , 2012 at 2:00 p.m. to December 26 th , 2012 at 6:00 p.m., and from December 30 th , 2012 at 6:00 p.m. to January 6 th , 2013 at 6:00 p.m.

2. The Respondent shall have until January 14, 2013 to serve and file responding materials to the Application, including an updated and complete Financial Statement;

3. A case conference is to be scheduled forthwith;

4. Counsel shall maintain records of all communications, written or verbal, and shall respond without delay to communications or inquiries from opposing counsel;

5. Unless they are able to agree otherwise, counsel may exchange and file cost submissions not to exceed 2 pages in addition to any accompanying documents, no later than February 15, 2013.

“Original signed by Justice Robert Pelletier”

Justice Robert Pelletier

Released: December 18, 2012

COURT FILE NO .: 632-2011

DATE: 2012/12/18

ONTARIO SUPERIOR COURT OF JUSTICE BETWEEN: Sonia Bargiel Applicant AND Raymond Mainville Respondent REASONS FOR JUDGMENT on the Respondent’s motion to set aside the final default order OF Madam justice mÉtivier, June 22, 2012 Justice Robert Pelletier

Released: December 18, 2012