Court File and Parties

COURT FILE NO.: 6719/15 DATE: 20160524 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Nolan Rodney Steckly, Applicant AND: Rebecca Louise Steckly, Respondent

BEFORE: The Honourable Justice R. Raikes

COUNSEL: Glenda McLeod, Counsel for the Applicant Jessi Stanfield, for the Defendant

HEARD: April 26, 2016 in Stratford

Endorsement

Overview

[1] The Applicant, Nolan Steckly (hereafter “Nolan”), commenced an Application on June 16, 2015. Pursuant to that Application, he sought, inter alia, equalization of net family property, an interim and permanent order for joint custody of the children with an obligation requiring the parties to confer and consult on all major decisions but with final say to Nolan in the event of disagreement. He also sought an interim and permanent order that the children shall reside in his primary care subject to liberal and generous access to the Respondent mother.

[2] The Respondent, Rebecca Steckly (hereafter “Rebecca”), was noted in default on September 10, 2015 and the matter proceeded on an uncontested basis before Justice Hockin on December 15, 2015. On that date, Justice Hockin granted the relief sought by Nolan.

[3] Rebecca was served with the Order of Justice Hockin in early January, 2016. She moves for an order setting aside the Order of Justice Hockin dated December 15, 2015 pursuant to Rule 1(7) of the Family Law Rules and Rule 19.08 of the Rules of Civil Procedure. She also seeks the following relief:

1. Permitting her to file her Answer and other responding materials within five days;
2. Permitting her to bring a motion with respect to the residency of the children without the necessity of a Case Conference; and,
3. In the alternative, extending the time for service and filing of a Notice of Appeal from the Order of Justice Hockin.

Facts

[4] Nolan and Rebecca married May 13, 2006. There is a dispute as to when they separated. Nolan deposes that they separated July 13, 2014. Rebecca deposes that they separated November 24, 2014.

[5] Nolan and Rebecca are the biological parents of Danica Layne Steckly born November 13, 2008 and Tessa Bea Steckly born May 10, 2012.

[6] Nolan issued the Application in this litigation on June 16, 2015. According to the Application, Danica and Tessa were then residing with each of Nolan and Rebecca, i.e. there was a shared parenting arrangement in place.

[7] Rebecca was served with the Application and related documents on June 18, 2015. Rebecca retained a lawyer, Mr. Chan, on June 10, 2015, prior to issuance of the Application. She engaged Mr. Chan to attempt to negotiate or mediate a resolution of all issues with Nolan, who was by then represented by his current counsel, Ms. McLeod.

[8] Rebecca deposes that Mr. Chan tried unsuccessfully to engage Nolan in discussions to resolve the issues between the parties. In early August, 2015, he advised her that as the litigation was to proceed, he required a further retainer of $2000 which she could not afford. She ended her retainer with him at that time.

[9] In her affidavit sworn February 22, 2016, at paragraph six, she indicated that to her recollection, she was not advised of any specific date by which she had to file any court documents. At paragraph 11 of that affidavit, she indicated that she did not receive a letter from Nolan or his counsel advising that if she did not file court documents by a specified date, she would be noted in default and an order made in her absence. She deposed: “Mr. Chan did not discuss with me that this was a possibility. Had I known, I would have acted expediently.”

[10] Rebecca later produced a letter from Mr. Chan dated August 14, 2015 addressed to her. In that letter, Mr. Chan wrote:

“…In your particular matter, we provided legal services to you that included all correspondence with Nolan’s lawyer Glenda McLeod. …You are encouraged to prepare your Answer and other responding documents so that Nolan’s lawyer does not find you in default.”

[11] The letter from Mr. Chan does not indicate a date by which her Answer was required to be filed notwithstanding that an extension had been granted to him for that purpose by Ms. McLeod to August 20, 2015. The letter is also silent as to the consequences of being noted in default, i.e. once noted in default, Nolan would be entitled to proceed on an uncontested basis and obtain an order without further notice to or participation by her.

[12] Ms. McLeod points to the letter by Mr. Chan as evidence that contradicts the affidavit sworn by Rebecca. She asks that I infer that Mr. Chan acted as a reasonable and prudent counsel; that he brought to Rebecca’s attention Ms. McLeod’s earlier correspondence granting the extension of time with the new deadline and explained to her the consequences of being noted in default. Rebecca denies that she received Ms. McLeod’s correspondence from Mr. Chan or that she was advised by him of any deadline or the consequences of being noted in default.

[13] Ms. McLeod also notes that the Application itself expressly advises the recipient that if she fails to file responding materials within 20 days, she may be noted in default and the matter will proceed in her absence. Rebecca acknowledges that she received the Application, but did not note that paragraph which forms part of the pre-printed, standard form language common to every application.

[14] Rebecca contends that she continued to have discussions with Nolan in September through the Fall of 2015 to try to resolve discrete issues such as personal effects, vehicles and sale of the matrimonial home. She wished to engage him in discussions to mediate or resolve all of their outstanding issues. She was unaware that he had deposed an affidavit on September 10, 2015 or that she was noted in default on September 10, 2015. Following termination of her retainer of Mr. Chan, she received no communication from Ms. McLeod or Nolan that she had to file her Answer or she would be noted in default.

[15] Rebecca acknowledges receiving correspondence in November, 2015 from Ms. McLeod but not similar correspondence sent in December, 2015. That correspondence is likewise silent with respect to any pending court date and does not advert her to having being noted in default. Rebecca deposes that she finds Ms. McLeod to be aggressive and intimidating. Ms. McLeod takes umbrage at that characterization. I note that her letters are written in a professional manner and cannot be criticized for either tone or content. That said, it is hardly uncommon that an individual may feel intimidated by a lawyer’s letter.

[16] On December 15, 2015, the matter proceeded on an uncontested basis before Justice Hockin. He granted a comprehensive order dealing with custody/access, decision-making, holiday schedules, equalization and sale of the matrimonial home which was then occupied by Rebecca.

[17] In early January, 2016, Rebecca received from Nolan a copy of Justice Hockin’s Order dated December 15, 2015. At first she disbelieved that it was a real court order. She received correspondence from Ms. McLeod making clear that the Order was, in fact, valid and had been issued.

[18] Soon after receiving the Order, which she found quite distressing, she contacted her current counsel, Ms. Stanfield and met briefly with her. Unfortunately, Ms. Stanfield was unable to accept her retainer at that point. She consulted a lawyer at a clinic and as a consequence of doing so, drafted her own motion and supporting affidavit to set aside the Order of Justice Hockin. Her materials were deeply flawed.

[19] When the matter came before me on February 17, 2016, Rebecca had retained Ms. Stanfield who had filed further materials in an effort to shore up Rebecca’s motion. Ms. McLeod’s concerns with the materials filed were front and centre. I issued directions for fresh materials to be filed and set timelines for same so as to regularize Rebecca’s motion.

[20] The parties then exchanged a flurry of affidavits. Suffice to say that the affidavits demonstrate significant discrepancies with respect to matters affecting custody/access, equalization, child support and spousal support. The affidavits filed by Rebecca indicate that the evidence provided by Nolan to Justice Hockin was inaccurate and misleading or omitted crucial facts. Of course, Nolan denies this characterization and Rebecca’s version of events and circumstances during their period of cohabitation and post-separation.

Issue

[21] The issue before me is whether to set aside the final Order of Justice Hockin dated December 15, 2015 and, if so, on what terms.

Positions of Parties

[22] Rebecca’s position is:

1. She was unaware of the deadline to file her Answer and the consequences of failing to do so. She was completely unaware that she had been noted in default and that the matter had proceeded to trial on an uncontested basis in December, 2015 until she received the Order in early January, 2016;
2. Upon learning of the Order, she moved promptly to it set aside. In doing so, she was hampered by her lack of expertise in family law matters and by the fact that she was self-represented, at least initially;
3. She has a good explanation for her default including the fact that she was engaged in discussions with Nolan resolving minor collateral matters all the while trying to engage him on the bigger issues; and,
4. There is good reason to believe that the evidence she has to tender could have materially affected the outcome. In other words, had she participated in the trial and put forward the evidence that she did in her affidavits, it could have resulted in a very different order.

[23] Nolan’s position is:

1. Rebecca knew or should have known of her obligation to file her Answer and responding materials. She deliberately chose to ignore her obligations and should not now be allowed to set the process back to square one;
2. He acknowledges that Rebecca moved promptly to correct her default once she learned of the Order; and,
3. The Order of Justice Hockin dated December 15, 2015 adequately addresses any interests or concerns that Rebecca had. It is not a one-sided order. She is given large and generous access to the children. She could hardly have hoped to do better at a trial. The equalization component of the Order simply reflects the applicable legislation. She has not raised a defence on the merits.

Law

[24] The Family Law Rules contain no provision to set aside a default judgment or judgment obtained at an ex parte trial. In those circumstances, Rule 1(7) of the Family Law Rules permits the court to give directions and determine the applicable practice by analogy to the Rules of Civil Procedure.

[25] Rule 19.08 of the Rules of Civil Procedure allows the court to set aside judgment obtained against the defendant who has been noted in default or who fails to attend a trial. This provision has been used by Family Courts to set aside orders made at an uncontested trial where a party has been noted in default: Cadas v. Cadas, 2013 CarswellOnt 5551 at para 15; Gray v. Rizzi, 2010 CarswellOnt 7120 at para 17; Diciaula v. Matrogiacomo, 2006 CarswellOnt 2274 at para 14; and, Lemieux v. Lehane, 2014 ONSC 4462 at para 19.

[26] The test for setting aside an order under Rule 19.08 is threefold:

1. Has the moving party on the motion moved to set aside the default judgment as soon as possible after he or she became aware of the judgment, i.e. timeliness of motion to set aside?
2. Has the moving party explained the circumstances under which the default arose that provide a plausible explanation for the default, i.e. explanation for default?
3. Has the moving party set out facts that support the conclusion that there is at least an arguable case to present on the merits, i.e. arguable defence?

[27] The moving party must satisfy all three of these criteria to be successful on the motion to set aside.

Analysis

a. Timeliness

[28] It is undisputed by Nolan that Rebecca moved to promptly to set aside the order of Justice Hockin upon becoming aware of that Order. Timeliness is not in issue.

b. Explanation for default

[29] Although I have some sympathy for Nolan’s position on this branch of the test, I am satisfied on the evidence before me that Rebecca has provided a plausible and reasonable explanation for the default. I observe that:

1. Although Mr. Chan’s letter alerts Rebecca to the possibility of being noted in default if she does not file her Answer, it does not explain the consequences of being noted in default, i.e. Nolan can proceed to trial without further notice to or participation by her;
2. Ms. McLeod gave Mr. Chan an extension of time to August 20, 2015 to file an Answer for Rebecca. Mr. Chan’s letter of August 14, 2015 is silent with respect to that deadline;
3. Rebecca’s affidavit that she was unaware of the deadline or the consequences of being noted in default is uncontradicted;
4. Neither Ms. McLeod nor Nolan advised Rebecca directly of the August 20, 2015 deadline or any other deadline before or following termination of Mr. Chan’s retainer;
5. Neither Ms. McLeod nor Nolan advised Rebecca that she would be noted in default if she did not file her Answer and what that meant in a practical sense moving forward, at any point after Rebecca terminated Mr. Chan’s retainer; and,
6. Rebecca and Nolan continued to have direct communication on a number of fronts during the Fall of 2015. Nothing in those dealings alerted Rebecca to the need to file responding materials or to move to set aside the noting in default of which she was entirely ignorant.

[30] I accept that Rebecca was well aware that legal proceedings had been commenced. The Application on its face indicates the obligation to file responding materials and the consequences for not doing so. Nevertheless, litigation is a very unsettling experience and I am prepared to accept Rebecca’s explanation that she did not read and did not comprehend her obligations in this regard.

[31] I am not prepared to infer that Mr. Chan provided to Rebecca copies of his correspondence from Ms. McLeod, including that which extended the time to file an Answer to August 20, 2015. Likewise, I am not prepared to infer that Mr. Chan explained to Rebecca the deadline and the consequences for failing to file her Answer in a timely manner given the evidence provided by Rebecca and the notable gaps in Mr. Chan’s August 14, 2015 letter. It may well be that he did so but that evidence is not before me.

[32] Ms. McLeod urges me to find that I should not rely upon the affidavit evidence given by Rebecca in light of the contradiction between her February 22 affidavit and the letter of Mr. Chan. She asserts that Rebecca’s affidavit indicates that Mr. Chan said nothing at all about being noted in default yet his letter clearly alludes to that possibility.

[33] I do not read Rebecca’s affidavit as narrowly as Ms. McLeod. Mr. Chan’s letter does refer to the obligation to file an Answer so as not to be noted in default. That is as far as it goes. Rebecca’s affidavits make clear that she was not alive to the deadline or the consequences and this was all during a time period when she and Nolan were at least dealing with one another on some of the issues. During that same time period, they were continuing the custodial arrangements that had been in place for some time without incident.

[34] I accept that Rebecca ought to have educated herself as to what was required of her in the litigation given that Nolan was not prepared to mediate resolution of all issues. She knew that much from Mr. Chan’s letter. However, in these circumstances where the parties were continuing to have discussions and to interact with one another, and in the absence of any evidence that the consequences of being noted in default were known by Rebecca, I am inclined to accept her explanation for default.

c. Defence on merits

[35] In her affidavits on this motion, Rebecca deposed that she had reviewed the affidavit filed by Nolan for the uncontested trial; the information provided by him to the court was misleading and inaccurate.

[36] I have reviewed the affidavit which Nolan swore for the uncontested trial heard by Justice Hockin on December 15, 2015. I have compared the evidence provided by him to the court with the affidavits deposed by Rebecca in support of this motion. I have also reviewed the further affidavits that he has sworn on this motion which contradict Rebecca’s affidavits and reiterate that which was before Justice Hockin.

[37] Rebecca’s evidence with respect to responsibility for the care of the children during the marriage and post-separation is substantially different from that put before Justice Hockin on December 15, 2015. Nolan’s characterization of Rebecca’s conduct during the marriage is, to say the least, very unflattering. His evidence paints a picture that Rebecca had serious mental health and anger issues that posed a threat to both Nolan and the children. His evidence likewise asserts that he had assumed a greater and greater responsibility within their marriage for the care of the children while Rebecca engaged in behaviours that diminished the family’s financial resources including an extramarital affair in Greece.

[38] In her affidavits filed on the motion, Rebecca admits to an extramarital affair but asserts that she only engaged in that extramarital affair after she became aware of Nolan’s infidelity. She replaced the money used for her trip to Greece with funds received at Christmas and on her birthday from her family.

[39] Further, she deposed that she engaged in social activities outside the home on the advice of her therapist. She had an adverse reaction to an antidepressant which led her parents to take her to the hospital. That caused her to yell at Danica but that was the only time she ever did so. She denies any anger issues with the children either before or after that event.

[40] Rebecca agrees that she and Nolan argued during the marriage but asserts that their fights were often instigated by him and that he participated in them fully. She suggests in her evidence that police were called by him after he provoked an argument. She disputes any physical violence against Nolan or his family.

[41] Rebecca’s affidavits tell a very different story with respect to child care responsibilities during the marriage and post-separation. I am satisfied on the evidence before me that the outcome of the trial could well have been materially different on the issues of custody and access if Rebecca’s evidence had been heard and found credible by the trial judge. I am mindful of the following passage from King v. Mongrain, 2009 ONCA 486 at para 31:

“At the same time, however, courts should use the utmost caution in striking pleadings where children’s interests are involved and it is generally preferable to avoid using that sanction: see, for example, Haunert-Faga v. Faga (2005), , 203 O.A.C. 388 (C.A.). The reason for that admonition is simple – in order to make custody and access decisions in the best interests of the child, the court needs the participation of both parties.…”

[42] This is not a motion to strike pleadings but it does indirectly engage the best interests of the children on matters of custody and access. Accordingly, the above admonition has some bearing on the issues before me.

[43] With respect to equalization of net family property, I observe that there is a dispute on the evidence as to the date of separation and as to whether assets are missing from the financial statement filed by Nolan for the uncontested trial. Nolan disputes the date of separation and that any information is missing from his financial statement. At this stage, it is not for me to resolve that dispute on the basis of conflicting affidavit evidence. It is sufficient that Rebecca’s affidavit material raises the prospect of a different outcome if that evidence is found to be credible and reliable at trial.

[44] Nolan’s affidavit material does not address spousal support for Rebecca in any meaningful way nor does Justice Hockin’s Order deal with that issue. In her affidavit material, Rebecca makes clear that she intends to pursue that relief and provides a factual basis for same. That is a live issue that can be raised in these proceedings after the Order of Justice Hockin is set aside.

[45] Thus, I am satisfied on the evidence before me that Rebecca had, at all material times, a defence or defences on the merits to the relief sought by Nolan on December 15, 2015. More to the point, I am satisfied that if the evidence she has put before me had been available to Justice Hockin on that date, it may have resulted in very different relief being granted.

Conclusion

[46] In summary, I find that Rebecca has met each of the three branches of the test required to set aside the Order dated December 15, 2015. Accordingly, I order that the Order of Justice Hockin dated December 15, 2015 made at an uncontested trial be set aside on the following terms:

1. Rebecca shall deliver her Answer and Financial Statement within 10 days of the date of release of this decision;
2. Rebecca shall pay to Nolan his costs thrown away for the uncontested trial including the noting in default. If the parties cannot agree upon those costs, written submissions not exceeding three pages may be made to me within 15 days;
3. The parties shall proceed to a Case Conference to be scheduled as soon as possible with the Trial Coordinator at Stratford;
4. The terms of the Order of Justice Hockin dated December 15, 2015 with respect to custody and access shall continue as an interim interim, without prejudice order pending further order of this Court or other agreement between the parties;
5. If the parties cannot agree on costs of this motion, they may make written submissions not exceeding three pages within 15 days of release of this decision.

“Original signed by Raikes, J.” The Honourable Justice Russell Raikes

**Date:** May 24, 2016