Herman v. Rathbone, 2017 ONSC 4585
Court File No.: 2023/96
Date: 2017-07-28
Superior Court of Justice - Ontario
Re: Mary Ann Rathbone Herman, Applicant
And:
Michel Piers Rathbone, Respondent
Before: The Honourable Madam Justice L. Madsen
Counsel: Stanley P. Jaskot, Counsel, for the Applicant Mitchell B. Rosenblatt, Counsel, for the Respondent
Heard: July 25, 2017
ENDORSEMENT
Overview
[1] This was initially brought as a Motion to deal with implementation concerns relating to a long-overdue equalization payment. The parties have differing views as to how much is due to the Applicant.
[2] However, as a preliminary matter, the Applicant seeks an Order that the Respondent is not entitled to any further relief or orders from the Court as he is in continuing breach of the Court Order of Justice Pazaratz dated August 14, 2008 [“the 2008 Order”] with respect to ongoing child support.
[3] On the motion I heard only argument with respect to the impact of the alleged breach of the Court Order on the Respondent’s entitlement to further relief. Below I address the next procedural steps with respect to the equalization issue.
[4] For the reasons which follow, I find that until the Respondent cures his breach of the 2008 Order in one of the ways made available to him below, he is not entitled to further relief from the Court.
THE FACTS
[5] In summary, the facts are these:
[6] The parties were married on September 21, 1991 and divorced October 1999.
[7] Issues arising from the separation were resolved in the Consent Order of Justice Van Duzer dated September 9, 1999 [“the 1999 Order”].
[8] The 1999 Order provided at paragraph 10 for an equalization payment in the amount of $25,000 to be made by October 31, 1999, now almost 18 years ago. The Order also provided for the calculation of certain amounts payable to the Applicant if the payment was not made by the specified date. The payment was not made and has not to date been made.
[9] The 1999 Order also provided that the Respondent was to pay ongoing child support in the amount of $1,031 per month for the parties’ two children, Erin Melinda Rathbone, born January 20, 1992 [“Erin”] and William David Rathbone born December 25, 1992 [“William”], based on an imputed income of $80,000 per year.
[10] In 2014, approximately 15 years after the 1999 Order, the Respondent wished to take steps to “discharge all of my remaining obligations” to the Applicant, and initiated negotiations with the Applicant’s lawyer regarding the amount to be paid to satisfy the equalization obligation. The Respondent says that there is a settlement of that issue which simply needs to be enforced. That issue has not been argued and is not addressed herein.
[11] In 2008, the parties were involved in further litigation with respect to child support. The issues were resolved in the Consent Order of Justice Pazaratz dated August 14, 2008 [“the 2008 Order”]. That Order provided at paragraph 1 that commencing June 1, 2008, the Respondent was to pay child support in the amount of $3,100 per month for Erin and William, based on an imputed income of $245,000 per year.
[12] The Order also specifically stated:
Paragraph 6. Until the child support is adjusted by way of an amending agreement or Court Order, the Respondent shall continue to pay the basic Guideline amount of child support and his contribution to the children’s special and extraordinary expenses as determined by this Court Order. (Emphasis added.)
[13] The Applicant asserts that the Respondent has not made any payments under paragraph 1 of the 2008 Order. The Respondent’s affidavit contains a general denial of claims in the Applicant’s affidavit and refers to the “alleged failure to comply with the obligation”. However he acknowledges that “in or about 2009” he was advised by his now deceased lawyer that he no longer had an obligation to pay child support, and that “in accordance with such legal advice I stopped paying child support.” He nowhere asserts that he in fact paid any child support under the 2008 Order.
[14] Counsel did not suggest in argument that the Respondent had paid any support under the 2008 Order and conceded that at a bare minimum his client should have paid child support until the children were both 18 years of age.
[15] It was conceded that the Respondent’s arrears today are in the range of $300,000.
[16] It is common ground that there is no Amending Agreement and that the Respondent has not brought a motion to terminate or vary child support under the 2008 Order.
[17] The Respondent states that since the 2008 Order he has had no contact with his children, who moved to Wisconsin in 1997, other than a phone call with the child, Erin. He states that he attempted to arrange access to the children but this was not successful. He states that after several years of not hearing from the children he ceased sending Christmas and Birthday cards and presents. He further states that he was advised by his late-counsel in about 2009, that in such circumstances, he would no longer have an obligation to pay child support. He says that he understood from his then-counsel that child support had been “automatically terminated or, perhaps, suspended indefinitely.”
[18] In addition to determining prospective child support and the process for changing same, the 2008 Order provided at paragraph 12 that the Respondent pay to the Applicant $110,000 on account of accumulated child support arrears under the 1999 Order.
POSITIONS OF THE PARTIES
[19] The Applicant argues that the Respondent is not entitled to relief or any further Order from the Court as he is in breach of the 2008 Order, owing, as he does, over $300,000 to the Applicant as unpaid, court-ordered child support. The Applicant argues that the Respondent has a pattern of breach of Court Orders, demonstrated by the fact that he did not attempt to address the unpaid equalization amount until 15 years after it was due under the 1999 Order and by the fact that by 2008, $110,000 in child support arrears accumulated under the 1999 Order. The Applicant argues that under section 1(8) of the Family Law Rules, the Court should dismiss the Respondent’s claim within which he seeks to pay certain monies for equalization into Court, and hear the Applicant’s motion that certain monies be paid to her (not into Court) for unpaid equalization on an uncontested basis.
[20] The Respondent argues that the Court should hear his motion, for several reasons. First, he says that the Applicant took no steps to enforce the 2008 Order, including not filing with the Family Responsibility Office (the parties had withdrawn from the FRO). He asserts a lack of good faith on the part of the Applicant, noting that she did not raise the issue when there were discussions between counsel in 2014 about the equalization issue, raising the concern for the first time in her Notice of Motion dated May 3, 2017. He stresses that there has been no demand for the child support to be paid. He argues that the Applicant should be estopped from raising the issue at this late date. Finally, the Respondent argues that the Court Order was terminated or suspended by the lack of a relationship between himself and the children. He suggests that the children may no longer be children of the marriage for the purpose of child support, suggests that the Applicant’s delay has been unreasonable, and asserts that it would cause him considerable hardship were he now obligated to pay any amount of arrears. The Respondent also stresses that on this motion there was little information if any about the children and their circumstances which he says would be essential for any determination regarding child support.
LAW AND ANALYSIS
[21] Rule 1(8) of the Family Law Rules reads as follows:
FAILURE TO OBEY ORDER
(8) If a person fails to obey an order in a case or a related case, the court may deal with the failure by making any order that it considers necessary for a just determination of the matter, including,
(a) an order for costs;
(b) an order dismissing a claim;
(c) an order striking out any application, answer, notice of motion, motion to change, response to motion to change, financial statement, affidavit, or any other document filed by a party;
(d) an order that all or part of a document that was required to be provided but was not, may not be used in the case;
(e) if the failure to obey was by a party, an order that the party is not entitled to any further order from the court unless the court orders otherwise;
(f) an order postponing the trial or any other step in the case; and
(g) on motion, a contempt order. O. Reg. 322/13, s. 1.
[22] In 2014, Rule 1(8) was amended, removing the earlier requirement that the failure to obey an order be “wilful” for the Court to be able to dismiss a party’s claim. The jurisprudence under former subrules 1(8) and 14(23) is still applicable and sets out the relevant principles. See Bullock v. Bullock, 2017 ONSC 1719 at 38, 39.
[23] Where there has been a failure to obey a Court Order, the Court may make any order that it considers necessary for a just determination of the matter, including dismissing the claim. The words “just determination” are sufficiently broad to include protecting the administration of justice, which is at stake when a party wilfully disobeys an Order. Hughes v. Hughes, 2007 CanLII 10905 (ON SC), 2007 CarswellOnt 1977.
[24] In Ferguson v. Charlton 2008 ONCJ 1, [2008] O.J. No. 486 (O.C.J.), Justice Spence set out a three stage process for approaching the application of Rule 1(8) as follows:
Is there a triggering event that would allow a consideration of Rule 1(8)?
Is it appropriate to exercise discretion in favour of the non-complying party? This discretion should be exercised only in “exceptional circumstances.”
If discretion is not exercised in favour of the non-complying party, what is the appropriate remedy pursuant to the provisions of Rule 1(8)?
[25] In Ferguson, supra, the father in 2007 sought rescission of arrears accumulated under an Order from 2003. Among other things, the father alleged that the mother had alienated the children from him. Justice Spence cited Justice Quinn in Gordon v. Starr, 2007 CanLII 35527 (ON SC), 2007 CarswellOnt 5438 in which he commented on the “offensiveness of allowing a party to obtain relief while in breach of a Court Order,” stating:
Court orders are not made as a form of judicial exercise. An order is an order, not a suggestion. Non-compliance must have consequences. One of the reasons that many family proceedings degenerate into an expensive merry-go-round ride is the all-too-common casual approach to compliance with court orders. Ferguson, supra at 59.
[26] The three stage process set out by Justice Spence in Ferguson, supra has been adopted and applied by the Ontario Superior Court in decisions including Bullock, supra, Dumont v. Lucescu, 2015 ONSC 494, Mark v. Cirillo-Mark, 2014 CarswellOnt 8429, and Chiaramonte v. Chiaramonte, 2015 ONSC 179.
[27] The fact that a party does not act when he or she first learns that the other party is in non-compliance with an Order is not relevant. As Justice Quinn states in Hughes, supra, “A court should never be left at the mercy of litigants when it comes to defending and preserving the administration of Justice.” See Hughes, supra, at 26.
Application of Stage One
[28] In this case, the triggering event is the acknowledged failure to comply with the 2008 Order, with respect to ongoing child support. The Respondent acknowledges that since “in or around 2009”, he has not paid child support under the Order. He did not assert that he paid any support under the Order.
Application of Stage Two
[29] The Respondent suggests, in effect, that this Court should exercise its discretion under the second branch of the test, in his favour. He states, and there is no denial by the Applicant that he has not seen his children since 1997 and that he experienced significant difficulties trying to get access established after the children and the Applicant moved to Wisconsin in 1997. He asks the Court to consider that there was no “demand” by the Applicant, and states that he has made financial plans over the years relying on the Applicant’s choice not to pursue the court ordered support.
[30] For the following reasons, this Court declines to exercise its discretion in favour of the Respondent. He has not shown that this is an “exceptional circumstance.”
[31] First, the Respondent took no steps to vary or terminate the 2008 Order, and indeed, even as at this Court appearance, had not initiated a Motion to Change. The 2008 Court Order clearly set out that the child support was payable until amending agreement or Court Order. By virtue of arrears having accumulated under the 1999 Order and having had to pay $110,000 to satisfy those arrears under the 2008 Order, the Respondent would clearly have known that non-payment of support would result in arrears accumulating that would become payable.
[32] Second, as at the date of the 2008 Order, the parties’ daughter Erin would have been 16 years old, and their son William would have been 15 years old. They were both minors. At a bare minimum, and without in any way suggesting that child support was not payable thereafter, the Respondent should have paid child support for the children when they were under 18.
[33] In Ferguson v. Charlton, supra, Justice Spence considered whether the lack of access for minor children with their father and the alleged alienation by the mother in any way “modifies of expands the statutory provisions that would either permit or require a court to link the issue of access with child support.” The Court considered two lines of cases, concluding that the case law in Ontario does not link access with child support. Justice Spence refers to the “absolute obligation to pay child support for children under the age of majority” and states as follows:
What I take from the wording of the relevant subsections of the Act and the case law in Ontario to which I have referred is that, at least until the age of 16 years, the obligation of a parent to provide support in accordance with the guidelines in absolute. Beyond age 16, the obligation to pay support will depend on such factors as whether the child has withdrawn from parental control and whether the child continues in full-time attendance at school.”
[34] In this case, there is no evidence before the Court to suggest that from the date the Order was made until each child reached the age of majority at 18, that he or she either withdrew from parental control or was not in full-time attendance at school. While there may or may not be arguments that the Respondent could make on a Motion to Change child support for the period after which the children were adults based in his estrangement from them, I find that his failure to pay the court ordered support even when the children were under 18 militates against exercising discretion in favour of the Respondent under the three stage analysis.
[35] A further comment about the estrangement argument raised by the Respondent: The Respondent asserted that somehow in the absence of access, the child support provisions “automatically terminated or were indefinitely suspended”, notwithstanding that he took no steps to change the Order. He cited numerous cases which are not applicable on this motion, several of which were cases in which a parent was seeking prospective child support for an adult child or children in the face of estrangement with a parent. In this case there was an existing Court Order setting out the Respondent’s child support obligation. He failed to comply with that Order and took no steps to change it. This is not a case in which the Applicant is now seeking an Order for ongoing child support for adult children in the face of estrangement.
[36] I note, also, that in the governing case law regarding the retroactive reduction or expunging of arrears, difficulties with access or estrangement are not listed as factors for consideration. The factors a Court should consider are set out in the decision of Justice Chappel of this Court in Corcios v. Burgos, 2011 CarswellOnt 3910, and Gray v. Rizzi, 2016 CarswellOnt 2663 (Ont. C.A.). Those factors include whether there is a reasonable excuse for the payor’s delay in applying for relief, the financial capacity of the payor, the conduct of the payor including the making of voluntary payments, as well as hardship to the payor. The cases stress that the payor has a duty to initiate proceedings in a timely manner to address the issue. Whether the lack of access and the estrangement from the children should be a factor for consideration can be canvassed more fully if the Respondent brings a Motion to Change. However, for the purpose of my application of stage two of Justice Spence’s three stage analysis, the fact that access is not listed as a consideration by the Ontario Court of Appeal also militates against exercising discretion in the Respondent’s favour on this motion.
[37] I wish to also briefly address the estoppel argument raised by the Respondent. The Respondent argues that the Applicant should be estopped from raising non-compliance with the Order at this late date, not having sought enforcement earlier. He states that he relied “on the Applicant’s representation, if you will, that she did not intend to pursue ongoing child support and/or arrears.” He states that he relied upon her “failure and/or choice not to pursue any child support arrears.” This argument cannot succeed. In Gray, supra, the Ontario Court of Appeal held that “delay on the part of the support recipient, even a long delay in enforcing the child support obligation does not, in and of itself, constitute a waiver of the right to claim arrears.” (Emphasis added.) See paragraph 60.
[38] Finally, I note the sheer magnitude of the arrears is a factor for consideration in this case. The Applicant asserts that the Respondent has not made a single payment under the 2008 Order. This suggests, according to her, that the arrears are in the order of $337,900. Even under the most generous interpretation of the Respondent’s affidavit materials (in which he does not assert ever having made a child support payment since the 2008 Order but states that “in or around 2009” he stopped paying child support), calculating support as if he paid through all of 2009, his arrears from January 2010 to the present would be approximately $279,000. This is a significant breach.
[39] This is not an “exceptional case” in which to exercise discretion in favour of the Respondent.
Application of Stage Three
[40] The third stage in the analysis set out in Ferguson v. Charlton, supra, is to determine what the appropriate remedy should be. The Court has wide discretion in fashioning the appropriate remedy which it regards as necessary for the just determination of the matter. Specifically, the Court may make “any Order that it considers necessary.”
[41] Under clause 1(8)(b), such Order could include dismissing the claim of a party. Under clause 1(8)(c), such Order could include a provision striking out certain documents filed by a party.
[42] In this case, having regard to the all of the evidence before the Court and the law as set out above, this Court finds that the appropriate remedy is as follows:
a. That the Respondent’s Motion dated July 11, 2016 shall be dismissed unless:
i. Within 60 days, the Respondent complies in full with paragraph 1 of the Order of Justice Pazaratz dated August 14, 2008 and provides proof of having done so; or
ii. Within 60 days, the Respondent pays all arrears accumulated to December 31, 2010 (when both children had reached the age of 18) under the Order of Justice Pazaratz dated August 14, 2008, providing proof of having done so, and commences a Motion to Change regarding his child support obligations under that Order;
iii. If, after 60 days, the Respondent has not complied with sub-paragraph (i) or (ii), the Applicant shall be at liberty to proceed with her Motion dated May 3, 2017 on an uncontested basis, with the Respondent’s Affidavits dated July 11, 2016, August 15, 2016 and June 19, 2017 being struck.
Costs
[43] If counsel cannot agree upon costs, I will receive brief written submissions and a Bill of Costs from the Applicant by August 25, 2017 and brief responding submissions and a Bill of Costs from the Respondent by September 8, 2017.
Madsen J.
Date: July 28, 2017