Court File and Parties

COURT FILE NO.: FS-17-01448P-00 DATE: June 22, 2017

ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

JAMES ROBERT GORDON MCMURTER Appellant – and – DIRECTOR, FAMILY RESPONSIBILITY OFFICE, FBO KELLY ANN MCMURTER Respondent

Counsel: Michael Swinwood, for the Appellant Don Pyper and Caroline Brett, for the Respondent

HEARD: June 6, 2017

Before: Tausendfreund, J.

Reasons

Overview

[1] The Appellant has appealed the Default Order of Justice Malcolm dated March 10th, 2017 (the “Default Order”). This order requires the Appellant, as support payor, to pay arrears of spousal support and ongoing support payments, or be incarcerated pursuant to the Family Responsibility and Support Arrears Enforcement Act, 1996 (“FRSAEA”). In the interim, the Appellant brings this motion to stay the Default Order to prevent the Director, Family Responsibility Office (the “Director”) from enforcing the Default Order while the Appellant pursues the appeal.

[2] Both sides agree that the three-part test set in RJR-McDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311 (“RJR-McDonald”) applies to this request for a stay of the Default Order:

“a) The Appellant must demonstrate that there is a serious question to be tried; b) The Appellant must demonstrate that irreparable harm will result if the relief is not granted; and c) The Court must conduct an assessment of which party would suffer greater harm from the granting or denial of an order staying the Default Order.”

RJR-McDonald at para. 40

[3] It is also common ground that for the Appellant to succeed, he must meet each of the three branches of the RJR-McDonald test. That is the issue here. The Respondent’s position is that the Appellant has failed to do so.

Background

[4] This matter has had an almost eight year history which I will now briefly review.

[5] An interim order of July 14th, 2009 provided that the now Appellant pay interim spousal support to his wife Kelly Ann McMurter (the “Support Recipient”) in the amount of $2,439.00 per month commencing August 1, 2009 payable until trial or further order.

[6] Both the Appellant and the Support Recipient are members of the Mohawks of the Bay of Quinte First Nation. Both are status Indians under the Indian Act. This was the first of several orders that followed. Since 2008, the Appellant and the Support Recipient have been in court more than 30 times in an effort to finalize their divorce and to settle support payments, including several appearances before the Court of Appeal.

[7] The interim 2009 order was filed with the Director for Enforcement. The Appellant did not comply. This resulted in the suspension of his driver’s licence.

[8] In March 2010, the Support Recipient brought a motion to strike the Appellant’s pleadings based on non-payment of support. The Appellant then agreed to pay $9,000.00 arrears of spousal support. The motion was then withdrawn and the Appellant’s licence reinstated.

[9] In April, 2010, the parties signed minutes of settlement, certain particulars of which were incorporated into the order of April 6, 2010 by Justice McKinnon. That order required the Appellant to pay spousal support of $2,500.00 per month. The arrears fixed at $40,915.00 were to be payable as follows: $10,000.00 by May 6, 2010, $10,000.00 by June 6, 2010 and $1,000.00 per month as of July 6, 2010 for 20 months and $915.00 on the 21st month. This order was again filed with the Director for enforcement. The Appellant did not comply. A suspension of his driver’s licence was the result.

[10] On February 8th, 2011, Justice Byers granted the Appellant a refraining order against that driver’s licence suspension, on his undertaking to bring a motion to change. That motion was dismissed on August 2nd, 2011 based on the Appellant’s failure to comply with certain disclosure orders. His driver’s licence was then suspended a third time.

[11] On January 17th, 2012, the Appellant sought leave to extend time to serve and file a Notice of Appeal from the April 6th, 2010 order of Justice McKinnon. One of the cited grounds for the appeal alleged that the court did not consider the implications of the Indian Act on support payments when the court approved the minutes of settlement.

[12] This Appeal was dismissed by the Court of Appeal on February 6, 2012. The Court in its reasons found that the trial record revealed discussions about the implications of the Indian Act on the division of property and that the Appellant’s assertions that the parties had not considered the Indian Act were without merit. The Court further found that the parties had been “fully involved in the negotiations that lead to the minutes of settlement” and that the Appellant was simply “disgruntled by the settlement he made”.

[13] A Notice of Default Hearing under s. 41(1) of the FRSAEA requiring the Appellant to appear to explain the default was started by the Director on July 20th, 2012. The arrears of support at that time were $77,815.00. The Appellant challenged the constitutionality of s. 41 of the FRSAEA. The Director had suspended the Appellant’s licence and sought a default order pursuant to s. 41(10) of the FRSAEA seeking a committal order for imprisonment in the event of non-payment. In responding, the Appellant took the position that s. 41 of the FRSAEA (the Default Hearing provision) was unconstitutional and inoperative to the extent that it intruded on the core federal power over Indians under s. 91(24) of the Constitution Act, 1867 (UK), 30 and 31 Victoria, c3 by impairing his vested legal rights under ss. 29 and 89(1) of the Indian Act. These sections, respectively, provide that:

“Reserve Indians are not subject to seizure under legal process” and that “subject to the Act, the real and personal property of an Indian or a Band situated on a reserve is not subject to charge, pledge, mortgage, attachment, levy, seizure, distress or execution in favour or at the instance of any person other than an Indian or a Band.”

This hearing was held before Justice Deluzio on April 18th, 2013. In her reasons released June 18th, 2013, Justice Deluzio dismissed the Appellant’s constitutional challenge. She found that there was no conflict between s. 41 of the FRSAEA and s. 89(1) of the Indian Act, noting that the Director’s enforcement efforts were undertaken “for the benefit of” or “in favour of” the support recipient, who herself is a status Indian. In dismissing the Appellant’s constitutional challenge, she stated:

“22. Mrs. McMurter is a status Indian. Mr. McMurter is a status Indian. Their status as Indians is not affected by the enforcement proceedings authorized by Section 41 of the FRSAEA.”

[14] Justice Deluzio’s decision was not appealed.

[15] In April 2013 the Appellant brought a motion to change the order of Justice McKinnon of April 6th, 2010. This motion was heard by Justice Macleod-Beliveau in 2016. The motion was dismissed. Justice Macleod-Beliveau held that the Appellant had the ability to pay the ongoing support amount and all of the accumulated arrears. In her reasons at paragraph 179, she stated:

“He can well afford to pay the spousal support ordered and the full amount of the arrears – he simply chooses not to pay.

Mr. McMurter has used the Court system to frustrate payment of spousal support to Mrs. McMurter. He is not made full and frank financial disclosure throughout these lengthy proceedings. …

This was a marriage of long duration. Mrs. McMurter has done everything that was expected of her to earn income and made efforts to support herself since 2012. Mr. McMurter is in breach of the consent order of Justice McKinnon dated April 6, 2010 because of his own determination of what he is going to pay, based on his own needs, with a disregard of the Court order. No convincing explanation for his default exists on the evidence in this case. Further and more egregious, is that there is clear evidence that Mr. McMurter is lying about his true income, and that he indeed does have the funds to pay the support order and all of the arrears.

Mr. McMurter’s failure to pay is defiant, willful and blatant. He has made strenuous efforts and spent considerable sums of money in attempting to defeat Mrs. McMurter’s spousal support claims. He has a long history of not following Court orders. An order preventing him front bringing further proceedings while he is in breach and or in default of a Court order is necessary to protect the integrity of the administration of justice, which is at stake when a party disobeys a Court order.”

Paras. 251-253

[16] On December 21, 2016 Chief Justice Strathy of the OCA dismissed the Appellant’s appeal of the order of Justice Macleod-Beliveau of July 15th, 2016. Justice Macleod-Beliveau ordered the Appellant to secure and pay spousal support of $2,500.00 per month on the first of each month based on his annual income of $255,404.00 grossed up for tax purposes. She fixed arrears of spousal support as of June 8th, 2016 at $134,138.32. Costs were fixed at $30,000.00 to be enforced as spousal support.

[17] The Appellant has not complied with any of the terms of the order of Justice Macleod-Beliveau.

[18] The default hearing came before Justice Malcolm in November 2016. At the request of the Appellant, it was adjourned to March 2nd, 2017 to allow him to present arguments as to whether the principles of R. v. Gladue, [1999] 1 S.C.R. 688 could apply to a committal order made pursuant to s. 41(10)(h) of the FRSAEA.

[19] On March 2nd, 2017 the Appellant sought a further adjournment of the default hearing so that a formal Gladue report could be completed. Justice Malcolm refused to grant the adjournment on the basis that this default hearing had been adjourned at the Appellant’s request from November, 2016 to address that very issue. She permitted the Appellant to testify as to his experience as an Indigenous person. This he did.

[20] Justice Malcolm released her decision on March 10th, 2017. She accepted the Director’s position that Gladue-factors are relevant to and may impact on the ability of an Indigenous person to pay support. She held, however, that once an ability to pay is established, any further orders must be made within the statutory confines of the FRSAEA.

[21] On the issue of whether a Gladue report was required for a decision by her on this default hearing, she stated:

“66. During his testimony, the support payor provided considerable personal information about himself … the importance to him of his First Nation status; his cultural and customary traditions within the Mohawks of the Bay of Quinte; his status within the community and his business; and the loss that would be felt by the community if he was incarcerated.

69. I am satisfied that all of the evidence necessary to make the committal order is before the Court and nothing more is required.

70. I have already heard considerable evidence as to the support payor’s systemic and background factors. I find that they did not impact his decision to default in payment of support. Nor are they relevant to the considerations necessary before making a committal order.

71. The request for the Gladue report is denied as it is not relevant to this proceeding. Further, the support payor had ample opportunity since September 2012 to file a Gladue report with his default material. I find that he is simply trying to delay the inevitable warrant for a committal that will be issued if he does not comply with a default order.

72. I am left with no other recourse than to order a period of incarceration if the support payor defaults on payment.”

Analysis

[22] The FRSAEA is a statutory code for the enforcement of support orders in Ontario.

[23] Once a support payor is in default under a support order filed with the Director, s. 41(1) of the FRSAEA authorizes the Director to initiate a default hearing requiring the payor to appear before the Court to explain the default. That is how the matter came before Justice Malcolm.

[24] S. 41(10) of the FRSAEA provides a series of remedial powers available to the Court on the disposition of a default hearing. The order of Justice Malcolm was made in accordance with s. 41.

[25] There is no automatic stay of a support order pending the hearing of an appeal. See Rule 38(33) of the Family Law Rules (“FLR”):

… the service of a Notice of Appeal from a temporary or final order does not stay a support order or an order that enforces a support order.”

[26] That takes me to the three-part test set out in RJR-McDonald, supra.

Is there a serious question to be tried?

[27] The Appellant concedes that on this motion he is advancing but one issue:

He asserts that his rights under s. 35 of the Constitution Act, 1982 were infringed when Justice Malcolm failed to order a Gladue report for consideration at the default hearing.

[28] As I understand the position of the Appellant, he asserts that the Supreme Court of Canada decision of Tsilhqot’in Nation v. British Columbia, 2014 SCC 44 supports the Appellant’s position that the order of Justice Malcolm should not have been made absent the prior preparation of a Gladue report. Although this decision does not appear to specifically address or refer to a Gladue report, the principles the Supreme Court enunciated in this decision should lead me to conclude that the Appellant, as an Indigenous person, was entitled to have a Gladue report considered prior to a decision that may lead to an eventual custodial sentence, in the face of his default in addressing payment of support obligations. I note, however, that Tsilhqot-in is a decision that addresses and does not stray beyond land title issues between the Tsilhqot-in Nation on one side and the Province of British Columbia on the other. I find that this SCC decision has no application to the issue before me.

[29] I also note that this purported constitutional issue before me was raised by the Appellant for the first time on this motion to stay his support obligations pending the resolution of his appeal. As a result, there is no evidentiary record of the application to these facts of s. 35 of the Constitution Act, 1982. Such rights normally require an extensive evidentiary background at a trial.

[30] The Appellant appears to assert that his rights under s. 35 of the Constitution Act, 1982 were infringed when the Court at the default hearing failed to order a Gladue report. He states that he was entitled to a Gladue report under s. 7 of the Canadian Charter of Rights and Freedoms.

[31] I note again that Justice Malcolm considered the Gladue factors before arriving at her decision. She stated:

“65. I find that the application of Gladue is not required in this proceeding as to whether there shall be an order of committal.

66. During his testimony, the support payor provided considerable personal information about himself including: details about his childhood much of which was spent in the care of the Children’s Aid Society because of alcohol abuse and domestic violence in his family; the importance to his of his First Nation status; his cultural and customary traditions within the Mohawks of the Bay of Quinte; his status within the community and his business; and the loss that would be felt by the community if he was incarcerated.

67. The support payor testified that despite being in the care of the Society for much of his formative years, he was able to obtain a great 12 education; he maintained contact and sometimes lived with his mother; he attended school at the Tyendinaga Public School for some time and had contact with other youth who were First Nations; he and his wife moved to the Tyendinaga territory when they were a newly married couple; and he has enjoyed considerable financial and personal success as an adult.

68. I am satisfied that all of the evidence necessary to make the committal order is before the Court and nothing more is required. To adjourn to obtain more information about the support payor would be to perpetuate the delay and avoidance of his Court ordered obligation to support his former spouse.

69. I have already heard considerable evidence as to the support payor’s systemic and background factors. I find that they did not impact his decision to default in payment of support. Nor are they relevant to the considerations necessary before making a committal order.

70. The request for the Gladue report is denied as it is not relevant to this proceeding. Further, the support payor had ample opportunity since September 2012 to file a Gladue report with his default material. I find that he is simply trying to delay the inevitable warrant for a committal that will be issued if he does not comply with a default order.”

[32] I also note, as other Judges before me have, that the decision of incarceration or not rests entirely with the Appellant. The above noted decisions have held that he has the ability to pay. To date, he has simply chosen not to avail himself of that option. Whatever underlying reason the Appellant may have as an Indigenous person not to have honoured to this date the court ordered support obligations, he had a full opportunity at the default hearing to testify and call evidence on that very question. He did not.

[33] I find that the Appellant has failed to demonstrate that there is a serious question to be tried. In the event that I should be incorrect in that finding, I will now proceed to address the remaining two parts of the RJR-McDonald test.

Will irreparable harm result to the Appellant if the relief is not granted?

[34] The Supreme Court of Canada in RJR-McDonald held that irreparable harm exists where “a refusal to grant relief could so adversely affect the [Appellant’s] own interests that the harm could not be remedied if the eventual decision on the merits does not accord with the result of the interlocutory application”: see para. 63.

[35] Potential for or even actual incarceration of a support payor does not establish irreparable harm in accordance with the RJR-McDonald test. Inconvenience, indeed incarceration, is not a sufficient reason to grant a stay.

Dow v. Ontario [2002], O.J. No. 3497 at paras. 22 and 27 Davidson v. Director, FRO, 2010 ONSC 1013 at para. 14

[36] As has been found that the Appellant has the ability to pay, the harm that could result from the Appellant’s incarceration, if any, would be his own doing.

Which party would suffer greater harm?

[37] The third test for a stay of the Default Order under RJR-McDonald is a balancing of which party would suffer greater harm if the motion for the stay is granted or refused. The Appellant does not allege that he would suffer greater harm than the Support Recipient if the Default Order were not stayed. To assess the financial status of the Appellant and the Support Recipient and the impact this order might have on these parties, I turn to excerpts of the July 15th, 2016 decision of Macleod-Beliveau, J. of this Appellant’s motion to change the McKinnon, J. order of April 6th, 2010:

“101. Mr. McMurter’s net worth in 2010 I find is $1,285,456.00. … his net worth in 2015 is … $1,861,350.00.

107. The total value of Mr. McMurter’s land holdings acquired since his separation in 2007 I find is $654,408.00.

108. … I find the main reasons that Mr. McMurter has accumulated assets since 2010 is by not paying spousal support to Mrs. McMurter as ordered.

109. … I find his 2015 income for spousal support to be $156,351.00 per annum non-taxable, the equivalent of $255,404.00 of SSAG Guideline income grossed up for tax.

110. The facts of this case clearly demonstrate that this case is not about Mr. McMurter’s inability to pay. This case is about Mr. McMurter’s refusal to pay what he was ordered to pay. Mr. McMurter can well afford to pay the current spousal support order and all the arrears. He can well afford to pay now, and he could well afford to pay since 2010. He chooses not to pay.”

[38] I now turn to Justice Macleod-Beliveau’s reference to the financial position of the Support Recipient:

“78. After the separation in August 2007, Mr. McMurter fired Mrs. McMurter and paid her regular salary of $660.00 per week … for five months … after that date, he did not pay her a salary. In January 2008 Mrs. McMurter went back to school at Loyalist College to be a Business Administrator … Mrs. McMurter received some assistance from the Band for these courses …

79. Mrs. McMurter then obtained part-time employment on the Territory … later she worked part-time at the Band office. January 2010, she went back to school to be qualified as a real estate agent and received her licence in July 2010. … she now works days, evenings and weekends at her two jobs.

80. I find Mrs. McMurter’s 2010 income to be $25,577.00 per annum … the equivalent of $28,416.00 of SSAG Guideline income grossed up for tax. I find her 2015 income to be $34,699.00 per annum both taxable and non-taxable the equivalent of $37,264.00 of SSGA Guideline income grossed up for tax.

81. In 2010, Mr. McMurter should have been paying $6,622.00 per month in spousal support based on his averaged income of $258,024.00 and Mrs. McMurter’s income of $28,416.00 according to SSAG calculations. In 2015 he should have been paying $7,953.00 per month in spousal support based on his averaged income of $255,404.00 and Mrs. McMurter’s averaged income of $37,264.00 according to the SSGA calculations … the presumption in the SSAG is that after 30 years of marriage, the parties’ incomes should be equalized, which I find would be appropriate in this case. The amount of spousal support at $2,500.00 per month is therefore very low, but was agreed to by Mrs. McMurter and she does not seek an increase.”

[39] I conclude that the Support Recipient would suffer greater harm if I were to grant the stay order than the Appellant would if I were to deny it.

[40] I find that the Appellant has failed each of the three-part test set out in RJR-McDonald, supra. Accordingly, the stay order is denied.

[41] In the normal course, costs would follow the event. If the parties cannot agree on costs, I expect to have written submission from each side with 30 days. In the alternative, I assume costs are resolved.

Honourable Mr. Justice Wolf Tausendfreund Released: June 22, 2017