OTTAWA COURT FILE NO.: FC-13-1271
DATE: 20151016
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Heather Smith, Applicant
AND
Richard Sanftenberg, Respondent
BEFORE: Mr. Justice Timothy Minnema
COUNSEL:
John E. Summers, for the Applicant
Bryan Delaney, for the Respondent
HEARD: October 7, 2015
ENDORSEMENT
Issue
[1] This was a motion by the respondent to set aside a Divorce Order that was obtained by default.
Facts
[2] The parties started living together in 2007. The applicant has a child from a previous relationship who lived with them; the child’s father pays the applicant child support. The respondent was involved in a motorcycle accident in 2008 and was rendered a quadriplegic; he also has diabetes, coronary artery disease, and periods of prolonged apnea. They married in 2009. They separated in January 2013 after being together about 5½ years.
[3] Following the separation, the applicant retained a lawyer who contacted the respondent in February of 2013. Not having a response from him or his lawyer, on June 7, 2013 the applicant’s lawyer served the respondent with the application and other court materials. The applicant’s counsel then set a case conference date for August 7, 2013 and advised the respondent by letter, reminding him that he had not filed responding materials and strongly recommending that he seek legal advice and deal with the court matter. The applicant’s Case Conference Brief was personally served on the respondent on July 15, 2013. No one on behalf of the respondent appeared at the case conference, at which time an order was made that he had until August 30, 2013 to defend the case failing which the matter would proceed to an uncontested trial without further notice. That order was personally served on the respondent on August 12, 2015.
[4] On August 29, 2013, a lawyer on behalf of the respondent wrote the applicant’s then lawyer indicating that he did not represent the respondent on the family law matter, but was aware of the court application as the respondent had called him in the early part of August. He advised that the respondent had suffered two heart attacks in the previous six months. He said that he was prepared to assist the respondent to obtain a lawyer who makes house calls, and undertook to forward any correspondence and review it with the respondent on the telephone. However, he reiterated that he was not prepared to become solicitor of record himself and was not retained.
[5] The applicant’s lawyer immediately replied by email on August 30, 2013, gave a brief summary of the steps to date, suggested mediation, and indicated that he would not take further steps in the court process until counsel had spoken or communicated about an alternate plan.
[6] About two months later, on October 29, 2013, the applicant’s lawyer wrote that same lawyer noting that he had not heard from him since September 12, 2013 and that the applicant therefore had no choice but to move forward and obtain a date for an uncontested hearing without further notice. On November 1, 2013, the lawyer wrote back advising he had no instructions from the respondent and reiterated that he was not retained.
[7] The applicant proceeded by way on an uncontested trial on February 13, 2014, at which time the court noted in its reasons “[u]nfortunately Mr. Sanftenberg has failed or refused to participate in this process and as such this final order is made without his input or position.”
[8] Upon being served with the default Divorce Order the respondent retained different counsel and brought a procedural motion to set it aside and stay its enforcement. The parties agreed to adjourn the motion on its first return date. On the next return date no one appeared and the motion was adjourned by the court to a date to be set by the trial coordinator. A letter dated May 20, 2014 from the applicant’s lawyer to the respondent’s lawyer spoke of the possibility of setting aside the default judgment on terms. He requested an affidavit from the respondent to clarify what he was seeking. There is reference in the materials to a reply letter from the respondent’s lawyer dated June 9, 2014 agreeing to provide that affidavit.
[9] Subsequently there was a long lull in communication between lawyers. The respondent did not pursue his motion. The applicant did not take steps to enforce the property orders in her judgment. Eventually the respondent’s lawyer sent a letter to the applicant’s lawyer dated March 26, 2015. He noted that the file had been “dormant” for some time, and that he had not provided the affidavit promised some ten months earlier “for various personal and business reasons.” He recommended the parties attend mediation with counsel, and asked for a prompt response. It appears that following or around the time of that letter the parties had direct discussions. The applicant understood that an agreement had been reached with respect to the sale of one of the real properties. However, when she attended at the property with a real estate agent in early July of this year, the respondent immediately brought an urgent motion for a stay of the default judgment pending a hearing of this motion, and for certificates of pending litigation against the real properties. That motion was ultimately heard by Justice Corthorn on July 29, 2015. She denied the request for certificates of pending litigation but stayed the default judgment in part pending further order.
Law
[10] While there was no dispute that I have authority under the rules of practice to set aside a Divorce Order obtained by default, there was a disagreement between counsel about the legal test. Both referred to and relied on Dodge v. Dodge, 2007 80075 (ON SC), [2007] O.J. No. 3888 (S.C.J.) wherein the traditional three part test is noted. The applicant asserted that it is a conjunctive test, such that a failure by the respondent to meet any one of the three parts is fatal to his request to have the order set aside. The relevant excerpt from that case is found in para. 26 as follows:
The questions to be determined … [are] whether Mr. Dodge has moved promptly to seek to set the judgment aside; whether the default has been adequately explained; and whether there is an arguable defence on the merits …
[11] However, this was not treated as a conjunctive test in that decision. The court went on to note that a finding of undue delay alone is not a barrier to setting aside the order but rather an important factor among many given the need for finality and certainty (see paragraphs 29 and 32). Indeed, it is clear to me that while I am to consider the three parts noted, it would be an error in law to treat them as rigid preconditions to the exercise of my discretion: see Earl v. Koloszar, [1991] O.J. No. 45 (C.A.) at para. 1, and Peterbilt of Ontario Inc. v. 1565627 Ontario Ltd. (2007), 2007 ONCA 333, 87 O.R. (3d) 479 (C.A.) at para. 1. I note the further direction from the Court of Appeal found at paragraph 2 of the Peterbilt decision which is also inconsistent with the applicant’s position:
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. In doing so, the motion judge will have regard to the potential prejudice to the moving party should the motion be dismissed, the potential prejudice to the respondent should the motion be allowed, and the effect of any order the motion judge may make on the overall integrity of the administration of justice.
Analysis
[12] While the applicant concedes that the respondent moved promptly upon learning of default judgment, her main position was that the delay since then is fatal to his success on this motion. However, the applicant herself took no real steps to enforce the property provisions, and engaged in further settlement discussions on those issues, including quite recently. While I agree that delay is an important factor, I have considered it and do not agree that in this case it defeats the respondent’s motion.
[13] The reasons for the default have been adequately explained by reference to the respondent’s disability and his further health complications. However, I want to add that I do not accept in any way, and indeed was troubled somewhat by the arguments along these lines, that the applicant in obtaining the default judgment acted improperly or took advantage of the respondent’s condition. To the contrary, it is clear to me that through her counsel she acted appropriately. She tried to engage the respondent and gave as much notice as was possible. She disclosed to the court the respondent’s physical condition.
[14] I find that the respondent has an arguable case on the merits. Without going into detail, incorrect date-of-marriage figures were used with respect to the Hyndford Road property that alone skew the equalization payment significantly in the applicant’s favour. The affidavits filed in support of this motion raise questions about the appropriateness of the support orders and cannot be summarily dismissed. The order gives the applicant possession and the power to sell the matrimonial home, notwithstanding that it had been significantly modified to accommodate respondent’s disabilities and he continues to reside there to date. The respondent intends to claim an unequal division of net family properties relating in part to the tracing and treatment of his income from his personal injury settlement. When weighed against the applicant’s own acquiescence in the post-order delay, the totality of the respondent’s arguments leads me to the finding that there is more potential prejudice to him if I fail to grant the motion than there is to the applicant if I grant it.
Decision
[15] In my view, the interests of justice favour a setting aside of the default Divorce Order, save and except the costs provision. Regarding the latter, I have considered the applicant’s limited resources, her costs now substantially thrown away, and her lack of blame for the serious stutter-start in this litigation. I find that she is still entitled to her costs as determined by the court at that time.
[16] The rules of practice give me the authority upon setting aside a default judgment to impose such terms as are just. In light of the careful consideration given by Justice Corthorn to the respondent’s possession of Fireside Drive, to the rent and sale of the Hyndford Road property, and to the $2,500 monthly payment from the respondent to the applicant, those orders shall not be affected and shall all continue as interim orders in this proceeding.
[17] This matter shall proceed to a case conference, pre-emptory on the respondent.
[18] While the respondent was successful on this motion, he sought an indulgence from the court. As was done in Menzies Lawyers Professional Corporation v. Morton, 2015 ONCA 553, in my view it is reasonable here to make a cost award in favour of the applicant, which I set at $1,500 all inclusive.
Mr. Justice Timothy Minnema
Date: October 16, 2015
OTTAWA COURT FILE NO.: FC-13-1271
DATE: 20151016
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Heather Smith
Applicant
– and –
Richard Sanftenberg
Respondent
BEFORE: Mr. Justice Timothy Minnema
COUNSEL: John E. Summers, for the Applicant
Bryan Delaney, for the Respondent
ENDORSEMENT
Mr. Justice Timothy Minnema
Released: October 16, 2015