COURT FILE NO.: 526/17
DATE: 2019-08-29
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Mary-Anne Gajic
Mr. M. Carson, for the Applicant
Applicant
- and -
Michael Lazeo
Self-Represented Respondent
Respondent
HEARD: May 27, 29, 30, 2019
JUDGMENT
THE HONOURABLE MADAM JUSTICE L. BALE
PART I: OVERVIEW
[1] The Respondent, Mr. Lazeo, has brought a motion to set aside the Final Order of Madam Justice C. Brown dated March 19, 2018. The Final Order was obtained in the absence of the Respondent at an Uncontested Trial held before Brown J. as a result of the Respondent’s failure to file an Answer in these proceedings.
[2] In summary, the result of the Uncontested Trial was a Final Order in favour of the Applicant, Ms. Gajic, providing, inter alia, as follows:
- Compensatory and non-compensatory spousal support payable to the Applicant by the Respondent:
a. October 1, 2016 to December 31, 2016: $2,982.00 per month (mid-range SSAG), based upon Applicant’s 2016 income of $4,631.00, and an income of $102,000.00 imputed to the Respondent;
b. January 1, 2017 to December 31, 2017: $2,902.00 per month (mid-range SSAG), based upon Applicant’s 2017 income of $7,233.00, and an income of $102,000.00 imputed to the Respondent;
c. Commencing January 1, 2018: $2,459.00 per month (mid-range SSAG), based upon Applicant’s 2018 income of $21,699.00, and an income of $102,000.00 imputed to the Respondent;
Annual exchange of Income Tax Returns and Notices of Assessment by June 1st; and,
Maintenance of the Applicant on the Respondent’s health care plan.
[3] This long motion to set aside the Judgment of Brown J. proceeded by way of reliance upon two volumes of Affidavit materials filed by both parties, supplemented by three days of viva voce evidence and submissions.
[4] The essence of the Respondent’s case is as follows:
a. He was not aware of the court proceedings commenced by the Applicant on April 12, 2017. He disputes two findings made at trial in his absence:
i. the period of cohabitation between the parties of approximately twenty-one years duration; and
ii. the income imputed to him of $102,000.00 per year;
b. He submits that as a result of these findings the quantum of spousal support ordered was not appropriate.
PART II: ISSUES
[5] The sole issue for determination on this motion is whether or not the Final Order of Brown J. dated March 19, 2018 should be set aside, and if so, whether in whole or in part.
PART III: EVIDENCE AT TRIAL
1. Background
[6] The parties were never married, and had no children together. The length of their cohabitation is in dispute.
[7] The Applicant submits that the parties cohabited for 21 years. The Respondent contends that the parties cohabited for 10 ½ years.
[8] The Applicant is 65 years of age. She was previously employed as a hairdresser and cleaning homes but did not work on a full-time basis outside of the parties’ home(s) during the period of cohabitation. Her historical gross annual income over five years, as reported on Line 150 of her Income Tax Returns/Notices of Assessment is as follows:
a. 2017: $7,232.00;
b. 2016: $4,630.00;
c. 2015: $4,462.00;
d. 2014: $10,734.00;
e. 2013: $15,394.00.
[9] The Respondent is 52 years of age. He has been employed as a Pipefitter and a member of the Canadian Piping Trades (Union – Local 67) since approximately 1991. He worked on a full-time basis during the parties’ relationship. His annual income is typically derived from various employment positions obtained through the Union and Employment Insurance benefits. The Respondent provided evidence that his employment income varies annually based upon availability of work through the Union. His historical gross annual income over five years, as reflected on Line 150 of his Income Tax Returns/Notices of Assessment is as follows:
a. 2017: $68,177.00;
b. 2016: $103,292.00;
c. 2015: $75,849.00;
d. 2014: $85,816.00;
e. 2013: $98,203.00.
[10] The parties engaged in the purchase, rental, and resale of various investment properties throughout their relationship. There is no evidence that either party reported any rental income or capital gains from this venture in any of the Income Tax Returns filed with the court in these proceedings, despite that they were actively involved in same.
[11] The Applicant was 62 years of age at separation. The Respondent was 49 years of age at separation. They had little in the way of assets and their last-remaining jointly-owned family residence was in foreclosure on the date of separation.
2. Relationship Dates
[12] The Respondent testified that he began dating the Applicant in or around 1994. They commenced cohabitation in March 2001 at 339 Fruitland Road, Stoney Creek, Ontario. In summary, the Respondent’s evidence of cohabitation is as follows:
a. March 2001: The parties commenced cohabitation together at 339 Fruitland Road, Stoney Creek, Ontario;
b. April 2001: The Respondent moved out of 339 Fruitland Road and into 387 Hemlock Avenue, Stoney Creek, Ontario without the Applicant;
c. April 2003: The Respondent moved back into 339 Fruitland Road with the Applicant and resided continuously with the Applicant until December 31, 2009. The Applicant and Respondent moved together to 604 South Coast Drive, Nanticoke, Ontario on September 9, 2008;
d. January 2010: The Respondent moved out of 604 South Coast Drive on December 31, 2009 and moved into 50 St. David’s Road East, Thorold, Ontario without the Applicant;
e. July 2010: The Respondent moved back into 604 South Coast Drive, Nanticoke, Ontario with the Applicant;
f. August 2012: The Respondent moved out of 604 South Coast Drive on August 25, 2012 and moved into 12 Jones Street, Stoney Creek, Ontario without the Applicant;
g. January 2015: The Respondent moved to 50 St. David’s Street, Thorold, Ontario with the Applicant;
h. July 2016: The Respondent moved out of 50 St. David’s Street on July 16, 2016 without the Applicant and moved into 49 Lakeview Drive, Stoney Creek, Ontario with his current partner, Ms. Patricia Ann Berry.
[13] The Respondent testified that his Ontario Ministry of Transportation Driver’s Licence History, filed as an Exhibit in this proceeding, accurately reflects his municipal address at all relevant times. Specifically, that it shows “exactly where I lived, when I lived there, and who I was with.” He testified that the Court was misled by the Applicant as to the total duration of the parties’ cohabitation; that the total period of cohabitation was not 21 years, as portrayed by the Applicant, but rather approximately 10 ½ years in length.
[14] The Respondent’s evidence was that the parties’ cohabitation was not continuous and that their relationship was sometimes of a ‘business nature’, ‘platonic’, and not always ‘romantic’ or ‘conjugal’. He testified in his examination in-chief that he could not specifically recall which properties listed on his MTO Driver’s abstract were jointly-owned or jointly-financed with the Applicant and which were not. He testified that the purchase and maintenance of these property investments occurred both when they were “together” and when they were “not together”. Although unsure as to the number of properties owned together, in cross-examination the Respondent acknowledged there to be “more than ten”. He further testified that the Applicant often did not make contribution to the initial down payment of the jointly-owned properties, regardless of the state of their “rocky” relationship.
[15] The parties do agree that the ultimate date of separation was on or around June 25, 2016.
[16] The Applicant testified that the parties did indeed cohabit continuously for a period of approximately 21 years as found by Brown J. Her evidence included the following:
a. On April 15, 1995 the Respondent moved into the Applicant’s home. He kept all of his belongings, including furniture, clothing and personal items at this location;
b. In approximately 1998 the parties moved into 47 Ferrie Street West, Hamilton, ON, which was owned by the Applicant’s father until his passing. The Applicant was executor of her father’s Estate;
c. In March 2001 the Applicant and Respondent purchased their first home together (339 Fruitland Road, Stoney Creek, Ontario);
d. Thereafter the parties purchased and resided together at multiple other properties, including but not limited to:
i. 694 Southcoast Drive, Nanticoke, ON;
ii. 604 Southcoast Drive, Nanticoke, ON;
iii. 50 St. David Street, Thorold, ON; and
iv. 12 Jones Street, Stoney Creek, ON.
e. The Applicant and Respondent owned multiple investment properties between 2001 and 2016, including 387 Hemlock Avenue, Stoney Creek, properties at 335-341 Fruitland Road, Stoney Creek, student rentals in the Hamilton Westdale area, and additional properties in Thorold. The Applicant testified that over the twenty one years of their relationship they owned twenty four properties together (with various ownership and financing structures) and had a list of 47 real estate transactions with their lawyer Harvey Katz. The Applicant testified that she was actively involved in each investment – for example, renovating, cleaning, and maintaining the properties in anticipation of tenants or resale;
f. The Applicant and Respondent agree that they were engaged in the mid-2000’s. The Respondent proposed to the Applicant at Casino Niagara and provided her with an engagement ring. The Applicant testified that there were times during their relationship that the parties struggled financially which caused situations of stress (i.e. “we were in over our heads”, “financially tapped out”, “going overboard”, “buying things that we shouldn’t have been buying”, etc.) but that to her knowledge they remained in a committed and loving relationship. The engagement was never broken off until the Applicant received a text message from the Respondent on June 25, 2016 which read “I think I would like to be on my own”;
g. The Applicant first became aware of the Respondent’s relationship with Ms. Berry in or around August 2016.
[17] The Applicant maintains that at all times they remained in a committed and conjugal relationship while residing together and purchasing investments together. She maintains that the parties did not break up during their twenty-one years together. She only learned of the Respondent’s affair with Ms. Berry after the parties separated.
[18] The evidence of both parties differed slightly between their Affidavit evidence and oral testimony as it pertained to dates residing at specific municipal addresses, and details of ownership (e.g. titled owner, names on mortgages, etc.). This is understandable as a result of the many investment properties the parties owned and resided in over the years and their ability to recall same with the passage of time.
[19] In approximately July 2018, after receiving notice of the Order for spousal support made against him, the Respondent retroactively filed his income tax returns for the years 2011 to 2017, inclusive. The Respondent testified that on the advice of his accountant his marital status was reflected as “separated” for each of those taxation years. These returns, filed with the hindsight of the Final Order of Brown J., do not assist in the determination of the parties’ period of cohabitation.
[20] The Applicant testified that previously the Applicant and Respondent had utilized the same tax service and had filed their respective tax returns as having common law status. The earliest Income Tax Return filed as evidence in this proceeding was the Respondent’s 2007 Notice of Assessment which reflected “common-law” marital status.
3. Income
[21] The Applicant provided evidence that she was financially destitute at the time of separation; 62 years of age, without full-time employment, her home in foreclosure, and dependent upon the generosity of family members (i.e. sleeping on couches, etc.) to meet her needs. The Respondent moved in with his current partner shortly after separation and did not provide any financial support to the Applicant.
[22] At the Uncontested Trial on March 19, 2018, Brown J. found that the best available income information she had in relation to the Respondent was $102,000.00 earned in 2016. The Applicant had accurately testified that this was just above the high end of the range of income that the Respondent had earned while together, which she said was about $95,000.00. Justice Brown ruled that, based upon the evidence provided, this was an appropriate case in which to impute an income to the Respondent of $102,000.00. The Respondent’s actual income in 2016 was $103,292.00. There is no merit to the Respondent’s suggestion that the Applicant mislead the Court as to the Respondent’s income.
4. June 2016 to March 2018
[23] The Respondent did not return to the parties’ home to reside with the Applicant after June 25, 2016. Although his evidence was somewhat vague on this point, it appears that very shortly after this date he began cohabiting with Ms. Patricia Berry at 49 Lakeview Drive in Stoney Creek. It is uncontroverted that he did not provide his new residential address to the Applicant.
[24] The parties generally agree that between the date of separation and September 2016 communications between them were minimal, but that on approximately two occasions they met in person:
a. At Eastgate Square for the Respondent to return the Applicant’s vehicle to the Applicant;
b. At the office of Harvey Katz with respect to signing the closing documentation for the sale of their home.
[25] The evidence of both parties suggests that there was some discussion as to financial support between them. The Respondent eluded to a settlement proposal he made (although quite appropriately he did not provide the details of settlement discussions to this Court), and the Applicant testified that she advised the Respondent that she would be pursuing a claim for spousal support. Thereafter the Applicant retained counsel to assist her in addressing the issues arising from her separation.
[26] The following communications were exchanged between the Applicant and Respondent, through the Applicant’s counsel and contained within the court record:
a. On September 22, 2016 an e-mail was sent to the Respondent from the Applicant’s counsel to the e-mail address mikelazeo67@gmail.com. The e-mail attached formal correspondence on counsel’s letterhead which addressed, inter alia, the following:
i. The Respondent was advised that counsel was retained;
ii. The Respondent was advised that the issue of spousal support needed to be addressed;
iii. The Respondent was advised that financial disclosure was necessary, including copies of the Respondent’s Income Tax Returns and Notices of Assessment for the past three years and confirmation of his current sources of income;
iv. A response was requested within fourteen days, failing which court proceedings may be initiated.
Of note, counsel’s letterhead contained counsel’s name, address, phone number, fax number, and website. The e-mail was sent from the e-mail address of counsel’s administrative assistant, ‘Christine’.
b. On October 4, 2016 the Respondent sent a reply e-mail to counsel indicating that he was in the process of retaining counsel who would contact the Applicant’s counsel in October 2016 to resolve the matter without necessity of court proceedings.
c. Counsel for the Applicant replied directly from his e-mail account on October 6, 2016 indicating that the Respondent’s message was received and that they would await communications from the Respondent’s counsel.
d. On October 19, 2016 follow-up correspondence was sent to the Respondent via the Applicant’s counsel’s administrative assistant.
e. On October 24, 2016 the Respondent sent a second e-mail to counsel for the Applicant, through the administrative assistant, advising that he was still in the process of finding legal representation and that he needed to file income tax returns for the past four years. He requested an additional 30 days.
f. On October 28, 2016 the Respondent sent a third e-mail to counsel for the Applicant, through the administrative assistant, advising that he would be sending the requested information “this coming Monday”, and requesting the Applicant’s reciprocal disclosure.
g. On November 9, 2016 follow-up correspondence was sent to the Respondent via the Applicant’s counsel’s administrative assistant. The Respondent’s evidence was unclear as to whether or not he recalled viewing this e-mail from counsel.
h. On January 20, 2016 further follow-up communications were sent to the Respondent requesting an update and the Respondent’s residential address. The Applicant’s counsel received an “undeliverable” reply message specifying that the “message to mikelazeo67@gmail.com couldn’t be delivered; that “mikelazeo67 wasn’t found at gmail.com.
[27] The Respondent testified in his examination in-chief that he lost his telephone. He testified that all of his passwords were saved in his telephone and as a result of the loss of his phone he could not access his e-mail account and contacts. He was unsure as to whether he also lost the passwords to other accounts, including his social medial accounts etc. He initially testified that he believed he lost his telephone in September 2016. In cross-examination he was reminded that his previously sworn Affidavit indicated that he “broke” his phone. The Respondent corrected his testimony indicating that first he broke his phone, and then he lost his phone. He was also reminded that he was communicating with counsel through his e-mail account as late as October 29, 2016. He thereafter corrected his evidence to conform with this timeline. The Respondent testified that he did not cancel his e-mail account, he simply could not access it because he had lost the password.
[28] The Respondent confirmed that he had blocked the Applicant from contacting him via phone and social media in June 2016, but was critical of the Applicant for not attempting to contact him through his Union.
[29] The Respondent called Ms. Patricia Berry as a witness at trial. Ms. Berry testified to unpleasant Facebook messages exchanged between herself and the Applicant in or around October 2016. She testified that she thereafter blocked the Applicant from communicating with her via this social media outlet in or around mid-November of 2016. Notably, this time period roughly corresponds with the time period that the Respondent alleges he broke and/or lost his telephone.
[30] The Applicant’s same counsel has been retained throughout these proceedings and has not changed since September 2016. The Applicant confirmed that she did not change her contact information, including her personal telephone number post-separation. The Respondent conceded that he was aware of the Applicant’s contact information on social media at minimum. When confronted in cross-examination that he could have contacted the Applicant, the Respondent argued “yes, and she could have contacted me”, notwithstanding his own evidence that the Applicant had been blocked from all forms of communication by both the Respondent and Ms. Berry.
[31] The Respondent testified that at some point he obtained an initial legal consult with counsel. He was unclear as to the timing of same, but provided names of two lawyers with whom he may have consulted.
[32] In January 2016 the Applicant sought permission by Legal Aid Ontario to employ the services of a private investigator to assist in locating the Respondent. She was granted this permission and was able to produce the Respondent’s Driver’s License Number. The private investigator conducted a database search with this information and on March 29, 2017 the Applicant’s counsel was advised of the Respondent’s residential address: 49 Lakeview Drive, Stoney Creek, Ontario.
[33] On April 12, 2017 the Applicant formally commenced her Application for spousal support. A process server was retained to personally serve the Respondent. The process server, Mr. Ron Boers, was called as a witness at trial. He provided Affidavit and oral evidence outlining his efforts to serve the Respondent including:
a. On April 13, 2017 at 6:22 p.m. Mr. Boers attended at 49 Lakeview Drive, Stoney Creek, Ontario. There was a light on in the living room, approximately five cars in the driveway, and the garage door was open. No one answered the door;
b. On April 14, 2017 at 8:46 a.m. Mr. Boers again attended at 49 Lakeview Drive, Stoney Creek, Ontario. Again there were cars noted in the driveway but no response at the front door;
c. On April 17, 2017 at 8:45 p.m. a female party, later identified in these proceedings as Ms. Berry, answered the front door. She confirmed to Mr. Boers that Mr. Lazeo lived at the residence. She indicated that she would accept the documents and went inside to get identification but then did not return to the door. She was non- responsive to Mr. Boers subsequent knocks on the door. He then left a note requesting a telephone call.
[34] Mr. Boers’ Affidavit of Service was supplemented by viva voce evidence at trial. He elaborated that he explained that he was attempting to serve documents on the Respondent and needed the unidentified woman’s identification in order to leave the documents at the residence because of the nature of the documents. When she did not return he left his name and telephone number on a sticky note affixed to the door. He did not receive a reply to this note.
[35] Ms. Patricia Berry testified to this issue at trial. She provided evidence that she was the unidentified female who answered Mr. Boers’ attendance at the door of 49 Lakeview Drive, Stoney Creek, Ontario on April 17, 2017. She testified that Mr. Boers did not identify himself, and that she became apprehensive when he asked for her identification. She became “hesitant” and her “stress level was high”. Her Affidavit materials specify that she “was a little frightened as there were previous altercations with Ms. Gajic and I didn’t want to deal with it”. She went inside and did not return to the front door. In examination in chief, when asked whether the individual provided of left any identification she indicated “not that I recall”. Ms. Berry’s evidence was that “a couple days later” she told the Respondent that someone had been at the door inquiring about him but that she didn’t know who it was. The Respondent, in his evidence, indicated that together they surmised that “we just thought it could’ve been a friend of mine – it could have been anybody”. The Respondent confirmed that he was residing at 49 Lakeview Drive, Ontario at the time.
[36] As a result of the process server’s unsuccessful efforts to serve the Respondent personally, the Applicant was compelled to bring a motion for substitute service. On May 12, 2017, Mazza, J. granted a Temporary Order that service of the Application on the Respondent be effected by regular letter mail at his last known address of 49 Lakeview Drive, Stoney Creek, Ontario L8E 5A6.
[37] On May 18, 2017 the Applicant’s Application, Financial Statement, MIP Notice, Notice of Motion (without notice), Affidavit, and Order of Mazza J. dated May 12, 2017 were mailed to the Respondent at 49 Lakeview Drive, Stoney Creek. The Affidavit of Service of Christine Oliveira dated May 25, 2017 confirms that although the package was ‘overweight’ it was still sent via regular letter mail to the Respondent’s last known address. The package was not returned to sender.
[38] The Respondent did not file an Answer. His evidence, put simply, is that he did not receive the information by regular mail as Canada Post service to 49 Lakeview Drive, Stoney Creek, Ontario was ‘unreliable’. Ms. Berry also testified to the inconsistency of her receipt of mail at that address.
[39] The Applicant filed an Affidavit for Uncontested Trial in July 2017. On September 6, 2017 the Brown J. requested that a viva voce uncontested hearing take place before the Court. The uncontested hearing, initially scheduled for January 15, 2018 was heard on February 20, 2018 after the filing of updated financial information by the Applicant.
5. March 2018 to Present
[40] Justice Brown released her 9-page typewritten endorsement on March 19, 2018. Within the lengthy endorsement Brown J. succinctly summarized the legislative authority for spousal support under Part III of the Family Law Act, R.S.O. 1990, c. F. 3, (“FLA”), made reference to the relevant caselaw, and provided detailed reasons for her award of compensatory and non-compensatory spousal support to the Applicant at the mid-range level in accordance with the Spousal Support Advisory Guidelines. The spousal support was made retrospective to October 1, 2016 after formal notice of this claim to the Respondent from the Applicant’s counsel.
[41] The Respondent testified that he first became aware of the Order of Brown J. in or around April 2018 when he received notification from the Family Responsibility Office of the registration of his case with their office. Of note, this mail was received at 49 Lakeview Drive, Stoney Creek, Ontario. The Respondent provided evidence that he thereafter consulted with counsel on May 22, 2018, retained counsel in July 2018, and initiated his motion to set aside the Order of Brown J. promptly thereafter.
[42] The Respondent’s initial supporting Affidavit dated July 17, 2018 asserted that his employment income to date was $32,244.03. He affirmed that he was currently receiving $479.00 per week form employment insurance and did not believe that he would have any other job opportunities through his Union for the balance of the year. This information was later proved incorrect.
[43] The hearing of this matter (the viva voce long-motion to set aside the Final Order of Brown J.) commenced on May 27, 2019. The Respondent did not produce his 2018 Income Tax Return or Notice of Assessment. He testified that he had not yet filed same with the Canada Revenue Agency, however produced T4’s from positions of employment totalling approximately $90,000.00. The Respondent did not volunteer, but later agreed that he was in receipt of Employment Insurance Benefits in 2018 from June through August, which were garnished by the Family Responsibility Office. The Respondent’s Government of Canada My Service Canada Account details confirm payment of regular benefits of $547.00 per week for the period of June 10, 2018 to August 18, 2018 (10 weeks). The combined effect of this evidence suggests that the Respondent’s 2018 gross annual income exceeded $95,000.00.
[44] The Respondent has made no voluntary payment of spousal support to the Applicant to date. The parties agree that the Applicant has received approximately $7,000.00 in spousal support receipts garnished by the Family Responsibility Office by way of collection of the Respondent’s income tax refunds and one-half of his net Employment Income receipts. The Respondent testified that he was instructed by his former family law counsel not to make any voluntary payment of spousal support under the terms of the Order of Brown J. until his motion to set aside the Order was determined.
PART IV: THE LAW
1. Setting Aside a Default Order
[45] The primary objective of the Family Law Rules, O. Reg. 114/99, as outlined in r. 2(2), is to deal with cases justly. Rule 2(3) prescribes that dealing with a case justly includes ensuring that the procedure is fair to all parties; saving time and expense; dealing with the case in ways that are appropriate to its importance and complexity; and, giving appropriate court resources to the case while taking account of the need to give resources to other cases.
[46] The Family Law Rules are intended to be a complete procedural code. As the Court of Appeal stated in Frick v. Frick, 2016 ONCA 799, 132 O.R. (3d) 321, at para. 11:
The Family Law Rules were enacted to reflect the fact that litigation in family law matters is different from civil litigation. The family rules provide for active judicial case management, early, complete and ongoing financial disclosure, and an emphasis on resolution, mediation and ways to save time and expense in proportion to the complexity of the issues. They embody a philosophy peculiar to a lawsuit that involves a family.
[47] Rule 25(19) of the Family Law Rules provides that the court may, on motion, change an order that:
(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.
[48] Recent caselaw confirms that the remedies available to the court under r. 25(19) of the Family Law Rules are broad, including jurisdiction to:
(a) set aside the whole of a Final Order: Gray v. Gray, 2017 ONCA 100, 137 O.R. (3d) 65 at paras. 26-27;
(b) “change”, “vary”, “suspend”, or “discharge” a Final Order: Gray, at paras. 26-27;
(c) set aside part of a Final Order: Benarroch v. Abitbol et al, 2018 ONSC 5964 at para. 28;
(d) correct or add to a Final Order: Benarroch, at para. 29.
[49] Mountain View Farms Ltd. v. McQueen, 2014 ONCA 194, 119 O.R. (3d) 561, at paras. 48-49, has set out the following factors for the Court to consider when determining whether to set aside a default order or judgment:
Whether the motion to set aside the default judgment was brought promptly following the moving party’s discovery of the default judgment;
Whether the moving party has established that there exists a plausible excuse or explanation for the default;
Whether the moving party has set forth sufficient evidence to establish that there is an arguable case to present on the merits;
The potential prejudice to the moving party should the motion be dismissed, and the potential prejudice to the Respondent should the motion be allowed;
The effect of any order the motion judge may make on the overall integrity of the administration of justice.
[50] In Mountain View Farms, the Ontario Court of Appeal explained at para. 50 that “these are not to be treated as rigid rules; the court must consider the particular circumstances of each case to decide whether it is just to relieve the defendant from the consequences of his or her default”.
[51] In assessing whether there is an arguable case on the merits, the motion judge must take a “good hard look at the merits” and analyze whether the moving party has established an arguable case. It is not an error to assess credibility at this stage; more is required than self-serving statements devoid of detailed evidence supporting key assertions: “a self-serving affidavit does not create a triable issue in the absence of detailed facts and supporting evidence”: HSBC Securities (Canada) Inc. v. Firestar Capital Management Corporation, 2008 ONCA 894 at para. 28.
[52] While there is broad discretion and flexibility under the Family Law Rules, and under r. 25(19) in particular, at least one of the five preconditions outlined in Mountain View Farms must be engaged before the broad judicial discretion under r. 25(19) of the Family Law Rules can be invoked: E.S.R. v. R.S.C., 2019 ONCJ 381, at para. 70.
2. Spousal relationship
[53] In addition to other codified circumstances, the determination of amount and duration of spousal support requires the court to consider the length of time that the dependant and respondent cohabited: Family Law Act, s. 33(9)(l)(i).
[54] The Family Law Act at s. 1(1) defines “cohabit” to mean “to live together in a conjugal relationship, whether within or outside marriage”. The definition of spouse under Part III of the Act, which codifies the support obligations which exist between married and unmarried spouses, includes either of two persons who are not married to each other and have cohabited continuously for a period of not less than three years: Family Law Act, s. 29.
[55] The Supreme Court of Canada has provided direction with respect to the meaning and classification of ‘conjugal’ relationships. Specifically, in M. v. H., 1999 CanLII 686 (SCC), [1999] 2 S.C.R. 3, the Court:
(a) endorsed the generally-accepted characteristics of a conjugal relationship enumerated in the case of Molodowich v. Pentinnen (1980), 1980 CanLII 1537 (ON SC), 17 R.F.L. (2d) 376 (Ont. Dist. C.) including: shared shelter, sexual and personal behaviour, services, social activities, economic support and children, as well as the societal perception of the couple;
(b) stressed that these identified elements may be present in varying degrees and not all are necessary for the relationship to be found to be conjugal: in order to come within the definition couples are not required to fit precisely the traditional marital model to demonstrate that the relationship is “conjugal”; and
(c) opined that the weight to be accorded the various elements or factors to be considered in determining whether a couple is in a conjugal relationship will vary widely and almost infinitely and that the approach to determining whether a relationship is conjugal must be flexible: M. v. H., at paras. 59-61.
[56] The concepts of ‘cohabitation’ and ‘living separate and apart’ are interdependent for the purposes of a spousal support analysis. An exhaustive review of the law as it pertains to these concepts is contained within the recent decision of Justice Chappel in Al-Sajee v. Tawfic: 2019 ONSC 3857.
[57] The case of Climans v. Latner, 2019 ONSC 1311, 144 O.R. (3d) 743, recently explored the impact of separate addresses in the context of a claim for spousal support between unmarried persons. In Climans, Shore J. found overwhelming support for the proposition that the maintenance of separate addresses is but one factor for the court’s consideration:
(a) The fact that parties maintain separate residences does not prevent a finding of cohabitation: Campbell v. Szoke (2003), 2003 CanLII 2291 (ON SC), 45 R.F.L. (5th) 261 (Ont. S.C.);
(b) The court must look at all of the circumstances and consider the reasons for maintaining another residence: Thauvette v. Malyon (1996), 1996 CanLII 8090 (ON SC), 23 R.F.L. (4th) 217 (Ont. Gen. Div.);
(c) Continuous daily cohabitation is not a necessity for a finding under s. 29 of the FLA: Hazlewood v. Kent, [2000] O.J. No. 5263 (Ont. S.C.);
(d) Whether a couple has cohabited continuously is both a subjective and an objective test. Intention of the parties is important. Where there is a long period of companionship and commitment and an acceptance by all who knew them as a couple, continuous cohabitation should be found: McEachern v. Fry Estate, [1993] O.J. No. 1731 (Ont. Gen. Div.);
(e) There is no prerequisite “bright-line rule” stating that the parties must have ‘moved-in’ together to be considered to live together/cohabit. The necessary intent to cohabit can be demonstrated by mutual exclusivity, functions within the relationship, and representations to society at large. The law recognizes a variety of different relationships and living arrangements. Further, “the specific arrangements made for shelter are properly treated as only one of several factors in assessing whether or not the parties are cohabiting: Stephen v. Stawecki (2006), 2006 CanLII 20225 (ON CA), 32 R.F.L. (6th) 282 (Ont. C.A.);
(f) Relationships or affairs with other partners are not persuasive, particularly where the offending party’s actions or intentions are unknown to the other spouse: Thauvette.
[58] In Climans the court held that the unmarried parties were spouses for the purposes of spousal support for a period of 14 years despite that they maintained separate homes throughout the entirety of their relationship.
3. Income
[59] A payor spouse’s income is typically determined by reference to his or her Line 150 “Total income” in the T1 General form issued by the Canada Revenue Agency in support proceedings: Child Support Guidelines, O.Reg. 391/97, at s. 16. If the Court is of the opinion that the determination of spouse’s income by this method would not be the fairest method, the Court may have regard to the spouse’s past income and determine an amount that is fair and reasonable in light of any pattern of income, fluctuation in income or receipt of non-recurring income: Child Support Guidelines, at s. 17.
[60] The Court may impute such amount of income to a spouse as it considers appropriate in the circumstances where, amongst other things, the spouse is intentionally unemployed or underemployed and/or the spouse has failed to provide income information when under a legal obligation to do so. Income may be imputed to a party for the purposes of determining support provided that a rational and solid evidentiary foundation has been laid: Drygala v. Pauli, 2002 CanLII 41868 (ONCA), Homsi v. Zaya, 2009 ONCA 322, 65 R.F.L. (6th) 17.
[61] In a variation application under s. 37 of the Family Law Act, if the court is satisfied that there has been a material change in a party’s circumstances, or where evidence not available on the previous hearing has become available, the Court may discharge, vary or suspend a term of the order, prospectively or retroactively; relieve the Respondent from the payment of part or all of the arrears or any interest due on them; and make any other order under s. 34 that the Court considers appropriate. The Ontario Court of Appeal has opined that evidence “not available at a previous hearing has become available” should not include evidence resulting from a party’s deliberate failure to meet his disclosure obligations: Gray v. Rizzi, 2016 ONCA 152 at para. 36.
[62] In deciding whether a previous support order should be “changed”, a fundamental consideration is whether the support order was based upon acceptance of declared income, or whether the support order was based upon an income imputed to the payor. This distinction affects the onus of the moving party: Trang v. Trang, 2013 ONSC 1980, 29 R.F.L. (7th) 364, at paras. 43-44.
[63] In Trang, Pazaratz J. identified the following important considerations where a party seeks to change a support order originally based on imputed income:
a. Why did income have to be imputed in the first instance? Have those circumstances changed? Is it still appropriate or necessary to impute income, to achieve a fair result?
b. How exactly did the court quantify the imputed income? What were the calculations, and are they still applicable?
[64] In analyzing this issue Pazaratz J. identified an important concept at paras. 51-54:
If “declared income” automatically prevailed on a motion to change support, it would defeat the purpose of imputing income in the first place. It might even be a disincentive for payors to participate in the initial court process. They could simply ignore support Applications – as they often do. They could wait to see if the court imputes an income, and how much. If dissatisfied with the amount, the payor could later return to court waving their tax returns, to suggest that the original judge got it wrong…
Support claimants should not be forced to go through this two-step process. Our family court system certainly can’t afford it.
[65] This concern has been reiterated by other courts. For example, recently in E.S.R. v. R.S.C., Finlayson J. commented that:
Sometimes support payors operate on the mistaken belief that they may choose not to participate in an initial proceeding for support, and then return to Court to pray for relief once the FRO has caught up with them… A payor has a positive obligation to respond and to provide details of his or her income. A payor refusing to do this runs the risk of adverse inferences being drawn against him or her. And he or she will not necessarily be entitled to retroactive relief if he or she fails to cooperate as ought to have been done in round one: E.S.R. v. R.S.C., [2019] O.J. No. 2906. (Ont. Ct. Jus.) at paras. 197-199
[66] The Ontario Court of Appeal has repeatedly emphasized that disclosure rules and sanctions for non-compliance are integral to the family court process. For example in Roberts v. Roberts, 2015 ONCA 450 at paras. 11-13 the court opined that:
The most basic obligation in family law is the duty to disclose financial information. This requirement is immediate and ongoing.
Failure to abide by this fundamental principle impedes the progress of the action, causes delay and generally acts to the disadvantage of the opposite party. It also impacts the administration of justice. Unnecessary judicial time is spent and the final adjudication is stalled.
[67] Non-disclosure should not be rewarded. To allow a party who ignores his or her financial disclosure obligations to later produce the information and seek a change “would eviscerate the financial disclosure regime”: Gray v. Rizzi, 2016 ONCA 152 at para. 24.
[68] The Spousal Support Advisory Guidelines have now been available in family court proceedings for more than a decade. While they are neither legislated nor binding, and are advisory in nature, they have proven to be very useful tool in determining the appropriate range of spousal support payable in family law cases across Canada, providing more certainty and predictability to spousal support cases. A departure from the ranges suggested by guidelines requires strong rationale: Fisher v. Fisher, 2008 ONCA 11, 88 O.R. (3d) 241, at paras. 93-103.
PART V: ANALYSIS
[69] Should the Final Order of Brown J. dated March 19, 2018, which requires the Respondent to pay spousal support to the Applicant, be set aside? The five-part analysis under Mountain View Farms is necessary.
1. Was the motion to set aside the default judgment made promptly after discovery of the default judgment?
[70] The Final Order of Brown J. was made on March 19, 2018. In April 2018 the Respondent became aware, through Family Responsibility Office enforcement efforts, of the existence of the judgment against him. I accept that the Respondent consulted with counsel shortly thereafter. The Respondent brought his motion to set aside that Order on July 17, 2018. I find that the Respondent moved with reasonable efficiency in making these efforts.
[71] The Respondent has satisfied the first part of the Mountain View Farms test.
2. Did the moving party provide plausible excuse or sufficient explanation for the default?
[72] I do not accept the Respondent’s explanation for failing to address the issues arising from the parties’ separation in a timely manner. I find that the Respondent was wilfully attempting to avoid communications with the Applicant and her counsel and was evading service of her Application materials in an effort to avoid paying spousal support.
[73] The Respondent offered a combination of explanations for the default: his phone broke, his phone was lost, he no longer had access to e-mail, he could not remember his passwords, he could not remember the name or contact information of the Respondent’s counsel, he blocked communications from the Applicant due to harassing messages, the Applicant could have made greater/alternate efforts to contact him, Canada Post is unreliable, etc.
[74] The Respondent’s evidence was vague as to when he broke and/or lost his telephone and although I have some doubt that either of these two occurrences actually occurred, it is clear on the record that the Respondent had the Applicant’s counsel’s name, address, e-mail address, administrative assistant’s e-mail address and website at his fingertips from September 22, 2016 until, at minimum, November 9, 2016 and did little to address the spousal support issue with the Applicant during that period. There is no reliable evidence before the Court that he either retained counsel or filed his income tax returns during that period despite the representations made in his e-mails that he was doing so. The Respondent was untruthful in his written assurance to counsel on Friday October 28, 2016 that he would be “sending the requested info today and this coming Monday”. He did not in fact even file his Income Tax Returns until approximately July of 2018. This falsehood casts a shadow on his credibility in these proceedings, and in particular detracts from his position that he was not trying to avoid a spousal support obligation to the Applicant.
[75] I do not accept that the Respondent’s e-mail address ceased to exist in January 2017 simply because he lost the password to same. I find that the Respondent deliberately closed this e-mail account as it was the only method of communication that the Applicant’s counsel had with the Respondent at his disposal.
[76] I find that the Respondent was likely aware that he had significant exposure to the payment of spousal support to the Applicant; he hoped that the Applicant would either give up or lose interest in her claim if he did not cooperate willingly.
[77] The Respondent’s evidence, both in examination in-chief and in cross-examination, with respect to efforts to reconnect with the Applicant or her counsel after breaking/losing his telephone were vague, inconsistent, and not credible. What is clear on the record is that after October 28, 2016 he did not communicate with either the Applicant or her counsel through telephone, e-mail, or social media until after becoming aware of the Final Order of Brown J. in April 2018. The Respondent was evasive and non-responsive to critical points under cross-examination with respect to any efforts to reconnect with the Applicant and her counsel to address the outstanding issues and instead attempted to deflect fault for the lack of communication upon the Applicant. For example, the Applicant’s efforts to serve her Application upon the Respondent were exhaustive, including the atypical additional steps of hiring a private investigator and running a driver’s licence search to locate the Respondent to effect service. Notwithstanding these additional steps, the Respondent was critical of the Applicant’s efforts at service. He testified that the Applicant was aware that he worked through the Pipefitter’s Union and “could have contacted them to reach me”. I find that the only party who can be faulted in his efforts to locate and communicate with the other is the Respondent.
[78] I further find that the Respondent deliberately evaded service of the court materials by the Applicant’s process server. It is not logical that an unidentified stranger attended at the Respondent’s home, frightening Ms. Berry to the extent that she did not return to the front door, thereafter only to advise the Respondent of his attendance “a couple days later”, and to surmise that it could have been a friend. I do not accept the evidence of the Respondent or Ms. Berry on this issue. Ms. Berry’s Affidavit confirms that she suspected the materials pertained to the Applicant; she specifically affirmed that “there were previous altercations with Ms. Gajic and I didn’t want to deal with it”. I find that together the Respondent and Ms. Berry made a joint and concerted effort to cease all contact with the Applicant and her counsel in or around November 2016. I find that they were both aware that in April 2017 the Applicant was attempting to serve court materials on the Respondent and they made it impossible for the Applicant to do so.
[79] Mr. Boers is a professional process server at arms’ length from all parties. His evidence was not shaken in cross-examination. Where the evidence of Ms. Berry and the process server Mr. Boers contradict, I accept the evidence of Mr. Boers without exception. I accept that Mr. Boers left a note with his name and contact information at the Respondent’s home, and that the Respondent made the deliberate decision not to reply. In the totality of circumstances, even if Mr. Boers had not left his contact information, the Respondent ought to have known the nature of the documents being served upon him, yet he made no effort to attend at the family court to ascertain whether or not proceedings had been commenced against him, and if so, the name and contact information of the Applicant’s counsel.
[80] The court quite correctly approved service upon the Respondent by regular mail as per the Temporary Order of Mazza J. dated May 12, 2017. I accept that all of the requisite court materials were served upon the Respondent by mail at his address (49 Lakeview Drive, Stoney Creek, Ontario) on May 18, 2017 as per the judicial oversight and pre-approval of this method of substitute service. Service of a document by mail is deemed effective on the 5th day after it was mailed under the Family Law Rules. I do not accept the Respondent’s evidence that he did not receive these materials in the mail. He simply does not deserve the benefit of the doubt on this point as a result of all of the other efforts he made to avoid dialogue and service.
[81] I do not accept the Respondent’s explanation for the default. The totality of the evidence overwhelmingly suggests that he chose to ignore the court process because he was aware of his obligation to support the Applicant and he wished to avoid doing so.
3. Has the Respondent established an arguable case on the merits?
[82] The sole issue for determination before the Honourable Mme. Justice Brown at trial was spousal support. The Reasons for Judgment dated March 19, 2018 were detailed and thorough, citing legislative authority and identifying the relevant facts. In relying upon both the documentary and viva voce evidence provided by the Applicant, Brown J. made the following findings at trial:
• The Applicant is entitled to both compensatory and non-compensatory spousal support based upon the duration of the relationship, the roles adopted by the parties during the relationship, her contributions to the Respondent’s purchase and rental of real estate, her need for spousal support and the Respondent’s ability to pay;
• The Applicant qualifies as a spouse within the meaning of the legislation;
• The parties had a relationship of approximately 21 years duration;
• The Respondent was the primary income earner during the relationship and the Applicant was dependent upon him in whole or in part for much of that time;
• The Applicant suffered an economic disadvantage arising from the breakdown of the relationship in that she now finds herself without the intra-spousal support of the Respondent that she enjoyed during their time together. This gives rise to a non-compensatory support entitlement;
• There is a significant disparity in income;
• The Applicant’s employment experience was impacted by her obligations, both in terms of labour in time, with respect to the Respondent’s business of buying and renting out properties. In this regard, her career advancement opportunities and earning potential also likely suffered by the choice made by the parties during the relationship. This gives rise to a compensatory support entitlement;
• The Applicant’s estimated 2018 income is $21,699.00;
• The Respondent has worked consistently as a pipefitter since 1991. The parties’ jointly-engaged accountant advised the Applicant that the Respondent’s 2016 income was $102,000.00. This was just above the high end of the range of income that the Respondent had earned while the parties were together of approximately $95,000.00. The most current information available to the Applicant and the best information available to the Court with respect to the Respondent’s income was his 2016 income of $102,000.00;
• The relationship constitutes what is characterized as “longer term”;
• The Applicant requires spousal support from the Respondent to live at a relatively modest standard of living;
• The Respondent’s income provides him with the ability to pay a reasonable amount of support to the Applicant.
[83] After review of the above circumstances Brown J. found that it was reasonable to award indefinite support to the Applicant at the mid-range level prescribed by the Spousal Support Advisory Guidelines in consideration of ‘the duration of the relationship, the age of the parties, and the financial circumstances of the parties at the commencement of cohabitation, during cohabitation, and since separation. The Respondent does not dispute the appropriateness of an award at the mid-range level of the Spousal Support Advisory Guidelines.
[84] The only findings of Brown J., as reviewed above, which are disputed by the Respondent are the length of the parties’ cohabitation and the income imputed to the Respondent. It is therefore necessary to review whether an arguable case on the merits exists with respect to the Respondent’s position that (a) the parties did not have a spousal relationship of approximately 21 years’ duration, (b) whether the imputation of a gross annual income of $102,000.00 to the Respondent was unreasonable, and whether as a result of these findings the final award of spousal support ordered was inappropriate.
a. Length of Cohabitation
[85] The parties disagree as to the duration of their cohabitation. The Applicant asserts a period of cohabitation of 21 years, and the Respondent asserts a period of cohabitation of 10 ½ years. The Respondent is, in effect, advancing a position that the parties were not spouses for a period of 21 years, as found by Justice Brown. He asserts that the duration of the relationship impacts the quantum of spousal support payable under the Spousal Support Advisory Guidelines.
[86] The Respondent testified that, at times, the parties’ relationship was a business relationship only or “platonic” in nature. He relied heavily upon his Ontario Ministry of Transportation Driver’s Licence History (abstract) dated May 23, 2018 in support of his position. The Respondent asserts that the driver’s licence abstract demonstrates with precision his cohabitation dates with the Applicant. I do not accept this argument. The Driver’s Licence abstract reflects the addresses that the Respondent chose to report to the Ministry at any given time, however:
(a) A Driver’s Licence abstract does not list ‘others’ residing at the property;
(b) The Respondent did not present an abstract pertaining to the Applicant to the court for comparative purposes. It is insufficient for the Respondent to be critical of the Applicant for failing to tender this evidence; if he wished to rely upon this argument it was incumbent upon him to obtain and file the necessary documentation in support of his case;
(c) The Applicant testified, and I accept, that the parties’ Driver’s Licence abstracts may not be an accurate reflection of the parties’ accommodations throughout their relationship given the number of times that they moved in and out of their jointly-owned residences. However, she notes that all of the addresses listed on the Respondent’s driver’s abstract were jointly owned between them. The Respondent did not lead any evidence to suggest otherwise. The Driver’s Licence abstract is a self-reporting system and I accept that there are multiple reasons why it might not reflect, with precision, an individual’s living accommodations for the past twenty-one years. For example, the Respondent testified that he moved out of his jointly-owned residence with the Applicant at 50 St. David’s Street West, Thorold, Ontario “around the end of June 2016” (the parties’ date of separation). His MTO abstract does not demonstrate a change of address from 50 St. David’s Street to 40 Lakeview Drive, Stoney Creek, Ontario until October 29, 2016, an approximate 4-month delay. This official document clearly conflicts with the Respondent’s sworn testimony and is a simple and recent example of the lack of precision this document provides.
[87] The Respondent did not produce any other official documentation to dispute the factual finding of Brown J. that the parties cohabited for approximately 21 years. He did not tender into evidence any real estate documentation to counter the finding that the parties jointly contributed to the purchase and rental of real estate properties and resided together in many of those properties throughout their relationship, despite that the evidence suggests there were approximately 50 real estate transactions completed with the assistance of the same lawyer.
[88] The Respondent’s evidence that his mother did not include the Applicant’s name in a millennium message in the local newspaper in 2000, and that he sent a facebook message to a friend in 2009 that he was in a “faltering” relationship are not convincing evidence that the parties’ relationship had ended. A text message (segment only) offered as evidence by Respondent that in October 2012 the parties were not together reads: “Mike, are you coming home ever!...I’m not liking this set-up!!!!...I might as well list the house….it’s not where I want to everyday by myself… especially with winter coming!!!!”. Again, I do not accept partial text exchange as convincing evidence that the relationship consortium had come to an end. I accept the Applicant’s evidence that she was unhappy with the status of the renovations being undertaken at their residence and that they continued to be in a conjugal relationship at the time of this exchange.
[89] I find that for the majority of the parties’ 21 year relationship, the Applicant and Respondent resided together at the same address. I accept that there may have been brief periods of time that the parties resided under separate roofs, within their jointly-owned real estate properties, for various reasons pertaining to the improvement and maintenance of their properties and potential income tax motivations. However, I find that even during these brief periods the parties continued to be in a spousal relationship. I do not accept the Respondent’s classification that at times the relationship was only platonic, or of a business nature. The evidentiary record before me simply does not support this assertion.
[90] The Respondent has now had the benefit of a full hearing on the parties’ relationship dates. He has had full opportunity to advance his best case that the spousal relationship between the parties was less than 21 years, and in this court’s opinion, he has failed to do so. In support of this conclusion I rely upon the following:
(a) The finances of the parties were interwoven for a period of approximately 21 years. They shared expenses, relied upon one another’s credit, and continued to share the use of assets throughout the entire period. For example, the Applicant was at times listed as a mortgagor on properties in which title was held by the Respondent alone, the Respondent drove a vehicle registered in the Applicant’s name, etc. The Applicant was dependent upon the Respondent for the majority of this period as the lower income earner. There was no evidence led at trial which suggested otherwise.
(b) The parties were jointly engaged in the purchase, maintenance, improvement, rental, and resale of real property together for approximately 21 years. They both contributed financially and physically to this real property enterprise. No documentation was produced to suggest that this was a business association rather than a spousal relationship.
(c) The parties performed typical domestic functions for one another in their daily lives. Neither party identified any changes in their domestic activities during the relevant time period.
(d) The parties were engaged to be married in or around 2005 and remained betrothed to one another until the end of June 2016.
(e) The Applicant believed that the parties were in a mutually exclusive relationship for a period of 21 years. She did not date any other persons during this period of time and was not aware of any break-ups. She believed that the Respondent was loyal to her as well; the Respondent never advised her otherwise and cannot rely upon his own previously undisclosed indiscretions to counter this belief.
(f) The parties represented themselves to the public at large as a couple, despite any periods of stress or relationship discord. Neither party identified any changes in their joint or individual social activities during the relevant time period.
(g) Neither party identified any prior legal efforts to separate (i.e. obtaining legal advice, etc.).
(h) Neither party identified any changes in their physical relationship or level of intimacy during the relevant time period.
(i) I find that there were no identifiable periods of separation identified for the court wherein evidence was led to suggest a withdrawal of one or both parties from their relationship consortium.
[91] Where the evidence of the parties on this issue of cohabitation conflicts, I prefer the evidence of the Applicant. I accept the Applicant’s evidence that at all relevant times she believed the Respondent and herself to be in a committed, conjugal, spousal relationship. She was unaware of any intention on the part of either party to live ‘separate and apart’ prior to June 25, 2016. On the evidence presented at trial, there was no clear statement or unequivocal act by either party indicative of a desire to terminate the relationship prior to that time. On the totality of the evidence I accept the Applicant’s position that the parties’ cohabitation commenced on or around April 15, 1995 and that they did not separate until June 25, 2016. No convincing evidence was led at trial leading this court to conclude otherwise. The parties were spouses of one another, as defined by the Family Law Act for a period of approximately 21 years.
[92] With respect to the evidence of both parties, from time to time each ventured off course to provide unsolicited evidence supportive of their own case, but generally speaking both parties made effort to answer the questions posed. Both parties conducted themselves appropriately at trial. The Respondent, although self-represented, was well-prepared and respectful. At times during his testimony he required opportunity to refer to his written materials to refresh his memory. By contrast, while at times tearful and emotional, I found the Applicant to have better recall of addresses and timelines without reference to written materials.
[93] The Respondent’s overall credibility suffers as a result of his disingenuous evidence in relation to the breakdown in communications with counsel and efforts to evade service as outlined above. I believe the Respondent to have been blatantly untruthful on those points, which casts a shadow upon the balance of his evidence. It is this Court’s opinion that he has tailored his evidence, with the benefit of hindsight, in an effort to minimize his spousal support obligation to the Applicant. His representation that he is not attempting to avoid his spousal support obligation to the Applicant does not ring true; he has not made a single voluntary payment of spousal support to the Applicant since separation despite a clear legal obligation to do so.
[94] Based upon the above, I find that there is no arguable case on the merits with respect to the length of the parties’ cohabitation which would support an Order setting aside the Final Order of Justice Brown.
b. Respondent’s Income
2016
[95] The Court imputed a level of income to the Respondent of $102,000.00 at the Uncontested Trial of this matter. The court was accurately advised by the Applicant as to past income levels of the Respondent generally and was advised that in 2016 his income was approximately $102,000.00, his highest income to date. The Respondent’s actual income in 2016 was $103,292.00. It was both factually correct and appropriate for the court to impute this income to the Respondent in the circumstances. There is no arguable basis upon which the spousal support ordered by Brown J. for the period of October 1, 2016 to December 31, 2016 should be disturbed as it precisely reflected the parties’ income. No further or other evidence is now available which would impact that result and there would be no arguable basis upon which the support ordered during this time period could be set aside.
2017
[96] The Respondent argues that his 2016 income, on which his support obligation was based, was atypically high. In 2017 the Respondent reported a gross annual income of $68,177.00. This income was atypically low. Brown J. did not have the benefit of the Respondent’s 2017 income information in light of his non-participation at the Uncontested Trial.
[97] The mid-range spousal support ordered by Brown J. at the Uncontested trial for the 2017 calendar year was $2,902.00 per month.
[98] The following table reflects Spousal Support Advisory Guidelines calculations using the Respondent’s actual reported income, the income imputed to him by Brown J. as per his 2016 income, and an approximate ‘average’ gross annual income, discussed further below, of $95,000.00 per year.
| Year | Respondent’s Income | Applicant’s Income | Low Range | Mid-Range | High Range |
|---|---|---|---|---|---|
| 2017 – reported | $68,177.00 | $7,233.00 | $1,600.00 | $1,866.00 | $2,133.00 |
| 2017 – Imputed as per Brown J. | $102,000.00 | $7,233.00 | $2,488.00 | $2,902.00 | $3,317.00 |
| 2017 – Imputed average income | $95,000.00 | $7,233.00 | $2,304.00 | $2,688.00 | $3,072.00 |
[99] In the year 2017, based upon the parties’ actual reported incomes, the spousal support of $2,902.00 per month was outside of the ranges suggested by the guidelines. This is the argument of the Respondent. However, this court notes that if an income of $95,000.00 were imputed to the Respondent, an income which in this court’s opinion is an average reflection of past and current reported earnings and consideration of a slight upward annual trajectory, the supported ordered by Brown J. would fall within the ranges of the Spousal Support Advisory Guidelines, but at the high end of the range. In this scenario, the Respondent would enjoy 55.3% and the Applicant would enjoy 44.7% of the parties’ combined net disposable income.
[100] In light of the calculations above, it is apparent that the only scenario in which the Respondent could have an arguable case with respect to the quantum of spousal support ordered in 2017, would be on the basis that support ought to have been ordered on the basis of the Respondent’s actual reported income rather than an imputed or average income. However, as the moving party, the onus falls upon the Respondent to advance the facts necessary to advance this as an arguable claim. Why did the trial judge impute an income of $102,000.00 to the Respondent in the year 2017? Because of the Respondent’s lack of participation, Brown J. did not have any evidence of the Respondent’s actual 2017 earnings. How did the trial judge impute an income of $102,000.00 to the Respondent in 2017? Justice Brown based the Respondent’s income upon his actual earnings in the previous year (2016).
[101] In this proceeding the Respondent has offered little explanation as to why, in the year following separation (2017), the Respondent earned $35,000.00 less than in the previous year (2016), and the lowest annual earnings he has earned since 2010. It is concerning that the Respondent, upon whom the burden falls to convince this court that he has an arguable case on the merits, did not call specific evidence to explain why his 2017 income was so low. The possibility exists that the Respondent was not diligent in maintaining gainful employment during this year. The possibility also exists that the Respondent accepted every employment position offered to him through his Union in that year. This evidence was not provided by the Respondent.
[102] The Respondent did indicate that his work typically consists of short contracts and that his income varies significantly on an annual basis. He provided an unsworn letter from a union representative that summarized that income for union members (generally):
“may vary from $30,000.00 to $60,000.00 annually depending on the availability of work. When there is a limited availability of work our members rely on Employment Insurance (EI). With the imposed tariffs on steel, cyclical oil prices and the nature of our industry as a whole, employment can be very uncertain at time for the members”.
[103] What is notably absent from the Respondent’s evidence is any information, confirmatory or otherwise, to suggest that the Respondent himself accepted all positions of employment offered to him in 2017, and that he completed each contract as offered. The Respondent provided no details of the contracts held by him in 2017, no evidence of availability of work generally in 2017, and provided no personal records of employment (ROEs) which would confirm the length of the employment positions held and reason for termination (e.g. shortage of work, etc.). The Respondent declined to call a Union representative or other witness at trial to speak to the 2017 calendar year; whether there was a shortage of work in general, or whether the Respondent accepted all positions offered to him through the Union. He simply argues that the default position should be his Line 150 income, without adequate explanation of this figure. In effect, he engages in the behavior identified by Justice Pazaratz in Trang: he ignored the initial application, then when dissatisfied with the spousal support award, returned to court “waving his tax returns, to suggest that the original judge got it wrong”.
[104] The Respondent has failed to satisfy this court, on the basis of the full evidentiary record before me, that the spousal support ordered in 2017 was inappropriate. The Respondent has now had full opportunity to provide the circumstances of his 2017 employment income and has failed to establish an arguable case on the merits. It is the opinion of this court, that even if the trial judge has used a more ‘average’ income for the year 2017 of $95,000.00 per year rather than reliance upon the Respondent’s income in the preceding year, the spousal support award of $2,902.00 per month, as ordered, would have fallen within the SSAG ranges of support, albeit at the high end of the range. In light of the age of the Applicant, her limited earning capacity and dire financial circumstances at the time of separation, the length and traditional nature of the relationship, minimal assets for division, and the Applicant’s strong compensatory claim for spousal support, I am not satisfied that there is an arguable case on the merits that the support ordered 2017 was inappropriate in the specific circumstances of this case.
2018
[105] At the outset, this court is concerned that the Respondent made a deliberate decision not to file his 2018 personal Income Tax Return, or evidence of year-to-date income in 2019. The hearing of this viva voce long motion began on May 27, 2019. Personal Income Tax Returns are expected to be filed with the Canada Revenue Agency by April 30th each year. The Respondent provided no viable explanation for why he opted not to file his Income Tax Return and provide this information to the court. I draw two negative inferences from this deliberate non-disclosure:
I find that that the Respondent did not file his 2018 Income Tax Return in a further effort to avoid involuntary payment of support (i.e. the capture of any refund that might be owing to him by the Family Responsibility Office); and
The Respondent’s income in 2018 and 2019 (to date) was significantly higher than it was in 2017 and providing this information to the court would weaken his argument that a genuine argument exists with respect to the income imputed to him by Justice Brown.
[106] The mid-range spousal support ordered by Brown J. at the Uncontested trial for the 2018 calendar year was $2,459.00 per month.
[107] The following table reflects Spousal Support Advisory Guidelines calculations using the income imputed to him by Brown J. as per his 2016 income, and his estimated 2018 income of $95,000.00 per year:
| Year | Respondent’s Income | Applicant’s Income | Low Range | Mid-Range | High Range |
|---|---|---|---|---|---|
| 2018 – Estimated | $95,000.00 | $21,699.00 | $1,924.00 | $2,245.00 | $2,566.00 |
| 2017 – Imputed as per Brown J. | $102,000.00 | $21,699.00 | $2,108.00 | $2,459.00 | $2,811.00 |
[108] In 2018, based upon the parties’ estimated incomes, the spousal support ordered of $2,459.00 per month was well-within the ranges suggested by the guidelines, and quite-close to the mid-range level of spousal support. The payment ordered by Brown J. affords the Applicant (recipient) with 44.8% of the parties’ net disposable income. It is the opinion of this court that there is no arguable basis upon which the spousal support ordered by Brown J. commencing in January 1, 2018 would be set aside. The amount falls within the ranges prescribed by the Spousal Support Advisory Guidelines and reflects an appropriate sharing of the parties’ net disposable incomes in light of the objectives of an order for support of a spouse prescribed under the Family Law Act.
4. Potential prejudice to the Respondent if this motion is dismissed v. potential prejudice to the Applicant if this motion is allowed?
[109] The Respondent has now had the benefit of a full hearing, advancing his best case both by way of Affidavit and viva voce evidence, as to his position on the duration of the spousal relationship and his level of income.
[110] The Respondent is no doubt prejudiced by his own failure to make any voluntary payments of spousal support since separation. At the time of this hearing, the Court was advised that his arrears of spousal support under the Order of Brown J. totalled approximately $80,000.00. He argues that this debt is crippling, and he cannot realistically be expected to pay same. The Respondent asserts that he was advised by counsel not to make any voluntary payments until this motion was determined. I do not accept that his former counsel would have advised him not to make any ongoing monthly payments toward this obligation. The Respondent alone has chosen the course that has placed him in this unenviable position of debt.
[111] This has been a long and arduous process for the Applicant. She brought each step in the court proceedings in a reasonable, truthful, and efficient manner and in accordance with the process prescribed by the Family Law Rules. Additional and unnecessary steps were required as a result of the actions (or lack thereof) of the Respondent. To date the Applicant’s efforts have yielded her spousal support payments totalling only $7,000.00. Counsel for the Applicant argues that there is no guarantee that she will be granted a further Legal Aid certificate for the re-trial of this matter given recent LAO cutbacks; setting aside the Final Order of Brown J. would put her back into her original position of extreme financial distress. She is exhausted, financially and emotionally, having been forced through multiple unnecessary and additional steps in this action. She would again be placed in a position of significant financial disadvantage. I find that a greater prejudice would befall the Applicant than the Respondent if this matter were to be re-litigated.
5. What effect would setting the Final Order aside, in whole or in part, have on the administration of justice?
[112] For the reasons outlined above, I am of the opinion that the Final Order of Brown J. dated March 19, 2019 should not be set aside in whole or in part. Although the Respondent moved swiftly to set aside the judgment against him, he did not provide plausible excuse or reasonable explanation for his default. He has failed to persuade this court that there is an arguable case on the merits which would necessitate his participation in further proceedings on the issues decided.
[113] In my view, the sole area in which the Respondent may have been successful in persuading the trial judge of a different outcome had he participated at trial, is in the quantum of spousal support ordered payable in the 2017 calendar year alone. In this court’s view, the Respondent may have been able to convince the trial judge that that the spousal support ordered be based upon more average earnings rather than his 2016 reported income, on the basis of fluctuations in his annual income. The end result could have been a small reduction in the arrears owing to Applicant today.
[114] On a motion under r. 25(19)(e) of the Family Law Rules the Court may decide that the most efficient remedy is to vary the order at issue without setting it aside. The Court must be mindful of applying the process which best promotes the efficient and just resolution of family law matters.
[115] While it may have been tempting for this court, with the benefit of hindsight, to set-aside the support payable in the 2017 calendar year, and lower the quantum to reflect support payable on a more average income of $95,000.00 per year, in my view to do so would have a negative impact on the administration of justice. Non-participation and non-disclosure by payor spouses should never be incentivized; the Respondent was wilful in his inaction with respect to both. The spousal support award was based upon an imputed income resulting from the Respondent’s deliberate non-participation and non-disclosure. This was the risk the Respondent assumed by choosing his course of conduct. The Applicant presented an accurate picture of the parties’ relationship and the Respondent’s pattern of income at trial in his absence. It was open to the trial judge to impute income to the Respondent on the basis of his most current known income. The spousal support award was appropriate in the circumstances and the Respondent has not led sufficient evidence in this hearing to present an arguable case to the contrary. Permitting the Respondent to re-litigate this matter, in the circumstances of this case, would serve an injustice to the Applicant and reflect poorly upon the family court process and the administration of justice. The primary objective and disclosure rules prescribed by the Family Law Rules would be undermined if the relief requested by the Respondent were granted.
PART VI: ORDER
[116] Based upon the foregoing, I make the following Order:
The Respondent’s motion to set aside the Final Order of the Honourable Mme. Justice C. Brown dated March 19, 2018 is hereby dismissed.
If the parties are unable to agree on costs written submissions may be submitted as follows:
a. By the Applicant mother on or before October 1, 2019, not exceeding two pages in length plus bill of costs;
b. By the Respondent father on or before October 14, 2019, not exceeding two pages in length plus bill of costs; and,
c. Reply by the Applicant mother on or before October 21, 2019, not exceeding one page.
d. If costs submissions are not received by October 1, 2019 the issue of costs will be considered settled.
Bale, J.
Released: August 29, 2019
COURT FILE NO.: 526/17
DATE: 2019-08-29
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Mary-Anne Gajic
Applicant
- and -
Michael Lazeo
Respondent
REASONS FOR JUDGMENT
The Honourable Madam Justice L. Bale
Released: August 29, 2019