Court File and Parties

COURT FILE NO.: FC-11-936-2 DATE: 2018/08/31 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Lanie Hormillosa, Applicant AND Octave Tshiani-Levine, Respondent

BEFORE: Justice A. Doyle

COUNSEL: Mr. Steve Duplain, Counsel for the Applicant Respondent, Self-Represented

HEARD: August 21, 2018

Endorsement

[1] The Applicant, Ms. Hormillosa, brings a motion to set aside paragraphs 3 and 4 of the Final Order of Justice Audet dated January 11, 2018 (Final Order) where she ordered that:

(1) Ms. Hormillosa must pay to the Respondent, Mr. Tishiani-Levine, the amount of $6,000 which was paid to her by the Family Responsibility Office in error; (2) Ms. Hormillosa will pay to Mr. Tishiani-Levine the amount of $18,000 which is half of the net value of her RRSP’s owned at the date of separation; (3) Ms. Hormillosa must pay to Mr. Tishiani-Levine the amount of $4,862 which represents her share of s. 7 special and extraordinary expenses; (4) Each party is entitled to keep their respective pension plans and assets in their possession; and (5) Ms. Hormillosa must pay to Mr. Tishiani-Levine the amount of $11,000 which represents her half of the mortgage payments that Mr. Tishiani-Levine paid for 11 months after the separation.

[2] The matter proceeded on an uncontested basis as a result of my Order dated February 28, 2017 striking Ms. Hormillosa’s pleadings pursuant to Rule 1(8) of the Family Law Rules, O. Reg. 114/99 (the “FLRs”). At that hearing, Ms. Hormillosa did not attend and the Court found that she had not respected Court Orders requiring financial disclosure.

Background

[3] The parties were married on September 5, 1998 and separated on March 28, 2011. They had two children: Kelliya who is 14 years old and Corey who is 12 years old.

[4] This matter has been in the Court for a long period of time. As set out below, there have been delays caused by both parties or one of the parties not attending Court or one or both of the parties not being ready to proceed.

[5] This matter had been previously removed from the trial list in January 2014 as the parties had not retained Guy Martel to value their pensions. Justice Metivier’s Order dated May 16, 2014 finalized the issues with respect to custody, access, child and spousal support. The issue of the division of property had not been resolved.

[6] On the January 13, 2015 appearance before Justice Kane, Mr. Tshinia-Levine agreed to a dismissal of his claims for a division of the household contents and reimbursement of the mortgage payments he had made between April 2011 to February 2012.

[7] On March 20, 2015, Justice Kane severed the divorce and his Order outlined the following:

− the parties had agreed that they would equally share their individual pension contributions and credits; − within 10 days, Ms. Hormillosa was to obtain a pension entitlement statement from her employer Madonna; − Ms. Hormillosa was to sign an authorization for Mr. Tshiani-Levine to allow him to obtain a statement of her pension plan contributions from the Quebec government; − the parties agreed to jointly retain Mr. Guy Martel to value each of their pension entitlements so that the agreed pension division could take place; − the parties would each be responsible for half of the Mr. Martel’s cost; and − the parties could not agree on the division of Ms. Hormillosa’s RRSP’s.

[8] The Divorce was issued on September 1, 2015.

[9] The Settlement Conference scheduled for October 16, 2015 was vacated as the parties were not in a position to proceed. On January 4, 2016, the settlement conference was not held as the parties had not completed the disclosure as per Justice Kane’s order. Ms. Hormillosa did not attend that hearing. Mr. Tshiani-Levine was granted permission to obtain her pension information from the Quebec government.

[10] On June 21, 2016, Mr. Tshiani-Levine attended on an urgent basis before Master Champagne (as she then was) asking for an order suspending the garnishment of spousal support pending his motion to change. Ms. Hormillosa did not attend but Mr. Tshiani-Levine advised the Court that she consented.

[11] On June 30, 2016, the parties appeared before me, requesting documents from third parties. Given that the third parties had not been served, the Court refused to make that order, but Ms. Hormillosa agreed to provide the following documents by July 22, 2016:

− Notices of assessment for 2014 and 2015 and RRSP information; and by August 12, 2016: − information regarding her contributions to her pension plan from a prior employer, information regarding the pension from the Quebec government and her employment information at Manoir Portobello.

[12] The Order also provided that if Ms. Hormillosa failed to comply with disclosure, Mr. Tshiani-Levine could seek another date before me to deal with the issue of non-disclosure.

[13] A Motion to Change dated July 2016 brought by Mr. Tshiani-Levine requested a variation of Justice Metivier’s Order for a termination of spousal support, rescission of accumulated arrears and reimbursement of support overpayment.

[14] On February 2, 2017, the parties consented to an Order terminating spousal support effective May 16, 2014, the amount of $6,000 from FRO would be reimbursed to Mr. Tshiani-Levine and special and extraordinary expenses would be shared equally between the parties.

[15] The parties requested a date before me through the Trial Coordinator. On February 28, 2017, Ms. Hormillosa did not attend and the Court struck her pleadings for non-compliance with the disclosure orders and ordered that the matter proceed on an uncontested basis.

[16] At the August 24, 2017 uncontested hearing, only Ms. Hormillosa appeared. Since no documents had been filed, the matter did not proceed.

[17] The uncontested hearing came before Justice Audet on January 11, 2018 which resulted in the Final Order. Ms. Hormillosa was not present as she was not aware of it. Mr. Tshiani-Levine relied on filed affidavit and exhibits with supporting documentation for the hearing.

Ms. Hormillosa’s Position

[18] On February 9, 2017, Mr. Tshiani-Levine emailed Ms. Hormillosa stating that he wanted to concentrate on the children and on his work. He stated that he was abandoning his claims in court as it was time for him to make peace and settle the matter to allow the parties to be free from this litigation. He further stated that he would draw up an agreement within a week.

[19] Ms. Hormillosa states that Mr. Tshiani-Levine sent her a draft agreement whereby both parties would keep their respective pension plans and RRSP’s. (Vol. 2 Tab 2H).

[20] There is a stream of emails dated February 22, 2017 where Ms. Tshiani-Levine requested an explanation of the difference between two paragraphs dealing with the parties’ RRSP’s. Mr. Tshiani-Levine provided an explanation (Vol. 2, Tab 2G).

[21] At 1:35 p.m. on February 22, 2017, Ms. Hormillosa stated that she appreciated his explanation and that she would sign the agreement and send it to him via the children.

[22] There are some other emails exchanged later that day dealing with the children and demand for documents from Ms. Hormillosa.

[23] Further emails dated February 26, 2107 were exchanged where Mr. Tshiani-Levine requested custody of the children and in return, he would waive his claim to her RRSP’s. Ms. Hormillosa stated that the children did not want to live with their father. There was no agreement on the issue of custody and waiver of RRSP’s.

[24] Ms. Hormillosa indicates that she did not attend the February 28, 2017 Court attendance as she thought that the parties had settled the matter as she had signed the agreement and sent it to him through their daughter Kelliya. She also was told by her daughter that her father said she did not need to go to court. She was not aware that the Court could strike her pleadings.

[25] On February 28, 2017, at 11:29 a.m. she emailed him indicating that she had received a French document from the Court saying that she did not attend. She asked him what had occurred at Court.

[26] On March 1, 2017, he responded by saying that the Court had paged her three times and nothing happened as she was not there and he asked for another date. He advised her that there was a date set for May 11, 2017.

[27] She states that she never received a copy of the February 28, 2017 Order even though Mr. Tshiani-Levine says he mailed it to her by post.

Mr. Tshiani-Levine’s Position

[28] He submits that this motion should be dismissed because:

− Ms. Hormillosa was aware of the February 28, 2017 as evidenced by the email exchange with the Trial Coordinator’s office; − when the date was set, she confirmed to the Trial Coordinator that she would be attending; − she had been receiving legal advice from pro-bono legal counsel before and after her February 2, 2017 hearing and thus, was aware of her rights; − she had failed to provide the financial disclosure documents regarding her pension as had been ordered for two years previous; − she did not move promptly and delayed in bringing this motion; and − if the Court sets aside the Final Order, there will be a prejudice to him as follows: there will be further delay, he has incurred significant legal costs and he could have obtained more money from her had he pursued it.

The Law

[29] Rule 25(19) of the FLRs permits the Court to change a Court order if the order:

(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.

[30] The Ontario Court of Appeal in Gray v. Gray, 2017 ONCA 100, confirmed that “change” in Rule 25(19) includes “set aside”.

[31] The reasoning for this interpretation is aptly stated at para. 31:

An interpretation of “change” as including “set aside” best promotes the efficient and just resolution of family law matters. On a motion under r. 25(19)(e), the Court may decide that the most efficient remedy is to vary the order at issue without setting it aside. However, the court may instead determine that the order needs be set aside entirely; a variation of the order at issue would not produce a just result. For example, a new hearing on the merits may be required.

[32] In Mountain View Farms Ltd. v. McQueen, 2014 ONCA 194, the Court of Appeal was dealing with Rules of Civil Procedure 19.08 which permits the Court to set aside a default judgment. Reference was also made to Peterbilt of Ontario Inc. v. 1565627 Ontario Ltd., 2007 ONCA 333, 87 O.R. (3d) 479 (C.A.). The Court held that the following factors should be considered:

a) whether the motion was brought promptly after the defendant learned of the default judgment; (b) whether there is a plausible excuse or explanation for the defendant’s default in complying with the Rules; (c) whether the facts establish that the defendant has an arguable defence on the merits; (d) the potential prejudice to the moving party should the motion be dismissed, and the potential prejudice to the respondent should the motion be allowed; and (e) the effect of any order the court might make on the overall integrity of the administration of justice.

[33] Ultimately, the Court’s task is to determine whether the interests of justice favour granting the order. The Court of Appeal emphasized that there are no rigid rules but the Court must consider the particular circumstances to decide whether it is just to relieve a party from the consequences of her default. A litigant needs not show that the claim or defence will succeed but rather that there is an air of reality.

Analysis

[34] The Court will consider each of the factors set out in Mountain View Farms Ltd.

Was the motion brought promptly after Ms. Hormillosa learned of the default judgment?

[35] Upon learning of the Final Order, Ms. Hormillosa immediately retained Mr. Duplain who sent Mr. Tshiani-Levine an email indicating that he would be bringing a motion to set aside the Final Order. Since Mr. Tshiani-Levine did not respond, he secured a motion date for the first available date, namely March 27, 2018.

[36] Upon receiving the motion materials, Mr. Tshiani-Levine wrote a letter dated February 26, 2018 to Mr. Duplain acknowledging service, disputing the motion and insisting on an adjournment as he had not been consulted on the date with which he had a conflict. He requested an adjournment to May or August 2018.

[37] Despite this, Mr. Duplain heard from a lawyer stating that Mr. Tshiani-Levine had retained her and they would be sending reply materials shortly.

[38] The motion was eventually adjourned to May 2018 and due to other court commitments, Mr. Duplain was only available to argue the motion in the afternoon. Mr. Tshiani-Levine was not available in the afternoon and hence the motion was adjourned to August 2018.

[39] Based on the above, I find that Ms. Hormillosa did not delay in bringing this motion forward promptly.

Is there is a plausible excuse or explanation for Ms. Hormillosa’s default in complying with the Rules?

(i) Non-attendance on February 28, 2017

[40] Ms. Hormillosa has provided an explanation for not attending the February 28, 2017 hearing before me. I accept her explanation that she thought she and Mr. Tshiani-Levine had settled the matter. She had returned a signed copy of the agreement to him and also their daughter had relayed a message from him that she did not need to attend court that day.

[41] There was no indication in the file that the Court had sent her the endorsement although she was advised by the court Trial Coordinator that she had missed the court attendance. She immediately asked Mr. Tshiani-Levine who told her nothing had occurred on that date and the next court hearing was in May 2017.

[42] A review of the Court attendances indicates that there were times Ms. Hormillosa did not attend and times when Mr. Tshiani-Levine did not attend and times when neither party attended.

[43] I agree with counsel’s description of his client being naïve to trust Mr. Tshiani-Levine and that she really should have proceeded with more caution to protect her rights by attending court on February 28, 2017. Nevertheless, the Court accepts that, based on the history of the file, she did not believe it was necessary for her to attend.

[44] She did attend the originally scheduled uncontested trial before me on August 24, 2017, but Mr. Tshiani-Levine did not attend. The matter was adjourned as no materials had been filed.

(ii) Disclosure

[45] There is contradictory evidence as to when Ms. Hormillosa actually provided the requisite information regarding her income and pension information as ordered by the Court. She states that, in February 2016, Mr. Tshiani-Levine requested further disclosure from her, and she provided it to him through their daughter. She has attached the requested documents to her affidavit found at Vol. 2, tab 5.

[46] Mr. Tshiani- Levine states the disclosure documents were only produced as an attachment to her March 21 2018 affidavit in support of the motion to set aside the Final Order. (see para. 51 of his affidavit of August 10, 2018, Vol 3.,Tab 1).

[47] He believes that she was hesitant to provide disclosure as her 2015 income shows she earned $85,712 and not $54,000 that she declared. The lack of income disclosure impacts on the level of support.

[48] Documents were necessary to complete disclosure to resolve the division of pension and there were remaining questions regarding Ms. Hormillosa’s pension contributions. There was an issue of the Quebec government pension plan not sending the pension statements for Ms. Hormillosa despite a signed direction requesting the same to be sent to Mr. Tshiani-Levine.

[49] Since Ms. Hormillosa had worked at numerous employments during the parties’ marriage, she was to gather the pension information from each institution as part of her disclosure. It appears that she was unable to provide some of the information, sometimes because she could not do so and other times no reason was given. According to Mr. Tshiani-Levine, some of the documents she did provide were not sufficient to determine the pension contributions.

[50] Since Ms. Hormillosa did not attend before me on February 28, 2017, she was not given an opportunity to show if and when she had provided Mr. Tshiani-Levine with the Court ordered documents. Neither party were aware that one of the consequences of failing to comply with disclosure orders is an order striking pleadings.

Do the facts establish that the defendant has an arguable defence on the merits?

Pensions

[51] Both parties had agreed before Kane J. to equally divide their pensions accumulated during the marriage.

[52] Mr. Martel’s valuation reports indicate that Mr. Tshiani-Levine’s pension is substantially greater than Ms. Hormillosa’s pension. Ms. Hormillosa’s pension was valued at $5,170 while Mr. Tshiani-Levine’s federal government pension is valued at $176,797.

[53] Ms. Hormillosa worked at other institutions and those documents are filed with the Court. The only other noteworthy pension plan is the Nursing Homes and Related Industries Pension Plan statement which shows $14,166 of contributions as of December 31, 2011, nine months after the date of separation. Although this is not the family law value, it is clear that it would not have the same significant value as Mr. Tshiani-Levine’s federal government pension. Certainly, he would owe her an equalization payment.

[54] He also states that he should have received one of her RRSP’s which were really $62,000 but for the purposes of the attendance before Justice Audet, he relied on a statement that stated she had $39,000 of RRSP’s. He submits that he could have obtained approximately another $10,000. Even if this were the case, he would still owe her half of the value of his pension, and at a gross level would be approximately $85,000.

Section 7 expenses

[55] With respect to her contribution to s. 7 expenses, Ms. Hormillosa is not aware of how the amount was calculated. She questions the bank account deposits and whether those expenses were indeed paid. She admits that she stopped depositing her income into the joint account after the separation.

[56] For the attendance before Justice Audet, Mr. Tshiani-Levine produced bank account statements and receipts demonstrating that he paid daycare expenses, school activities, counselling and extracurricular activities. His disclosure on this issue was extensive. He indicates the total cost from September 11, 2011 to September 2015 was $14,000.

[57] He stated that since Justice Audet found that some of the counselling fees would be covered by employer health insurance plan, she did not allow all the claims made by Mr. Tshiani-Levine.

[58] The Court finds that Ms. Hormillosa’s argument on this issue lacked clarity and precision. She did not outline what errors were made by Mr. Tshiani-Levine, what expenses should not be allowed nor did she put forward any of her own expenses to which he should be contributing. Therefore, on this issue, she does not have an arguable defence on the evidence and, accordingly, para. 3 of the Final Order will not be set aside.

What is the potential prejudice to the moving party should the motion be dismissed, and the potential prejudice to the respondent should the motion be allowed?

[59] In my view, Ms. Hormillosa would be prejudiced in that her RRSP’s at the date of separation were divided but Mr. Tshiani-Levin’s substantial pension was not. At the settlement conference held before Justice Kane on March 20, 2015, the parties had agreed that they would share equally their individual pension contributions and credits. Obviously, Mr. Tshiani-Levine did not tell Justice Audet about this agreement. In addition, he did not tell her about the fact that he had agreed not to pursue a reimbursement of mortgage payments in another appearance before Justice Kane.

[60] This shows a lack of candour and frankness before Justice Audet. Had she been made aware of these prior agreements, her Final Order would have been quite different.

[61] Mr. Tshiani-Levine may suffer some prejudice if the Court sets aside the Final Order, but, a review of the litigation history shows that the delay for the finalization falls on both parties. Costs can deal with any prejudice.

The effect of any order the court might make on the overall integrity of the administration of justice.

[62] In my view, the administration of justice demands that Ms. Hormillosa be given her opportunity to obtain her share of the division of Mr. Tshiani-Levine pension as had been agreed by the parties. Her failure to attend court before me on February 28, 2017 due her understanding that the matter was settled was a mistake on her part.

[63] The Court also notes Mr. Tshiani-Levine’s lack of truthfulness when he told Ms. Hormillosa on March 1, 2016 that nothing had occurred in Court the day before and there was another hearing in May.

[64] Having considered the particular circumstances as set out above, the Court relieves Ms. Hormillosa from the effect of paragraph 4 of the final Order para. 4 regarding the release of assets. In addition, given the fact that Mr. Tshiani-Levine had agreed to a dismissal of the reimbursement of mortgage payments before his appearance before Justice Kane, the Court also sets aside para. 5 of the Final Order.

Conclusion

[65] Accordingly, paras. 4 and 5 of the Final Order are set aside and Ms. Hormillosa’s pleadings are reinstated.

[66] This matter will be immediately listed for the May 2019 trial sittings, which is the next available sittings. A settlement conference/trial management conference must be set through the Trial Coordinator. A trial scheduling endorsement form must be filed by both parties by November 1, 2018.

[67] Mr. Tshiani-Levine’s request for his costs of $60,000 for the litigation, are reserved for the trial Judge.

[68] Regarding the costs of attending this motion, Ms. Hormillosa must provide her two-page submission on costs with any offers to settle and bill of costs by September 14, 2018 and Mr. Tshiani-Levine’s two-page costs submission with any offers to settle and bills of costs by September 28, 2018. Ms. Hormillosa may provide a one-page reply by October 5, 2018.

Justice A. Doyle Date: 2018/08/31