Court File and Parties

COURT FILE NO.: 107/17D

DATE: 20210625

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Kirk Richard Iredale, Applicant

AND:

Carol Dougall, Respondent

BEFORE: Justice R. Raikes

COUNSEL: James Bennett - Counsel, for the Applicant

Michael Blackburn - Counsel, for the Respondent

HEARD: June 2, 2021

ENDORSEMENT

[1] I released my trial decision in this matter on March 20, 2020. The issues at trial were constructive trust, equalization, and spousal support. Judgment has not yet been taken out and the issue of costs has been deferred a number of times at counsel’s request.

[2] On March 5, 2021 (almost a year after release of my decision), the Applicant brought this motion for an order pursuant to r. 59.06 to admit into evidence at trial an appraisal by Jason Wharram dated September 2, 2018 of the property at 71800 London Line, Exeter, Ontario so that the court “can properly adjudicate on the issue of equalization”. Applicant’s counsel asserts that the appraisal report was left out of the joint documents brief at trial by mistake. It was always intended to be part of the evidence at trial and should have been used in the determination of the value of the matrimonial home.

[3] By way of background, the farm property on which the matrimonial home was situate was owned by a farm corporation. The Respondent’s parents were the sole shareholders of that corporation until December 30, 2013 when they transferred the shares of the corporation to the Respondent alone. By then, the parties had been living in the house on the property for five years. They separated in June 2016.

[4] One of the issues at trial was whether the matrimonial home included the entire farm property (99 acres) or a lesser size, and the value of same. I specifically asked counsel to address that issue in their written closing submissions and referred them to s. 18(3) of the Family Law Act, R.S.O. 1990, c. F.3, as am..

[5] Applicant counsel’s firm took the lead in compiling a six volume joint documents brief for trial. Trial counsel for the Applicant (not Mr. Bennett) deposed that it was agreed between counsel and always intended that all three appraisals done by Mr. Wharram be included in that joint documents brief which was filed and marked as an exhibit at the commencement of trial. Two other appraisals by Mr. Wharram were included in the brief. Mr. Wharram was not called as a witness by agreement between counsel. I was told that I should use the appraisals filed to fix the value of the property.

[6] Respondent’s trial counsel (not Mr. Blackburn) deposed that he does not agree that there was an agreement that all evidence of property values was to be included in the joint documents brief. There was no agreement that the September 2, 2018 appraisal be included in that brief and he would not have agreed to same. That was a hypothetical appraisal done for settlement negotiation purposes. Given its hypothetical nature, he would have required that Mr. Wharram testify if that report had been included in the NFP Brief.

[7] It is undisputed that Mr. Wharram was retained by the Respondent and prepared three appraisal reports dated August 14, 2018, September 2, 2018, and May 2, 2019. The first two appraisals use a date of separation valuation date. The third appraisal used an April 30, 2019 valuation date.

[8] The August 14, 2018 appraisal valued the whole of the farm property and included a breakdown of the buildings on the property including the house that was the matrimonial home.

[9] The September 2, 2018 appraisal report was a hypothetical valuation as at the date of separation of the matrimonial home plus one acre of land. It is hypothetical because a severance would be required to create such a parcel.

[10] The May 2, 2019 appraisal took the same approach as the August 14, 2018 appraisal but used a more current valuation date.

[11] Only the August 14, 2018 and May 2, 2019 appraisals were filed in the NFP Brief that was part of the six volume joint documents brief. The NFP Brief was marked as an exhibit at the beginning of the trial.

[12] I was told by Applicant’s counsel at the outset of trial that there would be only three witnesses: the parties and the Respondent’s mother. I was also told that the NFP Brief included “two appraisals”. He indicated that one used a date of separation value and the other used the current value of the farm. I note that that is consistent with the August 18, 2018 and May 2, 2019 appraisals. He made no reference to a third appraisal or a stand-alone valuation of the home and one acre.

[13] The evidence at trial concluded on June 21, 2020. Counsel agreed to do written submissions by way of closing.

[14] Applicant’s counsel first noticed that the September 2, 2018 appraisal was not in the joint document brief during preparation of his written closing submissions. Nevertheless, he did not contact Respondent’s counsel to alert him to his mistake. He did not canvass with Respondent’s counsel whether he would consent to the appraisal being admitted into evidence at that late stage. He did not alert the court as to his mistake or bring a motion at that time, before written submissions were done, to re-open the evidence.

[15] Instead, he included the September 2, 2018 appraisal as an attachment to an NFP statement submitted as part of his written closing submissions. His submissions made no reference to the fact that the appraisal relied upon was not in evidence.

[16] In his written reply submissions, Respondent’s counsel did not alert me to the fact that the September 2, 2018 appraisal attached to the NFP statement as part of the Applicant’s written submissions was not evidence in this trial. His reply submissions were silent on that point. He deposes that he did not include reference to the September 2, 2018 report in his reply submissions because it was not relevant as it was not evidence at trial.

[17] As indicated, I rendered my trial decision on March 20, 2020. Although I reviewed counsel’s written submissions and referred to them in my Reasons, I relied upon the appraisals found in the joint documents brief. At paras. 104-110 of my decision, I wrote:

[104] The house on the farm was the matrimonial home on the date of separation. There is an older run-down detached garage in addition to other farming related buildings/structures on the home farm. It is undisputed that the detached garage is necessary to the use and enjoyment of the residence. The issue here is whether the entire property constitutes the matrimonial home or, if not, how much of the property is reasonably necessary to the enjoyment of the residence.

[105] When Kirk and Carol first moved to the home farm in August 2008, the cultivated lands were rented to Carol's cousin. He continued to rent part of the cultivated lands until 2012. Kirk and Carol paid very modest rent to Carol's parents for the use and occupancy of the house. They continued to do so until April 2012. Since separation, Carol continues to reside in the house but rents [out] the cultivated lands. That was the case in 2017 while Kirk was still living there.

[106] Thus, the house and lands being farmed were distinct throughout. The lands under cultivation were and are not necessary to the use and enjoyment of the residence.

[107] Page 11 of Exhibit 7 is an aerial photograph of the property. The photograph shows three distinct areas: a wooded area at the rear, lands that appear to be cleared and used for crops, and a smaller area nearer the road on which buildings are situated. According to the appraisal, the building site comprises 3.5 acres. The buildings are described in the appraisal as: the house, detached garage, implement storage shed, and older low eave storage shed, a traditional two-story barn with additions including roof mounted solar panels, and two commodity storage bins. Thus, part of the 3.5 acre building site lands are occupied by buildings related to farming

. [108] No site maps have been provided that further depict the building site area. It is not possible to do an exact calculation of the lands around the home that appeared to be used for the residence. The best I can do is a reasonable estimate in the circumstances. Accordingly, I fixed the amount of land connected to the use and enjoyment of the residents at 2 acres. In doing so, I am mindful that for a period of time, Carol had 1/4 of an acre for a garden that produced vegetables for sale at markets but also provided fresh vegetables for their family. There is a driveway to the road that I include in that estimate.

[109] What is the value of the matrimonial home? At page 59 of Exhibit 7, Mr. Wharram sets out separate values for the buildings and lands. He estimates the value of the house at $80,000, the detached garage at $2,500, and the price per acre of building site land at $14,000 - the same as the land used for crops . Based on those figures, the value of the matrimonial home is $110,500. No contrary evidence of value was adduced at trial.

[110] Therefore, the value of the matrimonial home is $110,500.

[18] The equalization issues occupied significant time at trial. There were many pieces of farm equipment and other items listed in the NFP statements. In some cases, counsel had agreed on ownership and value; in some cases, they agreed on one of ownership or value; or there was no agreement on either. They resolved some but not all ownership/value issues after the evidence was complete and before their written submissions were provided to me.

[19] After my trial decision was released, counsel conferred. Try as they might, they could not get the final equalization amount in my decision to match with my findings. Each wrote a letter to me on June 23, 2020 to ask for clarification.

[20] In his letter, Applicant’s counsel sought clarification of a number of issues and wrote in respect of the matrimonial home:

Paragraph 109 & 110

In the judgment, the figure of $110,500 was used from the Wharram report that value the farm as a total package. The Court was provided with the updated Wharram report that took the home as a stand-alone asset and valued it at $217,000 (attached to the Net Family Property Statement with closing submissions).

That $217,000 value went uncontroverted in the Respondent’s reply closing submissions. It was her appraiser that provided the updated valuation.

Is there an explanation for why the $110,500 was preferred to the $217,000?

[21] I note that by this point, Applicant’s counsel already knew that the $217,000 appraisal was not part of the evidence at trial, yet he wanted to know why it had not been used to determine the value of the matrimonial home. His letter is completely silent about his mistake in omitting it from the joint documents book.

[22] The Respondent saw Applicant counsel’s proposed letter to me ahead of June 23, 2020. Respondent’s counsel did not advise that that appraisal was not part of the evidence at trial. He only indicated that he felt my Reasons were clear and no clarification was needed.

[23] Trial counsel attended before me on September 22, 2020 at which time I went through each of the figures used to derive my final figure for equalization. I determined that there was indeed an addition error of $2,000 and my decision was revised to correct that mistake.

[24] At the September hearing, Applicant’s counsel again inquired why I had used the appraisal I did to calculate the value of the matrimonial home and not the September 2, 2018 appraisal. Respondent’s counsel interjected. He pointed out that I had used the figures from the August 14, 2018 Wharram appraisal report found in the joint documents brief and that the September 2, 2018 report referred to by Applicant’s counsel was a separate report never filed in any of the document briefs. That report was only attached to Applicant’s closing submissions. I indicated to Applicant’s counsel that the September 2, 2018 appraisal report was not in evidence.

[25] Following that attendance, the time for written submissions as to costs was extended yet again. Finally, on March 5, 2021, roughly 6.5 months after the attendance on September 22, 2020, the Applicant brought the within motion.

Law – Jurisdiction, Mistake and Re-Opening A Trial

[26] The law is well-settled that because the judgment has not yet been taken out, I am not functus: Metropolitan Toronto Condominium Corp. 626 v. Bloor/Avenue Road Investment Inc., [2009] O.J. No. 1205 (S.C.J.), at paras. 31 and 33. A order can be withdrawn, altered or modified by a judge on his/her own initiative or on application of a party until such time as the order has been entered: Montagne v. Bank of Nova Scotia, (2004), 2004 CanLII 27211 (ON CA), 69 O.R. (3d) 87 (C.A.), at para. 34 citing Holmes Foundry Ltd. v. Village of Point Edward; Caposite Insulations Ltd. v. Village of Point Edward, 1963 CanLII 197 (ON CA), [1963] 2 O.R. 404 (C.A.), at p. 407.

[27] The jurisdiction to modify an order is independent of the Rules of Civil Procedure: Metropolitan Toronto Condominium Corp. 626, at paras. 32 and 33, citing Smith Bus Lines Ltd. v. Bank of Montreal (1987), 1987 CanLII 4190 (ON SC), 61 O.R. (2d) 688 (H.C.), at p. 702.

[28] Justice O’Marra in Metropolitan Toronto Condominium Corp. 626 wrote at para. 30:

30. A judgment can be altered if “the integrity of the litigation process is at risk unless it occurs, or that there is some principle of justice at stake that would override the value of finality in litigation, or that some miscarriage of justice would occur if such reconsideration did not take place”. (See Schmuck v. Reynolds-Schmuck (2000), 2000 CanLII 22323 (ON SC), 46 O.R. (3d) 702 (Ont. S.C.J.) and Lawyers Professional Indemnity Co. v. Geto Investments Ltd., 2007 CanLII 27756 (ON SC), [2007] O.J. No. 2793 (Ont. S.C.J.)).

[29] Rule 25(19) of the Family Law Rules states:

(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.

The motion before me does not fit within any the categories provided for in r. 25(19) above.

[30] Rule 1(7) of the Family Law Rules states:

(7) If these rules do not cover a matter adequately, the court may give directions, and the practice shall be decided by analogy to these rules, by reference to the Courts of Justice Act and the Act in governing the case and, if the court considers it appropriate, by reference to the Rules of Civil Procedure.

[31] The Applicant submits that this court has jurisdiction and should deal with this motion under r. 59.06 given that the Family Law Rules do not have a similar provision dealing with accidental slips or omissions in respect of an order.

[32] Rule 59.06 of the Rules of Civil Procedure deals with amending, setting aside and varying an order. It states:

(1) Amending - An order that contains an error arising from an accidental slip or omission or requires amendment in any particular on which the court did not adjudicate may be amended on a motion in the proceeding.

(2) Setting aside or varying - A party who seeks to,

(a) have an order set aside or varied on the ground a fraud or a facts arising or discovered after it was made;

(b) suspend the operation of an order;

(c) carry an order into operation; or

(d) attain other relief then that originally awarded,

may make a motion in the proceeding for the relief claimed.

[33] Rule 59.06(1) permits the court to amend an order where there has been an error in expressing the manifest intention of the court: Convey v. Marsulex Inc., [2004] O.J. No. 3645 (S.C.J.), at para. 12. The court may set aside or vary an order under subsection (2) where it is necessary in the interest of justice to do so: Clatney v. Quinn Thiele Mineault Grodzki LLP, 2016 ONCA 377, at paras. 59-60.

[34] The court has a wider discretion to re-open a matter where the integrity of the process is at risk or a principle of justice is at stake. While a court should re-open a motion or other matter sparingly and with the greatest of care, it may re-open when it is just to do so in exceptional circumstances: Strugarova v. Air France (2009), 2009 CanLII 40552 (ON SC), 82 C.P.C. (6th) 298, leave to appeal to Div. Ct. refused 181 A.C.W.S. (3d) 890.

[35] In Varco Canada Limited v. Pason Systems Corp., 2011 FC 467, at para. 15, Justice Phelan wrote:

[15] The first point and an overarching aspect is that re-opening is a matter of broad discretion but one which should be exercised sparingly and cautiously. Finality of a trial is a critical concept in our justice system – no one appreciates that concept more than a trial judge who is faced with the generally unpleasant task of re-opening a case on which he or she has commenced writing.

[36] The test to re-open a trial for the purpose of admitting new evidence is twofold:

1. Would the evidence, if presented at trial, probably have changed the result? And

2. Could the evidence have been obtained before trial by the exercise of reasonable diligence?

(See 671122 Ontario Ltd. v. Sagaz Industries Canada Inc., 2001 SCC 59, at para. 20; Risorto v. State Farm Mutual Automobile Insurance Co. (2009), 70 C.P.C. (6th) 390 (Div. Ct.).)

Analysis

[37] The Applicant submits that September 2, 2018 appraisal was omitted from the joint document brief by the inadvertence of counsel. There was no strategic benefit to the Applicant to omit it. Further, there is no prejudice to the Respondent to allow the appraisal to be admitted into evidence. She commissioned the appraisal and was aware of it. Mr. Wharram was never going to be called as a witness. Admitting it now will not require any new or additional evidence. Failing to admit the appraisal report would be contrary to the interests of justice.

[38] The Respondent submits that the Applicant’s motion is really to re-open the trial to admit evidence already known to the Applicant during the trial. There was no agreement that the September 2, 2018 appraisal was to be included in the joint document brief. Respondent’s counsel would not have agreed to same and Mr. Wharram’s viva voce evidence would be required. The Respondent will be prejudiced. The test to re-open a trial is not satisfied in these circumstances.

[39] The evidence of Applicant’s counsel suggests a mutual mistake – both parties intended the appraisal to be part of the joint document brief and its omission should be remedied to give effect to what the parties intended. It is clear, however, from the evidence of Respondent’s counsel that there is a fundamental disagreement with that premise – there was no mutual mistake because the document was never intended to be in the joint document brief.

[40] Both trial counsel are very experienced family law lawyers. Both are known to this Court and have well-deserved reputations for integrity and competence. It may well be that Applicant’s counsel understood and believed that all three appraisals were intended to be and were part of the joint document brief despite his reference to “two appraisals” in his opening. I am, however, deeply troubled by his failure to address its omission promptly upon discovery and his subsequent submissions and communications with the Court.

[41] By the same token it is entirely understandable that Respondent’s counsel understood that only the two appraisals would be in the brief. Only two appraisals were shown on the index to the NFP Brief compiled by Applicant counsel’s firm. Only two appraisals were in the brief. The Applicant’s primary position and focus at trial was to establish a constructive trust over the whole of the farm property which is consistent with the two appraisals actually included in the brief. Applicant counsel expressly referred to “two appraisals” in the joint document brief in his opening with the second clearly being the May 2, 2019 appraisal.

[42] In short, I find that there was no meeting of the minds on inclusion of the September 2, 2018 appraisal in the joint document brief. I am not satisfied that both counsel agreed to the September 2, 2018 appraisal’s inclusion in the brief. The mistake in this case rests with Applicant’s counsel. If he wanted the September 2, 2018 appraisal in evidence, he should have obtained the agreement of Respondent’s counsel or called the appraiser. He did not.

[43] I cannot say whether the first branch of the test to re-open the trial is met on the record before me. Respondent’s counsel deposes that if the Applicant had sought to introduce the opinion as to value expressed in the September 2, 2018 report, he would have cross-examined Mr. Wharram given its hypothetical nature. I cannot predict what that cross-examination would have disclosed or how it may have affected the use and weight given to the value expressed in that report. I cannot conclude that it probably would have affected the outcome.

[44] Further, there is no question that the evidence existed at all material times. Applicant’s counsel received a copy of that appraisal report on September 4, 2018, more than 21 months before the trial. It is evidence that could have been adduced during the trial with reasonable diligence. It was not adduced because of counsel’s inadvertence. The second branch of the test for re-opening a trial to admit new evidence is not satisfied.

[45] The Applicant relies upon the decision in Gore Mutual Insurance Co. v. 1443249 Ontario Ltd., [2004] O.J. No. 1896. In that case, Justice Karakatsanis (as she then was) had rendered a decision on a motion. Before the order was entered, counsel discovered that certain provisions of the Insurance Act that had not been brought to the court’s attention made the sections actually relied upon inapplicable. She held that it was an obvious error by counsel and the interests of justice would not be served by requiring an appeal on a clear error of law. She granted the motion.

[46] That case is materially different from the case before me. First, the mistake in Gore Mutual was made by both counsel who equally failed to notice that the sections they were arguing had no application. Second, the error was on an obvious point of law, not an effort to re-open the evidence at trial after the decision was rendered to adduce new evidence that could have been put before the court.

[47] Finally, I am not satisfied that I should exercise my discretion to re-open the trial to allow this evidence to be admitted as:

1. My decision is now 15 months old. The finality principle is engaged;

2. The Applicant could and should have addressed the issue as soon as or reasonably soon after discovering the omission. He did not and made submissions relying on the omitted report that he knew was not part of the evidence at trial;

3. The Respondent will be prejudiced. She has met the case presented by the Applicant and should not be confronted at this stage by evidence that was readily available during the trial;

4. It is not in the interests of justice to re-open the trial to allow the evidence to be adduced;

5. The integrity of the trial process is not at risk nor is a principle of justice at stake; and

6. Exceptional circumstances do not exist in this case.

Conclusion

[48] For the above reasons, the motion is dismissed. If counsel cannot agree on costs of this motion, they may make written submissions not exceeding 3 pages within 10 days hereof.

[49] With respect to cost submissions for the trial, those submissions have been extended repeatedly at counsel’s request. It is past time that they were dealt with. Absent resolution, the parties are directed to file their written submissions not exceeding 5 pages within 30 days hereof.

Justice R. Raikes

Date: June 25, 2021