Angela Del Vecchio v. Mark Nickolas Del Vecchio
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Angela Del Vecchio, Applicant
AND:
Mark Nickolas Del Vecchio, Respondent
BEFORE: Kiteley J.
COUNSEL: Karen Ballantyne, for the Applicant
M. Susan Balz, for the Respondent
HEARD: March 1, 2018
ENDORSEMENT
1This is a motion by the Respondent for an order to set aside the final order dated October 13, 2017 in which Paisley J. made an order incorporating a prior order to strike the pleadings of the Respondent and to direct an uncontested trial. For the reasons that follow, the motion is dismissed.
BACKGROUND
2The Applicant started this proceeding in September 2015. She has persisted in trying to obtain disclosure and valuation reports and to proceed to trial. In reasons for decision released July 27, 20171 Horkins J. reviewed all of the prior endorsements and orders. I have read the endorsement brief and I adopt her review of those endorsements and orders.
3In paragraphs 54 to 64, Horkins J. applied the principles to which the court has referred in Roberts v. Roberts2 and in Manchanda v. Thethi3. At paragraph 65, Horkins J. made the following order:
- The respondent’s pleadings are struck if he fails to comply with the following terms by September 1, 2017:
Terms:
(a) Payment of all support arrears that are owed as of August 1, 2017. The respondent shall provide proof of payment to the applicant’s counsel.
(b) The respondent shall serve applicant’s counsel with an expert income report that he intends to rely upon in compliance with the orders of Myers J.
(c) Full payment of $7500 in costs ordered by the court on May 16, 2017 and payment of costs ordered in para. 4 of this order.
If the respondent fails to comply with the terms of this order, the applicant is granted leave to proceed with an uncontested trial.
Pending further court order, the applicant shall maintain possession of the 2013 Porsche Cayene.
The respondent shall pay the applicant her costs of this motion fixed at $5000.
EVENTS AFTER JULY 27, 2017
4The Respondent did not comply with any part of the July 27th order by September 1, 2017.
5In her order, Horkins J. directed that the Respondent’s pleadings were struck if he failed to meet the conditions. And she granted leave to the Applicant to proceed with an uncontested trial. Arguably it was not necessary for the Applicant to obtain another order striking his pleadings or another order for an uncontested trial. I assume, out of an abundance of caution, on September 5, 2017 counsel served the Respondent with a form 14B motion for an order striking the Answer and for leave to proceed to an uncontested trial.
6On September 8, 2017, the Respondent’s counsel served the responding affidavit of Karen Pritchard sworn September 8, 2017.
7On September 22, 2017, counsel for the Applicant filed the form 14B motion and supporting affidavit and an affidavit of service. Coincidentally on September 22, 2017, counsel for the Respondent filed the responding material. The evidence on behalf of the Respondent is that when the process server attended at the 10th floor, he was told that there was no form 14B motion in the computer. The person filing persuaded the clerk to take the responding material in any event. I assume that with two filers on the same day, the data relating to the Applicant’s 14B motion had not been entered at the time the process server filed responding material.
8Paisley J. made an endorsement on October 13, 2017. He signed the draft order that counsel for the Applicant had submitted which indicated that the court had received the evidence of the Applicant. The final order made was as follows:
The Respondent’s pleadings are struck.
The Applicant may proceed with an uncontested trial, on a date to be arranged with the trial coordinator.
Costs of $12,500 ordered payable to the Applicant by the Respondent on May 16, 2017 and July 27, 2017 shall be paid from the monies being held in trust by Levy Zavet. Jeff Levy at Levy Zavet is directed to release this amount to the Applicant from the monies held in trust.
A further advance on equalization to the Applicant from the Respondent in the amount of $85,000 shall be paid to the Applicant from the monies being held in trust by Levy Zavet. Jeff Levy at Levy Zavet is directed to release this amount to the Applicant from the monies held in trust.
The Respondent shall pay costs for this 14B motion in the amount of $1,500. The costs shall be paid to the Applicant from the monies being held in trust by Levy Zavet. Jeff Levy at Levy Zavet is directed to release this amount to the Applicant from the monies held in trust.
9When the Respondent received a copy of that order, he changed lawyers, again, and served and filed an appeal from the order dated October 13, 2017 to the Court of Appeal that is scheduled to be heard March 23, 2018.
10The Applicant brought a motion returnable January 25, 2018 in which she sought an order for sale of a property on Canning Rd. owned by the Applicant and Respondent as tenants in common. At that stage the Respondent’s pleadings had been struck and, arguably, it was not necessary to give him notice. I assume, out of an abundance of caution, counsel for the Applicant did serve him with the notice of motion and affidavit of Ms. Ballantyne’s law clerk, Karen Frieday, sworn January 9, 2018. The Respondent filed his affidavit sworn January 18, 2018.
11On January 25, 2018 Stewart J. made the following endorsement:
The Applicant has brought this motion seeking an order for the partition and sale of property at … Canning Road, Severn, Ontario which is jointly owned by the parties as tenants-in-common. The property is an empty plot of land. Although by orders of Horkins, J. dated July 27, 2017 and Paisley J. dated October 13, 2017, the Respondent’s pleadings were struck, the Applicant nevertheless served the Respondent with Notice of this motion. The Respondent delivered an affidavit in response and attended on this motion with counsel. The Respondent has both perfected an appeal of the order of Paisley J. in the Court of Appeal and has brought a motion in this Court returnable on March 1, 2018 to have the order set aside. I am of the view that much of the contents of the affidavit of the Respondent dated January 18, 2018 filed in response to this motion is not actually responsive to the issue of the motion even if it ought to be entertained. In my view, the Applicant has a prima facie right as tenant in common to have the property sold as she is seeking to have done. If the Respondent has a proposal to make to purchase the property on his own or with the assistance of his parents, the making of such a proposal may be made even if the order is granted. The Applicant’s concern that the Respondent’s half of the proceeds of sale of the property should be held in trust pending determination of these proceedings is a reasonable one in light of his conduct thus far as demonstrated by the Court orders which have been made and her affidavit material. Accordingly, an order shall go in accordance with paragraphs 1, 2, 3, 4 and 5 of the Applicant’s Notice of Motion. However, this order shall not be effective until February 28, 2018. This should allow the Respondent ample time to pursue an agreement for sale of the property on terms acceptable to the Applicant and with clear and enforceable mechanisms for either holding the Respondent’s share in trust or subject to a registerable restriction on transfer and/or encumbrance that will satisfy her reservations about any disposition other than a sale of the property to an arms-length third party for cash.
If the parties cannot agree on the costs of today’s motion, brief written submissions may be delivered to me for consideration by February 28, 2018.
12As indicated in that endorsement, the Respondent had served both an appeal from the order of Paisley J. and a motion returnable March 1, 2018 to set aside that order.
13On February 15 the Respondent served the notice of motion returnable March 1, 2018 for an order setting aside the order dated October 13, 2017. In support he filed his affidavit dated February 13, the Pritchard affidavit, and the affidavit sworn February 14 of the process server who had filed the Pritchard affidavit.
14On February 16 the Applicant served a 14B motion for an order to vacate the Respondent’s motion to set aside the October 13, 2017 order and for an order that the Respondent be restrained from taking any further steps at Superior Court, including bringing any further motions, unless and until the appeal of the October 13, 2017 final order of Paisley J. is successful. The affidavit of Karen Frieday, sworn February 16, 2018 was filed in support of that motion. In her affidavit, Frieday deposed as follows:
The Applicant advises me, and I verily believe it to be true, that she is financially destitute and she does not have the funds to pay a lawyer to argue an unnecessary motion. She advises me that support arrears have increased to over $142,000. She further advises me that she has incurred a great deal of debt and is at risk of losing her home.
The Respondent has not yet produced his income report.
The Respondent only paid his outstanding cost awards because Justice Paisley ordered them paid from the last of the funds being held in trust from the sale of the matrimonial home.
15In response to that 14B motion, counsel for the Respondent filed an affidavit sworn February 20, 2018 by Denis Ioffe, a lawyer at Ms. Balz’s law firm. He set out some of the procedural history. He referred to the affidavit of Karen Pritchard dated September 8, 2017 and, at paragraph 8 he deposed that he had been “advised by Mark”4 that the 29 exhibits attached to Pritchard’s affidavit were “intended to prove that the Respondent had directly and/or indirectly, paid the Applicant considerably more than the ordered support and there were no arrears”. At paragraph 11 he deposed that he had been “advised by Mark” that the issue of any alleged arrears of support was likely the most important issue for the Honourable Court and that the Respondent intended to prove that effectively there were no arrears of support and costs had “effectively” been paid. He also deposed that he had been advised that “as such”, the only section of the order of Horkins J. with which the Respondent “believed himself to be not yet compliant with was the section concerning the service of a new expert report regarding his income”. Ioffe attached a draft of a new income report and he deposed that the final report would be ready prior to the hearing on March 1, 2018.
16At paragraph 13 of the February 20 affidavit, Ioffe referred to the steps taken by the process server in September when he attended to file the Pritchard affidavit. On the basis of that affidavit, Ioffe deposed that “it appears, however, from the final order that, probably due to some clerical error or confusion at the Superior Court”, the material was not put before Paisley J. At exhibit G, Ioffe attached a draft income report by RSM and Ioffe deposed that he had been “advised by RSM” that the final report would be available before the motion on March 1. At exhibit H, Ioffe provided, again, the affidavit of the process server dated February 14, 2018.
17In response, counsel for the Applicant filed an affidavit sworn February 21, 2018 by Karen Frieday who pointed out some anomalies in the draft income report.
18In reply, counsel for the Respondent served an affidavit sworn February 26, 2018 of Denis Ioffe in which he again attached a copy of the draft income report.
19That 14B motion came before me and on February 27, 2018, I made an endorsement as follows:
In an order dated October 13, 2017, Paisley J. struck out the pleadings of the Respondent. The Respondent has perfected his appeal to the Court of Appeal from that final order. The appeal is scheduled to be heard March 23, 2018. The Respondent also brought a motion returnable March 1, 2018 for an order setting aside the order of Paisley J. In his notice of motion, he does not refer to any of the Rules of Civil Procedure or of the Family Law Rules. However, based on his affidavit in support of the March 1, 2018 motion he takes the position that the materials he had filed in response to that 14B motion were not put before Paisley J. The applicant has brought this 14B motion seeking an order to vacate the motion to set aside the October 13, 2017 [order] and an order that the Respondent be restrained from taking any further steps at Superior Court, including bringing any further motions, unless and until the appeal of the Oct. 13/17 final order of Paisley J. is successful.
In order to consider this 14B motion to vacate the date, I read the affidavits in Volumes 5, 6 and 7 including the facta filed for this motion. In his factum, the respondent relies on Rule 25(19).
I understand the Applicant’s concern about incurring legal expenses for the motion to vacate when the appeal from the final order is scheduled to be heard within a month. However, the grounds for the motion to vacate are such that it ought to be heard as scheduled.
The applicant ought not to be required to incur legal expenses on the motion to vacate in addition to those incurred on this 14B motion. The legal burden is on the Respondent to establish grounds under Rule 25(19). The applicant does not need to file any more responding material.
MOTION TO SET ASIDE THE ORDER DATED OCTOBER 13, 2017
20At the outset of the hearing on March 1, 2018, Ms. Balz provided an affidavit sworn February 28, 2018 by Oxana Tsoy, law clerk in Ms. Balz’s office, attached to which was a copy of the report signed by Mr. Mandel called “Calculation of the Income over which Mr. Mark Del Vecchio had Access and Control (Guidelines Income) for the years 2011 to 2017” prepared by RSM Canada Consulting LP along with Mr. Mandel’s cv and form 20.1 Acknowledgement of Expert’s Duty.
21Before hearing submissions on March 1, 2018 I reviewed my endorsement dated February 27 and confirmed that I did not expect that the Applicant would respond specifically to the motion to set aside. I indicated that I intended to rely on the following material:
(a) Motion by Respondent to set aside the order of Paisley J. dated October 13, 2017
(b) Affidavit of Karen Pritchard sworn September 8, 2017
(c) Affidavit of Respondent sworn February 13, 2018
(d) 14B motion by Applicant to vacate the motion to set aside with affidavit of Frieday dated February 16, 2018
(e) Affidavit of process server sworn February 14, 2018
(f) Affidavit of Ioffe sworn February 20, 2018
(g) Affidavit of Frieday sworn February 21, 2018
(h) Affidavit of Tsoy sworn February 28, 2018
(h)Factum filed by Applicant on 14B motion to vacate motion to set aside order dated October 13, 2017
(i) Factum filed by Respondent on motion to set aside the order dated October 13, 2017.
ANALYSIS
22The Respondent asks the court to set aside paragraphs 1, 2 and 5 of the October 13, 2017 order on the grounds that:
(a) There was a palpable and overriding factual error and material misapprehension of the evidence, in that the Judge made the order without reviewing the Respondent’s evidence; and/or
(b) The Judge did not provide any analysis of the evidence offered, nor any reasons for his decision; and/or
(c) That the judge erred in law in ordering the Respondent’s pleadings struck when he was in fact substantially in compliance with all court orders, and any default in compliance on his part was not willful, nor was the striking of pleadings the only appropriate remedy or warranted in this case.
23The Respondent takes the position that the case does not meet the test for striking pleadings in that his conduct was not egregious nor was there a “mountain of noncompliance” or a “total disregard of the court process”, his noncompliance was not willful, and he had made efforts to rectify any noncompliance. He also asserts that the decision dated October 13 “was not made on a proper evidentiary basis” because his materials were not before the court.
24The Respondent does not challenge paragraphs 3 and 4 of the order presumably because, as a result of that order, the costs orders made by Horkins J. were finally paid and because he acknowledges he owes the Applicant an equalization payment. I do not know the date when the funds from trust were released to pay those costs. For purposes of this motion, I will assume it was by the end of October, 2017, long after September 1, 2017 as ordered.
25Although his motion is to “set aside” three paragraphs of the order dated October 13, 2017, his factum and book of authorities do not quote rule 25(19) which is as follows:
The court may, on motion, change an order that,
(a) was obtained by fraud;
(b) contains a mistake;
(c) needs to be changed to deal with a matter that was before the court but that it did not decide;
(d) was made without notice; or
(e) was made with notice, if an affected party was not present when the order was made because the notice was inadequate or the party was unable, for a reason satisfactory to the court, to be present.
26The only criterion that may apply is (e), adapted to reflect that this was an in-writing motion. For purposes of this motion I assume that the Respondent did file the affidavit of Pritchard in a timely way and that, through no fault of the Respondent, the material did not reach Paisley J. On that basis, I am satisfied that the Respondent has a satisfactory reason as to why his material was not considered on the motion.
27But that does not end the matter because rule 25(19) provides that the court “may” change an order. These are the reasons for not exercising my discretion to set aside the October 13, 2017 order.
28I start by examining the affidavit of Pritchard. She describes herself as “the administrative assistant” to the Respondent. She deposed she had worked for him since March of 2017 and was “intimately familiar with the accounts, ledgers, receipts, payments and other paperwork of Venture Aviation Incorporated”. Her affidavit includes the following:
3: I was asked to compile a list of the relevant documents for the court to consider, relating to payments made from Venture to the Applicant and the Respondent. I have personally reviewed every document and have personally made all of the calculations and they are true and accurate to the best of my knowledge. All payments are made by Venture, and none of them were made by the Respondent to Applicant.
4: For ease, I have included a table of contents to this affidavit, which breaks down the total payments for the relevant tab, as well as the payments made from January of 2016 where relevant. I have also included a computation of the relevant number at each tab. All the relevant payments in this affidavit correspond to payments made after 2001.
33: I am of the opinion that these costs, payments and losses have depilated [sic] the working capital of Venture to such a point, that the company is in real danger of bankruptcy, with virtually no working capital. Whatever working capital exists, is urgently needed to keep the company running. Emphasis added
29Paragraphs 6 to 32 refer to attachments that include the Respondent’s T4 slips from 2013 to 2016; payments made by Venture for the Porsche driven by the Applicant; payments by Venture to various credit card companies; and payments by Venture to York University with respect to their son Adam.
30Based on the affidavit of Pritchard I make these observations. First, the affidavit was not from the Respondent. In a motion of such importance, it was critical that the Respondent provide first hand evidence, not rely on others.
31Second, the affidavit did not provide any evidence that, before September 1, 2017, the Respondent had complied with the July 27 order or evidence that he had made any efforts to comply. Specifically, it did not provide proof of payment of arrears owed as of August 1, 2017 which, as indicated by Horkins J. at paragraph 62 were at least $68,149.30. It did not indicate that he had retained an expert and the stage the expert was at nor did it include an explanation for failing to meet the deadline of September 1, 2017. It did not reference two costs orders in the amount of $7500 and $5000. In submissions, counsel for the Respondent conceded that the Pritchard affidavit did not respond to the specifics of the order made by Horkins J. Counsel conceded that the reader would “have to read between the lines that the evidence had any bearing on paragraphs 1(a), 1(c) and paragraph 4 of that order.”
32Third, it demonstrates that the Respondent has no regard for the orders that had been made requiring him to pay support. Based on the contents of paragraph 3, this affidavit refers only to payments made by the corporation.
33Fourth, it was prepared by an administrative assistant who had worked for the Respondent for approximately 6 months yet she had accumulated “intimate familiarity with the accounts, ledgers, receipts, payments and other paperwork of Venture”. As paragraph 4 of her affidavit indicates, some of the documents and information go back to 2011 and have no bearing on arrears that began to accumulate following the first order for support dated January 15, 2016. Some of the historic information may have been relevant to the motion heard by Horkins J. on July 20, 2017 with respect to arrears. If Pritchard could prepare an 800 page document within 3 days of service of the 14B motion, it begs the question as to why it could not have been prepared earlier for consideration by Horkins J. I observe as well that in paragraph 33, Pritchard purported to express an opinion about the capital needs of the corporation without any qualifications that would permit her to express such an opinion.
34For those reasons, if the affidavit of Pritchard had been before Paisley J. when he considered the 14B motion, it would have had no impact. I am confident that he would have made the order striking the Respondent’s pleadings and directing an uncontested trial. Accordingly, I decline to exercise my discretion pursuant to rule 25(19) to set aside the order dated October 13, 2017.
35As indicated in paragraph 22 above, the motion is also framed in language relevant to an appeal, such as palpable and overriding error and material misapprehension of the evidence, and failure to provide any analysis of the evidence. The Respondent has filed an appeal from the order of Paisley J. which is scheduled to be heard March 23. Those submissions are not relevant to this motion to set aside the order.
36The Respondent also submits that, since he has demonstrated compliance with the order dated July 27, 2017, that the court should set aside the October 13 order striking his pleadings. The evidence on which he relies is the affidavit of Pritchard sworn September 8, 2017, his affidavit sworn February 13, 2018, and affidavits of Ioffe sworn February 20 and 26.
37Counsel has not provided any authority for setting aside an order such as the October 13 order based on alleged compliance after the deadline. For the limited purpose of considering his counsel’s compliance submissions, I assume that I have inherent jurisdiction to set aside an order to prevent a miscarriage of justice.5
38The factum sheds light on this submission. The Respondent asserts that the Pritchard affidavit “was intended to prove that he had in fact, since January 1, 2016 (the date from which support was first ordered to begin), directly and/or indirectly, paid [the Applicant] considerably more than the ordered support (approximately $275,000 over and above the monies paid to the Family Responsibility Office, whereas arrears were alleged to be approximately $78,000.00 at the time of the 14B motion) and that there were therefore no arrears”. The Pritchard materials “were also intended to prove that [the Applicant] had unilaterally taken a further $190,000 out of Venture”.
39In September 2017 it was the Respondent’s view that the only order with which he was not in compliance was the order to produce a new income report. He had produced the earlier Bluepoint Valuations report and had indicated that he did not intend to rely on it. On May 16, 2017 Horkins J. directed him to obtain a new report by June 30, 2017. The following is taken from his affidavit sworn February 13, 2018 on the subject of the new report:
Due to various projects at Venture at that time, [June 2017] and after paying for the first reports, and paying legal fees, support, and costs, I had difficulty finding the money to pay for a new report. I also felt that I had not been given enough time to find and bring a new expert up to speed on the various concerns that I had with the Bluepoint income report, or for a new expert to be provided with and to analyze the voluminous data that would be required for a more accurate finding regarding my income.
Experts that I consulted advised me that, in order to arrive at a more accurate finding regarding my income, they would need to do a detailed review of the general ledgers of Venture, receipts for allegedly personal expenses and other documents, and that they would need to have meetings with Venture’s office managers Karen Pritchard and Margaret Basile, and corporate counsel John Eversley. Venture is being sued by a party who claims that he is a 15% shareholder in Venture. I cannot even begin to address the details of that issue without Mr. Eversley’s assistance, and he had his own prior commitments and health problems at that time as well. It was not possible to get a new expert report done within 6 weeks as ordered.
At a motion on July 27, 2017 I was ordered to produce the new income report by September 1, 2017. Again, there was not enough time between the Order of the Honourable Madam Justice Horkins dated July 27, 2017 ordering a new report, and the deadline of September 1, 2017.
My lack of compliance with the order to produce a new income report by September 1, 2017 was not in any way willful or deliberate.
I retained a new expert and over the last several months we have been working on producing a new income report. As of today’s date, I do not yet have a final income report, however I have a draft report, which is attached hereto as Exhibit “N”. It is my understanding that the RSM Report, on a draft basis, used the Bluepoint figures regarding supposedly personal expenses paid by Venture, because RSM is still working on completing their detailed analysis of the data regarding expenses paid by Venture and their proper characterization of those expenses as either business or personal. I hope to have the final report prior to the hearing of this motion, and if so I will be filing a subsequent affidavit attaching the final report prior to the hearing of this motion. My new counsel began the search for an appropriate expert immediately upon being retained in November 2017, and even so it has taken more then [sic] three months for the preparation of this report.
The outstanding costs awards have now all been paid out of the proceeds from the sale of the matrimonial home, my share of which was being held in trust by Levy Zavet P.C.
As such, I am now effectively in compliance with all sections of the Order of the Honourable Madam Justice Horkins dated July 27, 2017 with the exception of the section of that Order concerning a new (final) income report, and that is in the process of being rectified, and shall be rectified hopefully by the time of the hearing of this motion.
In my view it was not justified to strike my pleadings on the basis of the lack of a new income report alone. As an alternative, I could have been ordered to rely on the Bluepoint report.
If my pleadings remain struck and this matter goes to an uncontested trial, the result could be an extremely inaccurate finding regarding my income, which could leave me unable to pay the support ordered, which would end with my incarceration, which helps no-one.
Bluepoint Valuations valued Venture at the date of separation at $984,000. Angela’s experts, Crowe-Soberman, valued Venture at $2,094,000. That is a very big discrepancy. The Crowe-Soberman Valuation Critique Report is attached hereto as Exhibit “P”.
Based on the Crowe-Soberman report, the Applicant claims that she is entitled to an equalization payment of $1,061,782.97. Using the Bluepoint valuation, she would be entitled to approximately half that, and she has already received approximately $641,000 in funds that have been adjusted against equalization.
Furthermore, 30% on Venture’s profits are paid annually to two informal shareholders who provided start-up money for Venture at its inception. Venture is currently being sued by Dennis Grisoni, who claims to be a shareholder owning 15% of Venture (Exhibit “A”). Therefore, my share of Venture might be worth approximately $700,000 in which case the equalization payment owing to Angela would be even less.
Keeping in mind that Venture cannot be sold if I am to continue to rely on it for my income for support purposes, that leaves only the matrimonial home to be equalized immediately, and the equalization payment regarding Venture will have to come in periodic payments over time. Angela has already received all of the proceeds from the sale of the matrimonial home, which was approximately $409,000. Attached hereto as Exhibit “J” is a true copy of the court order releasing to Angela the sum of $106,169 from my share of the proceeds of the matrimonial home. Attached hereto as Exhibit “Q” is a true copy of the court order releasing a further $85,000 from my share (or half) of the proceeds of the matrimonial home plus costs of $12,500. (emphasis added) (emphasis in original text)
40Based on the evidence I make these observations.
41The July 27 order required the Respondent to do certain things. In paragraph 1(a) he was ordered to pay the support arrears owed as of August 1, 2017 and provide proof of payment to the Applicant’s counsel. As of the hearing on March 1, 2018, he had not paid the arrears or provided proof that he had done so. He expects the court to accept his assertion that there are none. The only conclusion available is that he is of the view that he does not have to comply specifically with that order. He takes the position that the court should be satisfied with evidence, of his assistant, that he confirmed in his affidavit, that does not demonstrate payment of arrears, although he says that is what it was intended to do.
42On May 16, 2017 Horkins J. ordered him to produce a report by June 30, 2017. In paragraph 1(b) of the order dated July 27, 2017, she ordered him to produce a report by September 1. He did not retain a valuator until November when his new counsel searched out an expert. That means that in the six months from May 16, 2017 to mid November 2017 the Respondent took no steps to comply with the order of Horkins J. with respect to the valuation of his income. At paragraph 41 of his affidavit, he states that his lack of compliance was not “willful or deliberate”. He had excuses for not doing what he had been ordered to do. But the only conclusion to draw from his evidence is that his lack of compliance was willful and deliberate.
43In paragraph 1(c) and 4 of the July 27 order, the Respondent was directed to pay costs ordered on May 16, 2017 and on July 27, 2017. As of the hearing on March 1, 2018, he had not paid those costs. He takes the position that, because Paisley J. ordered the costs paid out of the funds remaining from the proceeds of sale of the matrimonial home, he has complied. Those funds were held for purposes of giving the Applicant some confidence that the equalization payment to which she was inevitably entitled would be paid. In any event, payment from the trust funds could not constitute compliance by September 1, 2017 because the payments were not made until the end of October 2017. As of March 1, 2018, the Respondent has not paid the costs required by paragraphs 1(c) and 4 of the July 27, 2017 order.
44The authorities on which the Respondent relies relate to motions such as the motion to strike pleadings heard by Horkins J. on May 16, 2017 and July 20, 2017. The thrust of the submissions on his behalf is that the 14B motion heard by Paisley J. was a substantive motion on which he was entitled to make comprehensive submissions as to why the order of Horkins J. ought not to be enforced. In fact, his pleadings were struck out as a result of her order dated July 27 which the Respondent did not appeal. The 14B motion before Paisley J. was arguably not necessary; and in any event was a formality. On the evidence of Pritchard, there was no prospect of any outcome except the order made by Paisley J.
45However, assuming I have discretion to set aside an order to prevent a miscarriage of justice, there is no basis upon which I could find that a miscarriage of justice occurred when Paisley J. made an order incorporating the order made by Horkins J. into a formal order. As indicated by the extensive quotations from his affidavit, the Respondent demonstrates the following. To paraphrase his evidence: he says he has paid much more than he was ordered to pay and it is irrelevant that his legal obligations were paid by Venture and also irrelevant that there is no relationship between the orders made against him to pay support and what he paid and when he paid it. He says that the court could have ordered him to be bound by the Bluepoint report – and avoided ordering him to provide a fresh report. He says that the equalization payment will have to be made in periodic payments over time. He does not acknowledge that he has failed to comply and indeed insists that he has complied. And he makes no commitment to live up to his obligations as a party to these proceedings and pursuant to the Family Law Rules. There is no basis upon which the court could conclude that he would alter his historic persistently unreasonable behaviour.
46As the Respondent pointed out in paragraph 48 of his February 13 affidavit, the consequences of having his pleadings struck and the Applicant proceeding with an uncontested trial are serious. He ought to have figured that out on any number of prior occasions including May 16, July 20 and September 1, 2017.
47In the context of a possible miscarriage of justice, I must consider the circumstances from the perspective of the Applicant and the Respondent. To allow the Respondent to participate in the case would be fair to him; indeed it would be extraordinarily fair. To allow the Respondent to participate in the case would be a miscarriage of justice vis-à-vis the Applicant to whom the Respondent owes $142,000 in arrears of support and who has persevered for over 3 years in trying to force the Respondent to accept his responsibility as a spouse and a litigant and who has incurred significant legal expenses in her persistent effort to have him comply with his obligations pursuant to the Family Law Rules and comply with orders made against him. It would send a message that Respondents in his position can act with impunity and not lose the opportunity to defend in an application such as this.
48I am driven to the conclusion that the motion to set aside the order dated October 13, 2017 must be dismissed. Counsel for the Applicant may contact the Trial Co-ordinator to schedule an uncontested trial in an oral hearing.
49I point out what should be obvious to the Respondent. He should make efforts to settle with the Applicant. I expect that the Applicant would welcome the opportunity to put an end to these proceedings. But he has to make the offer for her consideration.
50The Applicant did not provide a costs outline but if successful asked for about $4000 in costs. Counsel for the Respondent provided a bill of costs that includes services in the amount of $6390 plus $830.70 HST for a total of $7220.70. Counsel indicated that, if successful, she would have asked for partial indemnity costs in the amount of $3600. The Respondent has not succeeded. The Applicant was not successful on the 14B motion to vacate the date for the motion to set aside. As I directed, the Applicant did not specifically respond to the motion to vacate. I indicated above that in the motion to set aside I would rely on the evidence on the motion to vacate. Given the success the Applicant has achieved in this important motion, she is presumed to be entitled to costs.
ORDER TO GO AS FOLLOWS:
51The motion by the Respondent for an order setting aside the order dated October 13, 2017 is dismissed.
52No later than March 21, 2018, the Respondent shall pay costs to the Applicant in respect of this motion in the amount of $3000 including HST and shall pay the costs of $1500 ordered by Paisley J. in the October 13, 2017 order.
53At the request of counsel for the Applicant, the Trial Co-ordinator shall set a date for an uncontested trial in an oral hearing and a date for the Trial Management Conference.
Kiteley J.
Date: March 12, 2018
Footnotes
- 2017 ONSC 4559
- 2015 ONCA 450
- 2016 ONSC 3776; upheld 2916 ONCA 909
- The affidavit of Ioffe does not comply with rule 14(19) in that it refers to information from the Respondent but does not incorporate the deponent’s belief.
- West v. West (2001) 2001 28216 (ON SC), 18 R.F.L. (5th) 440 (Ont.S.C.J.)