Court File and Parties
COURT FILE NO.: FS-14-81841-00 DATE: 2016 10 06
SUPERIOR COURT OF JUSTICE – ONTARIO
RE: Lopez v. Maldonado
BEFORE: Van Melle J
COUNSEL: Patrick Di Monte/Karen Di Monte, for the Applicant Jennifer Park, for the Respondent
HEARD: 2016-08-25
ENDORSEMENT
[1] The applicant moves for an order striking the respondent’s pleadings; an order that the respondent not be permitted to take any further steps until his costs have been paid in full and he is in compliance with all Orders; an order that all issues be stayed until he is in compliance; or in the alternative security for costs in the amount of $60,000.00.
[2] The respondent seeks an order staying or varying the order of Justice Edwards granting the applicant child support of $560 per month; an order that he pay child support of $213 per month; an order rescinding or varying arrears of child support; an order that the Applicant produce documentation in support of her assets and liabilities on the valuation date and the date of marriage; an order that the applicant be prevented from bringing any further motions without leave of the court; security for the next step and that she not be entitled to obtain any further financial disclosure until she complies with orders; that the terms of the order made by Justice Snowie on June 19, 2013 be made into a final order via summary judgment.
[3] On July 19, 2016 Justice Donohue arranged a long motion date for this hearing. She imposed a timetable for the exchange of pleadings and ordered the parties to serve consolidated Motion Records and factums with Books of Authority.
[4] This motion was scheduled for three hours and was on the 10:00 list. Ms. Park showed up more than 30 minutes late with no explanation.
[5] More troubling Ms. Park did not file a factum despite the consolidated Practice Direction and the Order of Justice Donohue compelling the filing of factums by August 22. As well, in the motion she filed on behalf of the respondent, she claimed a final judgment on the issue of access by way of summary judgment. A motion for summary judgment requires a factum as well.
[6] The applicant’s lawyers did not file a factum either. A factum is a concise argument stating the facts and the law relied on by the party filing the factum. The applicant filed a Statement of Law. On this motion a Statement of Facts relating the facts in this case to the law would have been far more helpful.
[7] As I was not satisfied with the materials before me on this motion, I ordered the applicant to file a chart outlining the disclosure she alleged had not been made with specific reference to whichever Court Order compelled that disclosure. I ordered the applicant to serve and file the document on the 6th floor, as I was in possession of the court file. I gave the respondent 10 days to respond to that document and assumed that the respondent too would file the response on the 6th floor. The respondent’s Response was filed in the general civil office and did not come to my attention until long after it had been filed. It should go without saying that Court Orders and directions from Judges are not “suggestions”. They must be followed.
[8] The applicant asked to file a Reply to the Respondent’s Response. I denied that request. This was the applicant’s motion to strike and sufficient materials should have been filed in the first place. The manner in which this motion and cross-motion proceeded was entirely unsatisfactory.
[9] I am not going to deal with the respondent’s motion asking that the terms of Justice Snowie's order be made into a final order. There is nothing in the materials to support that request. Justice Donohue made an order on July 19, 2016 requesting the reinvolvement of the Office of the Children’s Lawyer. The issues relating to access should wait until there has been a decision from the OCL as to its involvement in the case.
[10] The applicant asks that the respondent’s pleadings relating to the financial issues be struck for failure to pay outstanding costs order and for failure to make disclosure as ordered.
[11] The parties married on November 4, 1995 and separated on August 18, 2013. There are two children, Kassandra age 14 and Gemma age 5.
[12] Three costs orders were made against the respondent. In April of 2015 Justice Edwards ordered costs thrown away in the amount of $7,000.00; Justice Price on August 25, 2015 ordered costs of $2,500.00 however, made them payable from equalization; and on July 14, 2015 Justice Lemon ordered costs of $3,000.00. Therefore costs of $10,000.00 are outstanding at this time.
[13] It is not disputed that the respondent suffered a brain aneurysm on May 2, 2015 and two strokes resulting from the aneurysm. The order of Justice Edwards for costs thrown away is dated April 10, 2015. Justice Lemon’s order awarding costs of $3,000 is dated July 14, 2015. Based on the record, I am prepared to accept that the respondent is unable to pay outstanding costs of $10,000.00. However, there is nothing in the respondent’s materials in response to the applicant’s motion, dealing with or explaining his inability to pay costs. He makes a blanket statement that the costs orders should come out of the equalization to which he is entitled, but it appears that he may not be entitled to any equalization. The applicant points out that the respondent had access to other funds and used them to pay debts in preference to paying child support and outstanding costs. This does in fact seem to have occurred. For example, he paid $10,200 to his sister to repay her because she assisted him financially, but he made this payment in preference to his obligations in this lawsuit.
[14] The respondent takes the position that based on his income from ODSP he should be paying $213. per month in child support. (I did a calculation and took into account the tax free nature of the ODSP payments – child support based on his present income would be $267.)
[15] The striking of pleadings is an extreme remedy and should only be used in the clearest of circumstances. While I am satisfied that the respondent has not paid two outstanding costs orders, this is a very unusual circumstance where he is unable to earn income as a result of the aneurysm he suffered in May 2015. I accept that he should have paid the $10,200 to the applicant instead of to his sister, but I am not prepared to strike his pleadings on this basis. I have reviewed the applicant’s documentation indicating that the respondent will not receive any further money from the funds held in trust in this matter, but without further information or a trial, I am not satisfied that this would be the case.
[16] Only the applicant filed a Book of Authorities. The book contains cases outlining situations where pleadings have been struck for failure to make court ordered disclosure. Two key cases from Ontario Court of Appeal were not included in the Book of Authorities. The first is Chiaramonte v. Chiaramonte, 2013 ONCA 641. Tulloch J.A. overturned a decision of this court granting a motion striking pleadings for lack of disclosure. At paragraph 17:
This appeal arises out of the wife’s motion, brought in February 2012, to strike the husband’s pleadings for alleged breaches of the prior court orders and alleged bad faith conduct by the husband in attempting to prolong the litigation, increase the wife’s costs and generally prevent her from pursuing her claim.
[17] And at paragraph 31:
In family law cases, pleadings should only be struck, and trial participation denied, in exceptional circumstances and where no other remedy would suffice: Purcaru v. Purcaru, 2010 ONCA 92, 75 R.F.L. (6th), at para. 47. The exceptional nature of this remedy is rooted in the significance of the adversarial system…
[18] The second case is Kovachis v. Kovachis, 2013 ONCA 663. Laskin J. A. found that Mr. Kovachis had made substantial compliance and that his pleadings should be reinstated. He too quoted with approval from Purcaru saying that a party’s pleading should only be struck in exceptional circumstances. I am not prepared to strike the respondent’s pleadings on the basis that he has failed to pay child support. This is a rare circumstance where the respondent has a valid explanation for his failure to earn sufficient funds with which to pay Justice Edwards’ Order. He should have paid at least the $213 per month that he acknowledged should be paid pursuant to the Child Support Guidelines, but it is up to the Family Responsibility Office to deal with enforcement of child support.
[19] In reviewing all of the materials, I am not satisfied that the respondent has failed to make disclosure. It may be that the applicant is not satisfied with the disclosure but most, if not all, of the disclosure has been forthcoming. I specifically find as follows referring to the applicant’s chart.
Applicant’s List of Outstanding Disclosure (Using the numbers from the Applicant’s Chart)
[20] Numbers 1, 4, 5 and 13 reference Justice Edward’s Order of April 10, 2015 where he ordered: “Full financial disclosure within 30 days.” The items of disclosure complained of do not fall within this general description.
[21] Number 2: The respondent did provide a valuation of the vacation resort. He used a certified appraiser. There is now some dispute as to whether or not a DAR (Designated Appraiser Residential) is the appropriate person to carry out an appraisal on a commercial property, however, the Respondent has technically complied with the disclosure requirement.
[22] Number 3: The applicant wants the Mortgage Application for St. Clarens Avenue, Toronto. The Orders of Justice Price and the Order of Justice Edwards compel the respondent to produce the lawyer’s Reporting Letter for the purchase and the mortgage. The Reporting Letter has in fact been produced. A Mortgage Application is not part of a Reporting Letter. It does not appear that the respondent agreed to produce, or that there is an order compelling production of a Mortgage Application.
[23] Number 4: Justice Price ordered the Respondent to reinstate and bring into good standing all life insurance policies that he held on August 18, 2013. He has not done so. He has one policy with SunLife. He made the changes to the policy and confirmed that Kassandra and Gemma are joint beneficiaries with the applicant as trustee. The issue of the reinstatement of the other policies can be dealt with at trial.
[24] Number 5: Toyota Tundra lease or financing details. The chart from the respondent’s lawyer indicates that this has been answered. In any event, the failure to disclose this information does not impede the applicant’s ability to advance her case in any way.
[25] Number 6: Undertakings of Victor Lopez. Any undertakings of Victor Lopez have to be enforced against Victor Lopez. I note here though, that it appears that Ms. Park is acting for Victor Lopez. In her responding materials, she questions the relevance of some of the documentation requested from Mr. Lopez. If Victor Lopez undertook to produce documentation, he must do so. It is not sufficient to argue relevancy. The respondent should make best efforts to have Victor Lopez produce his undertakings.
[26] Number 7: Up-to-date status of the respondent’s income tax obligations. Justice Price’s order for the delivery of updated financial statements and net family property statements by March 10, 2016 does not specifically address this item. The respondent points out that the applicant, as a joint owner of the company is entitled to obtain this information from CRA directly. Whether or not this is true, the respondent must complete this part of his Financial Statement accurately. The failure to provide this information is not sufficient grounds upon which to strike pleadings.
[27] Number 8: Full clinical notes and records of all treating physicians, therapists and counsellor and an update on the respondent’s health status. Pursuant to Justice Price’s Order of August 25, 2015 the respondent provided a signed release and direction authorizing his medical practitioner to produce any further information concerning the respondent’s ability to work and his ability to care for the children without supervision. In fact, a number of records have been provided. There is no information from the applicant as to whether or not the direction was used to try to obtain the required information.
[28] Number 9: Details and confirmation of the respondent’s registration in the parenting course recommended by the OCL in January 2016 and court ordered by Justice Snowie. In his materials responding to this motion, the respondent attested to the fact that he had registered in a program that was scheduled to take place in mid-September 2016. The respondent should be able to confirm whether or not he has taken the course. In any event, his failure to take this course relates to his ability to parent and is not a reason to strike his pleadings.
[29] Number 10: 2014, 2015, 2016 Statements of Income and Expense for Hi-Lin Resort. The respondent says he provided the 2015 Income and Expense Statement and that on September 9 the 2014 and 2016 balance sheets were forwarded to the Applicant.
[30] Number 11: The respondent’s personal bank statements from the date of separation to present. Some statements have in fact been produced. The respondent is to produce within 30 days the statements that have not been produced to date.
[31] Number 12: A complete social assistance and ODSP payment history. Much of this has been provided.
[32] Number 13: An “error free” updated Financial Statement: The failure to provide an “error-free” document is not a ground for the striking of pleadings.
[33] The applicant has also made substantial disclosure. She acknowledges that she has not produced the documentation corroborating the “Grievance Settlement” that she was owed at the date of marriage. She has however, requested the information from her union and will turn it over upon receipt.
[34] I am concerned however, by the allegation that the respondent may be declaring bankruptcy. The respondent said that the bankruptcy situation “had not yet been confirmed.” I hereby order the Respondent to provide copies of all communications with a trustee in Bankruptcy and copies of any file in that regard. He is to produce anything that he has in his possession within 10 days. He is to produce anything that comes into his possession upon receipt.
COSTS OF TRIAL MANAGEMENT CONFERENCE HELD ON JANUARY 20, 2016 AND MARCH 11, 2016 BEFORE JUSTICE EMERY
[35] The applicant seeks costs of the appearances before Justice Emery on January 20, 2016 and March 11, 2016. Pursuant to Minutes of Settlement, Justice Emery reserved the costs of March 11 to the first motion judge hearing a motion. I am however, unable to determine who was at fault regarding the failure to enter into a consent. That issue remains to be determined. Costs of the March 11, 2016 hearing are reserved to the Judge dealing with that issue which will in all likelihood be the trial judge. The endorsement of January 20 is silent as to costs so for that appearance each party will have to bear their own costs.
SECURITY FOR COSTS
[36] The applicant claims security for costs in the amount of $60,000 for trial. The respondent says he is impecunious. Based on the applicant’s net family property it appears unlikely that the respondent will receive an equalization payment however, money from the sale of the matrimonial home is being held in trust. The applicant received a prepayment from the funds held from the sale of the matrimonial home. Apparently she received the payment because she had indicated to the court that the money was needed to pay off debt which according to the respondent has not been paid. This is an issue for trial.
[37] I cannot agree with the applicant that there is good reason to believe that the case is a waste of time. There are issues that have to be resolved through trial. It will be best for everyone if the respondent participates in the process. There will be no order for security for costs.
[38] The respondent’s motion to reduce his child support payments remains outstanding. It is adjourned to no fixed date. He will not be able to obtain a date until he has filed the materials that have to be filed on the motion, including a factum.
[39] The applicant has been unsuccessful on this motion. As a rule costs follow the event. I asked each side for their Costs Outline after the motion had been argued. The applicant produced a costs outline, but the respondent did not. Bearing in mind the fact that neither party filed a proper factum on the motion, and that the respondent did not file a consolidated Motion Record although ordered to by Justice Donohue, a nominal costs order is made in favour of the respondent in the amount of $1,000.00 to be offset against the costs he owes to the applicant.
It is critical that this matter proceed to trial as quickly as possible. Justice Donohue requested the Office of the Children’s Lawyer to become reinvolved in this matter. If the Children’s Lawyer agrees to do so, a new timeline will have to be arranged. If the Children’s Lawyer declines Justice Donohue’s request, I see no reason that this trial cannot proceed during the January 2017 concentrated sittings. If the matter does proceed at that time, then the respondent’s motion to vary child support can be dealt with at trial.