COURT FILE NO.: FC-14-1475

DATE: 2015/12/09

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: RUMELA KABIR BOOTH, Applicant

AND

RONALD ARTHUR BOOTH, Respondent

BEFORE: Madam Justice L. Sheard

COUNSEL: John H. Yach, Counsel for the Applicant

Wade L. Smith, Counsel for the Respondent

HEARD: September 29, 2015

ENDORSEMENT

Introduction

[1] The applicant moves for:

1. Judgment in accordance with an agreement reached between the parties on the issue of custody and access of the two children of the marriage;

2. Interim and retroactive spousal support;

3. Child support based on the respondent’s actual income;

4. An order that the respondent pay his pro rata share of the children’s special and extraordinary expenses;

5. An order scheduling a settlement conference and for a timetable for the remaining steps in the application; and

6. Her costs of the motion.

[2] The respondent brings a cross-motion seeking an order for the appointment of the Office of the Children’s Lawyer to represent the children and for costs on a substantial indemnity basis plus HST.

[3] At the hearing of the motion, I made the following two orders on consent:

i) An order that those portions of Exhibits “B” and “C” of the affidavit of Rumela Kabir Booth sworn July 7, 2015 that contain without prejudice communications not related to custody and access shall be struck out and removed from the continuing record. That task is to be undertaken by counsel for the applicant by removing those exhibits from the continuing record and replacing them with exhibits from which those paragraphs have been deleted; and

ii) An order that the parties maintain life insurance in the amounts as agreed upon by their counsel.

The Issues

[4] This issues to be decided on the applicant’s motion and the respondent’s cross-motion are:

(1) Do Exhibits “A”, “B” and “C” constitute a binding settlement agreement as between the parties and, if so, is the applicant entitled to a final order for custody and access embodying those terms?

(2) (a) Is the applicant entitled to interim spousal support?

(b) If so, from what date?

(c) What income should be used to calculate the respondent’s child support obligation?

(d) What incomes should be used to calculate the respondent’s spousal support obligations?

(3) Should the Office of the Children’s lawyer be appointed to represent the interests of the children on the issue of custody and access?

Background

[5] The parties were married on July 5, 1997. They separated on May 21, 2012. They were married almost 15 years.

[6] There are 2 children of the marriage:

• Maya Samiya MacKenzie Booth, born December 8, 2002, age 13; and

• Mikhail Aiden Kabir Booth, born September 22, 2004, age 11.

[7] No order for custody has been made. At the time of separation, the applicant and the children remained in the matrimonial home. In July 2012, the parties agreed that the children would spend alternate weekends with the respondent with one overnight visit in alternate weeks. Those visits began in December 2012 and continued to March 2014.

[8] In March 2014, the respondent sought to increase access to two consecutive overnight visits in alternating weeks in addition to alternate weekends. That was agreed to by the applicant. That arrangement has continued to the date of the motion.

[9] On a voluntary basis, the respondent has paid child support based on his reported annual income of $188,000.00. In addition, he has paid the applicant $250 per month for the children’s extraordinary expenses. This amount was based on an estimate or expectation of expenses to be incurred. In 2015 the respondent was provided with receipts for some of the extraordinary expenses. He believes that he has overpaid and that his contribution should be approximately $79 per month.

[10] Counsel agreed that I need not fix the amount to be paid in extraordinary expenses. The amounts are relatively minimal and there is an expectation that they can and will be agreed to once this Court has determined the amount of spousal support, if any, to be paid by the respondent.

[11] Counsel agreed that the allocation of the agreed-upon s. 7 expenses would be paid on a pro rata basis, as calculated using the usual support software.

[12] In the first 6 ½ years of marriage, the respondent pursued graduate studies. He completed a PhD in Biochemistry. In June 2002, he moved from Ottawa to Toronto to complete a Post-Doctoral Fellowship. In December of that year the applicant also moved to Toronto to be with the respondent. The parties’ first child was born on December 8, 2002.

[13] In December 2003, at the conclusion of her maternity leave, the applicant returned to work in Ottawa. She and their child lived with her parents until the respondent completed his studies in June 2004. For the first seven years of their marriage, the applicant was the primary source of financial support for the family. Throughout their marriage, the applicant has had full-time employment.

[14] The respondent prepared a Chart that set out the incomes earned by the applicant and the respondent from 1997 to 2012, the year they separated. The Chart is found at Exhibit “A” to the respondent’s affidavit sworn September 21, 2015. There is no dispute that while the respondent was continuing his studies, the applicant was the principal financial support for the family.

[15] In 2005, the respondent’s income almost doubled from what he had earned in 2004. The Chart identifies that he began full-time employment in 2005. Based on the Chart, the respondent’s income climbed from approximately $120,000 in 2005 to a high of $189,878 in 2011. The applicant’s income has ranged from $74,000 in 2000 to $110,559 in 2011.

[16] The applicant is 44 years of age and works full-time for a pharmaceutical company. In her July 7, 2015 affidavit she states that her 2015 income will be $74,400. She states that in her previous employment, which ended as a result of corporate restructuring, her annual income was $84,896.44. The amount of the applicant’s current income is in dispute and is one of the matters that must be decided on this motion.

[17] The respondent is 45 years of age. He works for the Ottawa Hospital as a biochemist. As per his 2013 Notice of Assessment, his 2013 income was $188,004.

Issue 1: Do Exhibits “A”, “B” and “C” constitute a binding settlement agreement as between the parties and, if so, is the applicant entitled to a final order for custody and access embodying those terms?

Settlement Negotiations

[18] On and after separation, the parties engaged in settlement negotiations concerning custody, access and child support. As set out above, they were relatively successful in reaching an agreement on those issues.

[19] The parties retained counsel to assist them. Counsel for the applicant has represented her throughout. The respondent was initially represented by lawyer, Darrin L. Clayton. In April 2014, the applicant proposed a settlement of all the issues between the parties.

Offer to Settle Custody and Access

[20] The applicant states that the terms of her settlement proposal were severable and that the respondent accepted the portion of her settlement offer that dealt with custody and access. It is this portion of the applicant’s Offer to Settle that she seeks to enforce on this motion.

[21] The Exhibits to the applicant’s July affidavit contain a copy of the part of her Offer to Settle dealing with custody and access. It is entitled: PART ONE TO OFFER TO SETTLE DATED APRIL 11, 2014 – CUSTODY and is found at Exhibit “A” to the applicant’s affidavit sworn July 7, 2015 (“the Offer to Settle”).

[22] Having received no response to the Offer to Settle, on June 24, 2014 the applicant commenced this application.

[23] Counsel for the respondent did reply to the Offer to Settle by letter dated July 22, 2014. At page 1 of that letter, the respondent’s then counsel, Darrin L. Clayton, accepted the terms of the custody and access portion of the Offer to Settle with one amendment. The July 22, 2014 letter is found at Exhibit “B” to the applicant’s July 7, 2015 affidavit. The relevant portion reads:

Part One – Custody

This part is acceptable but for section 12(i) – we ask that you make this reciprocal by adding “Similarly, in odd numbered years, the Father shall be entitled to share time with the children for the entirety of the March Break, so as to facilitate travelling with the children on a trip. If the Father exercises this right, then the following year, the Mother is entitled to share the entirety of the March Break with the children”.

[24] The applicant’s lawyer responded to Clayton’s July 22, 2014 letter on August 21, 2014. His response is found as Exhibit “C” to the applicant’s July 7, 2015 affidavit. The relevant portion of his letter reads:

Part One – Custody

The amendment you have proposed is acceptable.

[25] No further reference will be made to Exhibits “B” or “C”. I did not read them in their entirety. Portions of Exhibits “B” and “C” to the applicant’s July 7, 2015 affidavit included reference to without prejudice negotiations. As referenced above, on consent, the portions of these exhibits that were unrelated to custody and access are to be redacted from the Continuing Record.

[26] The applicant submits that Exhibits “A”, “B” and “C” constitute a binding settlement agreement between the parties concerning access and custody of their children.

Law

[27] Rule 18 of the Family Law Rules, O. Reg. 114/99 allows a party to make a motion to the court to convert an accepted offer into an order. Rule 18 sets out what constitutes an offer and acceptance for the purposes of that Rule. Rule 18(4) provides that an offer is to be signed personally by the party making it and also by the party’s lawyer, if any.

[28] In this case, the Offer to Settle and the letters at Exhibits “B” and “C” were not signed by the parties. For that reason, the respondent argues that the settlement set out in those Exhibits does not bind the parties and that there is no enforceable settlement between them as to custody and access.

[29] The applicant’s lawyer refers to the 2007 decision of Justice Wildman in Smith v. Smith, 2007 CanLII 17205(ON SC). Smith provides a helpful discussion of what does and does not constitute a rule 18 offer. Based on the evidence before me, I find that the correspondence exchanged between counsel for the parties does not constitute a rule 18 offer.

[30] In Smith, the court confirmed that the parties may still settle their cases by an exchange of offers that are not in compliance with rule 18. At paragraph 23:

Rule 18 of the Family Law rules creates a way for litigants to make formal offers to settle their cases and, possibly, to attract cost-benefit by doing so. Offers that do not meet the technical requirements of rule 18 are still valid offers. They may be taken into account in considering costs and they can still, of course, form the basis of a valid contract if accepted by the other side. However, offers that do not comply with rule 18 are governed by the principles of general contract law rather than the special provisions of the Family Law Rules.

[31] In Smith, the court found that there had not been an agreement reached between the parties. That conclusion was not based upon the parties not complying with rule 18. Rather, it was based on a factual finding that there had not been offer and acceptance.

[32] Smith is consistent with the much earlier Ontario Court of Appeal decision in Geropoulos v. Geropoulos, 1982 CanLII 2020 (ON CA), 1982 CarswellOnt 253, 26 R.F.L. (2d) 225. In that case, the Court was asked to set aside the judgment obtained by a party based on the settlement reached between his and the responding party’s counsel. The agreement, reached between counsel, settled all issues of support and division of property.

[33] The Court of Appeal was asked to overturn the judgment on the basis that it did not constitute a domestic contract because it was not signed by the persons to be bound, and witnessed. Similar to the arguments put forth by the respondent on this motion, in Geropoulos the appellant argued that, although the settlement between the parties was set out in correspondence between their lawyers, it was unenforceable as the agreement was not signed by the parties.

[34] The reasoning in Geropoulos remains compelling. At paras. 17-19:

I share the view that settlement agreements concluded by solicitors or counsel resolving outstanding claims in pending litigation under the Act are beyond the reason and purview of s. 54(1). The formal requirements laid down by the section are intended to ensure that asserted domestic contracts, be they marriage contracts (s. 51), cohabitation agreements (s.52) or separation agreements (s. 53), are reduced to writing and in fact agreed to by the parties as evidenced by their witnessed signatures; this in essence is a statute of frauds type provision made referable to domestic contracts by the Family Law Reform Act.

In my opinion, the section plainly is not aimed at or intended to apply to authorized settlement agreements like the present, made with legal advice during the pendency of court proceedings which, to be effective, require the intervention of the court. Such agreements derive their effect from an act of the court; their authenticity is assured by the court's supervision and control over them; and ample protection is afforded the parties to these agreements, wholly independent of the section. The court's jurisdiction to enforce settlements or refuse to do so, notwithstanding any agreement between solicitors or counsel, is well established; whether they should be enforced or not, in the final analysis, is a matter for the discretion of the court and, in litigation under the Family Law Reform Act, a matter that would be subject to the court's overriding jurisdiction with respect to domestic contracts: Scherer v. Paletta, supra; 3 Hals. 4th ed., paras. 1182-83, pp. 650-651 and ss.18(4) and 55 of the Act.

No purpose is to be served in compelling agreements of this kind to comply with the formalities of s. 54(1) and, if not, permitting parties to withdraw at will from compromises properly entered into by their legal representatives before trial of their action or, if the appellant's position were to be accepted, compromises concluded even during the trial of the action. It may well be that, given the nature of matrimonial litigation, prudence would dictate that lawyers ensure that settlement agreements are signed by the parties personally witnessed. But I cannot construe the section as requiring that an otherwise valid compromise of an action must be rendered void and defeated on this ground alone, nor do I believe that the legislation could have contemplated or intended that result. Such a construction would be wholly inconsonant with the established policy of encouraging the settlement of disputed claims and recognizing and preserving the validity of settlements freely and properly entered into under advice.

[35] In the case before me the parties were represented by counsel and entered into settlement negotiations. They intended to be bound by the offers exchanged through their lawyers. To ignore those negotiations and the agreement reached would be wholly inconsistent with well-accepted principles and policy that encourage parties to try to resolve disputed claims and would defeat a settlement freely and properly entered into with legal advice.

[36] I find that the Offer to Settle, read with Exhibits “B” and “C” constitute a binding agreement between the parties. I therefore make a final order for custody and access as per the agreement reached between the parties and evidenced by the correspondence (or portions thereof) found at Exhibits “A”, “B” and “C” of the applicant’s affidavit of July 7, 2015. So that an order based on this endorsement follows the wording agreed to by the parties, a copy of the relevant portions of Exhibits “A” and “B” are appended to this endorsement and identified collectively as Appendix 1 (14 pages).

Issue 2(a): Is the applicant entitled to interim spousal support?

[37] The parties were married on July 5, 1997 and separated on May 21, 2012. That is a marriage of almost 15 years. The evidence is that the applicant was the financial support for the family for the first seven years of marriage. The reason for that was that the respondent was engaged in post-secondary studies. That is true even though in those first seven years the applicant gave birth to the couple’s two children. The evidence shows that the applicant facilitated and supported the respondent in his post-secondary studies. Those studies have led to his obtaining a doctoral degree. That degree allows him to earn an income that is more than double that which the applicant has and can earn.

[38] I find that the applicant is entitled to compensatory support.

[39] This application is for a temporary and interim spousal support order. Having found that the applicant is entitled to support, I must next consider the date upon which spousal support should be paid.

Issue 2(a): From what date should spousal support be payable?

[40] The evidence of the applicant was that the issue of spousal support was discussed while the parties were engaged in ongoing negotiations. However, on the record before me I may only find that the respondent was given formal notice of the applicant’s claim for spousal support when this application was issued. It was issued on June 26, 2014. The applicant seeks to preserve her right to claim spousal support from the date of separation. However, for the purposes of this order her counsel accepted that retroactive support may only be ordered from the date that formal notice was given by way of the court application.

[41] Counsel for the respondent argues that retroactive spousal support should only be considered from July 1, 2015, which is the date of the notice of motion for temporary support. He argued that it was open to the trial judge to revisit the issue of spousal support and to determine whether it should be awarded from an earlier date or otherwise compensate the applicant for having supported the family while the respondent was completing his education.

[42] Counsel for the applicant argued that his client did not pursue a court application for support in view of the ongoing negotiations between the parties. However, the respondent was on formal notice that a claim for support would be made when the application was issued.

[43] For the purposes of this motion, I find that spousal support should commence effective July 1, 2014. This order is without prejudice to any right the applicant may have to seek spousal support retroactive to the date of separation.

Issue 2(c): What income should be used to calculate the respondent’s child support obligation?

[44] The most current evidence of the respondent’s 2015 income is his financial statement sworn September 1, 2015 [Volume 2, Tab 3, Continuing Record]. In it, he states that his income for 2014 was $219,487.00. The respondent’s financial statement says that his income in 2015 is $182,892.00.

[45] With respect to the respondent’s income, counsel for the applicant submitted that the respondent’s income is “back ended”. In other words, that he receives a significant payment near the end of the calendar year. For that reason, it is argued that I should impute a higher income to the respondent than is shown on his financial statement. There was no evidence before me of “back-ended” income and therefore, I do not attribute such income when determining the income earned by the respondent for the purposes of this motion.

[46] In the absence of any other and more current information, for the purposes of this motion, I find the respondent’s income in 2014 to be $219,487.00 and in 2015 to be $182,892.00.

[47] This order is intended only to deal with the payment of child support on and after July 1, 2014. I do not here address any child support paid or payable prior to July 1, 2014. Therefore, effective July 1, 2014 the respondent is to pay the applicant the Table amount of child support based on his 2014 income of $219,487.00. Effective January 1, 2015, the respondent’s Table amount of child support will be calculated on his 2015 income, which he has stated to be $182,892.00.

Issue (2)(d): What incomes should be used to calculate the respondent’s spousal support obligations?

[48] The parties were unable to agree on the income to be used for either party in order to determine spousal support using the Spousal Support Advisory Guidelines (“SSAG”). I have addressed the applicant’s arguments above. The respondent complains that no tax returns have been filed by the applicant and, therefore, it is impossible to determine the applicant’s income.

[49] Counsel for the applicant argues that the applicant’s T4 slips are a reliable source of information as to her 2014 income. The applicant has or will submit tax returns for 2014.

[50] While it might be preferable to have the Notices of Assessment available for making that determination, for a temporary and interim order I find that it is reasonable to award support based on the T4 slips provided by the applicant.

[51] For the purposes of retroactive support, I use the T4 slips found at Exhibit “C” to the affidavit of the applicant sworn September 23, 2015. In particular, I am using the employment income shown at box 14 of the T4 slip for 2014 from Lundbeck Canada Inc. in the amount of $79,353.58 and shown at box 14 of the T4 slip for Impres Pharma Inc. in the amount of $2,939.14 for a total 2014 income of $82,292.72. When the 2014 Notices of Assessment are available, that will allow the respondent to test the accuracy of the T4 information. It will also allow the applicant to refer to line 150 of the Notice of Assessment, should that differ from the $82,292.72 figure used above. If appropriate, the amount of spousal support could be adjusted by the court when a final order is made.

[52] With respect to the applicant’s 2015 income, the most up-to-date information appears to be found in her financial statement sworn September 23, 2015. [Volume 2, Tab 4A, Continuing Record]. For the purposes of calculating spousal support by the respondent for 2015, I use the income shown by the applicant on her financial statement in the amount of $64,978.32.

[53] Based on my findings of the parties’ respective incomes, I invite counsel to prepare the appropriate software calculations to determine spousal support. Of course, they must also take into account the child support ordered above in calculating the amount of spousal support.

[54] I order that on a temporary basis spousal support be payable by the respondent to the applicant using the SSAG mid-range.

Issue: 3. Should the Office of the Children’s lawyer be appointed to represent the interests of the children on the issue of custody and access?

[55] In the course of submissions, I raised whether or not the parties would be better served to retain a private professional to ascertain the wishes of the children with respect to custody and access rather than to appoint the Children’s Lawyer. There was a general acknowledgement that a private assessor would be able to conduct an assessment much more quickly than would the Children’s Lawyer.

[56] In any event, as I have made a final order regarding custody and access, I make no order regarding the appointment of the Office of the Children’s Lawyer.

Settlement Conference and Timetable

[57] Having received no submissions on the point, I also make no order on the timing of a settlement conference or timetable for the balance of the proceeding. The parties are free to obtain a settlement conference date and to ask the presiding judge for a timetable order, if required.

Costs

[58] The applicant has been successful on this motion. For that reason, she is entitled to her costs. If the parties cannot agree on the amount of costs, then they may provide me with written submissions within 30 days of the date of this endorsement. Submissions are not to be longer than three pages in addition to a Bill of Costs.

Sheard J.

Date: December 9, 2015

COURT FILE NO.: FC-14-1475

DATE: 2015/12/09

ONTARIO

SUPERIOR COURT OF JUSTICE

RE: RUMELA KABIR BOOTH, Applicant

AND

RONALD ARTHUR BOOTH, Respondent

BEFORE: Madam Liza Sheard

COUNSEL: John H. Yach, Counsel for the Applicant

Wade L. Smith, Counsel for the Respondent

ENDORSEMENT

Released: December 9, 2015