Court File and Parties

COURT FILE NO.: FS-11-73067-00 DATE: 2019 01 02 SUPERIOR COURT OF JUSTICE – ONTARIO

RE: MONA GUPTA, Applicant AND TARUN GUPTA, Respondent

BEFORE: TRIMBLE J.

COUNSEL: R. Fernandes for the Applicant raf@kblawyers.ca S. Moss for the Respondent smoss@mplawyers.ca

HEARD: 31 October 2018

Endorsement

The Motion

[1] The Respondent Father brings this motion to set aside, amend and/or vary the final order of Sproat J. dated 28 April 2014 as it relates to equalization and to income as it relates to spousal and child support, so both can be recalculated on the basis of a full record. He also seeks an order reinstating his pleadings as he has complied with the disclosure order of Baltman J. dated 5 December 2011 and has purged his contempt for any breach. Finally, he seeks an order that the Applicant Mother comply with the final order of Barnes J. dated 5 March 2014 and the final order of Sproat J. dated 8 April 2014, and sell a property in New York City.

Litigation History

[2] The following chart sets out the checkered litigation history of this matter.

Date:	Item:
11 August 1998	The parties were married.
18 December 2005	Son, Sachin is born.
26 February 2008	Son, Akshay is born.
29 December 2008	The parties separate.
23 September 2011	Mother begins her Application.
5 December 2011	Order on consent of Baltman J. ordering that the parties exchange extensive production.
19 April 2012	Order of Daley J. ordering Father to pay lump sum child support of $2000, and to make all outstanding disclosure from the 5 December 2011 Baltman J. order by 1 May 2012.
5 June 2012	Order of Price J. ordering Father to pay $1709 a month in child support and $1876 a month in spousal support. Father is to comply with all outstanding disclosure orders by 30 June, 2012, failing which Mother can bring a motion before Price J. on notice regarding support.
31 July 2013	Order on consent of Tzimas J. regarding sale of the New York and New Jersey properties, and ordering Father to make his income tax filings for 2011 in 2012 and provide those to Mother as well as his notices of assessment within 10 days of receipt thereof.
21 November, 2013	Order on consent of Bielby J. ordering Father to pay $1500 towards repairs to the New Jersey property, governing the sale of the New Jersey and New York properties, and adjourning to December 13, 2013, Mother’s motion against Father for financial disclosure.
10 December 2013	Order, Barnes J. ordering disclosure from Father to be completed by 20 January, 2014, failing which Mother is granted leave to bring a motion on notice, returnable before Barnes J. during the week of January 6, 2004, to strike Father’s pleadings.
13 December 2013	Endorsement of Barnes J. finding a) that Father has either complied with previous disclosure orders late or failed to do so, b) that given the Father’s pattern of either late disclosure or nondisclosure a further order must be made, c) delinquency regarding disclosure reaches back to the order of Tzimas J. with no affidavit filed indicating why he has not complied with disclosure orders.
3 March 2014	Order of Barnes J. regarding sale of New Jersey property and ordering that if Father does not provide the necessary consents to sell the New Jersey property, by 3 March 2014, at 2:00 p.m., Mother shall have the liberty to sell the house.
5 March 2014	Order of Barnes J. striking Father’s pleadings. Barnes J. finds that Father is in contempt of: 21 November 2013 order of Bielby J. - Para. 1A and E, as he has failed to provide his share of repair and carrying costs of the New Jersey property; - Para. 2A and E, as he has failed to provide his share of the repair and carrying costs of the New York property; - Para. 1(iv), as he has failed to provide his share of the shortfall of $40,000.00 from the sale of the New Jersey property; - He failed to cooperate fully with efforts to sell the New Jersey and New York properties. 13 July 2013 order of Tzimas J. - Para. 13, as he did not file his 2011 and 2012 income tax returns within 45 days, or his Notices of Assessment within 10 days of receipt. 13 December 2013 order of Barnes J. - As he failed to provide his 2011 and 2012 income tax returns by January 6 2014; - As he failed to provide Affidavit of evidence to explain/or defend any motions to strike on the basis of non-compliance with Barnes J.’s disclosure orders; 5 June 2012 order of Price J. - As he failed to pay child support and spousal support as ordered, retroactive to 1 January, 2012. By 3 March 2014, Father had complied partially by providing U.S. tax returns for 2011 and 2012, but failed to make other disclosure including his 2011 and 2012 Canadian tax returns. As of 3 March 2014, child and spousal arrears were over $91,000. Father made no payments against child or spousal support. Per the 13 July 2013 order of Tzimas J. $30,4761 of Father’s share of the net proceeds from the sale of the two U.S. properties was to be paid to Mother on account of support arrears. On 31 July 2013, $15,008 was paid to Mother from Father’s share of the sale of the New Jersey property on account of spousal support arrears. Barnes J. noted that the orders of Tzimas J. and Bielby J. reaffirming that Father’s share of the surplus proceeds from the sale of the two U.S. properties were to be paid to Mother, did not absolve Father of his support obligations under the Price J. order. Barnes J. rejected Father’s argument that he could no longer afford to make support payments due to changes in his income, since Father made no payments, nor did he make any partial payments on account of support. Barnes J. held that enough was enough. Father had enough indulgences. Any further indulgences "...will make a mockery of the court process and the administration of justice..." He ordered: a. Father’s Answer was struck; b. Mother should have control of the sale of the New York property. Father’s consent was no longer necessary; c. Father should pay costs of $6,000.00.
28 April 2014	Sproat J. Default Judgment.
6 April 2016	Father’s current motion to set aside Sproat J.’s order, is brought originally returnable 9 November originally returnable.
18 July 2016	Divorce granted.
19 October 2016	Order of Fairburn J. dismissing Father’s motion to hold Mother in contempt for not selling the New York apartment. She held that the final orders of Sproat J. and Barnes J. granted Mother control over the sale. They did not order her to sell the property. Fairburn J. allowed Mother’s motion staying all further applications or motions by Father until he paid all costs orders.
16 November 2017	Endorsement of Barnes J. in Mother’s motion to stay Father’s motion to set aside Sproat J.’s order, and orders further evidence with respect to Mother’s efforts to sell the New York Property and Father’s financial status given his failure to pay approximately $250,000 in arrears.
5 and 7 February 2018	Father files Affidavit and Factum, respectively, for his motion returnable on 14 February 2018. Trimble J. granted adjournment, with a timetable, which was subject to the parties providing to Barnes J. that which he required, and Barnes J. releasing his decision.
28 March 2018	Endorsement of Barnes J. in Mother’s motion to stay Father’s motion to set aside Sproat J.’s order. Barnes J. noted that while Father had paid all costs orders as required by Fairburn J.’s order, he had not paid anything toward support arrears of over $250,000 aside from that paid following the sale of the New Jersey property. Barnes J. dismissed Mother’s motion as by moving to stay based on lack of support payments (relief she could have claimed before Fairburn J. but did not) she cannot claim it now. That would amount to a case of "shifting goal posts" for Father.

Position of the Parties

Father

[3] Father claims that Sproat J.’s final order should be revisited to recalculate equalization, recalculate income for support purposes (and, then recalculate child and spousal support), and to set aside the vesting order of the matrimonial home.

[4] Father contends that Sproat J.’s final order contains significant errors exceeding a total of $500,000 which he says arise from Mother’s fraud and misrepresentation to the court. He says in para. 3 of the Factum that notwithstanding disclosure problems with respect to his income, there were no disclosure issues with respect to his asset base. Mother made a "... huge misrepresentation of [her] liabilities " and presented " erroneous values " to the court about his assets and income because of the lack of disclosure related only to his income or ability to earn income. Disclosure about his asset base was complete. He concluded the paragraph by saying " Ultimately the equalization component of the order has egregious mistakes, either by misrepresentation, fraud or some mathematical error, but they are significant as they are in an amount exceeding $500,000. "

[5] Father says that he has paid all of the costs he has been ordered to pay and made all disclosure. Mother, on the other hand, has not sold the New York property when she was ordered to do so or ought to have done so.

Mother

[6] Mother says that this motion should be dismissed. Even if Father has made full disclosure (which she disputes), he remains in contempt of other aspects of various orders. He has not made any further payments with respect to child or spousal support other than the payment made from Father’s share of the net proceeds of the New Jersey home, back in 2013.

Issues

[7] The issue in this matter is whether Father has met the test to vary or amend Sproat J.’s final order.

Result

[8] For the reasons set out below, Father’s motion is dismissed.

The Test

[9] Father says that I can set aside or alter Sproat J.’s order based on:

a) Rules 1(7) of the Family Law Rules and Rule 19.08 of the Rules of Civil Procedure; b) The court’s inherent jurisdiction; c) Because the court was misled regarding the evidence at the time of the default order; or d) Rule 25(19)(a) and (b) of the Family Law Rules, because of fraud or mistake.

[10] In his factum and in oral argument, the only argument that Father advanced was that Mother fraudulently misrepresented facts to the court, on which the court acted (i.e. items c and d, above). Father relies on Rule 25(19)(a) and (b) of the Family Law Rules and Rule 19.08 of the Rules of Civil Procedure. Hence, this is the only argument I address in these reasons.

[11] The parties agree that in order to bring a motion to amend or vary an order, Father must satisfy three criteria:

a) That he moved to amend or vary the order without delay after learning of the default order; b) That the circumstances giving rise to the default were adequately explained; and c) That he has arguable defence on the merits.

See Lenskis v Roncaioli, [1992] O.J. No. 1713 (Gen. Div.) at para. 11.

[12] Under R. 19.08 of the Rules of Civil Procedure, the test is the same, except that the approach to the arguable defence criterion, the test is the same as that under Rule 20. See Hunt v. Brantford (1994), 34 C.P.C. (3d) 379 (Div. Ct.).

[13] To these principles, the courts have added the possibility of prejudice to one side or the other in the order being granted or not, and the effect of any order on the overall integrity of the administration of justice. All of the criteria ought not to be applied too rigidly. They are principles which guide the court’s consideration of the ultimate question; namely to determine "whether the interests of justice favour an order setting aside the default judgment." See Chitel v. Rothbart, [1988] O.J. No. 1197 (C.A.), para. 1; and Peterbilt v. 1565627 Ont. Ltd., 2007 ONCA 333, at paras. 2 and 5.

[14] According to the Court of Appeal in Davis v. Morris, [2006] O.J. No. 1043, in family cases where a pleading is struck as a sanction imposed for not complying with an order, the court should also take into consideration procedural fairness as mandated in Rules 2(2) and 2(3) of the Family Law Rules. In that case, there were several significant procedural issues that indicated that the default should be set aside including that the Appellant was not properly served with the Respondent’s motion to strike his pleadings because it was served in the minimum time, the Appellant was not served personally because he moved shortly before service was attempted, the Appellant’s lawyer (who although served) had stopped working on the file and likely did not notify the Appellant of the motion, and the solicitor had removed himself from the record.

Analysis

[15] Father had not discharged his burden. I say this for the following reasons:

a) Father has not moved without delay after learning of the default order.

[16] Father says that he was unaware of Sproat J.’s 28 April 2014 default order until sometime in August, 2015, when he asked the lawyer he retained in the OCJ custody and access proceedings what was happening in the SCJ proceedings. Up until that time, Father said that he was consumed by the OCJ proceedings involving custody and access of the children that Mother brought. He blames his wife for continually bringing proceedings in the OCJ such that he did not realize the repercussions of the final order of Justice Sproat J. (see para. 31 of his 5 February 2018 Affidavit). Once he learned of the default order he took counsel’s advice, ordered the transcript of the uncontested trial proceedings so that he would be made aware of what transpired before deciding what steps he should take, reviewed the transcript which he only received at the beginning of October, 2015, then instructed counsel to bring a motion to set aside the default order.

[17] I do not accept that Father first became aware of the order in August, 2015. Further, when he became aware of Sproat J.’s 28 April 2014 order is only part of the analysis.

[18] Sproat J.’s order arises from Barnes J.’s 5 March 2014 order striking Father’s pleading. Father was actively involved and participated in that motion. He was aware of that motion and that endorsement. There is no evidence that Father took any steps following 5 March 2014 to challenge or set aside Barnes J.’s order striking his pleading. Given the vociferousness with which Father alleges Mother pursued matters in the OCJ, he ought to have expected her to pursue matters in the SCJ with equal energy, given Barnes, J.’s order striking his pleading.

[19] As indicated, I do not accept Father’s evidence that he became aware of Sproat J.’s order in August, 2015. FRO amended its records in August, 2014 to reflect Sproat J.’s final order. FRO’s records indicate that on September 18, 2014, it began to deduct from Father’s income based on Sproat J.’s order. In addition, writs were filed against Father.

[20] Even accepting that Father first became aware of the final order in August 2015, he did not bring his motion to amend or vary Sproat J.’s final order until 6 April, 2016, 8 months later, and 6 months after he received the transcript of the hearing.

b) Father has not adequately explained the reasons for the default

[21] There are two defaults that Father must explain, neither of which he explains adequately. The first is the default that lead to striking of his Answer.

[22] His explanation is multi-faceted. With respect to the various items listed in Barnes J.’s order, he says that he paid the cost orders against him. He only did so, however, when his current motion was stayed until he paid them. He did not make any effort to pay them as incurred.

[23] The gravamen of paras. 2 to 20 of his 5 February 2018 Affidavit is that he provided "most" of his ordered disclosure, and to the extent that he did not, he has now done so. He pleads in para. 18 of his Affidavit that there was only "... a small part that was outstanding ." In other words, he says his noncompliance with orders was only barely so, and it should not count. It is unclear whether he is referring to production made before or after his Answer was struck. If Father refers to production made before his Answer was struck, either he had the opportunity to advance that argument before Barnes J. but did not, or he did make it and it was not accepted.

[24] In any event, Father remains in noncompliance with other aspects of orders, defiantly so. For example, he has paid nothing toward the carrying and repair costs of the two U.S. properties as ordered. Mother is forced to borrow to pay those costs. Having paid nothing (despite being a title holder, and despite orders requiring him to pay 50% of the carrying and repair costs), however, Father complains bitterly that Mother has not sold the New York property. Further, he is in default on his spousal and child support payments. He pays nothing except what FRO deducts.

[25] The second default is that following Sproat J.’s final order which I have already addressed.

c) Father has no arguable defence on the merits

[26] The "defence on the merits", in the context of this case, focusses on whether Father has an arguable case on errors caused by fraud or on mistake under F.L.A. 25(19)(a) or (b).

[27] Under F.L.R. 25 (19), the court may change an order for a number of reasons including that the order was obtained by fraud or by mistake.

[28] A mistake has been held, generally, to be a typographical or clerical error. Any error that goes to the correctness of the order is a matter for appeal and not subject to correction under Rule 25: see Gray v. Rizzi, 2011 ONCA 436, [2011] O.J. No. 2563 (C.A.).

[29] Father has no argument on "mistake" since Father advances no typographical, purely arithmetical or clerical errors, or similar errors in respect of Sproat J.’s order.

[30] What about fraud?

[31] Before addressing Father’s allegations about Mother's fraudulent statements or misrepresentations to the court, I address issues of onus.

[32] Father says that Mother’s trial, in effect, was an ex parte hearing, on which she owed the highest duty of full and frank disclosure. She failed to meet this onus and he is entitled to relief.

[33] Father is not correct. The obligation to make full and frank disclosure applies to ex parte hearings because in those hearings one party is seeking a remedy without notice to the other, thereby depriving the other of the right to be heard. In Father’s case, he had notice of the proceeding. He participated in the proceeding. Due to his own flagrant violations of court orders, his Answer was struck thereby ending his participation. That the trial was uncontested was his own doing.

[34] In Father’s case, onus has two aspects: the onus to prove the value of an asset or income, and the onus to prove the fraud.

[35] Addressing the first onus, each family litigant has the onus to prove, by credible evidence, his or her income and the value of the assets that he or she controls: see Menage v. Hedges, (1987), 8 R.F.L. (3d) 225 (ONSC), at para. 44; Homsi v. Zaya, 2009 ONCA 322, at para. 38; Virc v. Blair, 2017 ONCA 394 at para. 59.

[36] Extrapolating from that to the situation of an uncontested trial, Mother’s obligation is to put forward such relevant evidence that Father produced up to that point, as to his income and the value of the assets. She has no obligation to test the veracity, accuracy, or reliability of that evidence, nor is she obliged to unearth other evidence within Father’s power to disclose, that he did not disclose. To hold that she has any other onus than that articulated above would reverse the onus.

[37] Addressing the second onus, with respect to Rule 25(19)(a) of the Family Law Rules, the onus is on the person alleging fraud (in this case, Father), to prove fraud. The Court of Appeal said in Virc v. Blair, 2017 ONCA 394, at para. 72:

The trial judge was correct to conclude the onus was on the husband to establish that the wife had actual knowledge. As this court stated when it allowed the appeal from the summary judgment motion:

In the face of a deliberate material misrepresentation, the onus is not appropriately placed on the recipient spouse. Rather, the burden is on the party disclosing to establish actual knowledge of the falsehood by the recipient. The Respondent could point to no authority for the proposition that the suggested duty of a spouse receiving financial disclosure in a matrimonial case, to investigate or test the veracity of the information provided, overtakes deliberate material non-disclosure by the other spouse: Virc v. Blair, 2014 ONCA 392, 119 O.R. (3d) 721, at para. 58.

[38] The definition of "fraud" within Rule 25(19)(a) of the Family Law Rules does not have a special meaning outside the common meaning. The party alleging fraud by the other party must prove that the other party (1) made a false representation (2) knowingly, or (3) without belief in its truth, or (4) recklessly, careless whether it be true or false, and (5) did so with wrongful intent. It is a high standard of proof: see Hatuka v. Segal, 2017 ONSC 5623, para. 28; Mohamed v. Mohamed, 2018 ONCJ 530, at para. 47.

[39] In this case, Father was held in contempt for non-disclosure, among other things. In other words, he was held to have deliberately not provided disclosure that he was ordered and obligated to provide in violation of a clear order. To the extent that any issue he raises in this motion with respect to errors in Sproat J.’s final order that are based on disclosure he made after the final order, those issues are matters for appeal and the admission of fresh evidence, should the fresh evidence be allowed.

[40] I find that Father has not met his onus of meeting the high standard required of him by showing on credible evidence that at the trial, Mother intentionally misled the court, or made false statements indifferent to their truth, or recklessly.

[41] I see no serious merit in Father’s arguments based on F.L.R. 25(19)(a).

[42] Finally, Father says that he deserves to have his income determined on the evidence, and his child and spousal support determined on its merits. He says that his income has declined significantly. He changed careers. He has been distracted by Mother’s incessant multiplicity of proceedings in the OCJ. His driver’s licence is suspended thereby impairing his ability to earn an income.

[43] This argument is based largely on information produced after Sproat J.’s final order that ought to have been produced before.

d) Is there prejudice to Father should the motion be dismissed and Mother should the motion be allowed?

[44] There is prejudice to both parties in making or not making the order.

[45] Mother’s prejudice is that she has lived with, and FRO has enforced this order for 4.5 years, for 22 months of which Father did nothing to challenge it. During all of this time, Father has not made regular spousal or child support payments as ordered, he has only demanded that they reduce and complain about FRO enforcement. He has not contributed to the repair or carrying costs of the two U.S. properties as ordered, and he has been uncooperative about their sale such that the sale of the New York apartment was given to Mother. Further, Father has taken the inconsistent positions of complaining that Mother has not sold the New York apartment while at the same time saying it should be rented, not sold.

[46] Father is prejudiced by not being able to re-open litigation after 4.5 years. Father’s prejudice is self-inflicted, however, arising from the contempt findings which resulted in his Answer being struck. I make these comments in the confines of Father’s motion under F.L.R. 25, and not with respect to any motion to change he might bring.

e) What is the effect of any order on the overall integrity of the administration of justice?

[47] Whatever order is made would not affect the integrity of the administration of justice.

f) Was there procedural fairness?

[48] Father has had procedural fairness throughout this matter.

[49] No one of these 6 criteria predominates in the decision to amend or vary the final order of Sproat J. Further, the decision to vary the order is not a mathematical one of adding up points. Rather, the exercise is a balancing of all of these factors and deciding whether the justice of the case requires Father to be able to amend or vary Sproat J.’s order. Finally, the decision in any one case to amend or vary an order, is a case specific inquiry.

[50] Considering all of these factors together I conclude that allowing Father’s motion to amend or vary the final order of Sproat J. is not in the interests of justice and his motion should be dismissed.

Costs

[51] I will address costs in writing, with submissions limited to 3 double spaced pages excluding Bills of Costs. Mother’s are to be served and filed by 4:00 p.m., 18 January 2019 and Father's by 4:00 p.m., 1 February 2019.

TRIMBLE J. Date: January 2, 2019