Henderson v. Henderson, 2015 ONSC 2914
NEWMARKET COURT FILE NO.: FC-05-022841-00
DATE: 20150505
CORRECTED DATE: 20150605
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Kathryn Rosanne Henderson
Applicant
– and –
Russell Andrew Henderson
Respondent
J. Daniel Dooley and Saly Botelho, for the Applicant
Beth Kibur and Gregory T. Evans, for the Respondent
HEARD: November 17, 18 and 28, 2014
Corrected decision: The text of the original judgment was corrected on June 5, 2015 and the description of the correction is appended
McDermot J.
Introduction
[1] On January 10, 2006, the Applicant and the Respondent were divorced by way of an order made by Nelson J. in Newmarket.
[2] Nelson J.’s order was for a divorce simpliciter with no corollary relief. That was notwithstanding a request in the Joint Divorce Application signed by both parties for a number of orders, including an order that the Respondent pay the Applicant support arrears of $100,000 over a period of four years.
[3] The Applicant now seeks to correct this error. The Respondent, however, now suggests that there was no agreement, and even if there was, the agreement is unenforceable by reason of uncertainty and the order cannot now be changed. The Respondent also raises issues of delay and suggests that the Applicant sue her own solicitor because of his negligence.
[4] This case therefore raises issues of whether the court can correct a mistake in the Divorce Order to reflect the terms contained in the Joint Application as well as the effect of the Applicant’s delay in seeking that remedy.
[5] Finally, the Respondent also says that, even if the agreement were enforceable, he owes the Applicant nothing as he has paid off the arrears over the past eight years in any event.
[6] All of these issues were initially placed before the court by way of a motion to amend the order based upon mistake under Rule 25(19) of the Family Law Rules.[^1] That motion was returnable before Kaufman J. on November 6, 2013; he endorsed that “for oral reasons given, the court is of the opinion that the discrepancies in this case are best resolved by a trial of the issue before the court with respect to whether or not the Divorce Order of January 10, 2006 should be amended.” Those oral reasons confirm that Kaufman J. felt that there were credibility issues concerning the issue of whether there was an agreement between the parties which required a trial of that issue.
[7] Although this part of the case began in 2013, and the divorce was granted in 2006, the origins of this matter lie well before that, when Ms. Henderson retained counsel and commenced divorce proceedings in April 1996 soon after the parties separated by way of a Petition for Divorce issued under the Rules of Civil Procedure[^2]. On May 7, 1996, Eberhard J. of this court made an interim interim order giving the Applicant temporary custody of the three children and ordering the Respondent to pay interim child and spousal support in a combined amount of $5,500 per month. That order was never changed or withdrawn, and although the Respondent paid some support over the years, substantial arrears accrued between the time of that order and the divorce judgment in question. It is the position of the Applicant that those arrears were addressed by the agreement which was eventually reflected by the terms of the Joint Divorce Application.
[8] As well, lurking behind all of this is the issue of solicitor’s negligence, something not before this court for determination. It appears that the the failure to include the terms from the Joint Application into the Divorce Order arose because the Applicant’s solicitor left the law firm somewhat precipitously, leaving the file largely unsupervised after that date. Certainly, Mr. Dooley acknowledged that he was acting for LawPro in bringing this motion, and Ms. Kibur complained at the beginning of trial that the Applicant’s legal fees were being paid by LawPro while her client had to bear his own costs throughout.
[9] The evidentiary portion of this trial proceeded over two days, with oral and written argument once Kaufman J.’s oral reasons were transcribed and made available.
[10] For the reasons set out below, I have determined that the order may be rectified and that the obligation for the payment of $100,000 be inserted in the amended divorce judgment. I have also determined that the Respondent has paid $48,607.89 towards the arrears, leaving $51,392.11 outstanding for arrears of support under the amended Divorce Order.
Background
[11] Mr. and Ms. Henderson were married on November 26, 1983. They had three children, all boys: Tyler was born May 9, 1988, Jordan on March 16, 1992, and Troy on June 10, 1993.
[12] The Hendersons, to all accounts, lived a luxurious lifestyle during the last years of their marriage. They owned a large home with maid service and a nanny; they drove expensive cars and holidayed at a cottage. Mr. Henderson funded this lifestyle with his land development business. He described his business ascent as a “rags to riches” story; his family had moved from Manitoba to Regent Park in Toronto when he was 12 where they lived in public housing throughout much of his youth. Although he began employment as a cab driver in Toronto, he founded a development business which did very well in the late 1980s and early 1990s. As he described it, everyone was making money and he did too.
[13] As with other developers, things went badly for Mr. Henderson as a result of the deep recession in the mid-1990s. Property values dropped by a third. Unlike his competitors, Mr. Henderson had used much of his income to pay down mortgages on his development properties. Although this would seem to be prudent business management, Mr. Henderson testified that this was a mistake as the bank saw him as a source of funds as his properties actually had some equity. The business suffered and the parties separated on May 26, 1995. Ms. Henderson remained in the matrimonial home with the children while Mr. Henderson moved in with friends and eventually into a makeshift apartment in his office. The mortgage on the matrimonial home eventually went into default and Ms. Henderson was forced to move in with her parents in August, 1996. She and the children subsisted on social assistance during this time. Mr. Henderson declared bankruptcy in 2001 and has since been discharged.
[14] During these difficult times, Ms. Henderson retained counsel, who issued on her behalf a Petition for Divorce under the Rules of Civil Procedure in April, 1996. Mr. Henderson was unrepresented, and apparently had filed no response to the Petition other than a Notice of Intention to Defend; he never did file an answer or counter-petition.
[15] Ms. Henderson next brought a motion for custody and child and spousal support. Mr. Henderson did file material responding to the motion. The parties attended before Eberhard J. on May 7, 1996. Eberhard J. ordered that the children live with their mother and Mr. Henderson received access on Thursday overnights and alternate Saturdays. Ms. Henderson received exclusive possession of the matrimonial home. Mr. Henderson was ordered to pay substantial support; spousal support was set at $2,500 per month and child support at $1,000 per month per child for a total of $5,500 per month. Ms. Henderson acknowledged that the support amount was not necessarily reflective of her husband’s income, but she said that it was ordered because Mr. Henderson said he was contemplating bankruptcy at the time and support took priority to that.
[16] The order was never adhered to. Mr. Henderson eventually began to pay about $1,000 per month. He received much more substantial access to the children than as contained in the order. According to his testimony, he eventually began to co-parent the children; although Ms. Henderson would not go that far, she acknowledged that he was an extremely involved father throughout. He coached the children’s hockey teams and the parties even took a holiday to the Dominican Republic together. For all intents and purposes, the parties maintained an amicable relationship for the subsequent decade after the interim interim order was made. They never returned to court to change the order and the petition was never withdrawn.
[17] Mr. Henderson says that he decided that it was time to obtain a divorce in 2002. He says that he asked his wife to go back to her lawyer to obtain the divorce. Because Ms. Henderson had paid for the first proceedings, the parties agreed that Mr. Henderson would pay the legal fees for the divorce. Ms. Henderson went back to the firm that she had originally contacted some years earlier, which was Sorley & Still in Newmarket. However, the lawyer she originally retained, Heather McGee, was then at another firm, and Ms. Henderson ended up meeting with Mark Epstein, who had joined the firm the year before.
[18] This was Mr. Epstein’s first year practicing family law; he had previously worked at a personal injury firm in Toronto. When he joined Sorley & Still, he juniored for Christopher Sorley, a senior partner at the firm. However, his time at this firm was somewhat limited, and this may explain some of the mistakes which were subsequently made.
[19] Ms. Henderson signed her retainer agreement dated February 4, 2004. She says in her affidavit that she had entered into “private negotiations” with Mr. Henderson, who admitted in testimony that he was, at the time, running into difficulties with the Family Responsibility Office (“FRO”), and wished Ms. Henderson to withdraw from the program. Both parties were cognizant of the order made by Eberhard J. many years ago, and both parties understood that substantial arrears had most likely accrued under that order. Ms. Henderson says that, in exchange for withdrawing from FRO, that Mr. Henderson would pay her $100,000 in arrears over four years; she would have day to day care of the children; Mr. Henderson would pay $1,200 per month in ongoing child and spousal support and that the parties would jointly apply for a divorce.
[20] Ms. Henderson says that the reason that she wished payment of the $100,000 was because she felt that she had been shortchanged when the marriage came to an end, nearly ten years earlier. In testimony, she said that she “deserved a settlement” as she had left the marriage with $20,000 in debt and three children. For Mr. Henderson, however, the proposal would have had some attraction; he was complaining in June 2004 of FRO garnisheeing his income tax refunds and he testified that they were also threateninghis driver’s license at that time. He was also, as noted above, fearful that there were substantial arrears under the Eberhard J. interim interim order. As far as he knew, arrears had been accruing for around 8 years at the rate of at least $4,500 per month[^3] which would give rise to arrears of which were conservatively well over $400,000.
[21] In fact, according to the FRO, the arrears which accrued in this matter do not appear to have been nearly as much. After being retained, Mr. Epstein obtained a Statement of Arrears which said that Mr. Henderson owed support in the amount of $10,287.89 rather than the hundreds of thousands of dollars that the parties were expecting. The Statement of Arrears was sent to Ms. Henderson by Mr. Epstein on August 9, 2004 along with correspondence noting that that “it appears that the amount [of arrears] is substantially less than you previously indicated."[^4]
[22] It is unknown whether the Statement of Arrears was shown to Mr. Henderson; however, Ms. Henderson soon after gave instruction to Mr. Epstein, on September 2, 2004. On that date there is a record of a telephone call that Mr. Epstein testified was in his handwriting. It records a telephone call between the Applicant and Mr. Epstein in which Ms. Henderson advised him to “set arrears $100K” and that she would “talk to him[^5] and let you know.” Apparently, Ms. Henderson did talk to her husband; on September 4, 2004 there is a record of a further telephone conversation with Mr. Epstein. This note is of a telephone message from Ms. Henderson in which she advises “Re $100K, we agreed to over 4 yrs roughly 25 / py.” Ms. Henderson’s call appears to have been returned on September 14, 2004 and Mr. Epstein notes that his assistant is away, but they would get to it next week and there would be a “withdrawal from fro.”[^6]
[23] Mr. Epstein then provided instructions to his staff to prepare a number of documents. He prepared a Joint Application for Divorce; in that application, eventually signed by both parties, there is a request for several orders which appear to be in accordance with the instructions provided to Mr. Epstein: the parties request a divorce, an order that “Support Arrears be set at $100,000.00 which will be paid by the Applicant Husband to the Applicant Wife within four years of the date of this Order”; the wife to “have day to day care and control of the children” and that the husband pay Ms. Henderson $1,200 per month for child support and spousal support. Mr. Epstein also prepared draft minutes of settlement which stated that Mr. Henderson would pay support arrears of $100,000; those minutes were never signed or presented to the parties. A withdrawal from FRO enforcement was also drafted; it was signed by both parties and eventually forwarded to FRO.
[24] In drafting these documents, Mr. Epstein apparently neglected to take into account the fact that there was an existing Petition for Divorce which had never been withdrawn. Without a withdrawal, the Joint Application that he drafted could not be filed. As well, Mr. Epstein also prepared standard form affidavits for both parties to sign in support of the Application for Divorce; neither of these affidavits signed by the parties requested in paragraph 8 that an order go according to the provisions in the Joint Application for Divorce. To add to the confusion, Mr. Henderson in signing his affidavit struck out the $1,200 amount of support in the divorce affidavit and inserted a higher amount of $1,500 per month; apparently in further discussions, the parties had agreed to a higher amount of support payable by Mr. Henderson than the amount originally agreed upon.
[25] In fact, Mr. Henderson denies that there was ever an agreement between the parties as set out in the Joint Application. Although he signed the application with the $100,000 amount set out in it, he says that the agreement was actually that he would only pay arrears of $100,000 if a project that he was then involved in in Cobourg earned him $1,000,000. He says that if the project did not make that amount, he and Ms. Henderson agreed that he would owe her nothing.
[26] Mr. Henderson testified that the project never made anything close to this amount and that he therefore does not owe the arrears.
[27] Mr. Henderson testified that when he received the Joint Application, he called Ms. Henderson prior to signing it and she agreed to this prior to him signing the Joint Application. When asked in cross-examination why he signed the agreement without this proviso in the arrears clause, Mr. Henderson said that he did so because he “did not think about it.” He stated that, notwithstanding the wording in the Joint Application, in his mind the deal was that he would only have to pay the arrears if the Cobourg project made a million dollars.
[28] Ms. Henderson testified that she did recall a discussion about the Cobourg project, but that the issue of the project making $1,000,000 was only a condition to receiving the money in a lump sum. She says that when she demanded payment of the $100,000 she was told by Mr. Henderson that he would only pay it if he “earned another $1,000,000.” She says she never agreed to this as a condition.
[29] If Mr. Henderson was seeking to resile from the agreement that the applicant says was struck between the parties, he appears to have been in luck. On May 19, 2005, prior to filing the documents in court, Mr. Epstein advised his employer that he was planning to leave the firm to set up a partnership with another member of the firm. He suggested that he leave in a month, but he was told to leave the firm the next day. He did not draft any transfer memos for his files, and indeed would not have had the time to do so. The file was passed to Adelit Maidenberg, who was then an articling student for the firm; she was only admitted to the bar in July of that year.
[30] Ms. Maidenberg testified at the trial, but could remember little or nothing of what had occurred. Indeed, the only recollection that she had about this file was that she was told that everything had been done and all she had to do was to obtain the divorce. Surprisingly, she signed the section 9 acknowledgment in the Joint Application for Divorce without ever having met the clients and then apparently instructed staff to file the application.
[31] As expected, the application could not be filed because of the previous Petition for Divorce. After this occurred, the matter appears to have been handled exclusively by law firm staff without supervision from any quarter; certainly it does not appear that Ms. Maidenberg had any subsequent involvement. She had no recollection as to any of the documents that were prepared and there were no subsequent time entries in her name on the ledger sheets associated with the file. In any event, it appears that, once staff discovered the original Petition for Divorce, they requested a divorce based upon that document rather than the Joint Application. No corollary relief, including the support or arrears provisions in the Joint Application, was inserted in the draft Divorce Order.
[32] The matter came before Nelson J. who endorsed on November 21, 2005 that the “petition” requested more relief than the draft divorce judgment and asking if the relief requested in the petition was still required. He also asked if the support in the interim interim order was being paid.
[33] In response to this endorsement, a paralegal at Sorley & Still named Mary Marschall reviewed the file and prepared a responding affidavit sworn by her on January 9, 2006; that affidavit indicated that based upon that statement of arrears, the support was up to date other than the amount of $10,207.89. She notes in the affidavit that the husband is paying $1,500 in support made up of $1,200 for child support and $300 for arrears; she says in the affidavit that she spoke with Ms. Henderson and that she believed that “the parties have resolved the issues related to the marital breakdown and are content with the current arrangements pertaining to child support.” Mary Marschall did not testify at trial.
[34] In fact, both parties agreed that the extra $300 was not on account of arrears. Ms. Henderson testified that she never spoke with Mary Marschall and would never have given that information to her. She said that in her discussions with Mr. Henderson that the payments were to be for $1,200 per month in child support and another $300 per month which would be “considered” spousal support. Mr. Henderson agrees that the $300 was not for arrears but that he agreed to $1,500 per month “after talking to Ms. Henderson.”
[35] Based upon Mary Marschall’s affidavit, as well as the affidavits signed by each of the parties, the Divorce Order issued without the provisions jointly requested by the parties in the Joint Application for Divorce. That is, in a nutshell, the error sought to be corrected by the Applicant pursuant to Rule 25(19).
Analysis
[36] The pleadings and proceedings raise the following issues:
a. Was there an agreement as alleged by the Applicant that the Divorce Order contain a provision for repayment of support arrears of $100,000 and for payment of $1,200 per month in child support (later amended to be $1,500 in support)?
b. If there was such an agreement, should the Divorce Order be amended under Rule 25(19) to include the terms of that agreement?
c. If the Divorce Order is ordered to be rectified, what payments did the Respondent make on account of the arrears since the order was made?
[37] I shall consider each of those issues in turn.
(a) Was there an agreement as alleged by the Applicant that the Divorce Order contain a provision for repayment of support arrears of $100,000 and for payment of $1,200 per month in child support (later amended to be $1,500 in support)?
[38] This is an issue of fact, and was the major reason that Kaufman J. determined that this matter proceed to trial rather than being dealt with on motion as initially requested by the Applicant.
[39] The Respondent firstly takes the position that there was no agreement whatsoever. He says through his counsel that, although there was discussion, there was no point where the parties were ad idem and that they never came to a firm agreement as to their finances and as to arrears. In his submissions, Mr. Evans suggested that there was too much uncertainty for the court to find that an agreement was arrived at at any time between the parties and that it is impossible to find a joint intention between the parties capable of rectification or of enforcement: see McLean v. McLean, 2013 ONCA 788 at paras. 45 and 46.
[40] In taking this position, Mr. Evans relies upon the various inconsistencies which appear on the record in the lawyer’s office and in documents signed by the parties. He notes that the notes on Mr. Epstein’s files are inconsistent; they indicate that he was told by Ms. Henderson that the arrears are to be set at $100,000 payable by $25,000 per year over four years, and that the support would continue at $1,200 per month. The instructions received were inconsistent with the Joint Application which provided for payment of the $100,000 within four years, and not by a fixed annual payment. Both were inconsistent with the draft Minutes of Settlement, which did not provide for any due date for payment of the arrears. Ms. Henderson stated in her affidavit and in an email sent in June, 2011 that she thought that the term for payment of the arrears was five years by payments of $20,000 per year.
[41] Moreover, there were inconsistencies as to the amount of support that was payable; in both Ms. Henderson’s affidavit for divorce and in the Joint Application, there is a provision for child support in the amount of $1,200 per month; in Mr. Henderson’s affidavit, he says that the amount of support to be paid was $1,500 per month. In fact, he had crossed out the $1,200 figure and substituted $1,500 per month in his affidavit. In Mary Marschall’s affidavit, she said that the support amount continued to be $1,200 per month, with a $300 payment on account of arrears. Both parties at trial agreed that the support was to be $1,500 per month, and that is what was paid by Mr. Henderson throughout. However, Ms. Henderson testified that the amount was comprised of $1,200 per month in child support with the remainder being attributed to spousal support. Mr. Henderson treated it all as child support and stopped paying support when he felt that all three children had become independent of Ms. Henderson.
[42] This was, as acknowledged by Mr. Evans, a result of extensive verbal negotiations between the parties. Both parties agreed that there was a course of negotiations which resulted in the Joint Divorce Application and the resulting support that the Respondent subsequently paid. As in many cases where there were verbal arrangements made by the parties, there is disagreement on the terms of the agreement. The fact that there is disagreement as to the terms of the agreement does not necessarily mean that there was no agreement, but only that the court must determine what the agreement was.
[43] Perhaps the best evidence as to whether there was an agreement arrived at is the fact that both parties testified that they did come to an agreement, but only differed as to the terms of that agreement. I note that Kaufman J. mentioned in his own oral reasons that he felt that there was an agreement between the parties but that a trial was necessary to determine what exactly was agreed to. In light of the parties’ testimony that there was an agreement, the court must do its very best to determine the terms of the agreement if possible; to do otherwise would be to abdicate its responsibility to the parties appearing before it.
[44] In doing this, the court must have regard to the totality of the evidence, and must determine on a balance of probabilities as to whether there was sufficient common intention to find that an agreement was arrived at. This is an objective test and to do so I may have regard to the documentation, the actions of the parties, as well as the testimony of the parties: McLean v. McLean, supra at paras. 60 and 61.[^7]
[45] In the present case, I would first note that both parties in testimony felt that there was an agreement. They both testified as to their views as to the terms of the agreement and as to how it was arrived at. They both testified that there was an agreement that there would be a withdrawal from FRO enforcement; Mr. Henderson testified that this was important to him as he was at risk of losing his license. They both testified as to the amount of the arrears being $100,000; they differed in their testimony only as to whether there was a condition to the repayment of those arrears. They both testified that they initially agreed that support payable by the Respondent would be $1,200 per month; they also each agreed in testimony that the support amount was subsequently adjusted to $1,500 per month. They only disagreed on how that support would be characterized.[^8] And although there appears to be a slight discrepancy between the wording of the Joint Application and the notes on to Mr. Epstein’s file, I note that Mr. Epstein did state in his notes that Ms. Henderson instructed him that the arrears were only payable by “roughly” $25,000 per year over four years.
[46] Considering the evidence of the parties that they both felt that there was an agreement of some sort, I disagree that the discrepancies on the Sorley & Still file are evidence of uncertainty sufficient enough for me to find that there was no agreement whatsoever. In fact, we are here exactly because of the imprecision of the lawyers at that firm and their failure to adequately supervise the conduct of this file. The mistakes made on the solicitor’s file are not evidence that the parties were uncertain as to their intentions, but only of the law firm’s inability to give effect to the agreement arrived at between the parties.
[47] As well, there was no evidence that the affidavit filed by Mary Marschall was anything other than an attempt by a hapless paralegal to obtain a Divorce Order in the face of confusion as to the intentions of the parties in light of the inconsistent divorce affidavits, the Petition for Divorce and the interim interim order on the file. She did not give evidence as to why she drafted the affidavit as she did; there was also very little evidence from the parties as to whether she consulted with them prior to drafting that affidavit.
[48] Accordingly, I find that, on the balance of probabilities, and based upon the testimony of the parties and the documentation contained on the lawyer’s file, that the parties had arrived at an agreement as to the terms of the final order in this matter.
[49] The next issue is to determine what, in fact, the parties had agreed to.
[50] As noted above, the parties’ testimony confirms most of the provisions of the agreement as set out in the Joint Application. The major disagreement between the parties was whether there was an agreement that the arrears of $100,000 was only payable if the Respondent made $1,000,000 from a development that he was working on at the time in Cobourg, Ontario. This is, in effect, makes payment of arrears conditional on the happening of an event. That event, according to Mr. Henderson did not occur. It was his evidence that the project was not sufficiently profitable to make anything near to that amount. He says that the condition as not fulfilled and that he is therefore not liable to pay the arrears.
[51] There was nothing in the written documentation which confirms this agreement. Mr. Henderson says that he received the Joint Divorce Application for signature which contained the clause requiring payment of $100,000 in arrears over four years. He does not deny reading that clause prior to signing the Joint Application. He says, however, that he immediately telephoned Ms. Henderson upon receipt of the Joint Application and confirmed the condition with her regarding the Cobourg development. He testified that when he received an assurance from Ms. Henderson that she was aware of the condition, he signed the application and returned it to Mr. Epstein.
[52] Ms. Henderson confirms that she recalls speaking with Mr. Henderson about the Cobourg project; however, it was her testimony that it was actually Mr. Henderson who assured her that he would make a lump sum payment of the $100,000 if Cobourg made $1,000,000. Otherwise, the arrears would be payable over a number of years.
[53] As noted, the condition regarding the Cobourg development appears nowhere in the lawyer’s file. That may not mean a lot when we consider that the lawyers involved in this matter were imprecise in papering their clients’ intentions in this matter. However, what is more important is the subsequent conduct of the parties, and what was lacking in the emails between the parties in 2011 when Mr. Henderson was attempting to bring child support to an end.
[54] This email exchange extends over a period between June and August of 2011. It arose out of Mr. Henderson’s desire to stop paying support for Troy, who was now no longer in school and over 18. Ms. Henderson strongly disagreed with that position; she testified that because of Troy’s mental health issues, he remains a dependent to this day.
[55] Early in that exchange, Ms. Henderson speaks of the $100,000 in arrears. She says in her email dated June 10, 2011, I assume somewhat sarcastically, that, “It now appears, therefore, that you do not owe me $100,000, payable in 5 annual payments.” She then asserts that this must mean that the Eberhard J. interim order still remained enforceable.[^9]
[56] Although Mr. Henderson, in response, threatens bankruptcy, and says that you “cannot get blood from a stone”, nowhere in those emails does he speak of the fact that he does not owe the arrears because of the Cobourg project. As submitted by Mr. Dooley, one would have thought that he would have immediately raised that issue in his emails in order to lay the arrears question to rest from the beginning. I note that Kaufman J., when he heard the motion, said that the Respondent’s failure to respond in his emails “would appear to be an acknowledgement from the Respondent that he did, in fact, owe $100,000.”[^10]
[57] I note that Mr. Henderson said in testimony that he did not mention this in the e-mails because he preferred to speak about these issues in person. Mr. Henderson put plenty of other assertions and threats in his e-mails and I simply find that response unbelievable.
[58] The Respondent’s failure to raise that issue continued through the documents filed in response to the Applicant’s motion. Mr. Henderson filed three affidavits but only in the final affidavit, and then only in response to a specific written question, does he speak of the payment condition attached to the Cobourg development.
[59] In cross-examination, Mr. Henderson agreed with Mr. Dooley that he knew his way around a contract. He says that in 2011, he told Ms. Henderson verbally that he did not owe the money because of the Cobourg development. He said rather weakly that he did not raise the issue of the Cobourg project in his affidavits because no one asked him about it.
[60] If I were to make a finding that the payment on arrears was conditional on the $1,000,000 success level of the Cobourg project, that would obviously put an end to this litigation as the $100,000 in arrears would then not be owed. Considering that to be the case, I would have thought that Mr. Henderson would have immediately put that on the table with both the Applicant during negotiations and then with the court in his initial responding affidavit. As it happened, he first mentioned it on the record in his affidavit of August 23, 2013 in response to a specific written question. His explanations given in cross-examination were not credible on this point.
[61] Moreover, I simply find it unbelievable that he would fail to clarify this specific term of the agreement when confronted with the Joint Divorce Application in 2005. He knew how to negotiate a contract, and he admits to reading the Joint Application prior to signing it. I note that he was willing to change his affidavit in support of the divorce to insert the agreed upon amount of support; why would he not have changed the Joint Application in a like manner in November of 2004, especially when his wife had not then signed it?[^11] Moreover, prior to sending out the draft Divorce Application to Mr. Henderson, Mr. Epstein apparently discussed with him the terms to be inserted in the Application;[^12] one would have thought that he would have raised the issue of the Cobourg development with Mr. Epstein when they spoke. The supposed condition would have been crucial to payment of the arrears, which were by then substantial, as far as Mr. Henderson knew, based upon the interim interim order of Eberhard J.[^13] and I again find it unbelievable that he would not have taken steps to have that condition inserted in the Joint Application.
[62] Finally, I note that when Kaufman J. heard the motion, he indicated in his reasons that he felt that on the face of things, Mr. Henderson had acknowledged the arrears owing of $100,000, but that “it may well be that there’s something else, given the opportunity, that he will be able to come up with so as to prove that [the condition respecting the Cobourg development] was in fact the basis of the $100,000 going in.” It does not appear that Mr. Henderson has come up with “something else” at trial.
[63] Accordingly, on this issue, I prefer the evidence of the Applicant to that of Mr. Henderson. I find Mr. Henderson’s evidence as to the condition on payment of the arrears to be without credibility. It appears to me to be an afterthought based upon the discussions outlined by Ms. Henderson which was that she was to receive the arrears as a lump sum if and when the Cobourg development made Mr. Henderson $1,000,000. I therefore find that there was no condition on repayment of the arrears as alleged by Mr. Henderson.
[64] That being said, I must now determine the agreement or common intention of the parties. It appears to me that the best determinant of the terms of the agreement can be gleaned from looking at what happened immediately after the agreement was made. This was reflected by the notes in the file made by Mr. Epstein after the parties discussed the matter between themselves in early September, 2004. At that time, Ms. Henderson had recently been given the news that the arrears were not as she thought they were.[^14] It is pure speculation as to whether this was the reason why the parties came to an agreement; however, Mr. Epstein received instructions from Ms. Henderson soon after the Statement of Arrears was forwarded to her.
[65] Mr. Epstein’s notes indicate that the parties had agreed to $1,200 per month in child support and that there would be $100,000 in arrears payable by roughly $25,000 per year over four years. He noted as well that there would be a withdrawal from FRO enforcement.
[66] The agreement was reflected in the Joint Divorce Application along with the Notice of Withdrawal from FRO enforcement, both of which were sent to Mr. Henderson by correspondence dated November 11, 2004. He quickly signed both documents and the documents were sent to Ms. Henderson to sign.
[67] The parties later appear to have agreed between them that the support would be increased to $1,500 per month as again reflected in the affidavit for the divorce signed by Mr. Henderson. Again, both parties agreed in testimony that this was the amount agreed upon although they differed as to its characterization.
[68] This also appears to be the parties’ intention from the fact that the Joint Divorce Application was to implement this agreement through a final Divorce Order. Although there is no evidence that the parties turned their minds as to how this would be made enforceable, it is a reasonable inference that, considering the withdrawal from FRO enforcement, that the parties had intended that there would be a legally enforceable result at the end of this divorce proceeding; otherwise why would Ms. Henderson be discussing the terms of the agreement with Mr. Epstein in early September, 2004?
[69] Finally, there is other documentation on the lawyer’s file that confirms the terms of the agreement between the parties. Apart from the notes on the file from early September, 2004 and the Joint Divorce Application, the file also contains a release document that Mr. Epstein requested Ms. Henderson to sign on November 11, 2004, which is the same day that he sent the draft Joint Application to Mr. Henderson. That document, which is entitled Confirmation of Legal Advice and Release confirms advice to Ms. Henderson that the previous interim order would come to an end and would be unenforceable once there was a final Divorce Order; it also confirms that she wished “to proceed with the Divorce based upon the agreed upon arrears.” That would appear to confirm her understanding as to the amount of the arrears as set out in the Divorce Application sent to Mr. Henderson that day. It also appears to confirm that Ms. Henderson was trading off the loss of her rights under the temporary order of Eberhard J. for the arrears amount that Mr. Henderson was agreeing to.
[70] The Release further notes that there was no court order as to custody and that she wished to “proceed without addressing that issue.”[^15] Notably, the draft Joint Application only speaks of care and control of the children and not custody.
[71] Furthermore, the letter sent by Mr. Epstein to Mr. Henderson on the same date enclosing the draft Divorce Application confirms that Mr. Epstein had spoken to Mr. Henderson about the contents of the application. The correspondence states that the Joint Application was “prepared in accordance with Ms. Henderson’s instructions and in light of your discussion with the undersigned.” That confirms that Mr. Epstein appears to have discussed the terms of the agreement with the parties which was as reflected in the Joint Application. Significantly, as noted above, nothing seems to have arisen from those discussions with Mr. Henderson regarding payment of the arrears only if the Cobourg development produced a certain amount of revenue.
[72] The actions of the parties and counsel subsequent to the signing of the divorce application also confirm their intentions as to the agreement which they had arrived at. As partial implementation of the agreement between the parties, and upon receipt from Ms. Henderson, the Notice of Withdrawal was sent to FRO on January 11, 2005. Mr. Henderson paid the support that he agreed to until 2012 when he decided to stop paying because he felt that Troy was no longer a dependent.
[73] Accordingly, based upon the evidence outlined above, documentation on the file, and the actions of the parties and counsel, I find that there was agreement between the parties as to the following essential provisions:
The parties would obtain a divorce. They would use Ms. Henderson’s solicitor and Mr. Henderson would bear the legal costs of the divorce.
There would be a withdrawal of Mr. Henderson’s support obligation from FRO enforcement;
There were arrears of support in the amount of $100,000 owing by Mr. Henderson to Ms. Henderson, payable over four years;
Mr. Henderson would pay ongoing support of $1,200 (this amount was later amended by the parties to $1,500 per month);
The children would have their primary residence with Ms. Henderson.
That the parties would end up with an enforceable agreement or court order reflecting the terms of this agreement.
[74] This agreement was correctly reflected by the Joint Divorce Application. It was not, however, reflected in the Divorce Order.
[75] I note that in written argument, Respondent’s counsel raised the fact that this was not a domestic contract capable of enforcement by the courts. This issue was not argued extensively before me.
[76] Firstly, were there a domestic contract capable of enforcement, this motion would have been unnecessary as there would be no issue as to the terms of the agreement or its enforceability.
[77] Secondly, this is not a proceeding to enforce a domestic contract. It is a proceeding to correct an order under Rule 25(19) by reason of counsel’s mistake in not inserting the parties’ agreement in that divorce judgment notwithstanding the agreement arrived at to insert it in that order. The agreement was to have been implemented through the Divorce Order and not through a domestic contract. The fact that there was no formal domestic contract is not relevant to these proceedings; all that is in issue is whether there was an agreement which was to be inserted in the court order and whether that court order can be corrected by reason of mistake.
[78] That is the next issue to be considered.
(b) Should the Divorce Order made by Nelson J. on January 10, 2006 be amended under Rule 25(19) to include the terms of the parties’ agreement?
[79] At the commencement of trial, Mr. Dooley suggested that Kaufman J. had already determined jurisdiction to change the order; all that was left to determine at trial was whether there was an agreement between the parties and the terms of that agreement.
[80] He is correct as to the latter assertion. However, there was no consideration of jurisdiction by Kaufman J. Nor did he consider the question of delay or laches. Therefore, jurisdiction to change the order remains an outstanding issue.
[81] I must first determine the court’s jurisdiction to change the order. I must then consider the other issues raised by Respondent’s counsel, such as laches, delay and res judicata.
(i) Jurisdiction to Change Order under Rule 25(19)
[82] The provision relied upon by the Applicant is Rule 25(19)(b) which reads as follows:
(19) The court may, on motion, change an order that,
(b) contains a mistake;
[83] Mr. Dooley submits that the order contains a mistake and accordingly requires amendment. The mistake is, of course, counsel’s failure to place the parties’ agreement as set out above before the Justice hearing the motion in order to obtain a final order in accordance with that agreement.
[84] To clarify issues, this was not a mistake made by the judge who heard the matter; Nelson J. was never made aware of the parties’ agreement or, apparently, the Joint Divorce Application. He only reviewed the Petition for Divorce issued in 1996 and the divorce affidavits and his comments contained in the endorsement dated November 21, 2005, confirm this. Once he received the affidavit of Mary Marschall, he did what was asked of him, which was to issue a Divorce Order simpliciter. He made no mistake in his decision.
[85] This is also not “a mistake in the content of the order, for instance where the order contains a typographical error, a misstatement of what was actually endorsed by the court, or a mathematical miscalculation” which is what Boswell J. suggested that Rule 25(19)(b) is meant to correct in Gray v. Rizzi, 2010 ONSC 2858 as aff’d by 2011 ONCA 436. There is no mistake in the terms of the divorce judgment, typographical or otherwise.
[86] This is in fact an omission in an order which arose from a solicitor’s error. When Mr. Epstein received instructions from Ms. Henderson on September 2 and 4, 2004, he elected to implement the parties’ settlement through the unorthodox means of preparing a Joint Divorce Application. That application was signed by both parties and on January 11, 2005, Mr. Epstein followed through on a portion of the settlement by filing the Notice of Withdrawal with FRO. Although he also prepared some draft Minutes of Settlement, there is no evidence that they were ever presented to the clients or signed.
[87] Unfortunately, on May 19, 2005, Mr. Epstein left Sorley & Still in a precipitous fashion. He was not given the opportunity to do transfer memos on the files, including Ms. Henderson’s file. And if Mr. Epstein was inexperienced, his successor at the firm, Adelit Maidenburg was even less experienced; in fact, she was still an articling student when she took over carriage of the file. And although she had little or no recollection of the file, she did recall that she was told that all that had to be done was to obtain the divorce. She apparently was not advised of Mr. Epstein’s intentions to implement the settlement by way of a final Divorce Order in accordance with the request for relief in the Joint Divorce Application. Indeed, as with Nelson J., there is no evidence that she was made aware of the settlement or the intention to implement the settlement in the final Divorce Order.
[88] To compound these errors, Mr. Epstein, in drafting his affidavits for the divorce failed to insert in the affidavit that his clients wanted an order in accordance with the relief contained in the application.[^16] And he also failed to take into account that there was a pre-existing Divorce Petition which requested different relief. It appears, in fact, that the Joint Divorce Application was never filed because of the original Petition for Divorce.
[89] Finally, Ms. Maidenburg failed to supervise the file in any meaningful manner. She had no recollection of talking to the clients and could not recall giving Mary Marschall instructions respecting Nelson J.’s November, 2005 endorsement. She signed the solicitor’s acknowledgement on the Joint Application (the application that was not filed) without meeting with either of the clients or actually confirming her duties under s. 9 of the Divorce Act.[^17]
[90] As a result, the agreement between the parties was mistakenly not contained in that Divorce Order. In light of Mr. Epstein’s initial intention of implementing the agreement by way of the final Divorce Order, there is little doubt that an error or mistake was made in obtaining the divorce judgment by counsel’s failure to include in the Divorce Order the agreement between the parties as reflected in the Joint Application.
[91] The issue is whether a solicitor’s error as described above is a “mistake” capable of correction under Rule 25(19)(b) of the Family Law Rules. In effect, Mr. Dooley relies upon Rule 25(19)(b) as jurisdiction for rectification of the order in the same manner in which a court would rectify a contract which contained a mutual mistake.
[92] Rule 25(19)(b) must be read in light of several other provisions which are applicable to this case, or are relevant to its determination. Firstly, there is, of course, Rule 2(2) and (3) which together read as follows:
(2) The primary objective of these rules is to enable the court to deal with cases justly.
(3) Dealing with a case justly includes,
(a) ensuring that the procedure is fair to all parties;
(b) saving expense and time;
(c) dealing with the case in ways that are appropriate to its importance and complexity; and
(d) giving appropriate court resources to the case while taking account of the need to give resources to other cases.
[93] As well, Rule 59.06 of the Rules of Civil Procedure must be considered as a number of the cases that I have considered were made under this rule. It reads as follows:
59.06 (1) An order that contains an error arising from an accidental slip or omission or requires amendment in any particular on which the court did not adjudicate may be amended on a motion in the proceeding.
[94] Although it would appear that the wording in Rule 25(19)(b) is significantly more restrictive than that in Rule 59.06, Boswell J. suggested that the family law rule was intended to apply to accidental slips or omissions as in Rule 50.06(1): see Grey v. Rizzi, supra at para. 37. As well, there are very few cases decided under Rule 25(19)(b) and any review of jurisdiction must include a review of the cases decided under Rule 59.06. Therefore, even though the family law rule is distinct in its wording and requires that the order “contain” a mistake, the cases decided under Rule 59.06(1) can, in my view, be considered in an analysis of Rule 25(19)(b).
[95] At first glimpse, the Ontario courts appear to have taken a restrictive approach to the use of Rule 25(19)(b) to permit amendment to a final court order. As noted above, in Gray v. Rizzi, supra¸ Boswell J. suggested that the rule is restricted to “typographical errors” or “mathematical miscalculations”. This approach followed that of Olah J. in Clarke v. Clarke, 2002 ON SC, [2002] O.J. No. 3223 at para. 32, where she said that Rule 25(19)(b) “deals with technical mistakes due to inadvertence or oversight, and empowers the court to make sure that its intention is accurately reflected in the order.”
[96] Both those cases, however, are distinguishable from the present case. In Gray, Boswell J. considered whether a judge’s legal error could be corrected by way of Rule 25(19)(b) and he made his statements restricting use of the order to clerical or mathematical errors in that context. In Clarke, Olah J. was similarly asked to apply the Rule to a supposed jurisdictional or legal error. Those cases both considered an issue which is not before the court in the present case. Counsel in this case is requesting rectification of the order pursuant to the Rule and not correction of a legal error.
[97] In fact, this restrictive viewpoint has not necessarily prevented the courts from rectifying an order which did not correctly reflect the intentions of the parties. In Ivey v. Ivey, 2014 NSSC 108, the parties agreed on the record to divide the husband’s pension equally. In the entered order, however, the lawyer for the wife inadvertently drafted the order to state that the wife would only receive 25% of the pension. The wife sought amendment of the order pursuant to the Nova Scotia rule which permits a court to “correct a clerical mistake, or an error resulting from an accidental mistake or omission, in an order.”
[98] The husband defended the motion on several of the bases that were cited by Ms. Kibur in argument. He suggested that the rule only applied to technical errors and not to mistakes of a solicitor. Furthermore, he noted that this was solicitor’s negligence and as such the wife had a right to seek damages against her lawyer in negligence rather than changing the order.
[99] In her analysis permitting amendment of the order, T.M. Forgeron J. cited a number of Ontario judgments. Included was the decision of Perell J. who considered Rule 59.06 in Millwright Regional Counsil of Ontario Pension Trust Fund (Trustees of) v. Celestica Inc., 2013 ONSC 1502. In that decision, at para. 31, Perell J. suggested that the three cases where the rule could be invoked would be as follows:
Generally speaking the court's inherent and statutory jurisdiction to amend an order or judgment is limited to: (1) cases of fraud; (2) where there has been a slip in drawing up the order; and (3) where there has been an error in the order expressing the manifest intention of the court from its reasons for decision: Paper Machinery Ltd. v. J.O. Ross Engineering Corp., 1934 SCC 1, [1934] S.C.R. 186 (S.C.C.); Wright, Re, [1949] O.J. No. 3 (Ont. H.C.); Millard v. North George Capital Management Ltd., [1999] O.J. No. 3957 (Ont. S.C.J. [Commercial List]) (emphasis mine).
[100] T.M. Forgeron J. later cited Monarch Construction Ltd. v. Buildevco Ltd. (1988), 26 C.P.C. (2d) 164 (C.A.) as authority for the proposition that an order “can only be rectified on the same grounds on which a contract can be rectified.” She also cited another Ontario case, Chitel v. Rothbart (1987), 19 C.P.C. (2d) 48 (Ont. Master), additional reasons at (1987), 19 C.P.C. (2d) 48 at 54 (Ont. Master), aff'd (1988), 28 C.P.C. (2d) 5 (Ont. Div. Ct.), where the Master stated, “A consent order may only be set aside or varied by subsequent consent, or upon the grounds of common mistake, misrepresentation or fraud, or on any other ground which would invalidate a contract.”
[101] Based upon these authorities, T.M. Forgeron J. determined that these parties had a common intention of dividing the pension equally and that the order should therefore be amended to reflect that common intention. She further rejected the argument that the wife should be put into the position of suing her own solicitor; she noted that implicit in that argument is the fact that the order was wrongly drafted through inadvertence, and that the husband should not benefit from the solicitor’s mistake. Significantly, she stated that this was not a case of the wife attempting to renegotiate a bargain and therefore the wife should succeed.
[102] It therefore appears, based upon the reasoning contained in Ivey and the Ontario cases cited therein, that Rule 59.06 is available as a remedy for the purpose of rectifying an order that does not express the common intentions of the parties when that order was negotiated. In other words, the rule is available to rectify an order on the same grounds as the court might use to rectify a contract.
[103] As set out in McLean v. McLean, supra, rectification is a remedy based upon a finding as to the common intentions of the parties. Therefore, if the finding of common intention can be made, a court may rectify a court order under Rule 59.06(2).
[104] In this analysis, I also need to address the differences in the wording of Rule 59.06 from that of Rule 25(19)(b) of the Family Law Rules. The latter states that I can only correct an order which “contains” a mistake. There have been no cases where courts have used Rule 25(19)(b) to permit rectification of an order, which is a substantial stretch from a typographical or mathematical error discussed by Boswell J. in Grey v. Rizzi.
[105] The key, in my mind, is the wording, “contains a mistake” in the Rule. The word “contains” has been defined as to “have or hold (someone or something) within”.[^18] It has also been defined as to “have within” or to “comprise” or “include”.[^19] Based upon these definitions, there is jurisdiction to rectify an order under Rule 25(19)(b) where the order has within it a mistake, or includes or comprises within it a mistake.
[106] Those definitions are, in my view, sufficient to permit a court to amend or rectify an order which mistakenly did not reflect the common intention of the parties. An order which, by inadvertence, failed to reflect the parties common intentions can be said to include within it a mistake, and may therefore be rectified under Rule 25(19)(b).
[107] Rectification is, however, an equitable remedy in the discretion of the trial judge,[^20] and it must be in the interests of justice that an order be changed to reflect the common intentions of the parties: see Stoughton Trailers Canada Corp. v. James Expedite Transport Inc., 2008 ONCA 817. This is especially so in the family context where Rule 2(2) of the Family Law Rules requires cases to be decided “justly”.
[108] Therefore, I believe that, in addition to correcting typographical or mathematical errors, Rule 25(19)(b) may be used to rectify a court order where, through mistake, that order does not reflect the common intentions of the parties and there are similar grounds to rectify the order as there would be for rectification of contract. This is, however, only where it is in the interests of justice to do so.
[109] I have already determined that it was the common intention of the parties to come to an agreement to obtain a divorce, to withdraw from FRO, and to set the arrears and ongoing support. I have also found that it was solely by inadvertence, and mistakes made within the lawyer’s office that resulted in a court order which omitted that agreement. This is therefore a case where, in the normal course, a court order can be amended, or rectified to reflect the common intention of the parties to obtain the final order requested in the Joint Divorce Application. The next question must be whether it is in the interests of justice to do so.
[110] There are three issues raised in this respect by Mr. Henderson’s counsel. Firstly, Mr. Evans and Ms. Kibur suggested that it was fairer that Ms. Henderson seek restitution from LawPro as this was a case of solicitor’s negligence. Secondly, he raised the issue of laches and delay. Finally, he raised the question of res judicata.
(ii) Solicitor’s Negligence
[111] I agree with Mr. Dooley that it is no answer to suggest that, because this was solicitor’s negligence, that the Applicant should not have a remedy. I would note that the fact that there is another pocket from which to seek payment is no grounds to excuse a support payor from paying the money he has agreed to pay. It is neither fair nor equitable to shift the obligation from the payor to the lawyer’s insurer.
[112] I agree with T.M. Forgeron J. when she says that the payor spouse should not benefit from a solicitor’s mistake. The fact that LawPro is involved is not a defense to the applicant’s motion.
(iii) Laches and Delay
[113] The delay in bringing this motion is, however, more troubling. Were we litigating this matter soon after the mistake was made, as was the case in Ivey, there would be little doubt as to the result. In this case, there was a seven year delay between the mistake and the motion. The significant delay in addressing the issue of mistake can only be partly explained through discoverability as Ms. Henderson was obviously alive to the issue of the arrears owing to her in at least June, 2011. The length of the delay affects the results for obvious reasons.
[114] Laches or delay is a defense to an equitable claim such as rectification. As far as can be determined from the evidence, Ms. Henderson did not broach the subject until June of 2011, about five years after the mistake was made. She did not bring this application until 2013, more than seven years after the divorce judgment was made by Nelson J.
[115] The failure to act quickly was, according to Ms. Henderson, out of fear that Mr. Henderson would not pay the support of $1,500 per month that he agreed to pay. She did not wish to “rock the boat.”
[116] According to Mr. Evans in argument, this caused prejudice in two respects. The evidence was now harder to come by because of the time that had elapsed: this is evident from the inability of counsel to remember much if anything at all from the file. Moreover, Mr. Evans submits that the Respondent “had conducted his affairs in reliance on the apparent agreement between the parties that support was payable at a rate of $1,500 per month and that payments were up to date.”
[117] Regarding the first issue, Mr. Epstein had difficulty in remembering how the file was conducted. Ms. Maidenburg had almost no recollection of what went on. However, even were their recollections better, there was little that could have assisted the Respondent. The documentation on the file speaks for itself, as did the actions of counsel. The parties agreed that there was an agreement and they only disagreed as to one particular term of the agreement and there was no allegation by Mr. Henderson that he discussed that particular condition with Mr. Epstein. There was no evidence of prejudice to Mr. Henderson arising from the delay in bringing this motion on a timelier basis.
[118] Furthermore, if Ms. Henderson failed to mention the arrears for five years, Mr. Henderson failed to raise the issue of the Cobourg development for another three, when he filed the affidavit sworn in August, 2013.
[119] Regarding the second issue, the evidence shows that Mr. Henderson did not believe that the payments were up to date and that all that he had to do was to pay the $1,500 per month. He testified that, as soon as he determined in 2007 that the FRO was collecting arrears of some $10,000, he paid those arrears. Again, his reasons for doing so are speculative, but it may have been because he knew he was potentially liable to pay much more in arrears than the $10,000 and may have found the arrears amount to be a pleasant surprise. However, the question must be asked as to why, if Mr. Henderson thought the support to be in good standing, he paid those arrears instead of immediately going to his former wife to complain about the continued registration of the support order with FRO.
[120] The issue of laches must also be considered in light of how these parties conducted themselves. There is a history of delays by both of these parties in addressing their legal issues. We should recall that the parties had been subject to an interim order made in 1996 and they failed to address it between themselves until they decided to obtain the divorce eight years later, in 2004. They attempted to keep things friendly for the sake of the children and negotiated and dealt with matters outside of the court process; it is evident that neither of them wished to rock the boat. They conducted their affairs in a casual manner, and neither wished to be overly legalistic. In fact, Mr. Henderson refused on two occasions to get his own lawyer because he thought that this would do nothing but exacerbate matters between the parties. In light of that, it is reasonable to expect neither party to take steps such as the present motion unless pushed to do so and that is what happened.
[121] Finally, I note that Ms. Henderson was correct in her fears as to her husband unilaterally ceasing to pay support. Whether he was right or wrong to do so, he did exactly that in 2012 when he felt that he should not be paying support for Troy because he was 18 and no longer attending school. As there was no enforceable support order, there was no means by which the applicant could object to this decision other than by commencing an application for support under the Divorce Act.
[122] Accordingly, I do not find this motion to be barred by reason of the doctrine of laches and delay.
(iv) Res Judicata
[123] Finally, the Respondent has raised the issue of res judicata, which is, as pointed out by Boswell J. in Grey v. Rizzi, supra is applicable where:
i. The same question or issue has been decided;
ii. The decision was judicial and final; and,
iii. The parties to the judicial decision are the same as the parties to the proceedings in which the estoppel is raised.
[124] This was to have been a consent Divorce Order implementing the common intention or the agreement arrived at between the parties. Other than including the agreement in a court order, there were no other issues for the court to decide as the parties had come to an agreement. As noted, that settlement was never placed before the court by counsel and that is why we are here today. Item i. above is therefore inapplicable as the same issue was never decided by the court as the court was never asked to consider it.
[125] As the issue presently before me was never previously decided by the court due to inadvertence of counsel, the doctrine of res judicata is not applicable to the order of Nelson J.
(v) Determination
[126] Accordingly, the order of Nelson J. dated shall be amended according to the Joint Application and pursuant to Rule 25(19)(b) to include the following:
a. Support arrears shall be set at $100,000 which will be paid by the Respondent to the Applicant within four years of the date of this Order.
b. The Applicant shall have day to day care and control of the children, namely, Tyler Henderson, born May 9, 1988; Jordan Henderson, born March 16, 1992 and Troy Henderson, born June 10, 1993 and the children shall remain with the Applicant;
c. The Respondent shall pay to the Applicant $1,500 per month for child support and spousal support.[^21]
(c) What payments did the Respondent make on account of the arrears since the order was made?
[127] Since the order was made, the Respondent has made a number of payments to Ms. Henderson. He has paid the the following amounts:
a. Ongoing child support and spousal support agreed to between the parties in the amount of $1,500 per month;
b. $20,000 from an Arizona property transferred by Mr. Henderson to Ms. Henderson;
c. Arrears of $10,287.89 when he received a statement of arrears from FRO in 2007.
d. Children’s expenses including hockey expenses and post-secondary expenses;
e. A number of “extras” beyond the support payments which total $16,110;
f. The children’s cell phone bills which Mr. Henderson says total $13,320 (5 years @ $2,664 per year).
[128] Other than the ongoing child support, Mr. Henderson claims a credit for all of these amounts against the support arrears.
(vi) Arizona Property
[129] Both parties agreed that after the Divorce Order was made in January, 2006, Mr. Henderson signed over title to an Arizona property to Ms. Henderson. Ms. Henderson sold that property and received net proceeds of $20,000.
[130] Ms. Henderson said that these funds were to repay the debt that she assumed after separation due to the Applicant’s bankruptcy. She said that she paid one half of these funds to her parents; the remainder was applied to the debt that she assumed.
[131] Ms. Henderson gave very little evidence as to the nature of the debt that she ended up with when the parties separated. Her right of reimbursement for the debt would have been eliminated along with other debts that Mr. Henderson owed because of his bankruptcy in 2001. She did not prove her entitlement to repayment of this debt, either pursuant to her right to an equalization payment or as a creditor of Mr. Henderson.
[132] She did say, however, that she negotiated the $100,000 in arrears payments because of the debts that she was left with after separation. If this is the case, and the $20,000 from the Arizona property was given to her to satisfy that debt, then it should be applied to the arrears which were negotiated partly to compensate Ms. Henderson for the deficit she was left with on separation.
[133] There is no reason why the amount realized on the Arizona property should not be applied to arrears and I so order.
(vii) Payment of Support Arrears of $10,287.89
[134] Mr. Henderson testified that he paid this amount when he received a statement of arrears in 2007. He testified that he felt that Ms. Henderson had reneged on her agreement to withdraw from FRO. However, he may have paid these arrears because they were substantially less than the amount agreed to or that might have been owing under the Eberhard J. order from 2006.
[135] Ms. Henderson did not dispute that he paid the arrears amount. The arrears that he paid pre-dated the Joint Divorce Application and the Divorce Order. This amount shall be credited to the arrears owing under the order, as amended.
(viii) Payment of Hockey and Post-secondary Expenses
[136] Mr. Henderson says that these payments total $74,889 and that they should be credited towards arrears owing under the amended Divorce Order.
[137] Hockey and post-secondary costs are both costs which would come within the definition of expenses which are to be shared between the parties under s. 7 of the Child Support Guidelines.^22
[138] As with many other matters between these parties, they came to agreements to pay the children’s expenses on an ad hoc basis as they arose. Although Mr. Henderson paid a good amount of the hockey expenses, Ms. Henderson testified that she shared in those expenses as well, and in fact paid most of them prior to 2006. And Ms. Henderson agreed that, although Mr. Henderson paid the tuition and other university costs for Tyler and Jordan, she paid the rent and other expenses for them during their university years. This was confirmed in one of the emails exchanged between the parties in 2011.[^23]
[139] Ms. Henderson also testified that her children had to obtain OSAP loans as not all of their expenses were covered by either of the parties.
[140] As these costs paid by the Respondent were legitimate section 7 costs which would have otherwise been owed under the Guidelines, they were not paid on account of arrears. They were a separate obligation that Mr. Henderson should have paid and did. As such, they shall not be credited to the arrears amounts.
(ix) “Extras” paid on top of the Support Payments
[141] Mr. Henderson says he paid a total of $16,110 in extras on top of the support that he had agreed to pay.
[142] He was unable to explain what many of these payments were. However, it appears that several payments were for section 7 expenses. This includes the $400 paid for Sylvan, the $610 paid towards a New York trip (presumably for one or more of the children) on September 14, 2007 and $600 paid towards hockey expenses on May 1, 2009. As discussed above, these expenses should not be applied towards the arrears as Mr. Henderson had a legal duty to contribute to these expenses apart from the arrears.
[143] The other expense of some concern is the $9,000 paid to Ms. Henderson on June 23, 2008. Mr. Henderson could not recall why this was paid, but he acknowledged paying a similar amount to Tyler Henderson on the same date for university costs. As such, I can reasonably infer that the $9,000 payment to Ms. Henderson was also for university expenses. Because of this, and because Mr. Henderson could not recall or explain why this payment was made, I decline to credit this expense to the support arrears.
[144] Finally, one of the payments of $500 was a Mother’s Day or Christmas gift to Ms. Henderson for a dishwasher. That was intended to be a gift and not a repayment of arrears. That amount is also disallowed.
[145] Deducting the payments that I have disallowed from the amount paid for extras, I allow a $5,000 credit to the arrears owing under the amended Divorce Order.[^24]
(x) Cell Phone Bills
[146] Mr. Henderson paid the children’s cell phone bills throughout. He says that, at a minimum, these bills were $2,664 per year for a total over five years of $13,320. Ms. Henderson does not deny that Mr. Henderson paid these bills.
[147] Unlike the university and hockey expenses, the cell phone bills are not a section 7 expense. The payments of these bills are over and above the amounts of support agreed to and appear to be completely gratuitous. More importantly, had the cell phone bills not been paid, the costs of the children’s cell phones would have been paid out of the child support received by Ms. Henderson.
[148] As such, and as these costs would have been borne by Ms. Henderson had they not have been paid by Mr. Henderson, the amount of $13,320 shall be credited to the support arrears.
(xi) Total Arrears Owing
[149] Under the amended order there is a total of $100,000 owing on account of arrears.
[150] I have also determined that the Respondent has paid $48,607.89 towards the arrears of support. Deducting the payments from the arrears amount, there remains owing arrears of $51,392.11.[^25] As Mr. Henderson was to have paid the arrears within four years of the Divorce Order, this amount is now owing.
[151] I would expect the parties to agree on a reasonable repayment plan for these arrears. If they cannot agree on an appropriate monthly amount, this may be spoken to on a date to be set by the trial coordinator in Barrie.
Order
[152] There shall therefore be a final order on the following terms:
a. The Divorce Order of Nelson J. dated January 10, 2006 shall be amended pursuant to Rule 25(19)(b) to add the following provisions:
i. Support arrears shall be set at $100,000 which will be paid by the Respondent to the Applicant within four years of the date of this Order.
ii. The Applicant shall have day to day care and control of the children, namely, Tyler Henderson, born May 9, 1988; Jordan Henderson, born March 16, 1992 and Troy Henderson, born June 10, 1993 and the children shall remain with the Applicant;
iii. The Respondent shall pay to the Applicant $1,500 per month for child support and spousal support.
b. After payments made by the Respondent since that Divorce Order was made, there remain owing support arrears in the amount of $51,392.11.
[153] The parties may make written submissions as to costs with the Applicant making her submissions and then the Respondent on a ten day turnaround. Costs submissions shall be limited to five pages in length not including any offers to settle or bills of costs.
McDERMOT J.
Released: June 5, 2015
- The addition of footnote 16 to explain the source of the affidavits mentioned in paragraph 88.
[^1]: O. Reg. 144/99
[^2]: R.R.O. 1990, Reg. 194
[^3]: $5,500 per month less the $1,000 per month that Mr. Henderson had been paying since the Eberhard J. order.
[^4]: Ex. 3, Tab 22
[^5]: Presumably Mr. Henderson
[^6]: See Ex. 3, Tabs 41 and 42
[^7]: McLean is a rectification of contract case. That is important because the claim in this case is for rectification of the order in accordance with the parties’ agreement under Rule 25(19)(b). The case is also useful to examine the criteria upon which one can find there to be an agreement arrived at as opposed to finding that no common intention was arrived at by the parties.
[^8]: Notably, neither felt that the $300 difference between the initial amount of $1,200 per month and the eventual figure of $1,500 per month was a payment on arrears as deposed by Mary Marschall. Mr. Henderson says that he agreed to pay more in child support; Ms. Henderson said it was spousal support.
[^9]: Ex. 2, Tab 4. In fact, that order came to an end as a result of the final Divorce Order and Mr. Epstein did advise Ms. Henderson of this fact in a release document that he had her sign on November 11, 2004: see Ex. 2, Tab 70.
[^10]: Ruling of Kaufman J. dated November 6, 2013, page 2, line 16.
[^11]: Ms. Henderson signed the Joint Application in January, 2005.
[^12]: See the correspondence from Mr. Epstein to Mr. Henderson dated November 11, 2004 found at Ex 3, Tab 27. That letter confirms that the Joint Application was prepared through instructions from Ms. Henderson and “in light of your discussion with the undersigned.”
[^13]: Mr. Henderson testified that the first time he saw the statement of arrears from FRO wherein it stated that he owed some $10,000 was in 2007. His response was to immediately pay those arrears.
[^14]: On August 9, 2004, Mr. Epstein sent a statement of arrears to Ms. Henderson, noting that the arrears were “substantially less” than she had “previously indicated.” As noted above, the FRO said that Mr. Henderson owed just over $10,000 in arrears which was much less than what would have been owing under the Eberhard J. order. Ms. Henderson could not explain this amount in testimony; however, the fact that Mr. Henderson quickly paid this amount when he found out about it later is evidence that he thought this was substantially less than what he thought he owed. It is unknown whether this was disclosed to Mr. Henderson. By September 2, 2004, Ms. Henderson was providing instructions to Mr. Epstein as to the agreement arrived at.
[^15]: Ex. 2, Tab 70
[^16]: In fact, it is unclear who drafted the affidavits in question. Ms. Henderson’s affidavit was sworn on January 10, 2005, when Mr. Epstein remained at the firm. There is a ledger entry in Mr. Epstein’s time dockets indicating that he prepared an Affidavit for Divorce. However, the first three pages of the affidavit are dated August 5, 2005, after Mr. Epstein left Sorley & Still in May, 2005, and these pages appear to have been inserted into the affidavit after it was sworn.
[^17]: R.S.C. 1985, c. 3 (2nd Supp.)
[^18]: Oxford English Dictionary (2015, Oxford University Press) found at http://www.oxforddictionaries.com/definition/english/contain.
[^19]: Merriam-Webster Dictionary (2015 Merriam-Webster, Incorporated) found at http://www.merriam-webster.com/dictionary/contain.
[^20]: McLean v. McLean, supra at para. 44
[^21]: I note that the Applicant has requested that an order go according to the Joint Application for Divorce which included a provision that spousal and child support be paid in the amount of $1,200 per month. I have found, however, based upon the evidence of the parties, that they both agreed when their divorce affidavits were filed that ongoing support would be $1,500 per month and not the $1,200 per month as set out in the Joint Application. As that agreement pre-dated the final Divorce Order, and that was the joint intention of the parties at the time that the Divorce Order was made, I have inserted the amount of support that the parties had agreed to at that time, and which they would have presumably inserted into their consent Divorce Order.
[^23]: See the emails from Ms. Henderson to Mr. Henderson dated August 12, 2011 and August 31, 2011, found at Tabs 6 and 9 of Ex. 2 respectively.
[^24]: $16,110 – ($610 + $400 + $600 + $9,000 + $500) = $5,000
[^25]: $100,000 – ($20,000 + $10,287.89 + $5,000 + $13,320) = $51,392.11