Court File and Parties

COURT FILE NO.: FC-18-1606 DATE: 2021/03/31 SUPERIOR COURT OF JUSTICE – ONTARIO

RE: Lynn Audrey Telford, Applicant AND William Orlin Waite, Respondent

BEFORE: Mackinnon J.

COUNSEL: Richard Bowles for the Applicant John Guest for the Respondent

HEARD: February 3, 2021

ENDORSEMENT

[1] The respondent, Mr. Waite, moves under the Family Law Rules, O.Reg. 114/99 as am, rule 25(19) to set aside provisions of a Final Order dated July 4, 2019 made following an uncontested trial. The basis of his motion is inadequate notice, fraud and mistakes in the information provided to the court by Ms. Telford.

[2] FLRs r 25(19) provides the following:

(19) The court may, on motion, change an order that,

(a) was obtained by fraud;

(b) contains a mistake;

(c) needs to be changed to deal with a matter that was before the court but that it did not decide;

(d) was made without notice; or

(e) was made with notice, if an affected party was not present when the order was made because the notice was inadequate or the party was unable, for a reason satisfactory to the court, to be present. O. Reg. 151/08, s. 6.

[3] Mountain View Farms Ltd. v. McQueen, 2014 ONCA 194 is often referred to by courts determining a motion under r 25(19) for the five factors it set out in the civil context:

[48] The court must consider the following three factors:

(a) whether the motion was brought promptly after the defendant learned of the default judgment;

(b) whether there is a plausible excuse or explanation for the defendant’s default in complying with the Rules; and

(c) whether the facts establish that the defendant has an arguable defence on the merits.

[49] To this list, I would add the following two factors the court should have regard to, as set out in Peterbilt of Ontario Inc. v. 1565627 Ontario Ltd. 2007 ONCA 333, 87 O.R. (3d) 479 (C.A.), at para. 2:

(d) the potential prejudice to the moving party should the motion be dismissed, and the potential prejudice to the respondent should the motion be allowed; and

(e) the effect of any order the court might make on the overall integrity of the administration of justice.

[4] Not all of these factors need be met but at least one must be engaged before the court exercises its broad discretion under rule 25(19): Gajic v. Lazeo, 2019 ONSC 4690. Other factors may also be considered including deficiencies in full and frank disclosure during the default proceeding and deficiencies in service that could impact the outcome of the trial: Irons v. Irons, 2020 ONSC 1471.

[5] Mr. Waite alleges that Ms. Telford misled him and the court in ways that amounted to fraud in relation to material issues of fact including the duration of the parties relationship, the degree of their economic integration, when important events occurred and by strategically omitting important facts. He submits the court relied on her misrepresentations to find there was a joint family venture when there was not and to find that he had been unjustly enriched at her expense, when he had not been. He asks the court to set aside the Final Order as it relates to the monetary award and to spousal support and to permit him to enter an Answer to these claims. He does not seek relief from the order related to the disposition of the jointly held residential home.

[6] Ms. Telford denies the grounds on which Mr. Waite relies and asks for the motion to be dismissed. She has relied on the finality of the order and does not want to start again to re-litigate any of the issues.

The Final Order

[7] The Final Order awarded the applicant a monetary award of $190,000, lump sum spousal support of $145,989 and required the sale and equal division of the proceeds of the sale of the parties jointly held home. Ms. Telford was also awarded costs of $12,655.

[8] The key findings made were these:

• The parties began their cohabitation in August 1999 and lived together continuously until April 2018, a period of almost 19 years. She was 39 years of age then and is 59 now. He was 40 years of age then and is 60 now.
• Ms. Telford moved into Mr. Waite’s home in Renfrew. When she sold the condo she owned in Ottawa, she put $40,000 into the jointly owned home purchased in 2006 and contributed another $12,500 to furnishings. Mr. Waite also sold his home and put $120,000 down towards the purchase of the jointly owned home. The balance was paid by a jointly assumed mortgage registered against title.
• The couple had no children together. Each had previous children, she a son and he two daughters. Each of their children lived with them for some time, his daughters for a summer each and her son for a year.
• Mr. Waite was employed at Ontario Power Generation from 1979 and throughout the relationship until he retired. He earned a higher income than Ms. Telford during the relationship. His most valuable asset at time of separation was his employment pension to which both he and his employer contributed in some way. On retirement he took the pension as a lump sum of $1,793,522, taxed in his 2016 income in the estimated amount of $758,143.
• Ms. Telford worked from 1999 to 2013 when she stopped by joint decision to assist her elderly mother and take on more of the family responsibilities. She resumed work in June 2017. During cohabitation almost all of her employment earnings went into household expenses. By the time of separation, she had managed to save some money in an RRSP and TFSA totaling $264,393.
• The parties helped purchase a condo for Ms. Telford’s son. She put in $40,000 down and Mr. Waite $15,000. The balance was financed by mortgage paid by her son. Each of the three names were on title as equal owners. Ms. Telford’s understanding was when the condo was sold her son would repay their down payments and keep the rest of the proceeds. Her position at trial was that the equity should be equally assigned amongst the three owners.
• Mr. Waite had employment income in the year prior to retirement of $157,719. In 2016 leaving out the pension lump sum his total income was $154,188 including salary and $16,000 investment income. Mr. Waite told Ms. Telford his 2017 net income was $116,717. He also told her prior to separation that he was making about $10,000 per month investment income. For the purpose of spousal support calculations, the court accepted Ms. Telford’s estimate of his 2018 income at $125,000 as reasonable.
• During the cohabitation the parties pooled their resources and efforts, they both contributed fully to the family enterprise and they shared household expenses. The applicant put almost all of her income towards family expenses. She also assumed almost full responsibility for managing the family home.
• Retirement was discussed. Mr. Waite said he would be able to cover their debts and expenses. A plan was worked on that showed their intention to utilize all of the assets they both had to cover off their joint expenses during retirement. Ms. Telford would retire soon after Mr. Waite.
• Neither party had a will. They discussed death along the lines that the survivor would have the house and also additional funds coming from some portion of their savings.
• Other indicia of living as an economic unit were a joint bank account, the jointly owned home, they were jointly obliged on the mortgage, tax returns typically showed themselves as common law spouses and in the one of his returns available for the period of cohabitation, Mr. Waite claimed Ms. Telford as a dependent.
• During cohabitation the parties enjoyed a standard of living not available to Ms. Telford since separation. She asked for Mr. Waite for support: he made a single deposit of $10,000 to the joint account for her use. She moved to a one bedroom apartment and had two jobs to meet her expenses. She could not afford the discretionary spending customary in cohabitation and had not been able to make adequate provision for her retirement.
• Post retirement Mr. Waite spent a lot of money on himself, $103,735 from 2016 to 2018, including significant jewelry purchases.
• Ms. Telford’s net worth at separation was $382,550. This did not include two jointly owned vehicles which Mr. Waite kept and sold, or personal items not retrieved from the home.
• Mr. Waite held a Manulife account with three components: RRSP, TFSA and LIF. The total held at the end of 2016 was $1,271,841.46. He also owned equity in the jointly owned house of $168,100; one third of the equity in the condo, estimated at $32,500 and the vehicles he retained or sold estimated at $50,000.
• The court found there was a joint family venture. The monetary award claimed was referrable to Mr. Waite’s pension. Whereas much of the money Ms. Telford earned went into the family the separate savings she acquired were relatively small compared to Mr. Waite’s very valuable pension acquired through source deductions and employer’s contributions. In the absence of a pension valuation the court applied a net prorated approach to conclude that the pension value accumulated during cohabitation was $536,663 net of income tax. Ms. Telford claimed one half of this amount but was awarded $190,000 after consideration of the applicable factors.
• Spousal support was awarded as a lump sum calculated at the midrange of the Spousal Support Advisory Guidelines[^1] and at the midpoint between the parties after tax amount.

[9] The following reasons will explain my conclusion that the motion should be dismissed.

The process leading to the uncontested trial

a. Service and related issues

[10] Mr. Waite was personally served by a process server on August 27, 2018 with the Application, Answer form, Notice of Case Conference including the date, and a letter from Ms. Telford’s lawyer. He advances several arguments to explain why he did not respond to them or attend the case conference. First, he says he believed these were only draft pleadings and were delivered as a scare tactic to induce him to negotiate more favourably towards Ms. Telford. Why? He had been served in a previous matrimonial case by a Sheriff not a process server. He regarded the facts set out in the Application as far from the truth, and a reference to another family was included (in error) in the family background section of the Answer form.

[11] Mr. Waite failed to take reasonable steps readily available to him to find out whether his belief was accurate or not. He did not contact Ms. Telford’s lawyer or check at the courthouse. Nor did he attend either his Mandatory Information date or the case conference date, both of which dates were included in the documents served on him.

[12] Mr. Waite telephoned Ms. Telford shortly after he had been served. He says he asked her if there really was a court case and she said no. Ms. Telford denies saying there was no court case pending. He insisted her lawyer had falsified the documents. She did respond sarcastically to the effect of “Sure, Bill, they are fake.” Mr. Waite says he took her at her word and therefore did not take any steps in the case.

[13] I do not believe that Mr. Waite thought the documents were fake and that there was no court case pending. Texts sent to Ms. Telford in September and October show Mr. Waite was clearly aware that court proceedings existed. He tried to bully her out of going forward in court, saying he “court fees are outrageous.” “it [going to court] is a risk. I have done it and won…be careful.” He also messaged her on October 17 that since he would not be coming to court the next day, (apparently the day for his MIP), she should not bother taking time off work herself.

[14] The content of his texts shows he knew there was a court date and he was intentionally not going to attend. This belies his statement that he thought the case was “fake”.

[15] Mr. Waite deposes that he had been severely depressed at the time and was drinking more than usual following the breakup of the relationship. Ms. Telford agrees he was drinking heavily, but there is no independent medical evidence before the court that depression or alcohol intake prevented Mr. Waite from acting in his own interests by checking into the status of the documents he was served with, by contacting a lawyer for assistance, or by attending court on the two dates of which he had notice.

b. October 24, 2018 order

[16] At the case conference on October 24, Mr. Waite was noted in default, an uncontested trial was directed, and other terms were ordered including that Ms. Telford could attend the home to retrieve her personal belongings. FLRs r 25(13)(a), r 10(5) and r 1 (8.4) required that Mr. Waite be served with this order; he was not. The omission is significant. Service of the order would have provided Mr. Waite with the opportunity to immediately seek leave to deliver an Answer, an order that would have undoubtedly been granted had it been sought at that time.

[17] Ms. Telford submits that the significance of this omission is lessened by events of November 10, 2018 when the fact of a court order was brought to Mr. Waite’s attention. In her first trial affidavit she says she attended the home accompanied by a police officer, that she had the October 24 order with her, and allowed Mr. Waite the opportunity to review it, but he denied her entry to the home. Mr. Waite submits November 10 is important because he says Ms. Telford lied so that the court would believe that he had received the October 24 order. Mr. Waite says that only the police, not Ms. Telford, came to the house on November 10. They told him there was a court order for her to obtain her possessions from the house but did not have the order with them.

[18] The police report clearly states that the officer met with Ms. Telford before attending the house but does not expressly state whether or not she accompanied the police to the house. It also states that Mr. Waite would not let her retrieve her belongings despite the fact of the court order but does not say how they knew this.

[19] I accept that Mr. Waite did not receive a copy of the order on November 10, 2018. He may well only have been told that it permitted her to obtain her possessions from the house. But I do not find that Ms. Telford intended to mislead the trial court as to whether the October 24 order had been served or shown to Mr. Waite. The paragraph of her trial affidavit in which she refers to November 10 addressed her inability to retrieve her belongings from the house and Mr. Waite’s lack of co-operation, not whether the order had been served. She exhibited the same police report that Mr. Waite relied on, in a trial affidavit, which is not consistent with an attempt to deceive.

[20] Despite the affidavit from a neighbour who saw Ms. Telford’s car parked several kilometers away not long after seeing the police talking to Mr. Waite, I am not persuaded that Ms. Telford’s testimony on this point amounts to fraud.

[21] Mr. Waite’s admission that the police told him an order had been made does show that on and after November 10 knowing there was an order, he still took no steps to look into the status of the case. This does raise a question as to whether he would have acted had he been served with the October 24 order.

c. Service of the Final Order

[22] The Final Order made on July 4 was signed on July 19, 2019. On August 9 a process server attempted to serve it by attending at the house and asking the man who answered the door whether he was Mr. Waite. The man said no, Mr. Waite was out of the country, return date unknown. Mr. Waite did not address this attempt at service in his affidavit, but his counsel candidly admitted the man at the door had in fact been Mr. Waite. The court is left with no explanation as to why he evaded service at this time.

[23] It was not until Mr. Waite received a letter from the Family Responsibility Office in early August 2019 that he contacted counsel, Mr. Guest. On August 21 Mr. Guest contacted Mr. Bowles who forwarded the October 24 order and the Final Order to him immediately. Mr. Guest acknowledged receipt and said he would reply after seeking instructions. It is acknowledged that Mr. Waite had notice of both orders on August 22.

d. Steps taken after August 21, 2019

[24] Mr. Guest ordered the trial transcript and received it on October 1, 2019. On October 15 he wrote Mr. Bowles advising he had instructions to bring a motion seeking to set aside the Final Order. No mention was made of this motion until it was served more than ten months later. The Covid 19 public health crisis did cause a temporary reduction in court services starting in March 2020. That does not explain either the delay up to that point in time or the subsequent delay in serving the motion materials.

[25] In the meantime, various steps were taken on behalf of Mr. Waite. On October 30 Mr. Guest pointed out an error in the Final Order with respect to the sale price of the house. This was corrected on consent. On December 11 he sent an offer by Mr. Waite to purchase the house from Ms. Telford. She declined the offer. Mr. Guest next contacted Mr. Bowles on June 26, 2020 to sort out the distribution of the proceeds of sale of the house prior to the July 2 closing date. This was accomplished, including payment by Mr. Waite of the costs order from trial. Mr. Waite submitted he was told he should pay the costs before bringing his motion and said he needed his share of the sale proceeds to do so. His financial statement would suggest otherwise.

[26] On August 28 Mr. Waite’s motion materials were served. Motion dates were canvassed. The first mutually available long motion date was selected.

Consideration of rule 25(19)

[27] Mr. Waite has not established that the order was obtained by fraud. Allegations of fraud must be strictly plead and strictly proven. See Mohamed v. Mohamed, 2018 ONCJ 530 at para 47:

[47] Setting aside an order under clause 25 (19) (a) requires a high threshold. Fraud within this clause does not have a special meaning outside of the common law. A moving party must clearly prove that the other party knowingly or recklessly made a false statement with knowledge of the falsehood and did so with wrongful intent. See: Hatuka v. Seigel, 2017 CarswellOnt 14911 (SCJ), per Justice Heather McGee.

[28] Mr. Waite has not established that in her evidence for the uncontested trial Ms. Telford knowingly or recklessly made a false statement with knowledge and wrongful intent. He relied heavily on her oral testimony that she sold her Ottawa condo in 1999 at the start of the relationship. I find she misspoke without intent to mislead. She testified that she put $40,000 from this sale into the purchase of the jointly owned home, which did not occur until 2006. Her financial statement sworn for the trial shows she owned the condo at the date cohabitation began. Her factum for the trial also clearly states she retained her condo after they started living together. The reasons given by the trial judge do not include a finding that Ms. Telford had sold her condo in 1999.

[29] In one of her trial affidavits Ms. Telford did depose that they had a joint account starting in 1998. In her other trial affidavit, she states that she added Mr. Waite’s name to her account to joint it in 2006 when they purchased the jointly owned home. There is an inconsistency, but it does not amount to fraud. In her first trial affidavit Ms. Telford clearly discloses that Mr. Waite alone made the mortgage payments on the jointly owned house. Several paragraphs set out in detail who paid which expenses at different points in time. Her trial affidavits acknowledged that Mr. Waite contributed to her RRSPs and put $50,000 into her TFSA.

[30] Ms. Telford’s evidence for trial did not mention that Mr. Waite traded in a car he owned so that he could pay down her vehicle lease by $52,000. She also neglected to list the jewelry he had purchased for her, explaining she had the mistaken view that gifts did not have to be included. These omissions and other factual disagreements between the parties will be considered in connection to whether Mr. Waite has shown an arguable defense on the merits, but in my view do not amount to fraud.

[31] There are other factual disagreements between the parties which do not rise to the level of fraud or come within the meaning of “mistake” in r 25(19) (b). Justice Summers discusses mistake in the context of FLRs r 25(19) in Bompas v. Henry, 2018 ONSC 7718. At para 20 she states:

The type of mistake capable of redress under rule 25(19)(b) is one that results from inadvertence or omission such as a typographical or mathematical error. The purpose of the rule is to allow the mistake to be corrected to ensure that the order accurately reflects the court’s intention. The gist of Mr. Henry’s argument is that the court made an order for child support without the necessary jurisdiction and thus made an error in law. Challenging the correctness of an order, however, is the subject of an appeal, not of a motion under rule 25(19)(b). (footnote omitted).

[32] Here, Mr. Waite seeks to call into question findings of fact on which the Final Order is based arising from his version of events and qualifications he asserts to Ms. Telford’s written and oral testimony. I would not give so broad an interpretation to the word “mistake” in the context of a rule 25(19) motion.

[33] Reasons have already been set out above to explain why Mr. Waite’s explanations for his default are not satisfactory. Lack of service of the October 24 order does engage the concept of inadequate notice in r 25(19)(e).

The Mountain View Farms Factors

[34] The motion to set aside the Final Order was not brought promptly. Mr. Waite had actual knowledge of the order on August 22, 2019. This motion was not delivered until August 28, 2020. Timely notice of intent to bring the motion was given but was not acted on promptly. In the interval there were several dealings between counsel in relation to the case with no further reference made to the intended motion.

[35] The explanation for the default in complying with the rules is not plausible. The Answer period expired on September 28, 2018. Mr. Waite did not take reasonable steps before or after that date to ascertain whether he had been properly served or whether there was in fact a court case pending against him. He did not contact the applicant’s lawyer, check the court registry, attend court either of the two court dates he had notice of, or retained a lawyer. Even after police officers told him there was a court order, he did nothing.

[36] An arguable defense on the merits requires showing a prospect of success that is not frivolous or vexatious. The threshold is low but no so low that mere assertion of a different version of events that have little or no impact on outcome is sufficient. See for example Dennis v Spears, 2020 ONSC 6585 at 26 and 37.

[37] My conclusion is that Mr. Waite has not shown an arguable defense on the merits in relation to spousal support.

[38] Mr. Waite challenges the finding at trial that the parties began their cohabitation in August 1999 and lived together continuously until April 2018, a period of almost 19 years. His view is that cohabitation for purposes of spousal support did not start until December 2006. As for the continuity of cohabitation he points to a few breakups in the Renfrew years when each would live in their own home for short periods.

[39] Mr. Waite agrees the couple met in 1998 and started dating seriously in May 1999. He agrees that Ms. Telford began spending weekends with him in Renfrew while continuing to work in Ottawa, that this was on an increasing basis by the fall, and by the end of 1999 she was spending the majority of her time with him in Renfrew. He also acknowledges there were times they slept over together at her home in Ottawa. Mr. Waite admits they were living together but describes the relationship as one of “boyfriend and girlfriend”. In paragraphs 73 and 74 of his affidavit Mr. Waite says they were living together in Renfrew and that “Ms. Telford was living primarily with me in Renfrew” but adds the qualification that, “Up until we purchased a home together in 2006, we maintained separate residences while living together in Renfrew, kept all utilities separate and did not contribute to each other’s living expenses.”

For spousal support purposes the Family Law Act, R.S.O. 1990, c.F.3, as am contains definitions of “cohabit” and “spouse”:

1 (1) In this Act,

“cohabit” means to live together in a conjugal relationship, whether within or outside marriage;

29 In this Part,

“spouse” means a spouse as defined in subsection 1 (1), and in addition includes either of two persons who are not married to each other and have cohabited,

(a) continuously for a period of not less than three years, or

[40] Recently in Climans v. Latner, 2020 ONCA 554 the court held that these criteria were met by unmarried parties in a long term romantic relationship who chose to maintain their own residences throughout their relationship, noting that intermittent periods during which they shared a roof could in all the circumstances constitute living together in a conjugal relationship.

[58] I reject Mr. Latner’s submission that the trial judge erred in finding that the parties had lived together in a conjugal relationship. Lack of a shared residence is not determinative of the issue of cohabitation. As the trial judge’s review of the caselaw demonstrates, there are many cases in which courts have found cohabitation where the parties stayed together only intermittently.

[59] The trial judge recognized that cohabitation requires not only that the parties had a conjugal relationship but also that they lived together. As she stated at para. 128 of the Trial reasons, all of the Molodowich factors must be considered in conjunction with one another when determining whether the parties cohabited, however, “there needs to be some element of living together under the same roof”.

[41] Molodowich v. Penttinen (1980), 1980 1537 (ON SC), 17 R.F.L.(2d) 376 (Ont. Dist. Ct.) set out a non-exhaustive list of criteria to be considered in determining whether a conjugal relationship exists: shared shelter, sexual and personal behaviour, services, social activities, economic support, children, as well the social perception of the couple. The Supreme Court of Canada adopted these criteria and a contextual and flexible approach to determining whether a relationship is conjugal. See M. v. H., 1999 686 (SCC), [1999] 2 S.C.R. 3.

[42] Climans persuades me that Mr. Waite has not shown an arguable case on the merits that the parties did not start cohabiting in 1999, or until 2006, or that the durational aspect of their relationship was wrongly factored into the spousal support award. Nor is there an arguable defense on the merits as to whether Ms. Telford is entitled to spousal support.

[43] Ms. Telford’s entitlement to spousal support was found to be both compensatory and needs based. Need in relation to prior standard of living and future retirement planning played a central role. A lump sum was awarded calculated at mid-range for quantum and at the mid-point between the parties after tax positions based on Mr. Waite’s estimated income of $125,000 for 2018 and Ms. Telford’s current actual income.

[44] Mr. Waite submitted that mid-range quantum is unjustified because he is retired and living off his assets. The mid-range based on an annual income of $125,000 and Ms. Telford’s current income had many advantages to him. First, the income estimate was low. It derived from information he had given to Ms. Telford that his net income in 2017 was $116,717 and that he had about $10,000 per month investment income prior to separation in 2018. Mr. Waite’s actual total income in 2017 was $146,367 and in 2018 was $218,171. His 2019 income tax return might have assisted his case but was not provided for the motion. His financial statement dated August 25, 2020 showed his prior year’s income as TBD and an annual current income of $113,036, but without supporting documentation.

[45] Second, Mr. Waite’s future income is quite predictable, and he has not established that the proportion of his total investment assets transferred to Ms. Telford will prevent him from sustaining an annual income in the range of $125,000. His lawyer prepared calculations to show that Mr. Waite would deplete all of his retirement savings by 2026 but the calculations are flawed. The starting point is $1,228,082 income generating assets at August 2020, which is then discounted by 20 % for disposition costs. This discount is inconsistent with the standard use of total income before tax for support purposes. Counsel then deducted debts of $160,421 from the income generating asset base. For support purposes debt payments are treated as an expense against income, not as a reduction against income generating assets. These two unwarranted deductions reduced the available income generating capital to $822,044 as the starting point for the calculations. Mr. Waite’s annual income of about $9,000 from CPP and OAS was not taken into account. An annual income of $146,367 was used, meaning Mr. Waite was predicted to draw down on his retirement assets by $21,367 more each year than required by the income the Final order is based on.

[46] Mr. Waite has had plenty of time to produce his 2019 income tax return and to obtain a professional income flow report from a financial advisor or actuary to support his claim that the spousal support award is unaffordable to himself over his expected lifetime, but he has not.

[47] Third, the trial judge was aware and considered the fact that Ms. Telford’s income would no doubt reduce significantly upon her retirement as one factor justifying the amount of the lump sum awarded. The SSAG calculations used at trial did not factor in a probable income for her after retirement when the likely income differential between the parties would have been greater and would have produced a higher range of monthly spousal support payments than the actual award is based on.

[48] Mr. Waite argues that the Rule 65 should not apply, whereas Climans makes clear that it is appropriate in the facts of this case. He questions whether Ms. Telford was accurate in reporting her self-employed income. He maintains that in the past she had taken excessive write offs and dealt in some cash transactions. He attached a blank, unnumbered invoice from her business to support this claim. Raising questions and making assertions is not the same as establishing a fact, but in this regard it is also important to note that the reasons given by the trial judge included findings that the respondent had already retired at Ms. Telford’s age of 59, and that it would be reasonable for her to choose to only work at her employed position until she did retire.

[49] The next issue is the joint family venture. Mr. Waite submits there never was a joint family venture, or alternatively that it did not commence until December 2006. Mr. Waite has not shown an arguable case that there was never a joint family venture between the parties. In December 2006 the parties bought a house, took title in joint names, set up a joint account to which they both deposited, Ms. Telford stepped out of the work force for several years in which she was dependent upon Mr. Waite and he supported her, including adding to her RRSPs and TFSA, they filed income tax returns in two of these years declaring common law marital status, continued to entertain as a couple, to discuss their retirement and according to Mr. Waite equally performed the household chores and responsibilities. The points he raises and the evidence he presented with respect to comparative contributions from December 2006 forward are relevant to the amount of the monetary award not to whether a joint family venture existed in those later years.

[50] Mr. Waite has met the arguable case threshold with respect to whether the joint family venture commenced before December 2006. In the years from 1999 to December 2006 even though the couple were cohabiting they did not have a joint account or own property jointly. Mr. Waite says their actual intention was not to marry or to become financially intwined on account of their previous experiences with marriage and divorce. Ms. Telford did depose in a trial affidavit that they “typically listed each other as common law spouses” on their income tax returns. Mr. Waite’s disclosure shows there were only two years in which he made this claim, namely 2016 and 2017. Ms. Telford now acknowledges that she had made a will in favour of her son which she says she had forgotten because it was made so long ago. The years before 2006 were also the years in which their children resided with them for some periods of time. His children and Mr. Waite take issue with Ms. Telford’s claim that priority was given to them as part of the family.

[51] Ms. Telford does not agree with Mr. Waite’s depiction of their relationship in the years before 2006, but he has provided sufficient evidence to meet the threshold to establish an arguable case on the merits.

[52] Mr. Waite also submits that he has made out an arguable case that the monetary award is too high. I will consider this issue first in relation to the award of $190,000 on the basis it was made, namely that the joint family venture extended throughout the cohabitation. Put another way, if the Final Order is set aside so that Mr. Waite is able to advance the position that the joint family venture only commenced in December 2006, but he is ultimately unsuccessful in establishing that claim, should he nonetheless be entitled to contest the monetary award made at trial as being too high? This requires consideration of whether he has an arguable case on the merits on the amount of the award in that scenario and is also related to the potential prejudice arising from the outcome of his motion.

[53] The monetary award made at the uncontested trial was related to Mr. Waite’s pension, their real property having been divided by ownership. I conclude that Mr. Waite has not raised a triable defense on the merits to the amount of that award as it relates to the finding of a joint family venture throughout the parties cohabitation. The trial judge knew that Mr. Waite retired at the end of 2016 and cashed out his pension, receiving a total of $1,793,522. Some of this went into registered accounts, but on the remainder, which was taxable, Mr. Waite paid $758,143 in income tax in 2016. In the absence of a pension valuation the trial judge accepted Ms. Telford’s proposal and prorated the net amount of $1,035,379 equally over all the years of contribution to produce the net figure of $536,636 attributable to the years of cohabitation. Of this Ms. Telford was awarded $190,000. The trial judge did not express this as a percentage, but it is in fact about 35%.

[54] For this motion Mr. Waite produced an actuarial report which established the value of his pension when he terminated his employment at $2,209,438 and the accumulated value at May 1, 1999 at $1,191,088. From these numbers the portion accumulated over cohabitation is seen to have been $1,018,350. Allowing a tax reduction on the portion of the amount taxed in 2016 attributable only to the period of cohabitation, as had been done at trial ($628,778 x 52.38 % = $329,354) would leave a net comparable value of $688,996, that is $152,360 more than the net value used at trial.

[55] Mr. Waite provided evidence of a financial advantage he bestowed on Ms. Telford in the pre-2006 years in the form of work done and money spent to improve her condominium in Ottawa. He also disagreed with the value placed on the son’s condo of $290,000 which he thought should have been $300,000 or more based on the comparable sales Ms. Telford presented at trial. These factors would be nominal in relation to the amount by which his pension was undervalued at trial.

[56] As will be seen Mr. Waite also submits that he made specific financial payments to or for Ms. Telford after 2006 that were not known to the trial judge, and which may impact on the monetary award. These will be discussed below. Despite the potential impact these may have had on the monetary award made at trial I would nonetheless dismiss this aspect of his motion based on considerations of prejudice to Ms. Telford and the negative impact on the administration of justice if Mr. Waite were permitted to set aside an order made on a significant undervaluation of his pension for which he is responsible.

[57] A second pension valuation established the accumulated pension entitlement at December 6, 2006. That value was $ 1,655,404, meaning that the value accumulated over this shorter period to termination was $554,034. Allowing a tax reduction on the portion of the amount taxed in 2016 attributable to this period of cohabitation as had been done at trial, ($342,087 x 52.38% = $179,185) would leave a net comparable value of $374,849, or $161,787 less than the net value used at trial. Based on this difference and if the joint family venture did not commence until December 2006, then Mr. Waite has an arguable defense on the merits as to the monetary award of $190,000.

[58] Mr. Waite also relied on other financial advantages he provided to Ms. Telford after 2006 that he says she did not reveal to the trial judge. Some of these have already been addressed in connection to the alleged fraud. Most were in fact set out in Ms. Telford’s trial affidavits, including that he made the mortgage payments on their home, topped up her RRSP, and put $55,000 into her TSFA in 2016. Mr. Waite complains that she did not provide the amount he contributed to her RRSPs, but neither did he. Ms. Telford did not advise the trial court that Mr. Waite contributed $52,000 to reduce the cost of her car lease by trading in his vehicle or that he paid the $197 monthly lease payment for her. Nor did she disclose the jewelry that he gave her over the years, which Mr. Waite says cost over $50,000. He also deposes she left with some $3,000 in cash whereas she admits to $1,000. It is also a fact that over the years Mr. Waite contributed much more money to their joint expenses than did Ms. Telford. This was and is conceded.

[59] Mr. Waite says in addition to his contribution to the down payment to Ms. Telford’s son’s condo that he also reduced the mortgage principal by another $16,440, whereas Ms. Telford had said her son paid the mortgage. Bank statements show that her son paid $1,100 per month rent which Mr. Waite then used to make the monthly mortgage payment of $825. Despite that, he claims credit for the full principal reduction as his own.

[60] Mr. Waite also unilaterally sold two jointly owned vehicles post separation from which he acknowledges $21,000 of net proceeds.

[61] There are several other specific claims in the motion record as to the comparative financial contributions of the parties after 2006 that are in dispute and not capable of determination at this time. One example is that Mr. Waite says that over two years, 2016 to 2018, he contributed $111,000 to reduce the balance on Ms. Telford’s line of credit. She disagrees and points out that of this sum, $41,500 appears not to have gone to her or her line of credit but to a credit card in Mr. Waite’s sole name and that the balance was to reimburse her for his share of joint expenses which she had paid.

[62] Although he has met the arguable defense threshold based on the pension valuation, the extent to which he has established economic advantages to Ms. Telford not known to the trial judge is also relevant to the consideration of the potential prejudice to each party arising from the outcome of the motion.

[63] The pension valuation provides some useful parameters. If the joint family venture did not start until 2006, one may reasonably conclude that a monetary award to Ms. Telford would not exceed half of the pension accumulated during that time, namely $187,425. Or, applying the same 35 % as was the result at trial, to the value accumulated during this shorter period of time, would result in an award of $131,197.

[64] For Mr. Waite the potential prejudice is that he may have over paid Ms. Telford. He has no other recourse against the judgment and its impact on his own financial future. On the other hand, the Final Order has been fully executed and Ms. Telford has relied on it to plan her future. If the order is set aside, she may have to undo financial steps she has already taken in reliance on the finality of the order.

[65] She also faces potential prejudice related to spousal support if the motion succeeds and a lower monetary award is made. Lump sum support orders may in theory be subject to a motion to a change, but in practice are intended to be final. Nor should a support order be made for the purpose of redistributing property between spouses. Ms. Telford would for all practical purposes be unable to have a court determine her spousal support claim in light of the impact a lower monetary award would have on her needs and means.

[66] The potential prejudice to Mr. Waite arises from his own disregard of the court process with the one exception that he was not served with the order noting him default and directing the uncontested trial. The potential prejudice to Ms. Telford from setting aside the order arises because Mr. Waite did not participate in the case although properly served or meet his financial disclosure obligations as required by FLRs r 13(1) and (3.4) to deliver a financial statement and information necessary to the property claim, whether or not he delivered an Answer.

[67] Ultimately the exercise of judicial discretion must reflect what is fair and just in all the circumstances of the case. In Bompas there was a strong arguable case that enforcement of a penalty clause calling for the imposition of a life-long pension division whether or not the full amount required by the separation agreement for debts and equalization of net family property had been paid seemed on its face to exceed a fair and reasonable estimate of the damages flowing from the default. Any potential prejudice to Ms. Bompas could be addressed through costs, such that the just outcome was to set aside the Final order.

[68] Mr. Waite has met the threshold of establishing an arguable defense on the merits as to whether the joint family venture did not commence until 2006, and in that scenario if a monetary award is ordered what the appropriate amount should be. He has shown potential prejudice to himself if the order is not set aside. The only other fact in his favour is that Ms. Telford’s lawyer was inadvertent in not serving the order noting him in default. The decision to dismiss the motion should not be taken as precedent that service of an order noting a party in default may be disregarded with impunity. However, Mr. Waite intentionally ignored two court dates he had notice of, one of which was the date on which that order was made, he took no steps after police told him an order had been made in a case between himself and Ms. Telford, and he lied to evade service of the Final Order.

[69] Factors weighing against Mr. Waite are the lack of a plausible or satisfactory explanation for his default in the first place and his delay in bringing the motion. There is potential prejudice to Ms. Telford in relation to the award made for her spousal support claim if the Final order is set aside and the joint family venture were found not to commence until 2006. She faces other potential prejudice if the order she has relied on as final to arrange her own affairs is set aside. I conclude that in this case setting aside the Final order would not be just and would have a negative impact on the integrity of the administration of justice, by excusing Mr. Waite’s dismissive conduct in relation to the court case, and placing more weight on the potential prejudice to him, rather than to Ms. Telford and the importance to the administration of justice of certainty and finality in litigation.

Costs

[70] Ms. Telford is the successful party to the motion. She is entitled to costs. If counsel cannot agree on the appropriate award of costs, they should exchange written submissions limited to three pages plus attached Bills of Cost and any offers to settle the motion. The applicant may also make a brief reply. All submissions are to be delivered to me by April 30, 2021.

Mackinnon J.

Released: March 31, 2021

COURT FILE NO.: FC-18-1606

DATE: 2021/03/30

ONTARIO

SUPERIOR COURT OF JUSTICE

RE: Lynn Audrey Telford, Applicant

AND

William Orlin Waite, Respondent

BEFORE: Mackinnon J.

COUNSEL: Richard Bowles for the Applicant

John Guest for the Respondent

ENDORSEMENT

Mackinnon J.

Released: March 30, 2021

[^1]: prepared for the Department of Justice Canada, July 2008, http://www.justice.gc.ca/eng/fl-df/spousal-epoux/ssag-ldfpae.html