Court File and Parties
Oshawa Court File No.: FC-16-50481-0001 Date: 20220215 Superior Court of Justice – Ontario – Family Court
Re: Joseph Fernicola, Applicant And: Josephine Fernicola, Respondent
Before: The Honourable Madam Justice S.J. Woodley
Counsel: L. Liquornik, for the Applicant L. Korhani, for the Respondent
Heard: February 11, 2022
Endorsement
Overview of the Urgent Motions Before the Court
[1] On February 4, 2022, two urgent motions were sought to be argued before me.
[2] The first motion was brought by the Applicant Father (“AF”) who seeks an Order enforcing an alleged Agreement reached between the parties through counsel varying the final child support Order of Justice Kaufman dated March 1, 2018, on a temporary without prejudice basis, in the amount of $500.00 per month commencing March 1, 2020.
[3] The second motion was brought by the Respondent Mother (“RM”) who seeks (i) an Order that the refraining order be terminate effective October 1, 2021; (ii) an Order that the Applicant’s motion be dismissed; and (iii) an Order that in accordance with the Applicant’s annual imputed income of $82,300.00 he shall pay child support in the amount of $2,201.00 for five children, to commence effective October 1, 2021.
[4] Both parties seek costs.
[5] The AF’s motion was originally scheduled for July 28, 2021, at which time it was adjourned as the RM’s counsel was ill and subsequently passed. The AF’s motion was rescheduled for February 2, 2022, and adjourned by Himel, J. to February 10, 2022, for the reasons set out in her Endorsement.
[6] Although the RM sought to have her Motion argued before me on February 10, 2022, there was no specific reference to the RM’s Motion in Himel, J.’s Endorsement nor did the RM’s motion appear to have been “properly booked through the Trial Co-ordinator” as required by the Endorsement. Further, there simply was not sufficient time booked for argument of both motions.
[7] As the AF’s motion had been twice adjourned and was specifically contemplated to be argued on February 10, 2022, by Himel, J.’s Endorsement, the hearing proceeded and was restricted to argument relating to the AF’s motion.
[8] In the circumstances, the RM was granted leave to contact the trial coordinator to book her urgent motion for hearing. The RM is required to comply with the terms of the local direction and PD as detailed at paragraph 5 of Himel, J.’s February 2, 2022 Endorsement. Any costs related to RM’s motion shall be determined by the Judge hearing the motion.
Review and Determination of the Relief Sought by the AF’s Urgent Motion
[9] The issue determined by me on the AF’s motion is restricted to the validity and enforceability of the alleged agreement dated December 16, 2021, between the parties.
[10] More specifically, the provisions of this Endorsement although providing a review the evidence filed by the AF and the RM, makes NO findings or assumptions regarding the AF’s income, whether past or present, or whether the AF should have income imputed to him as requested by the RM in her motion materials, yet to be argued.
Background Facts Related to the AF’s Urgent Motion
[11] The AF and the RM are former spouses of one another and together have five children, namely: Isabella, age 14; Joseph, age 12; Giancarlo, age 11; Christian, age 7; and Julian, age 6.
[12] Pursuant to Final Minutes of Settlement dated January 23, 2018, a final consent Order issued on March 1, 2018, from Justice R. Kaufman, that determined, inter alia, that commencing February 1, 2018, and on the first day of each month thereafter, the AF shall pay to Table support to the RM of $2,200 per month for the support of the five children, based on the AF’s imputed income of $82,300 per year.
[13] The AF owns and runs a soccer program for children and as noted the consent March 1, 2018 Order was based on imputed income of $82,300.
[14] In July of 2019, the AF commenced a Motion to Change his support obligation on the basis that his income had declined even prior to the pandemic.
[15] In support of the AF’s motion to change he commissioned an assessment of his income by Bonnie Prussky of AP Valuations Inc. who prepared a report dated May 29, 2019, which dealt with the years 2018 and 2019.
[16] The AF claims that he was “so devasted by the pandemic because of my business that I wound up on social assistance” and his ability to work and earn income was “further impacted tremendously by a serious back and spinal injury suffered while on my honeymoon in Mexico in November 2020”.
[17] The AF explains that he remarried in August 2020 and “as a result of some gifts from family and the financial assistance of my new wife, we took a honeymoon in Mexico” where he slipped and required “major surgery to my back and spine”. The AF claims this has caused him to suffer “tremendous ongoing chronic pain” and he has spent “a long- time rehabilitating”.
[18] The AF advises that “all of my financial circumstances were communicated to the RM’s previous counsel, Mr. Syed. For example, Ms. Prussky’s report with Scope of Review documents was sent to him as was proof of social assistance”.
[19] The AF states that his income has improved only marginally during the Spring and Summer of 2021 as a result of the continuing pandemic. The estimate of his “very modest income” is set out in his financial statement, which according to his 2020 CRA NOA is $5,140.00, which was “also provided to Mr. Syed”.
[20] The AF claims to have survived financially as a result of a “government loan, some assistance from his (new) wife and from my mother” together with his credit cards which has resulted in significant debt as seen on his Financial Statement.
[21] The AF and his new wife live at his mother’s home. He also has a GoFund me page which was set up to “assist me due to my injuries” which collected funds of $20,000 reflected again on his financial statement.
Alleged Agreement Between Counsel dated December 16, 2020: the AF’s Position
[22] On December 3, 2020, the AF’s counsel wrote to the RM’s counsel, Mr. Syed, confirming that he had written “some time ago” providing proof that the AF was on social assistance. The AF’s counsel suggested that the AF should not have been paying any amount on account of support in 2020 due to the pandemic and suggested that a temporary order issue changing the monthly obligation to $500 per month, retroactive to March 1, 2020. The AF’s counsel sought a response to the support issue by no later than December 8, 2020, failing which he advised he would schedule a conference and bring a motion.
[23] On December 16, 2020, the AF’s counsel wrote to Mr. Syed, as follows: “I am writing yet again about the issue of child support. The evidence is overwhelming that my client has suffered a dramatic downturn in his 2020 income. It is reprehensible that your client refuses to engage in a quick resolution of the issue. We are going to be seeking costs.
I will be requesting that the Motion to Change be scheduled for a case conference with Justice MacPherson who knows this case all too well. Please provide me with your available dates by Friday of this week.”
[24] By return email Mr. Syed responded as follows:
“WITHOUT PREJUDICE
Mr. Liquornik:
I am now prepared to respond to your letter of December 3, 2020, after obtaining instructions from my client.
I would like to note that your insistence on unilateral short deadlines (December 8, 2020) and your unnecessary interpretation of a “quick resolution” are unproductive and unwarranted.
We are responding within a reasonable amount of time, given the more pressing reconciliation issues my client is currently dealing with. I am sure your client can appreciate that my client is working very hard with Mr. Ambrozic towards reunification of him and the children.
What about the section 7 expenses and arrears? How does your client propose to resolve this matter? We need to commence resolution discussions about this issue, so your position and thoughts are welcome.
Regarding child support for the parties’ five children, my client will agree to an Order on a temporary and without prejudice basis to change the monthly obligation to $500.00 per month retroactive to March 1, 2020. We will await your draft settlement documents for review.”
[25] On December 21, 2020, the AF’s counsel by email forwarded to the RM’s counsel their client’s 14B Motion Form, with draft Consent for counsel’s execution, draft Order for approval as to form and content and a copy of the final support Order for convenience.
The AF’s counsel requested that the RM’s counsel “kindly return the Consent with your signature and with the Order containing your approval as to form and content if possible by Wednesday of this week”.
[26] The operative portions of the 14B Motion, and Consent sent by the AF’s counsel to the RM’s counsel read as follows: “a temporary without prejudice Order varying the Applicant’s base Guideline child support obligation to $500 per month commencing February 29, 2020”.
[27] The operative portions of the Order sent by the AF’s counsel to the RM’s counsel read as follows:
“THIS COURT ORDERS ON CONSENT ON A WITHOUT PREJUDICE BASIS THAT:
The Applicant’s base Guideline child support obligation as set out in paragraph 2 of the Final Order of the Honourable Justice Kaufman dated March 1, 2018 shall be varied to $500.00 per month for the children of the marriage (listed) retroactive to February 29, 2020.
the quantum of support as set out in paragraph 1 above, shall not be based at this time on any specific income of the Applicant father, having regard to uncertainty and lack of precision currently as to the overall 2020 year end impact of the pandemic on his income.
Unless this Order is withdraw form the Director’s Office, at the Family Responsibility Office, it shall be enforced by the Director and amounts owing under the Order shall be paid to the Director, who shall pay them to the person to whom they are owed.
For long as child support is paid, the Payor (and Recipient, if applicable) must provide updated income disclosure to the other party each year, within 30 days of the anniversary of this Order, in accordance with section 24.1 of the Child Support Guidelines.
This Order bears post-judgment interest rate of __% per year effective from the date of this Order. Where there is default in payment, the payment in default shall bear interest only from the date of default.”
[28] On January 13, 2021, the AF’s counsel wrote to the RM’s counsel regarding his (Mr. Syed’s) objection to the wording – not the substance – of the draft Order.
[29] On January 25, 2021, the AF’s counsel re-wrote the RM’s counsel noting that no substantive objection had been made to the draft documents. The AF’s counsel provided a timeline to resolve failing which he was instructed to bring a motion.
[30] The AF by his February 2, 2022 affidavit swears, “It was never clear why he objected to the wording and thereafter all communications essentially broke down”.
[31] The AF originally brought the within motion to enforce the alleged agreement on July 28, 2021. However, as the date approached, the AF’s counsel was advised that Mr. Syed was extremely ill, and the date was vacated. I am advised that Mr. Syed passed away as a result of this illness.
Alleged Agreement Between Counsel dated December 16, 2020: the RM’s Position
[32] The RM’s responding affidavit dated January 24, 2022, states that contrary to the AF’s affidavit, there was no agreement between counsel regarding child support on a retroactive basis and no agreement that the AF “overpaid”.
[33] The RM states that the Applicant’s counsel kept changing clauses in the agreements and thus the minutes of settlement could not be signed.
[34] The RM states that the AF failed to provide adequate disclosure that was requested of him which she stated is typical of the AF which is why income was imputed to him by the March 1, 2018 Order.
[35] The RM further states that despite the AF not “providing full and proper disclosure, an agreement was made in March 2021 (typo should read March 2018 ) regarding child support and not even a year later” the AF sought to lower his support.
[36] The balance of the RM’s responding affidavit relates to the AF’s ability to pay child support and her request that income be imputed to the AF.
[37] In this regard, the RM advises that the AF stopped paying child support in November 2020 when he took the (honeymoon) trip to Mexico.
[38] While the RM acknowledges receipt of the Prussky Income Report, she asserts that the report is the same report considered when the AF’s income was imputed on consent at $82,300.
[39] By the balance of her affidavit, the RM provides evidence as to her view of the value of the AF’s assets, his income, and the success of his business.
[40] The RM notes that the AF’s extensive travel during the period that he claims to be destitute including: travel to Jamaica in August 2020 to get married; travel to Jamaica in November 2020 for a honeymoon; and travel to the UK in January of 2022 to celebrate his wedding.
[41] The RM notes that there is no proof offered to support the AF’s position that the trips occurred because of gifts and financial assistance from family.
[42] The RM challenges and disputes the AF’s evidence that his wife supports him, that he lives with his mother (and not independently), and that his business is failing and provides evidence to the contrary.
[43] The RM notes that the pandemic did not change the needs of their children for support or for basic necessities. The RM suggests that if the AF’s business is failing that he could have sold it and returned to his field of HVAC in which he has a gas licence, even temporarily to supplement his income. The RM notes that instead of working to support his children the AF has chosen to remarry, travel, and pay no child support while she is left to solely support the parties’ five children.
[44] The RM has sworn that each of the five children have required additional costs, special orthotics, various therapies, dental expenses and more and the AF has not assisted with any of these costs.
[45] The RM has sworn that she is in receipt of OW who is assisting with these expenses but that when she finishes her schooling, she will no longer qualify for OW and will lose this funding.
[46] The RM pleads that $500 per month is not enough to support five children and in addition, the AF is in arrears with FRO in the amount of $27,000.
[47] The RM asserts that the AF has failed to show a material change in circumstances to change the final order of March 1, 2021 ( again should read March 1, 2018), imputing the AF’s income at $82,300 per year.
ANALYSIS AND DETERMINATION OF ISSUE
[48] As noted, the RM’s motion to impute income to the AF is pending and leave has been granted by me to obtain a date for argument of the RM’s motion in accordance with the local direction and PD detailed in the Endorsement of Himel, J. dated February 2, 2022.
[49] The sole issue before me is whether an Order should be granted enforcing the alleged temporary without prejudice agreement dated December 16, 2021, varying the child support order of Justice Kaufman dated March 1, 2018, on a temporary without prejudice basis to $500 per month commencing March 1, 2020.
[50] The AF provided substantial documentation regarding the alleged agreement.
[51] In particular, the AF provided a copy of a letter from his counsel dated December 3, 2021, offering a temporary order issue changing the monthly obligation to $500 per month, retroactive to March 1, 2020 and RM’s counsel’s acceptance of the offer dated December 16, 2021.
[52] The relevant portions of the correspondence from the RM’s counsel dated December 16, 2021, bears repeating: “ I am now prepared to respond to your letter dated December 3, 2020, after obtaining instructions from my client… Regarding child support for the parties’ five children, my client will agree to an Order on a temporary and without prejudice basis to change the monthly obligation to $500.00 per month retroactive to March 1, 2020. ”
[53] The RM provided no documentation regarding the agreement and does not allege that the agreement was entered into by her counsel without her knowledge or consent. The RF also does not allege that her counsel acted without her instructions or outside the scope of his authority.
[54] The concerns raised by the RM seem to relate to the substantive issues of child support and not whether a temporary without prejudice agreement was reached between counsel on December 16, 2021.
[55] To determine whether the parties have reached a settlement, the Ontario Court of Appeal in Halpern v. Halpern, 2014 ONSC 4246, citing Andrews v. Lundrigan, 2009 ONCA 160 and Ward v. Ward, 2011 ONCA 178, has set out three distinct lines of inquiry to consider:
(1) was there a “meeting of the minds” or consensus ad idem, that was manifest to the reasonable observers?
(2) was there a consensus on all of the essential terms of the agreement? and
(3) did the parties make the agreement conditional upon any other term, or subject to execution or a formal contract?
[56] The test is objective and the parties will be found to have reached a meeting of the minds where it is clear to the objective reasonable bystander in light of all the material facts that the parties intended to contract and the essential terms of that contract can be determined with a reasonable degree of certainty. (See Cook v. Joyce, 2017 ONCA 49).
[57] In the present case, on the face of the record there is an offer to settle the issue of child support on a temporary basis made by counsel for the AF on December 3, 2021. There is also an acceptance of that offer to settle made in writing by counsel for the RM dated December 16, 2021.
[58] Despite any breakdown in communication between the parties that may have occurred following December 16, 2021, the exchange of correspondence between counsel dated December 3, 2021 and December 16, 2021, constitutes an offer and acceptance of essential terms of the “temporary without prejudice” agreement sufficient to enforce same.
[59] On any reading of the correspondence exchanged, all three factors as noted by the Court of Appeal in Halpern have been satisfied: (1) there was a meeting of the minds objectively evidence on the face of the record that the parties intended to enter into the agreement; (2) all essential terms of the agreement were determined; and (3) the agreement was not conditional nor contingent upon any further terms or subject to execution of a formal contract.
[60] The terms of the temporary without prejudice agreement were clear, straight forward, and easily understood. The RM’s counsel’s acceptance of the terms on the RM’s behalf was also clear and unequivocal.
[61] The fact that an Order was required to enforce the agreement does not make the parties agreement conditional. (See Rivers v. Burt, 2015 ONSC 7756).
[62] Further, additional wording changes made by counsel to the draft Order which were made for the purposes of clarity, do not change the intent of the essential terms. The parties had already agreed to the essential terms and in this case the proposed additions did not materially alter any essential terms and did not undo the parties’ agreement. (See Osborne v. Osborne, 2020 ONSC 3826).
[63] The fact that the RM’s counsel titled his correspondence accepting the offer “Without Prejudice” does not invalidate the settlement.
[64] Without prejudice communications may be tendered as proof of the settlement where the existence of the agreement is in issue. (See Iverson v. Iverson, 2009 SKQB, at para 59; N.J.G. v. K.L.G., 2018 SKQB 42; and Bate v. Smith, 2017 BCSC 1261; Hallewick v. Everingham, 2004 ONCA 48157; and Patel v. Patel, 2003 ONSC 27615 Girgis-Boktor v. Reddy, 2017 ONSC citing Union Carbide Canada Inc. v. Bombadier Inc., 2014 SCC 35).
[65] Having considered the facts and circumstances of this case and the applicable law governing the interpretation of the alleged agreement, I am satisfied that there was a valid temporary without prejudice agreement reached between the parties pursuant to counsel’s exchange of correspondence dated December 3, 2021 and December 16, 2021, and the subsequent breakdown in communication did not invalidate the agreement.
[66] The relief sought by the RF’s motion to enforce the agreement reached between the parties through counsel, varying final child support Order of Justice Kaufman dated March 1, 2018, on a temporary without prejudice basis in the amount of $500.00 per commencing March 1, 2020, is granted.
[67] As for the issue of costs, Himel, J.’s Endorsement dated February 2, 2022, required the parties to file Bills of Costs together with any Offers to Settle exchanged, and to be “ready to argue costs” at the conclusion of the motion. The procedure as set out by Himel, J. was followed, and costs were argued at the conclusion of the motion on the basis that the AF was the successful party.
[68] Following determination of the motion, I had an opportunity to review the parties’ Offers to Settle. The AF sought to resolve the matter in accordance with the terms of his Notice of Motion with costs being severable. The RM sought to dismiss the AF’s motion, vacate the Refraining Order, and essentially reinstate the March 1, 2018 Order of Kaufman, J.
[69] The AF was the successful party on the motion and pursuant to Rule 24 of the Family Law Rules he is presumed to be entitled to costs.
[70] By his Bill of Costs, the AF seeks $10,851.49 on a substantial indemnity basis.
[71] Regarding the amount of costs claimed, I note that counsel for the AF prepared stellar materials including a Statement of Law that greatly assisted the Court and focused counsels’ argument of the issues in dispute.
[72] Counsel for the AF is clearly experienced, capable, competent, and was fully prepared for the hearing. I have no issue with the amount of costs sought by counsel for the AF, as between counsel and his client, the AF.
[73] However, the issue that concerns me is how much of the AF’s costs should the RM be required to pay, given the facts and circumstances of this case.
[74] In considering this issue, I have considered the caselaw and the factors outlined at Rule 24(11) which includes a consideration of the reasonableness of each party’s behaviour in the case, the time properly spent on the case, expenses properly paid or payable, and any other relevant matter.
[75] Having thoroughly considered the facts and circumstances that lead to the argument of this motion, it is my view that despite the AF’s success, an award of costs to be charged against the RM in the amount proposed would be unconscionable for the following reasons:
a. the AF consented to the March 1, 2018 child support Order including imputation of income at $82,300. However, within a short period of time and prior to the pandemic, the AF sought to reduce the child support payable to support his FIVE children by $1,700 per month placing the RM in an impossible financial situation;
b. although I found that an agreement was reached between the parties by their counsel, the RM’s counsel died, leaving the RM at a disadvantage as to both insight and documentation;
c. during the period that the AF sought to enforce the agreement reducing his child support obligations by $1,700 per month, the AF married and took three vacations. The optics from the RM’s viewpoint did not favour a simple resolution; and
d. regardless of the AF’s income and his ability to pay child support, the RM is left supporting five children aged 14 to 6 years old. As support is the right of the child, the RM’s effort to avoid implementation of the Agreement reducing child support by $1,700 per month appears to be in the best interest of the children however flawed such efforts were in law.
[76] For the foregoing reasons, given the unusual and unforeseen circumstances of this case, compassion, fairness, and consideration of the best interests of the children dictates that I exercise my discretion to limit the amount of costs payable by the RM to the AF. The RM requires every dollar at her disposal to support her five children.
[77] As a result, in accordance with the provisions of s. 24(11) and in the exercise of my discretion, I hereby fix costs payable by the RM to the AF at $2,000.00 inclusive, which amount shall be set-off and deducted from any arrears found owing by the AF to the RM on final disposition of the AF’s Motion to Change.
TEMPORARY WITHOUT PREJUDICE ORDER TO ISSUE
[78] For the foregoing reasons, an Order shall issue as attached hereto and signed by me.
Justice Susan J. Woodley Released: February 15, 2022
