NEWMARKET
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Donna Mary D. Lee, Applicant (Responding Party)
AND:
Stanley Kouhwa Chiang, Respondent (Moving Party)
BEFORE: THE HON. MR. JUSTICE P.H. HOWDEN
COUNSEL: E. Birnboim, Counsel for the Applicant (Responding Party)
H.A. Wright, for the Respondent (Moving Party)
HEARD: December 5, 2013
ENDORSEMENT
Background
1The moving party on the motion is the respondent Dr. Stanley Chiang. The responding party on the motion is the applicant Donna Lee. They have two children who are now adults and independent. This motion is for a series of orders requested by the respondent father as follows :
to reinstate his pleadings
to set aside or vary the orders obtained by the applicant for child support, spousal support and equalization; and
cancel all arrears and future payments under the said orders.
to give leave for this matter to proceed toward a contested trial unless settled within 60 days
2The responding party - applicant seeks dismissal of this motion and an order adding as a party respondent the professional corporation incorporated by Dr. Chiang and that it be jointly and severally liable for any judgment against the moving party-respondent.
3Despite the orders sought in the factum by the respondent, the argument concentrated on the first two requests of the respondent for obvious reasons. The final orders he now complains of were issued on October 30, 2009 for spousal support and January 21, 2010 for child support, almost four years ago. Leading up to and including those orders were endorsements containing the following observations, findings and interim orders and directions of the respective judges dealing with this matter:
April 30, 2007 - Consent order, respondent to pay support, unspecified, of $4,500 per month from May 1, 2007 and continue to pay the household bills. All reasonable financial disclosure ordered to be made on request.
June 20, 2007 - Consent order issued to disburse proceeds of sale, $200,000 to the applicant and $100,000 to the respondent, remainder to be held in trust until further order or agreement; disclosure to be made by the respondent as set out in list (para. 2 of order) including valuation of his dental practice or a letter requesting it within 30 days.
September 3, 2008 - “RF (respondent father) has still not complied with the consent order made over a year ago dealing with disclosure. He has unilaterally reduced the $4,500 per month support agreed to... He has failed to value his dental practice as agreed and ordered June 20, 2007.
“The RF continues to ‘thumb his nose’ at the court process. We expect court orders to be complied with and we expect someone to attend at court dates. (Counsel and respondent father failed to appear).”
March 18, 2009 - Motion by applicant adjourned to March 25, 2009 in the presence of counsel for the respondent.
March 25, 2009 - Re disclosure - Respondent in breach of court order - Disclosure is to be made by May 4, 2009. Consent order to go. ...The respondent to file IT returns for 2007-08 - provide by May 4, 2009, failing which his pleadings are struck.
October 30, 2009 - “The Applicant has filed a Form 23C dated July 20, 2009. The parties separated on August 16, 2006. This application was issued January 25, 2007.
The respondent’s pleadings are struck pursuant to the order of Justice Ferguson dated March 25, 2009...
“The respondent is a dentist who has chosen not to participate in this proceeding. ...The Respondent’s Income Tax Returns for 2005 and 2006 have been filed... The former indicates professional income of $303,262.00 - net $98,790.99 and the latter shows professional income of $768,997.00 - net $90,118.07.
“The March 25, 2009 - Order required the respondent to provide his 2007 and 2008 Income Tax returns by May 4, 2009, failing which his pleadings were to be struck. He has failed to provide his returns as required...”
The respondent was ordered on a final basis to pay spousal support of $7,000.00 per month commencing January 1, 2008, based on yearly income commencing August 16, 2006 of $380,000.00. Child support was adjourned pending further information including direct payments as an offset.
On or before December 1, 2009, Respondent shall provide a sworn financial statement...
A further amount of $150,000.00 of the sale proceeds of 14 Eastgate Crescent, Richmond Hill, Ontario to be released immediately to the Applicant as a credit to the payment of table child support, spousal support prior to January 1, 2007, and the Applicant’s claim for equalization.
The balance to be held in trust. A copy of this endorsement to be served on the Respondent.
January 21, 2010 - McGee J. noted that the respondent’s pleadings were struck and further material as required by the court was filed by the Applicant’s counsel. Retroactive spousal and child support ordered on a final basis from August 16, 2006 to December 1, 2007 for spousal (at $3,885 per month for 2007) and to August 31, 2009 for child support (at $2,956 per month to August 31, 2009) plus his proportionate share of university and s. 7 expenses, less a credit of $4,896 for overpayment of child support for 2008. The balance of the sale proceeds of $240,452.42 to be paid immediately to the Applicant as a credit toward retroactive child and spousal support and the Applicant’s equalization payment.
October 26, 2010 - Final order to go setting the equalization payable by the Respondent of $137,526.11.
December 15, 2010 - The Respondent has brought a motion to set aside “the Final order based on uncontested trial”. McGee J. conducted what she called a partial case conference and ordered the following in order “to have a productive case conference”. She ordered the parties “to attend a case conference which may not be scheduled until,
The RF delivers an expert’s report as to his income for support purposes in the calendar years 2008, 2009, and 2010...The report shall also identify the time worked by the RF to earn said amounts;
The RF must file a current financial statement; and
The RF must be making minimum table support payments for 2 children on income of $90,000 per annum from this date forward.
Failure of any of these steps shall prevent the RF from moving forward in this case.”
- February 8, 2013 - Kaufman J. presided at a case conference. He endorsed the following:
“As per order of December 15, 2010, as a precondition of RF going forward, he must comply with the terms of that order. On consent, and without prejudice as to quantum, the RF shall pay the sum of $6617 by March 4, 2013 representing the suggested arrears owing under the December 15, 2010 order. On the basis of the payment being made, a continued Settlement and Trial management conference will take place on April 15, 2013. at 2:15 p.m.” Further disclosure filings were required of both parties. Kaufman J. then ordered that “spousal support as per order of October 30, 2009 is terminated as of December 31, 2012 without prejudice to argument on other adjustments, being quantum and duration.”
There is no indication in the file that that order was ever issued. See April 15, 2013 endorsement.
- April 15, 2013 - Kaufman J. notes that “my last endorsement was premature regarding scheduling of Trial Management Conference. The RF must still deal with his outstanding motion to set aside the final order of the AM obtained on an uncontested basis. If successful, then the Trial management Conference and trial proceeds”. He outlined 4 issues for trial: (i) quantum of spousal support owing for 6.5 years; (ii) determining if RF had overpaid child support by $25,000; (iii) determining s. 7 expenses after accounting for the RESPs and bursaries available; and (iv) determining RF’s income.
He ordered on consent that child support as previously ordered on October 30, 2009, January 21, 2010 and December 15, 2010 is terminated effective April 30, 2013. Disclosure order (unidentified) rescinded and further disclosure lists are to be provided “proportional to outstanding issues”, disclosure was ordered of both parties as set out.
- The last two appearances were on August 14 and November 5, 2013, the latter date occurring after the week of December 2 was set for hearing of the motion subject to terms of further evidentiary filings, the actual date to be ascertained in November. The reason for the appearance by counsel on November 5 was an ex parte motion brought by Mr. Birnboim requesting an interim preservation order. The motions judge set out the three-fold test for what is in essence a Mareva injunction. She found that there was no undertaking filed as to damages, that risk of dissipation was not established beyond “a generalized anxiety”, and a prima facie case was neither defined nor addressed. The motion was dismissed, the endorsement to be served on Mr. Wright by newly retained counsel for the Applicant, Mr. Birnboim. This motion was brought on following the setting of the date for the Respondent’s motion now before me, without any case conference and without establishing urgency as required by the rules to prevent this kind of attempted end run around them.
4This concludes the history of interim and final orders. I now turn to the motion before me.
5The Respondent’s motion is in substance a motion to set aside the final orders made on October 30, 2009, January 21, 2010 and October 26, 2010, set aside the orders of March 25 and October 30, 2009 striking his Answer and allow him to defend at trial his position that these orders were based on false assumptions about his income, and that as a result the findings on spousal and child support and equalization were skewed. This motion to set aside is brought following a separation which occurred 7 years ago, following default by the Respondent of appearance from September 3, 2008 until he originally brought on this motion in late 2010, following default by the Respondent under several disclosure orders, and following default by the Respondent of three orders to pay costs. The outstanding cost orders are:
March 25, 2009 $3,000.00
September 3, 2009 $3,000.00
January 21, 2010 $7,271.60
Total $13,271.60
6The respondent’s motion is now brought on following a delay of three years from December 2010 when it first came before the court.
The Test to Set Aside Default Judgment
7The test to set aside a default judgment or order is set out in Page-Cole v. Cole, 2009 57152 (Ont. S.C.) at para. 28:
The motion to set aside a default judgment should be made as soon as possible after the applicant becomes aware of the judgment.
More importantly, the moving party's affidavit must set out circumstances under which the default arose that give a plausible explanation for the default.
The moving party must set forth facts to support the conclusion that there is at least an arguable case on its merits.
8The application of this analysis cannot be mechanical or arithmetic; as the Court of Appeal for this province held in Peterbilt of Ontario Inc. v. 1565627 Ontario Ltd. et al, [2007] ONCA 333, it is an error to treat these principles as rigid preconditions,
such that the failure to satisfy any one of those supposed preconditions necessitated the dismissal of the motion to set aside the default judgment.
On a motion to set aside a default judgment, the motion judge will be guided by the principles identified in the authorities. The motion judge must, however, ultimately determine whether the interests of justice favour an order setting aside the default judgment. (Paras. 1-2)
9The potential prejudice to each party must be considered, as well as the effect of any order that the judge may make on the overall integrity of the administration of justice. Peterbilt, at para. 2; D’Alessio v D’Alessio, 2010 ONSC 321 (Ont. S.C.) at para. 6, citing Scaini v. Prochnicki (2007), 2007 ONCA 63, 85 O.R. (3d) 179 at pp. 184-5; Page-Cole, supra. As Ray J. stated in D’Alessio at para. 6, “The exercise of discretion requires a weighing of these factors whilst balancing of the interests of the parties. A contextual approach is required.”
10Counsel for the respondent cited to me several statutory authorities giving the court the power to set aside, discharge, vary or suspend a prior support order or other types of orders on grounds of fraud or mistake or a lack of notice, from the Divorce Act, RSC 1985, c.3 (2nd Supp.), as amended, to the Family Law Act, R.S.O. 1990 c.F.3, as amended, and the Family Law Rules, O.Reg.114/99, as amended. The problem, of course, is not whether this court has the power by statute or by its own inherent jurisdiction to control its own process. Murray J. put it succinctly when he ruled in a case with definite similarities to this case, Oelbaum v. Oelbaum, 2010 ONSC 4874 :
28I accept that the Court has inherent jurisdiction to ensure that cases are determined on their merits and that the exercise of the court process does not lead to unfairness or abuse. See Higgins v. Higgins, (2007), 2007 ONCA 663, 232 O.A.C. 340, in which the Court of Appeal stated at para. 18 that there may be some cases in which a court should grant relief from the strict operation of Rule 10(5)(b) of the Family Law Rules. The question is whether this is a case which demands intervention by this Court.
11The Family Law Rules contain a very strong statement on the effect of striking pleadings which the Civil Rules governing non-family cases do not have. Rule 10 (5)(b) states:
If a respondent does not serve and file an Answer as this rule requires, or if the Answer is struck out by an order, the respondent is not entitled to participate in the case in any way...
12Mr. Wright submitted that this respondent did act to reinstate his pleadings and set aside the default orders by obtaining the earliest date possible, that the court set conditions to the respondent bringing this motion and a timetable for specific steps to be completed, one being that the respondent get an evaluation of his income by a profession evaluator. The evaluation was not completed until June 22, 2012. The next step was that a case conference must be held prior to the motion proceeding and the first available date was not until 2013. Kaufman J. took hold of the case then and case managed it to the setting down of this motion at this time.
13The respondent was also required, as part of the schedule set in 2010 for this motion to go forward, to file a financial statement which he has done, and to pay child support based on an income of $90,000 annually (with which he failed to comply until March 2013). As to the merits of the case, Mr. Wright submits that the income evaluation challenges the applicant’s evidence at the uncontested trial. It has shown that Dr. Chiang earns an income now substantially less than that recorded as the basis for fixing the child and spousal support. Instead of $380,000, the Hames report records a calculation of Dr. Chiang’s available income, after expenses and discretionary spending, in 2008 as $166,000, in 2009 as $151,000, and in 2010 as $118,000. This slippage, according to the report, is explained by a decrease in Dr. Chiang’s workdays from 171 in 2008 to 142 in 2010. The report accepts the respondent’s explanations for this decrease rather uncritically, in my view. The report includes as a “workday” any day in which his appointment book recorded an appointment with one patient. The report hedges its conclusion on this subject in the following carefully chosen language: “It would appear that the explanations of Dr. Chiang provide a basis for the decline in his workdays during the period.”
14The respondent’s explanations for this drop in income since separation include loss of patients from a clinic he worked in to supplement his income and his administrative role now that he has no office manager/bookkeeper. In his own affidavit evidence, the respondent decries the area in which he is located as a major reason for this decline and states that non-dentists do not realize that there are dentists who do not earn large incomes. Nevertheless, he is a dentist who, one way or the other, was earning as late as 2006, the year of the separation, gross revenue of $474,000 (rounded) according to the Hames report and by 2010 gross revenue had slumped to $280,000, a drop of almost 60% since the separation. This respondent may have caught the same disease that so many self-employed payor parties suffer from in Family Court - declining income fever.
15Mr. Wright sees the potential prejudice to the respondent from dismissal of this motion as far outweighing that of the applicant if the motion was allowed. He would lose his day in court where he has a case of some merit which may succeed in reducing his present crippling support debt. According to a recent FRO statement filed at the hearing, his arrears in periodic payments total $462,897 as of May 17, 2013. The applicant on the other hand has received additional moneys from the house sale and she has not reported to FRO all of the money the respondent has paid her. Any prejudice to the applicant of reopening this case to a trial may be compensated for in costs. He sees this as a very different case from Oelbaum, a case where the greater prejudice to the respondent of dismissal and a meritorious case require for the respondent a chance to be heard despite the defaults of the past.
16Mr. Birnboim makes a powerful argument for outright dismissal of this motion. He submits the following:
The respondent’s pleadings were struck after three orders for disclosure and two orders regarding support were made, not appealed, and not complied with between April 2007 and March 25, 2009.
Following the final order on October 30, 2009, after the respondent’s pleadings were confirmed as struck out and a final order for spousal support was made based on an annual income found to be $380,000, no motion was brought by the respondent to set aside the default final order until this motion began by notice of motion dated December 9, 2010 to set aside both the October 30, 2009 and the January 21, 2010 orders, a delay of over one year following the first final order and close to one year following the second one.
The lack of expedition in bringing this motion has not been explained and he is only prosecuting the motion now to defeat the enforcement measures being taken by FRO.
The respondent remains in default of disclosure, costs and support orders, none of which were appealed by him.
The three year delay in bringing on this motion after he commenced it is not adequately explained, nor is the delay in obtaining the dental practice evaluation report until June 2012, ordered on December 15, 2010.
The respondent’s counsel has supplied no case involving this magnitude of delay following a final default order where relief was granted, absent extenuating factors beyond his control.
The prejudice to the applicant of granting this motion now includes increased costs to her without his paying prior cost orders; the difficulties now of re-creating the respondent’s asset and income situation 7 to 8 years ago and earlier; putting her back to trying to move the case forward again three to four years after the final orders were obtained at a cost to the applicant which has been largely thrown away; and making it impossible for her to move forward with her new life.
The administration of justice has a strong interest and inclination to have cases decided on their merits but it is not confined to that one objective; justice means resolving disputes within a reasonable time frame: Laskin J.A. in Hamilton (City) v. Svedas Koyanagi Architects Inc., [2010] ONCA 887; Sharpe J.A. in 1196158 Ontario Inc. v 6274013 Canada Ltd., 2012 ONCA 544, [2012] O.J. No. 3877 (C.A.).
Whatever the outcome of this motion, the applicant seeks an order adding the respondent’s professional corporation as a party respondent.
Timeliness in Moving to Set Aside or Appealing the Final Orders and the Striking of the Respondent’s Answer; Explanation for Delay
Timeliness in Moving to Set Aside or Appealing the Final Orders and the Striking of the Respondent’s Answer; Explanation for Delay
17This litigation began shortly after the parties’ separation in April 2006. The respondent was warned by repeated disclosure orders, by statements from the bench about his unilateral lowering of support payments ordered by the court between June 2007 and October 2009 and by warnings of consequences if orders were not complied with. The respondent was in breach of several orders for disclosure and support by May 4, 2009 when the order striking out his Answer became in effect and the final spousal support order was made on the evidence of the applicant. F.L. Rule 10(5)(b) requires that once a party’s pleadings are struck, that party may not participate further, subject of course to the court’s jurisdiction to grant relief from the strict application of that rule. Higgins v Higgins (Ont. C.A.), supra, cited in Oelbaum (O.S.C.), supra.
18The explanation for the respondent’s original inertia from 2007 to 2010 when he brought this motion is singularly self-serving, unhelpful, and unsupported by his own evidence. He asserts that it was because of the applicant’s second lawyer and increased demands for disclosure that resulted in his fall into a paralyzing depression. (Resp.’s Factum, paras. 4-6; Resp.’s affidavit sworn December “9/20” (sic, meaning 9/10), paras. 12-15, Exhibits C and D, and Exhibit H).
19Exhibits C and D to the respondent’s affidavit of December 9, 2010 are letters regarding settlement meetings which culminate in the letter (Exhibit D) from the applicant’s then lawyer of February 21, 2008 asking: “Am I going to receive a response to my client’s proposal. We are waiting. I do not want to return this case to court if it is not necessary.”
20These letters explain nothing and end in a note of exasperation from the applicant’s lawyer at the failure of the respondent to respond. By September 3, 2008 the matter was back in court where the presiding judge noted the continuing default in paying support and in disclosure including his failure to obtain a valuation of his dental practice, ordered originally on June 20, 2007 on consent of the respondent.
21As to his reported depression, there is no medical report whatsoever filed in all these years since this self-diagnosis was suggested by Dr. Chiang, a dentist, not himself a person trained in mental disorders. The only medical letter is Exhibit H. It is a letter from Dr. Ashraf Mikhail MD, M B B ch., dated November 10, 2010, well after the respondent’s defaults began in 2007 and it is very brief.
“This is a letter to confirm that Mr. Chiang’s medical condition has improved and he is able to attend court.
If you have any questions or concerns, please do not hesitate to call me at the above number.
Sincerely”
22It is clear that Dr. Mikhail was quite willing to provide more information but was never asked. There appears to have been some “condition” prior thereto but no explanation is forthcoming to account for three years of breached court orders since 2007. In any event, this claim of depression was not so debilitating that it prevented Dr. Chiang from travelling abroad in 2009; Mr. Wright referred to this trip as an explanation for Dr. Chiang’s absence from the court proceedings for part of 2009; no pressing reason was put forward for this trip at the time in question.
23I see no satisfactory explanation for what I can reasonably infer was an intended inertia and disregard of court orders on the part of the respondent and his failure to bring a timely appeal or motion to set aside the support order made on consent in 2007 or the disclosure orders he ignored. The valuation of his practice, ordered on June 20, 2007, was finally addressed in June 2012, 5 years after it was first ordered and two years after it was made a condition of his bringing this motion to hearing. But even then, it was only partly addressed, because the Hames report is an evaluation of the income from his practice, not a valuation of the practice. There was an original so-called valuation filed with the respondent’s affidavit of December 9, 2010 but it is only a valuation of assets, again not of his practice.
24I find most of the respondent’s affidavits to be self-serving attacks on the applicant for misrepresenting his situation and partial explanations without specific information. For instance, after McGee J. set her three conditions for this motion moving ahead on Dec. 15, 2010, the first being the income evaluation, the respondent provides no retainer letter showing prompt attention to this order. All I am left with is that at some point following that order and before the report date of June 2012 he retained Mr. Hames as the valuator and he produced a report that would normally take perhaps two to six months (on the outside) to prepare once the valuator had the information he wanted from Dr. Chiang and his accountants.
25Again, no satisfactory explanation is given for the delay in obtaining the report or for the ensuing time to arrange a settlement conference to meet McGee J.’s third pre-condition on April 15, 2013. Kaufman J. had to adjourn that conference from February 8, 2013 because, once again, Dr. Chiang had not complied with a prior court order and he was given until March 4 to pay $6,617, being the arrears under McGee J.’s order of December 15, 2010. That order for support was much lower than the support previously ordered, based as it was on the respondent’s income being $90,000, not $380,000 per year. I take it that this was paid though neither counsel saw fit to be specific in their material about it being paid in fact. I take it also that he has continued to pay under that order on account of arrears of support, as it was a precondition to this motion proceeding. Dr. Chiang has not addressed this in any detail in his material. Ongoing spousal and child support were terminated by orders of Kaufman J. as of April 30, 2013 and December 31, 2012 respectively, the latter on a without prejudice basis.
Is There an Arguable Case for the Respondent on its Merits?
Is There an Arguable Case for the Respondent on its Merits?
26The main asset claimed by Mr. Wright as the central feature of Dr. Chiang’s case is the income evaluation by Jonathan Hames, a chartered accountant with fourteen years experience in forensic accounting with SLF Financial Services Inc. And there is no doubt that the Hames findings of a considerably lowered annual income for the respondent since the separation assist his case. They indicate a much lower income than that which the 2009 spousal and the 2010 child support orders imputed to him for purposes of setting the support relief granted to the applicant.
27It occurs to me, from a perusal of the report, however, that at trial where its assumptions and carefully worded conclusions will be probed and tested, that it could also lead to claims that income is being sheltered in the respondent’s professional corporation and/or it is evidence of deliberate under-employment and the basis of a claim under s. 19 of the CSG to impute income to the respondent, as Mr. Birnboim has already asserted. I acknowledge that the report indicates there is some merit to the respondent’s case. I just do not see it as the panacea that Mr. Wright claims for it but coupled with Dr. Chiang’s and his accountant’s evidence, it lends some degree of strength to his case.
Potential Prejudice and the Integrity of the Administration of Justice
Potential Prejudice and the Integrity of the Administration of Justice
28For the respondent, I am well aware of the prejudice for him if his motion is dismissed. He would not have his day in court. He could no longer litigate his late claims of misrepresentation of his assets and income by the applicant during the default hearings before McGee J. in 2009 and early 2010. It also means that he will continue to be pressured by FRO as he has been, to make payments toward the large amount of arrears owing according to its accounting. He claims that he has already lost his passport and his driver’s license. He was at one time subject to the usual FRO order of time in jail if he failed to pay an amount toward arrears.
29Finally Mr. Wright and the respondent through his affidavit material assert that it is the goal of the administration of justice to hear and decide matters fully and fairly on their merits. Mr. Wright submits that it would go against the very heart of the justice system - the court’s concern for fairness and justice - if a case like the respondent’s, with a potentially meritorious defence to the default findings of the court, were dismissed.
30For the applicant, it is asserted that allowing the respondent to reinstate his pleadings and set aside the final orders is highly prejudicial to her in the large expenditure of money she had paid already thrown away and the prospect of more expense in having to start over. She will be without much hope of recovering it due to the respondent’s ability to shelter income from FRO or to render himself judgment proof by yearly reductions of patients and working hours without any effort to regain patients and work to the level he exhibited before the separation. In addition, it would place her in the most difficult position of having to prove, seven and more years after the fact the respondent’s financial position after he has been able to restructure his affairs and assets by creating his personal corporation. And it would be the justice system which would force her into such an unfair position after its promise, in which she invested, of timely process and some finality to this conflict. It means that she must re-visit this difficult period in her life instead of being able to move on with her life. And all this, simply because the respondent failed or refused to meet his obligation of full disclosure and evidence of his income for support purposes four years ago (Endorsement of McGee J., October 30, 2009).
Analysis
Analysis
31The case cited earlier and decided by Justice Murray, Oelbaum, has several similarities to this case, though the time from commencement of litigation to the motion to set aside a final default judgment is longer, fourteen years instead of almost eight years here. Justice Murray’s description of the respondent’s position in that case is echoed in the protestations of the respondent in this case. As Justice Murray put it,
15The position taken by Mr. Oelbaum in this motion is succinctly stated in written submissions made by Mr. Oelbaum’s counsel as follows:
In essence, the respondent’s position is that the applicant’s lack of candour before McGee J. (the judge hearing the uncontested trial) on December 18, 2009, led to an unfair judgment, one that cannot be enforced as the respondent does not have the income or assets to honour or satisfy the judgement.
16The respondent alleges that the applicant failed to advise the court that the Oelbaums’ high lifestyle came crashing down long before the April 1995 separation and the evidence before Justice Miller was significantly misleading.
17In sum, the respondent appears on this motion and says: help me! The result is unfair!
32As in Oelbaum, the cost orders in the interim proceedings and on the judgment following the uncontested trial have not been paid. The spousal and child support orders are in arrears in the amount of over $ 400,000 according to FRO. The equalization payment ordered in 2010 has not been paid. Again as in Oelbaum, no effort was made by the respondent to reinstate his Answer after it was struck for many months, in this case from May 4, 2009 (though not formally pronounced until October 30, 2009) to December 9, 2010. In this case he never made full financial disclosure and it is only because the case management judge rescinded a prior disclosure order (not identified in the endorsement of April 15, 2013 and substituted a more limited and virtually unenforceable disclosure order that it could be said that disclosure for the limited purpose of getting this motion on might be up to date. It is impossible for me to say now whether the prior orders were ever fulfilled; certainly Mr. Wright never demonstrated how they were.
33This respondent’s major accomplishment was to finally have produced a valuation of the income from his practice in June 2012 five years after a valuation of his practice was ordered. It was only produced after the first case management judge ordered it to be done as a condition to this motion being heard. That order was made on December 1, 2010. And it appears to me as a reasonable inference that as long as this motion could be said to be coming on, enforcement efforts could be requested to be held in abeyance, hence the lack of any haste in meeting the December 15, 2010 order as I mentioned earlier. To take three years to get a motion on for hearing, after the initial delay of more than a year following the striking of his pleadings, even given the difficulties in Newmarket, is simply untenable and dilatory.
34The respondent failed to act without delay following the striking of his pleadings. He has failed to explain his delay in bringing this motion, in my view. He never appealed that order. As in Oelbaum again, to paraphrase the words of Justice Murray at para. 41, this respondent had ample warning prior to 2009 that his pleadings might be struck. On March 18 2009, the applicant’s motion to strike part of the respondent’s case was adjourned for hearing to March 25, 2009, and on that date he was ordered to provide financial disclosure by May 4, 2009, “failing which his pleadings are struck” (Endorsement of Ferguson J.). He had ample opportunity either to move to set aside or vary the interim support orders which he unilaterally lowered in his payments since 2007, or to comply with them. It is a reasonable inference that he simply decided to sit back and wait to see what happened at the uncontested trial.
35In terms of prejudice, while I appreciate the dire effect of dismissal on the respondent’s position, I cannot in all conscience ignore the unfairness in which that would place the applicant. To face, eight years after the separation, having to reconstruct the respondent’s financial position leading up to and at separation now, after the respondent has restructured his assets and income situation by incorporating “Dr. Stanley Chiang Dentistry Professional Corporation”, to my judgment outweighs the self-inflicted prejudice claimed now by the respondent.
36This respondent simply ignored prior orders of this court for years. It would be an affront to the integrity of the administration of justice to reinstate his Answer now after the course of conduct evidenced here. A court order is not some invitation to a dance which can simply be ignored or excused. I am informed, without disagreement from opposing counsel, that even now, the respondent is in default of an order made last September in the FRO proceeding to pay $5,000 per month. No more than one payment has been made, and so it goes on. Compliance with court orders is not optional. Non-compliance with court orders, absent circumstances beyond the party’s control, must have consequences. The court’s response to failure or refusal to comply without proper excuse must be strong and decisive. Levely v. Levely, 2013 CarswellOnt 1953 (O.S.C.), at para. 23; Colivas v. Colivas, (2013) ONSC 1991 ().
37It is not correct for this respondent to claim that he will be denied his day in court and his right to have the case decided on its merits. Dr. Chiang simply refused to comply with several orders over a two-year period and then decided to wait to see what would happen. Now he is unhappy with the result. That was his choice.
38It is also not the case that the case management judge in some way showed an understanding of the respondent’s position and chose to forget the pre-and post-striking-of-pleadings pattern of non-compliance here. Dealing with the motion itself was not within the purview of the case management judges. It was the role chosen by the case management judges to see that this motion would be brought on for hearing with any pre-conditions to its being heard having been met and that matters best settled would be dealt with on the way, such as the termination of the prior ongoing support orders when the children reached independence as adults and the applicant could accept the inevitability of not being able to enforce the growing arrears indefinitely. Those pre-motion orders and pre-conditions were not some advance recognition that somehow this motion was destined to be allowed. They simply facilitated the motion coming on so that the parties’ positions and evidence would be heard and understood. And that has happened.
39Sharpe J.A. set out well the multi-faceted objectives of the civil court system. The desire and goal to hear and decide cases on their merits is not the only objective, especially where to do so would be to trivialize the orders made by a court and thus damage the integrity of the system as a whole. Sharpe J.A. stated well the dilemma faced by courts when confronting an inability to meet one objective where it would cheapen and damage a more important one, in the following words:
34Modern civil procedure recognizes the need to deal with unexplained delay and, through rules such as rule 48.14, provides for an active judicial role "to promote the timely resolution of disputes, to discourage delay in civil litigation and to give the courts a significant role in reducing delays": Todd Archibald, Gordon Killeen and James C. Morton, Ontario Superior Court Practice (Markham, Ont.: LexisNexis Canada, 2011), at p. 1205. As judgments of this court and the Superior Court recognize, if an action could not be dismissed for delay unless there was proof of actual prejudice, timelines would become meaningless. Where a party fails to prosecute an action in a timely fashion, the court is entitled to exercise the powers conferred by the rules to dismiss actions absent an adequate explanation for the delay: Riggitano v. Standard Life Assurance Co., [2009] O.J. No. 1997, 2009 CarswellOnt 2685 (S.C.J.), at para. 45, aff'd. [2010] O.J. No. 292, 2010 ONCA 70.
37I also agree with and adopt the statement of D.K. Gray J. in Broniek-Harren v. Osborne, [2008] O.J. No. 1690, 2008 CarswellOnt 2544 (S.C.J.), at para. 29:
The Rules reflect a balance. The litigant does not have an untrammelled right to have his or her case heard. In order to be heard, a case must be processed in accordance with the Rules. By the same token, adherence to the Rules must not be slavish in all circumstances. They are, after all, designed to ensure that cases are heard. Throughout the Rules, the principle is reflected that strict compliance may be dispensed with where the interests of justice require it: see, for example, Rules 1.04(1), 2.01, 2.03, 3.02, and 26.01. The difficult issue, in any particular case, is to determine when non-compliance reaches the point that it can no longer be excused. The Court, and society as a whole, have an interest in ensuring that the system remains viable. If the Rules can be ignored with impunity, they might as well not exist. [Emphasis added.]
38See, also, Sepehr Industrial Mineral Exports Co. v. Alternative Marketing Bridge Enterprises Inc. (2007), 2007 23175 (ON SC), 86 O.R. (3d) 550, [2007] O.J. No. 2438 (S.C.J.), at para. 21, Quinn J:
Legal proceedings are not to be undertaken lightly. Plaintiffs have a responsibility to prosecute their actions diligently and in accordance with the Rules of Civil Procedure. Our legal system, sagging, as it is, under the weight of a heavy caseload, should not lightly tolerate anything short of that diligence.
39These cases quite properly reflect and reinforce the strong public interest in promoting the timely resolution of disputes. "The notion that justice delayed is justice denied reaches back to the mists of time ... For centuries, those working with our legal system have recognized that unnecessary delay strikes against its core values and have done everything within their powers to combat it": Marché D'Alimentation Denis Thériault Ltée v. Giant Tiger Stores Ltd. (2007), 87 O.R. (3d) 660, [2007] O.J. No. 3872, 2007 ONCA 695, at para. 25, quoting Blencoe v. British Columbia (Human Rights Commission), [2000] 2 S.C.R. 307, [2000] S.C.J. No. 43, 2000 SCC 44, at para. 146. Excusing significant delay "risks undermining public confidence in the administration of justice": Marché, at para. 32. The timelines the rules impose are relatively generous and there is a heavy price to be paid when they are not respected.
40Such is also the case with regard to compliance with court orders and the consequences for a pattern of refusal and delay.
41In all the circumstances, and with a particular regard for the inherent prejudice and unfairness to the applicant and to the integrity of the civil justice system if I were to do otherwise, it is my judgment that this motion must be dismissed.
Costs
42Counsel may address brief written submissions to me at the Barrie court house, the applicant’s counsel within 15 days and the respondent’s counsel within 15 days from receipt of the applicant’s costs brief. The applicant’s right of reply must be exercised within 7 days.
43I profoundly hope that the applicant will realize fully the fulfillment of getting on with her life after this case and will propose a realistic lump sum at which to end this matter. It appears, from what Mr. Birnboim suggested to me, that enforcement of anything even close to the full amount of arrears will be near impossible. I hope both parties will think very carefully on this and see that their lives can go on free of the conflicts and hard feelings of the past. I ask both counsel to have their clients read this paragraph and consider carefully where they go from here. A better life awaits. This is not an order – simply a suggestion based on the experience of many years.
HOWDEN J.
Date: December 27, 2013
