Court File and Parties

COURT FILE NO.: FS-12-17965 DATE: 20180718 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: William Glenn McSkimming, Applicant AND: Diane Roberta Schmuck, Respondent AND: The Director, Family Responsibility Office, for the benefit of Diane Roberta Schmuck

BEFORE: P.J. Monahan J.

COUNSEL: Giovanna Cacciola, for the Applicant Michael Stangarone and Serena Lein, for the Respondent Diane Gillies, counsel for the Family Responsibility Office

HEARD: June 21, 2018

Endorsement

Overview

[1] The Applicant, William Glenn McSkimming, and the Respondent, Diane Roberta Schmuck, have been involved in extended and acrimonious litigation for close to a decade. Following their divorce on September 22, 2009, they participated in an arbitration before the Honourable Dennis Lane. Arbitrator Lane’s three arbitral awards, delivered in 2012, were subsequently incorporated into court orders issued by Kiteley J. in December 2014. These orders included an order for spousal support in favour of the Respondent (the “Spousal Support Order”), as well as an order (the “Costs Order”) that costs awarded to the Respondent by Arbitrator Lane should be enforced as support through the Family Responsibility Office (FRO).

[2] The current litigation was commenced in January 2017 when the Applicant brought a motion to change (the “Motion to Change”), seeking a declaration that no further spousal support was payable under the Support Order, along with a 50% reduction in the costs enforceable as spousal support pursuant to the Costs Order. In her Response to the Motion to Change (the “Response”), the Respondent sought an order dismissing the Motion to Change, as well as (amongst other things) an increase in the quantum and duration of spousal support.

[3] The Respondent subsequently filed a separate motion on June 21, 2017, (the “Strike Out Motion”) seeking a variety of relief, including an order striking the Applicant’s Motion to Change as a result of his breaches of Kiteley J.’s December 2014 orders. In the alternative, if the Applicant’s Motion to Change were not struck out, the Respondent sought an order for security for costs. The Respondent also sought leave to lift a stay of her appeal of one of Arbitrator Lane’s 2012 arbitral awards. In response to the Respondent’s Strike Out Motion, the Applicant filed a second motion on December 1, 2017 (the “Interim Relief Motion”), in which he sought, on an interim basis, relief largely similar to that sought in his January 2017 Motion to Change.

[4] These reasons deal only with the Strike Out Motion and the Interim Relief Motion; the Motion to Change and the Response are not before me. However, since the relief sought in the Interim Relief Motion is broadly similar to that sought in the Motion to Change, these reasons will necessarily address certain aspects of the Motion to Change as well.

[5] By way of general overview, for the most part I dismiss both the Respondent’s Strike Out Motion as well as the Applicant’s Interim Relief Motion. With respect to the Strike Out Motion, I decline to strike out the Applicant’s Motion to Change on the basis of his non-compliance with Kiteley J.’s 2014 Costs Order. Nor would I order the Respondent to post security for costs in order to proceed with the Motion to Change. I also find that too much time has passed to permit the Respondent to proceed with her appeal of Arbitrator Lane’s Award, and I therefore refuse to lift the stay of the appeal that was entered on consent in May 2014.

[6] Turning to the Interim Relief Motion, the Applicant is seeking a 50% reduction in the costs enforceable as spousal support pursuant to the Costs Order. The Applicant argues that there were multiple issues before Arbitrator Lane, and notes that only about half of his main award dealt with spousal support. Therefore, the Applicant argues, it was inappropriate for Arbitrator Lane to order that all of the costs he awarded should be enforced as spousal support by FRO.

[7] The problem with the Applicant’s argument is that he is in substance attempting to appeal the Costs Order in the guise of a motion to change. The Applicant did file an appeal of Arbitrator Lane’s award, but that appeal was quashed by Moore J. in May 2014 and the Applicant’s appeal of Moore J.’s quashing order was subsequently quashed. It is plain and obvious that the Applicant cannot now appeal Arbitrator Lane’s award. Thus this aspect of his Motion to Change should be dismissed.

[8] Both parties seek certain relief in respect of the Spousal Support Order. In my view, these issues cannot properly be resolved on an interim or summary basis. I therefore decline to make the orders sought by either the Applicant or the Respondent in respect of the Spousal Support Order, leaving these issues for determination by the Court hearing the Motion to Change and the Response.

[9] Finally, I find that the Applicant has failed to satisfy the test required for an interim stay of enforcement of either the Costs Order or the Spousal Support Order.

Background Facts

[10] The parties were married on September 10, 1994, separated in January 2007, and were divorced on September 22, 2009. During the marriage, the Applicant had told the Respondent, and she had accepted, that he was impotent. In August 2006, the Respondent became aware that the Applicant was involved in viewing Internet porn and participating in Internet chat rooms with women. She also testified before Arbitrator Lane that he admitted to 21 extramarital affairs. The discovery of the Applicant’s double life caused the Respondent to descend into a state of complete shock and eventual nervous breakdown and led to the dissolution of the marriage.

Arbitrator Lane’s Awards

[11] Arbitrator Lane found that the Respondent was entitled to spousal support on both a retroactive and ongoing basis. With respect to ongoing spousal support, Arbitrator Lane ordered the Applicant to pay the Respondent $4500 a month commencing July 1, 2012. However, Arbitrator Lane was also made aware of the fact that the Respondent anticipated receiving a substantial inheritance in the near future. He therefore ordered that 18 months after the Respondent had received this inheritance, there was to be a recalculation of the spousal support obligation based on the parties’ respective incomes at that time. This revised amount would remain in effect for the ensuing 24 months, at the end of which the process would be repeated and the spousal support would be adjusted for a period of a further 24 months. At the end of this second 24 month period (i.e. approximately 64 months after the Respondent received her inheritance), the Applicant’s obligation to pay spousal support would cease.

[12] In his costs award, Arbitrator Lane found that the Applicant had acted in bad faith by concocting a scheme involving the transfer of his business to a new corporation, with a view to financially disadvantaging the Respondent. Arbitrator Lane further found that the Applicant had failed to make full and complete financial disclosure and had deliberately sought, in bad faith, to ensure that neither the Respondent, nor Arbitrator Lane himself, would be able to go behind the Applicant’s self-prepared financial statements. He therefore ordered total recovery of the Respondent’s expenditures for legal representation, and also ordered the Applicant to pay the fees of the arbitration in full, along with certain other costs. The Applicant was ordered to pay a total of approximately $285,000 in costs and Arbitrator Lane further directed that these costs be enforced by the FRO as spousal support.

Appeals of Arbitrator Lane’s Awards

[13] Both parties appealed various aspects of Arbitrator Lane’s awards. On May 6, 2014, Moore J. of this Court found that the Applicant had failed to comply with various aspects of Arbitrator Lane’s awards and did not come before the Court with clean hands. He therefore quashed the Applicant’s appeal. He further ordered that the Respondent’s cross-appeal of Arbitrator Lane’s award should be stayed, without prejudice and on consent, “to permit them to agree upon and implement a process aimed at sourcing and exchanging relevant, admissible financial disclosure information and documentation for purposes of the cross-appeal.”

[14] On June 16, 2014, the Applicant filed a notice of appeal of Moore J.’s order quashing his appeal of Arbitrator Lane’s awards. However this appeal was never pursued, and was subsequently quashed. With respect to the stay of the Respondent’s cross-appeal, the parties did not engage in the discussions contemplated by Moore J., nor was any action taken by the Respondent to lift Moore J.’s stay of the cross-appeal, prior to an amendment to the Applicant’s Motion to Strike filed in November 2017.

The Applicant’s Bankruptcy and Kiteley J’s December 2014 Orders

[15] The Applicant filed an assignment in bankruptcy on July 22, 2014. The Bankruptcy and Insolvency Act provides that bankruptcy does not release the bankrupt from any liability arising under a judicial decision respecting spousal support. In December 2014 Arbitrator Lane’s awards were converted into court orders, with the result that the Applicant’s discharge from bankruptcy could not reduce or eliminate his obligation to pay ongoing spousal support under either the Spousal Support Order or the Costs Order.

[16] The Spousal Support Order provided, in relevant part, as follows:

5. Commencing on July 1, 2012, the Applicant shall pay spousal support in the amount of $4500 per month to the Respondent until the provisions of the ensuing paragraph 6 below take effect.

6. When the Respondent has her inheritance or any significant portion, being not less than half of it, in hand for 18 months, she and the Applicant shall disclose their respective incomes to each other and a fresh SSAG calculation, using the mid-point in the range shall be made and the Applicant shall pay to the Respondent the sum that is the result of that calculation for the ensuing 24 months at the end of which the process shall be repeated and the spousal support adjusted accordingly for a period of a further 24 months at the end of which period the spousal support shall cease.

[17] The Costs Order provided, in relevant part, that all costs awarded in respect of Arbitrator Lane’s Award “shall be enforced as support through the Family Responsibility and Support Enforcement Act, 1996.” As previously noted, these costs amounted to approximately $285,000.

Subsequent Litigation

[18] The Applicant filed the Motion to Change on January 19, 2017. In that Motion, the Applicant argued that the terms of paragraphs 5 and 6 of the Spousal Support Order had been fully satisfied. The Applicant claimed that the Respondent had inherited a substantial portion of her grandmother’s estate in June 2011. He therefore argued that, based on the provisions of paragraph 6 of the Spousal Support Order, his obligation to pay ongoing spousal support ceased as of December 31, 2016.

[19] The Applicant further argued that, at most, 50% of the arbitration before Arbitrator Lane had dealt with issues relating to spousal support. He therefore argued that Arbitrator Lane and Kiteley J. should have ordered no more than 50% of the costs awarded against him to be enforceable as spousal support by FRO pursuant to the Family Responsibility and Support Arrears Enforcement Act.

[20] The Applicant also sought an order staying any enforcement action by the FRO pending the outcome of the Motion to Change.

[21] In her Response filed June 14, 2017, the Respondent sought the dismissal of the Motion to Change, along with a variety of other relief, including an increase in ongoing and retroactive spousal support. Subsequently, the Respondent filed the Strike Out Motion, seeking an order striking out the Motion to Change and prohibiting the Applicant from taking any further steps in the proceeding, as a result of his breaches of the December 2014 orders of Kiteley J. In the alternative, the Respondent argued that the relief claimed in the Motion to Change should be dismissed summarily; if summary judgment were not granted, the Applicant should be required to post security for costs in the amount of $200,000 before proceeding with the litigation. The Applicant subsequently amended the Strike Out Motion to seek an order lifting Moore J.’s May 6, 2014 stay of her cross-appeal of Arbitrator Lane’s awards.

[22] The Strike Out Motion prompted the Applicant to file the Interim Relief Motion on December 1, 2017, in which the Applicant sought an order declaring that his obligation to pay ongoing spousal support pursuant to the Spousal Support Order had terminated effective January 1, 2017; an order that the Costs Award be reduced by 50%; or, in the alternative, an order staying the Costs Order and/or the Spousal Support Order. The Applicant also sought an order staying any enforcement action by the FRO pending the outcome of the Interim Relief Motion.

Issues

[23] The following issues arise in respect of the Strike Out Motion and the Interim Relief Motion:

1. Should the Applicant’s Motion to Change be struck on the basis of his non-compliance with Kiteley J.’s 2014 orders?
2. If the Applicant’s Motion to Change is allowed to proceed, should the Applicant be required to post security for costs in the amount of $200,000 (or some other amount)?
3. Should leave be granted to lift the May 6, 2014 stay of the Respondent’s cross-appeal of one of Arbitrator Lane’s awards?
4. Should the entire Costs Order continue to be enforced as spousal support?
5. Is the Applicant entitled to an interim stay of the Costs Order or the Spousal Support Order?
6. Is it appropriate to determine the Applicant’s obligation to pay ongoing spousal support in these interim proceedings?

Should the Motion to Change be Struck?

[24] Rule 1(8) of the Family Law Rules grants the Court broad discretion to deal with a party’s failure to obey a court order by way of various mechanisms, including striking out a party’s pleadings. The Respondent argues that the Applicant has failed to pay the Costs Order and that the arrears of spousal support payable by the Applicant are currently in excess of $300,000. The Respondent relies on a series of cases in which a party’s pleadings have been struck out pursuant to Rule 1 (8) on the basis of noncompliance with court orders. [2]

[25] I note that the Court of Appeal has held that striking a pleading and denying a party the right to be heard on a motion is a drastic remedy of last resort. [3] Such a remedy is appropriate in cases where there has been a consistent and unyielding pattern of noncompliance with court orders and a total disregard for the process of the court on the part of the party in question. [4] This approach to the application of Rule 1 (8) is reflected in the various cases cited by the Respondent.

[26] For example, in Purcaru No.2, Kelly J. struck the pleadings of a party who had wilfully refused to comply with two court orders despite having the means to do so. The Court found that the party in question had “shown a flagrant disregard for orders of the Court and does as he pleases if he disagrees with the result.” This “defiance of the Court’s orders has impeded the course of justice… [and] cannot be condoned.” [5] Similarly, in Bourassa, [6] the respondent had failed to comply with three court orders compelling financial disclosure, having failed to produce basic financial information such as his Notices of Assessment from the Canada Revenue Agency, his T-4 slips, or his paystubs. Further he was in arrears of child support, based on an arbitrary amount of $250 per month that he had chosen to pay. O’Connell J. of the Ontario Court of Justice found that the respondent was simply “not taking this Court proceeding or his obligations to abide by court orders seriously”, and that giving him even more opportunities to comply with the disclosure order “will just prolong the process with no reasonable expectation that he will comply.” The Court found that there was “no other realistic alternative to striking the Respondent’s pleadings on a without prejudice basis to being re-instated once he had fully complied with the disclosure order.” [7]

[27] In this case, the Respondent has failed to pay the Costs Order of $285,000. Moreover, in 2015 and early 2016 he reduced the amount of ongoing spousal support from $4500 per month to $2983 per month. However since June 2016, the Respondent has consistently been paying the $4500 per month spousal support ordered by Kiteley J. The Respondent further argues that the Spousal Support Order was time-limited, and that his obligation to pay ongoing spousal support terminated effective December 31, 2016. Despite that, he has continued to make monthly payments of $4500 which, he argues, should be credited against the arrears owing in respect of the Costs Order. The Respondent argues that he is simply not in a position to obtain the funds needed to pay the arrears of support in a lump-sum, since his 2014 bankruptcy has resulted in him being unable to secure loans from financial institutions. He indicates that in 2017, he borrowed just over $53,000 from his mother in order to make a lump sum payment towards the arrears of spousal support.

[28] I do not regard the circumstances here as being analogous to those in which courts have exercised their discretion to strike out pleadings for wilful breach of court orders. While the Respondent failed to pay the full amount of spousal support in 2015 in early 2016, for the past 2 years he has consistently met his obligations to pay monthly support of $4500. Moreover, he has done so despite the fact that, in his view, he is no longer obliged to make these monthly payments. Unlike the litigants in Purcaru or in Bourassa, who effectively “took the law into their own hands”, the Respondent commenced the Motion to Change to clarify the extent of his obligation to pay ongoing spousal support. His failure to pay the arrears owing in respect of the Costs Order is a matter of serious concern, but if he is correct in his claim that his support payments since January 1, 2017 should be credited against these arrears, the amount outstanding would be reduced significantly.

[29] Considering all the circumstances in this case, I do not find that the Respondent has displayed a “consistent and unyielding pattern of noncompliance with court orders” or a “total disregard for the process of the court”, that would justify the remedy of striking out his pleadings. I therefore decline to so order.

Requirement to Post Security for Costs

[30] The Respondent seeks an order requiring the Applicant to post $200,000 as security for costs, pursuant to Rule 24 (13) of the Family Law Rules. Where such an order is made, the party against whom security is ordered may not take any step in the case, other than to appeal the order, unless a judge orders otherwise. Further, failure to give the security as ordered may result in a striking out or dismissal of the party’s pleadings.

[31] Rule 24 (13) requires the court to consider whether an order for security for costs is “just”. The Rule is intended to control frivolous or wasteful litigation. [8] An order for security for costs is “a control on a blithe pursuit of another person in the courts without attention to the merits of the pursuit and the legal costs likely to be incurred by the respondent to defend the case.” [9] Ordinarily on a motion for security for costs, the Court will be required to embark on an inquiry into the merits of the case, with a view to considering whether it is obvious that an action cannot succeed, or whether it has been brought for an improper purpose, such as to harass or oppress other parties rather than for the assertion of legitimate rights. [10] Rule 24 (13) does not envisage situations where a payor is in arrears of support as a basis for obtaining an order for security for costs since other remedies are normally available in such circumstances. [11]

[32] In my view, this is not a case in which an order for security for costs would be just. It is clear that the Applicant has failed to comply with both the Costs Order and the Spousal Support Order. But the Motion to Change is far from frivolous or vexatious. Indeed, given the time-limited nature of the Spousal Support order, the Applicant has established a prima facie case that his obligation to pay ongoing spousal support terminated effective December 31, 2016.

[33] I have already found that the Respondent is not entitled to an order striking out the Applicant’s pleadings. His request for an order for security for costs is an indirect way of achieving the same result, since it is not clear that the Applicant would have the capacity to post the $200,000 in security that is being sought. In that event, the Respondent would no doubt move to have the Applicant’s pleadings struck on the basis of Rule 24.

[34] I do not believe that the merits of this proceeding should be determined by the Applicant’s inability to post security for costs. I therefore dismiss the Respondent’s request to that effect.

Lifting the Stay of the Respondent’s Cross-Appeal of the Arbitrator’s Award

[35] The Respondent seeks the lifting of the stay of her cross-appeal of Arbitrator Lane’s award, as entered by Moore J. on May 6, 2014. The Respondent argues that it would be unjust for her to be denied the opportunity to pursue the cross-appeal, given that the Applicant delayed in producing the disclosure contemplated by Moore J.’s stay. The Respondent submits that she is a severely disabled spouse who suffered long-term mental and emotional consequences from an abusive marriage. She argues that she desperately needs ongoing and indefinite spousal support in order to continue with her path of recovery, which remains uncertain at this time.

[36] The primary objective of the Family Law Rules is to enable the Court to deal with cases justly, which includes ensuring that the process is fair to all parties, saving expense and time, dealing with the case in ways that are appropriate to its importance and complexity, and giving appropriate Court resources to matters before the Court. The Court also has a duty to promote this primary objective through the active management of cases, which includes controlling the progress of the case and considering whether the likely benefits of taking a step justify the cost.

[37] Given these objectives and considerations, in my view it would be inappropriate to lift the stay of the Respondent’s cross-appeal entered by Moore J. in May 2014. Amongst the considerations in support of this conclusion are the following:

(a) the Respondent has offered no convincing explanation as to why she did not take any steps to pursue the cross-appeal until her amendment to the Strike Out Motion in November 2017. Although the Respondent claims that the delay in pursuing the cross-appeal was attributable to actions of the Applicant, such as his 2014 bankruptcy and his failure to provide adequate disclosure, I see no reason why these circumstances would have caused a 3 ½ year delay in pursuing the cross-appeal;

(b) the cross-appeal seeks to vary spousal support ordered by Arbitrator Lane on both a retroactive and going forward basis. This includes spousal support payable for periods dating back to 2009. Given the passage of time, it appears to me that there would be a real risk of prejudice to the Applicant from allowing such an inquiry to proceed now. Moreover, the court hearing the appeal may well be hampered in its ability to properly adjudicate the merits;

(c) to the extent that the Respondent wishes to establish a right to ongoing spousal support, she may do so through her Response, where she seeks to establish that there has been a material change in circumstances since the Spousal Support Order which justifies a variation in the Order. This would mitigate any prejudice to the Respondent even if she is denied the opportunity to pursue her cross-appeal;

(d) parties should be able to rely on court orders that have been in effect and followed by the parties for a substantial period of time. I do not believe that it is appropriate for a party to allow a cross-appeal to lie fallow for many years, and then attempt to resurrect the cross-appeal only when another party commences a subsequent motion to change. Not only does such a method of proceeding risk unfairness to other parties, it fails to take account of the need for an appropriate allocation of Court resources, and is inconsistent with the court’s role to actively manage cases.

[38] I therefore dismiss the Respondent’s request to lift the stay of her cross-appeal of Arbitrator Lane’s award.

Should the Entire Costs Order Continue To Be Enforced as Support?

[39] The Applicant argues that in cases where there are multiple issues considered in a family proceeding, the courts have determined that it would be inappropriate to direct that the entire amount of any costs awarded be enforceable by FRO as support. Instead, the Applicant argues that courts have attempted to ascertain the proportion of time spent dealing with the issue of support, and ordered only that proportion of the costs be enforceable by FRO as support.

[40] In this case, the Applicant argues that Arbitrator Lane considered a variety of other issues in addition to that of spousal support. Therefore, in the Applicant’s submission, it was inappropriate for Arbitrator Lane in his award, and for Kiteley J. in the Costs Order, to direct that the entire $285,000 in costs payable by the Applicant be enforceable by FRO. The Applicant suggests that no more than 50% of the costs ordered related to the issue of spousal support, and that the remaining 50% should be discharged by the Applicant’s bankruptcy.

[41] The Applicant further argues that it is appropriate to advance this claim by way of a Motion to Change rather than by way of an appeal, given that the costs order is being enforced by FRO as spousal support. The Respondent notes that spousal support is subject to material change pursuant to section 17 of the Divorce Act. [12] In the Applicant’s submission, his bankruptcy is a material change affecting his ability to pay costs being enforced as support by FRO, thereby making it appropriate to reduce the costs enforceable.

[42] In my view, the Applicant’s argument on this issue is entirely without merit. As the Supreme Court of Canada has make clear in both L.M.P. v. L.S. [13] and in Willick v. Willick, [14] a motion to change under section 17 of the Divorce Act is not an invitation to reconsider the correctness of the original support order. It is presumed that the judge who granted the initial order knew and applied the law correctly and that, accordingly, the prior support order met the objectives set out in section 15.2 of the Divorce Act. Parties wishing to question the legal correctness of a support order must do so by way of an appeal rather than a motion to change.

[43] In this case, the Applicant is essentially seeking to appeal the Costs Order in the guise of a motion to change. The Applicant is arguing that Arbitrator Lane and Kiteley J. incorrectly failed to identify the proportion of the costs attributable to support matters, and were therefore wrong to direct that all of the costs payable by the Applicant were enforceable by FRO. Since this is simply an attempt to question the legal correctness of the original Costs Order, it can only be raised by way of an appeal rather than a motion to change.

[44] I note that the Applicant did, in fact, appeal Arbitrator Lane’s determination that the entire costs awarded in favour of the Respondent should be enforced by FRO as spousal support, but this appeal was quashed by Moore J. on May 6, 2014, and the appeal of Moore J.’s order was itself quashed. Thus it is not open at this stage for the Applicant to question the legal correctness or validity of the Costs Order.

[45] Nor can the subsequent bankruptcy of the Applicant somehow give rise to the possibility of reconsidering the Costs Order through a motion to change. Assuming the original Costs Order to be legally correct (which I am required to do), the BIA specifically provides that bankruptcy does not release the bankrupt from any liability arising under a judicial decision respecting spousal support. [15] Therefore, to reduce the Applicant’s liability in respect of the Costs Order on the basis of his bankruptcy would be to do the very thing that section 178 of the BIA expressly prohibits.

[46] The principles applicable to summary judgment in the civil context, identified by the Supreme Court of Canada in Hryniak v. Mauldin, [16] apply equally to summary judgment motions brought under Rule 16 (6) of the Family Law Rules. [17] The court should grant summary judgment when the judge is satisfied that there is “no genuine issue requiring a trial”. This will be the case where the process allows the judge to make necessary findings of fact, apply the law to those facts, and is a proportionate, more expeditious and less expensive means to achieve a just result.

[47] Since I am satisfied that the Applicant’s claim for a reduction in the costs enforceable as support is entirely without merit, there is no need for a trial on this issue. Moreover, granting summary judgment on this particular aspect of the Motion to Change will narrow and simplify the issues on that Motion. In my view, therefore, it is appropriate to grant partial summary judgment in this case, notwithstanding recent decisions of the Court of Appeal limiting the availability of partial summary judgment. [18] Accordingly, this aspect of the Interim Relief Motion, as well as of the underlying Motion to Change, should be dismissed pursuant to Rule 16 (6).

Is the Applicant Entitled To An Interim Stay Of Kiteley J.’s Orders?

[48] The Applicant seeks, as an alternative form of relief, an order staying enforcement of the Spousal Support Order and the Costs Order.

[49] In Hayes v. Hayes, [19] Spies J. set forth a three-part test for determining the interim variation or suspension of a support order, pending the hearing of the merits of a motion to change. The moving party must establish: (i) the merits of the motion and whether there is a prima facie case that there has been a material change; (ii) that failure to grant the relief sought would cause hardship to the moving party; and (iii) that the moving party has come to the Court with clean hands.

[50] I have already found that the Applicant’s request to reduce the Costs Order is without merit and dismissed this aspect of his motion on a summary basis. It necessarily follows that the Applicant cannot obtain a stay of the Costs Order on an interim basis.

[51] Although the circumstances with respect of the Spousal Support Order are somewhat different, ultimately the same result obtains. I have found that the Applicant has established a prima facie case that his obligation to pay spousal support terminated effective December 31, 2016. This satisfies the first element of the three-part test in Hayes. But in my view, the Applicant has failed to meet the remaining two elements of the test.

[52] With respect to the requirement to demonstrate hardship, the Applicant has filed a sworn financial statement dated February 2, 2018 stating that his 2017 income was approximately $225,000. However the only evidence in support of this claim is a letter from his accountant; moreover, the accountant indicates that the Applicant’s 2015 income was approximately $263,000. There is no explanation as to the apparent decline in the Applicant’s income over this 2 year period. Even assuming this income information to be accurate, I am unable to find that the continued payment of spousal support of $4500 per month would cause hardship to the Applicant, given this substantial income.

[53] Neither has the Applicant satisfied me that he comes to court with clean hands. The outstanding arrears of spousal support payable by the Applicant are currently in excess of $300,000. He has provided no explanation as to why he has been unable to pay anything towards the costs ordered by Arbitrator Lane over 6 years ago. In addition, although he has been paying spousal support in accordance with the Spousal Support Order over the past 2 years, overall he remains in arrears in terms of his obligation to pay ongoing spousal support.

[54] Nor is it clear to me whether there was a legitimate financial or business purpose to the Applicant’s assignment in bankruptcy in July 2014. The Respondent alleges that the bankruptcy proceedings were initiated by the Applicant simply to avoid the effect of Arbitrator Lane’s awards. The Applicant has filed no evidence to the contrary, which suggests that the Respondent’s allegations in this regard may well have substance.

[55] I earlier declined to strike out the Applicant’s pleadings, since I did not find his conduct to be so egregious as to merit such a drastic remedy. But that conclusion does not mean that the Applicant has come to court with sufficiently clean hands to justify the granting of interim relief in his favour.

[56] I conclude, therefore, that the Applicant is not entitled to an interim order staying either the Spousal Support Order or the Costs Order. In these circumstances, I make no order with respect to enforcement of either order by the FRO. I leave it to the Director to exercise her enforcement discretion under the Family Responsibility and Support Arrears Enforcement Act, 1996, [20] having regard to this Endorsement.

Is It Appropriate to Determine the Applicant’s Obligation to Pay Ongoing Spousal Support in these Interim Proceedings?

[57] In the Motion to Change, the Applicant seeks an order that his obligation to pay spousal support pursuant to the Spousal Support Order terminated effective January 1, 2017. He argues that I should make this order on an interim basis, pending the final adjudication of the Motion to Change. Conversely, the Respondent argues that this request should be summarily dismissed pursuant to Rule 16 (6).

[58] I accept neither argument. In my view, the Applicant has in fact established a prima facie case that the Spousal Support Order was spent effective January 1, 2017. But I am not satisfied that the Applicant is entitled at this interim stage to an order terminating his obligation to pay ongoing spousal support. That said, neither am I satisfied that the Respondent is entitled to summary judgment dismissing this aspect of the Applicant’s motion through the Motion to Strike.

[59] The Spousal Support Order is, on its face, a time-limited order. It provides that the Applicant is required to pay spousal support for a period of 64 months after the receipt by the Respondent of an expected inheritance. It is conceded that the Respondent received this inheritance by June 2011. Thus the Applicant has established, on a prima facie basis, that his obligation to pay ongoing spousal support terminated effective December 31, 2016.

[60] At the same time, the Spousal Support Order also contemplated that the parties would exchange information about their respective incomes 18 months following the receipt of the Respondent’s inheritance, and adjust the spousal support payable on the basis of this updated financial information. A second exchange of financial information, along with a second adjustment in the amount of spousal support payable, was to have taken place 24 months later. No such exchange of information or adjustment in spousal support has occurred. Nor do I have before me sufficient information to reliably determine the respective incomes of the parties for the relevant periods of time. In my view, I simply do not have an appropriate evidentiary basis to make a final determination at this stage as to whether the obligation to pay ongoing spousal support in accordance with the Spousal Support Order has been fully satisfied and/or whether that Order has now been spent.

[61] This conclusion is reinforced by the fact that the Respondent, in her Response, is seeking an order extending and increasing the spousal support payable pursuant to the Spousal Support Order. The Respondent argues that Arbitrator Lane assumed that the Respondent would be able to generate income through her inheritance and, on this basis, ordered spousal support on a time-limited basis. The Respondent maintains, however, that for a variety of reasons, particularly because of the ongoing litigation between the parties, she has been required to deplete her inheritance completely and it is no longer available to generate income. She argues that this amounts to a material change which, if known at the time, would have resulted in a different order for ongoing support by Arbitrator Lane.

[62] Moreover, she argues that the spousal support payable by the Applicant is her only source of income. Thus if I were to order that spousal support be terminated on an interim basis without providing the Respondent with the opportunity to make the case that there is been a material change in circumstances, this would cause serious prejudice to the Respondent and deprive her of the means to support herself.

[63] I therefore conclude that I lack the proper evidentiary record to determine, on an interim basis, whether the Applicant’s obligation to pay ongoing spousal support has been fully satisfied. Moreover, any such interim determination in advance of a consideration of the Respondent’s Response runs the risk of substantial prejudice to the Respondent. These matters must be assessed and determined by the Court dealing with the Motion to Change and the Response.

Disposition

[64] Based on the foregoing, I find as follows:

a. subject to paragraph (b) below, the Motion to Strike is dismissed;

b. I hereby grant the Respondent’s request for summary judgment, dismissing the Applicant’s motion to reduce the amount of the Costs Order payable as child support (as sought in paragraph 3 of the Motion to Change as well as paragraph 2 of the Interim Relief Motion); and

c. the Interim Relief Motion is dismissed.

[65] I invite the parties to make written costs submissions of no more than 3 pages each (excluding any Offers to Settle or Bills of Costs), within 21 days of today’s date.

P.J. Monahan J. Date: July 18, 2018

[1] RSC 1985, c. B-3, section 178(1) (c) (the "BIA"). [2] See, for example, Purcaru v. Purcaru, 2010 ONSC 4031 (“Purcaru No. 2”); Bourassa v. Magee, 2014 ONCJ 393 (“Bourassa”); Sgro-DiGiosaffatte v. DiGiosaffatte, [2003] O.J. No. 5011 (S.C.J.). [3] Ablett v. Horzempa, 2011 ONCA 633 at paragraph 7. See also Purcaru v. Purcaru, 2010 ONCA 92 (“Purcaru No. 1”), in which the Court of Appeal upheld a decision by Paisley J. striking a party’s pleadings and limiting his participation at trial. [4] Ablett at paragraph 7. [5] Purcaru at paragraph 86. [6] 2014 ONCJ 393, 49 R.F.L. (7th) 442. [7] Bourassa, at paragraphs 41 to 43. [8] Hodgins v. Buddhu, 2013 ONCJ 137, 28 R.F.L. (7th) 492 at paragraph 21. [9] McGraw v. Samra, 2004 ONCJ 164 at paragraph 24. [10] F. (J.) v. C. (V.), (No.5) at paragraph 10. [11] Mariani v. Mariani, 2010 ONSC 1464 at paragraph 33. [12] RSC 1985, c 3 (2nd Supp). [13] 2011 SCC 64, [2011] 3 S.C.R. 775 at paragraph 33. [14] , [1994] 3 S.C.R. 670 at page 687. [15] See section 178 (1) (c) of the BIA, described above. [16] 2014 SCC 7, [2014] 1 S.C.R. 87. [17] See Philion v. Philion, 2015 ONSC 4255; Keyes v. Keyes, 2015 ONSC 1660, 60 R.F.L. (7th) 406. [18] See, for example, Butera v. Chown, Cairns LLP, 2017 ONCA 783, where the Court of Appeal sets out a number of cautions regarding the advisability of granting summary judgment (see paragraphs 30 to 34). In my view, the cautions set out in Butera do not apply here and, in fact, granting summary judgment on this particular issue will streamline and simplify the argument on the Motion to Change. [19] 2010 ONSC 3650, 87 R.F.L. (6th) 435. [20] SO 1996, c 31.