NEWMARKET COURT FILE NO.: FC-17-55198-00
DATE: 20220922
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Peyman Raisfirooz (not present)
Applicant – Self-represented
Applicant
– and –
Hanieh Dajmar
Respondent
G. Schwartz, Counsel for the Respondent
HEARD: September 21, 2022
RULING ON MOTION
A. Himel J.
Relief Sought and Background
[1] This is a motion brought by the Respondent (“mother”) to strike out the Applicant (“father”)’s pleadings, to proceed by way of a 23C uncontested trial and for a vesting order in respect of the matrimonial home (which is held jointly).
[2] The parties were married in Iran on August 25, 1994 and separated in January 2017 (5.5 years ago). They were married for 22.5 years. There are two children of the marriage, Ali (age 26) and Sana (age 19).
[3] The parties immigrated to Canada in 2009. The mother resides in the matrimonial home, 16 Old Park Lane, Richmond Hill, Ontario, and the father in Iran.
[4] The father was served this motion on August 18, 2022, yet he failed to file any responding materials and he failed to attend at court today. The father ceased attending at court in 2021 (although he sent an agent to request an adjournment of the January 2022 child and spousal support motion), and he has failed to participate in any way since then. To clarify, the father failed to file or attend the March 3, 2022 motion, or the August 2022 Trial Scheduling Conference.
[5] The support motion was ultimately heard by Sutherland J. on March 3, 2022. His Honour wrote extensive reasons, and made various factual findings (in respect of the egregious non-compliance of court orders by the father and his blatant disregard for court orders respecting the payment of funds to the mother and disclosure).
[6] This case has been ongoing since December 2017. It has been marred by non-disclosure (by the father), non-compliance (by the father) and delay (various adjournment requests made by the father, Covid-19, and other delays).
[7] The mother’s evidence in support of today’s motion (by affidavit sworn August 18, 2022) reiterates the facts upon which Sutherland J. made his findings, and provides an update as to the further breaches of court orders (which equate to a complete disregard of the Sutherland J. order and the other orders). I rely on the findings made by Sutherland J. It is unnecessary to re-state the history or additional facts as both parties are in receipt of that decision.
[8] For the reasons set out below, I am granting the relief sought by the mother, including costs.
Law and Analysis
[9] Pursuant to Rule 1(8) of the Family Law Rules, O. Reg. 114/99, as am, the court has wide discretion in dealing with a party’s failure to obey an Order. The section reads as follows:
Failure to Obey Order
(8) If a person fails to obey an order in a case or a related case, the court may deal with the failure by making any order that it considers necessary for a just determination of the matter, including,
(a) an order for costs;
(b) an order dismissing a claim;
(c) an order striking out any application, answer, notice of motion, motion to change, response to motion to change, financial statement, affidavit, or any other document filed by a party;
(d) an order that all or part of a document that was required to be provided but was not, may not be used in the case;
(e) if the failure to obey was by a party, an order that the party is not entitled to any further order from the court unless the court orders otherwise;
(f) an order postponing the trial or any other step in the case; and
(g) on motion, a contempt order. O. Reg. 322/13, s. 1.
[10] The three-pronged test governing the exercise of judicial discretion to strike a party’s pleadings/dismiss a party’s case is well established in the caselaw (Lamothe v. Ellis, 2021 ONSC 4883, at para 25):
(a) Is there a triggering event justifying the striking of pleadings;
(b) Is it appropriate to strike the pleadings in the circumstances of the case; and
(c) Are there other remedies in lieu of striking pleadings that might suffice?
The Triggering Event: The Breaches and Justifications
[11] The mother summarizes the father’s breaches of the court orders as follows:
(a) prior to the Sutherland J. support motion on March 3, 2022 – the father has failed to comply with various court orders for: the payment of expenses related to the matrimonial home, the payment of the mortgage since 2019, the payment of any monies since November 2021, financial disclosure (including authorizations to the mother’s lawyer in Iran for banking information, Royal Bank of Canada disclosure and Bank of Nova Scotia disclosure), meaningful contributions towards the daughter’s university expenses, as well as costs of the Di Luca J. attendance in 2021; and
(b) following the Sutherland J. motion – the father has failed to pay the retroactive and ongoing child support, currenting amounting to $143,072, retroactive and ongoing spousal support, currently amounting to $504,992 and costs of $17,976.04. To be clear, the father has made none of the required payments.
The Appropriateness of the Remedy Striking his Pleadings
[12] As stated in Manchanda v. Thethi, 2016 ONSC 3776, 2016 CarswellOnt 8951 (S.C.J.) “Without enforcement of the primary objective, a party can frustrate the civil justice system’s goals of efficiency, affordability, proportionality, and fairness, by making the process slow, expensive, and distressful.” The Court of Appeal held that striking of pleadings is not reserved for drastic and extreme cases” (2016 ONCA 909).
[13] In Lamothe v. Ellis (2021 ONSC 4883, at para 42), the court struck the Respondent’s pleadings due to his chronic and persistent disregard of court orders. Chozik J. considered the following five factors in determining whether it was appropriate to strike the Respondent’s pleadings:
(a) That the Respondent's non-compliance is extensive and persistent;
(b) That his non-compliance is willful in nature;
(c) That the Respondent has not made any reasonable efforts to comply with the court orders and is unable to provide acceptable explanations for the breaches;
(d) That in claiming that he is financially unable to pay the costs awards and minimal child support, the Respondent has not provided adequate financial disclosure to the Applicant or the underlying documentations that would allow her (and the court) to make adequate determinations as to his income and employment; and
(e) That the remedy must not go beyond that which is necessary to express the court's disapproval of the conduct in issue and must be proportionate to the issues in question and the conduct of the Respondent.[^1]
[14] In the present case, each of the factors identified by Chozik J. in Lamothe v. Ellis apply:
(a) the father’s non-compliance is extensive and persistent. He has made no mortgage payments since 2019 and no other payments since 2021;
(b) the father’s non-compliance can only be described as flagrant, wilful and calculated. The mother provided evidence of deposits made into sole and joint accounts held in the father’s name of over $658,000 (from March to October 2021);
(c) no effort has been made towards compliance with any of the orders. As the father no longer attends court proceedings there are no explanations; and
(d) the remedy is necessary to show the court’s disapproval and as a response to the father’s conduct (which includes transferring a property in Iran to the son. When the father participated in the proceeding he acknowledged same and the value of $2,900,000).
Another Remedy that Might Suffice
[15] Prior cost orders have not been sufficient to yield compliance with court orders as these remain unpaid.
[16] Given the history in this matter, the father’s non-compliance and non-participation, there is no other remedy that might suffice.
Conclusion Regarding the Motion to Strike
[17] The father’s pleadings are hereby struck out. The mother may proceed by way of an uncontested trial (on notice to the father), in writing, with a return date as scheduled by the trial coordinator for the November/December 2022 trial sittings.
Vesting Order
[18] The recent decision of Casullo J. in Nikfar v. Nikfar, ONSC 1252 provides a comprehensive review of the law in respect of a spouse’s request for a vesting order, including a request made on a motion. The lengthy excerpt below sets out the relevant legislation and caselaw.
[85] In Ontario, the court’s general power to grant a vesting order is found in s. 100 of the Courts of Justice Act:
A court may by order vest in any person an interest in real or personal property that the court has authority to order be disposed of, encumbered or conveyed.
[86] Sections 9(1)(d)(i) and 34(1)(c) of the Family Law Act also provide a broad power to grant a vesting order.
[87] In Lynch v. Segal, 2006 CanLII 42240 (ON CA), 82 OR (3d) 641, the Ontario Court of Appeal described the legal principles related to the issuance of vesting orders as follows:
27 In Ontario, the court's broad general power to grant a vesting order is found in section 100 of the Courts of Justice Act. In the specific context of family law claims, sections 9(1)(d)(i) and 34(1)(c) of the Family Law Act confer an equally broad power to grant a vesting order on an application for equalization of net family property or support, respectively. Vesting orders are discretionary and have their origins in the court's equitable jurisdiction …
31 The rationale for the vesting power, therefore, is to permit the court to direct the parties to deal with property in accordance with the judgment of the court. The jurisdiction is quite elastic. Nothing in the language of either section 100 of the Courts of Justice Act or section 34(1)(c) of the Family Law Act operates to constrain the flexible discretionary nature of the power.
32 I do not think any useful purpose is served by attempting to categorize the types of circumstances in which a vesting order may issue in family law proceedings. The court has a broad discretion, and whether such an order will or will not be granted will depend upon the circumstances of the particular case. I agree with the appellants that the onus is on the person seeking such an order to establish that it is appropriate. As a vesting order — in the family law context, at least — is in the nature of an enforcement order, the court will need to be satisfied (as the trial judge was here) that the previous conduct of the person obliged to pay, and his or her reasonably anticipated future behaviour, indicate that the payment order will not likely be complied with in the absence of more intrusive provisions: see Kennedy v. Sinclair (2001), 2001 CanLII 28208 (ON SC), 18 R.F.L. (5th) 91 (Ont. S.C.J.), affirmed (2003), 2003 CanLII 57393 (ON CA), 42 R.F.L. (5th) 46 (Ont. C.A.). Thus, the spouse seeking the vesting order will have already established a payment liability on the part of the other spouse and the amount of that liability, and will need to persuade the court that the vesting order is necessary to ensure compliance with the obligation.
33 In addition, the court should be satisfied that there is some reasonable relationship between the value of the asset to be transferred and the amount of the targeted spouse's liability and, of course, that the interests of any competing execution creditors or encumbrancers with exigible claims against the specific property in question are not an impediment to the granting of a vesting order. However, I would not go so far as to say — as argued by the appellants — that the onus to satisfy the court on these matters is at all times on the person seeking the order. I shall return to these issues later in these reasons.
[88] Before making a vesting order, the court should have some indication from the payor’s previous conduct, and reasonably anticipated future behaviour, that payment will not be forthcoming: Lewchuk v. Lewchuk, 2012 ONSC 2236, at para. 24.
[89] In Buttar v. Buttar, 2013 ONCA 517, 116 OR (3d) 481, the Court of Appeal considered the powers granted to the court under s. 9 of the Family Law Act. As Rosenberg J.A. explained at para. 53:
Section 9 gives the court the power to transfer properties only “if appropriate to satisfy an obligation imposed by the order [for equalization of net family properties]”. In other words, the transfer power under section 9 is specifically connected to the satisfaction of the order for equalization of net family properties rather than a general transfer power for the settlement of disputes arising from martial breakdown.
[90] While the Court of Appeal cautions that a vesting order under s. 9 should be applied to ensure satisfaction once a net family property determination has been made at trial, there have been instances where such orders were made prior to trial.
[91] For example, in Verch v. Verch, 2012 ONSC 2621, the court granted a vesting order to the mother, who was not named on title, before an equalization payment had been ordered. The couple were at risk of losing the matrimonial home to a tax proceeding following the father’s failure to pay property taxes. The father’s behaviour during the course of litigation (including disregarding an order to pay $143,700 into court) led the court to conclude that the father would continue to disregard court orders:
I am persuaded that a Vesting Order is necessary to ensure compliance with that obligation and to ensure that the matrimonial home is protected pending the final outcome of this litigation: at para. 39.
[92] Finally, relying on r. 1(8) and 14(23) of the Family Law Rules, Abrams J. held that when a party chooses not to follow the Family Law Rules, or fails to abide by a court order, the court has the discretion to “make any order that it considers necessary for a just determination of the matter, on any conditions, that the court considers appropriate.”
[93] In Patel v. Patel, 2021 ONSC 1741, the mother was granted a vesting order, which allowed her to list and sell the matrimonial home to secure payment of the father’s court-ordered child support obligations, in addition to an outstanding costs award. The father had not complied with six court orders concerning financial disclosure and had left the jurisdiction. As Tzimas J. held at paras. 31-34:
First, there is no dispute that Mr. Patel has failed to comply with any of the court orders related to his obligation to pay child support and s. 7 expenses, and he has accumulated costs orders against him that total $16,500. All told, the monies he owes to Ms. Patel to date add up to approximately $37,467. Having regard for the fact that the child is only three and a half years old, Ms. Patel can expect a substantial augmentation of this debt and a substantial judgment if she were to proceed with an uncontested trial, as anticipated by the court order of July 29, 2020. When these figures are considered against the estimated equity of $70,000 I find that there is a reasonable relationship between the value of the matrimonial home and Mr. Patel’s debt to Ms. Patel.
Second, I also find that a absent a vesting order, there is no reasonable prospect that Ms. Patel will be able to enforce the current outstanding court orders or any future judgment against Mr. Patel. On Mr. Patel’s own representations to the court, his alleged financial difficulties underscore the risk to Ms. Patel’s future ability to enforce the court orders to date and any other judgment against Mr. Patel. His disappearance to India, without notice and for an extended period of time only exacerbates the risk to Ms. Patel’s rights. Rather remarkably, nobody suggested anything about any plans to return to Canada. That means that apart from being able to realize against the matrimonial home, if Mr. Patel does not return to Canada, the prospects of the Family Responsibility Office being in a position to go after Mr. Patel’s wages, or any other financial sources to collect support and section 7 obligations are slim to nil.
Third, insofar as Mr. Patel’s default on his debts to RBC and RBC’s imminent power of sell (sic) proceedings are concerned, there was no evidence before the court to suggest that Mr. Patel would seek to reinstate his mortgage payments or do anything to avert the sale of the matrimonial home. The indication by RBC that if Ms. Patel acted swiftly to obtain a vesting order and then to immediately list and sell the matrimonial home actually represents a very time-limited opportunity for Ms. Patel to mitigate Mr. Patel’s expected loss and effectively do what she could to maximize the net equity…
On the strength of the foregoing this (sic) analysis, I conclude that issuing a vesting order in favour of Ms. Patel and requiring her to list and sell the property immediately is the only order that makes sense.
[94] In the case at bar, it is uncontroverted that the Respondent will owe the Applicant a considerable equalization payment. During his Questioning he agreed that, at a minimum, the Applicant would be entitled to $750,000. Indeed, according to one of the Respondent’s FSs, the equalization payment could be as high as $2,600,000.”
[19] The relevant considerations and my conclusions to support the requested vesting order are as follows:
(a) the mother is currently owed significant arrears of support and costs, in the approximate amount of $700,000. The arrears do not include support payable from 2017 to 2020 (the start date of the Sutherland J. order);
(b) given the father’s actions to date, the evidence supports a finding that he will not comply with his ongoing and future support obligations;
(c) the father resides in Iran. The sole property of value in Ontario may be his 50% interest in the matrimonial home (as there is no current evidence about any funds held in Canadian banks as he refuses to disclose same);
(d) enforcement of orders (support and property) may be difficult (or not possible) given that the father resides in Iran and may have transferred further assets to others;
(e) it is unclear what steps the FRO has taken or are willing to take given that the father resides in Iran (although they are encouraged to take all appropriate steps);
(f) the equalization payment, which is based on the father’s stated assets (including the Iran property that he admitted to transferring to the son) is approximately $2,300,000. The mother states that she believes it is likely higher than that amount as the father has likely undervalued his assets. Sutherland J. noted (at paragraph 67 of the March 21, 2022 decision) that, “there is much more to his income and his wealth that he is not disclosing, for obvious reasons”;
(g) a vesting order is appropriate where a property is at risk of foreclosure or other such event. The mother states that she has been forced to obtain loans from friends and families to avoid issues with the matrimonial home;
(h) the father’s 50% share of the net equity in the matrimonial home is approximately $1,227,000 (as per the letter of opinion obtained by the mother), after deducting the mortgage and any other encumbrance;
(i) the father will receive a credit in the amount of the equity in the matrimonial home when the support and equalization payments are determined on a final basis (which is anticipated to be addressed shortly); and
(j) the mother will not inappropriately benefit from a vesting order. The value of the equity in the matrimonial home will be “owed” to her on account of some combination of an equalization payment and retroactive and ongoing support. There is a reasonable relationship between the value of the equity and the father’s financial liabilities.
Costs
[20] In setting the amount of costs, Rule 24(12) requires the court to consider the reasonableness and proportionality of each enumerated factor as it relates to the importance and complexity of the issues. Assessing costs is “not simply a mechanical exercise” (Delellis v. Delellis, 2005 CanLII 36447 (ON SC), [2005] O.J. No. 4345). The Court retains discretion to make costs awards that are fair, proportional, and reasonable in all the circumstances (M. (C.A.) v. M. (D.), (2003) 2003 CanLII 18880 (ON CA), 67 O.R. (3d) 181 (Ont. C.A.).
[21] The mother has been wholly successful on this motion.
[22] The mother requests costs of the August 2022 Trial Scheduling Conference in the amount of $1,000 and costs of this motion in the amount of $3,200. Both requests are entirely reasonable and appropriate. Costs payable within seven days.
Order to Go as Follows
Pursuant to Rules 9(1) (d) (i) and 34(l)(c) of the Family Law Act, and Section 100 of the Courts of Justice Act, R.S.0. 1990, c. C.43 the Applicant’s right, title and interest in the matrimonial home located at 16 Old Park Lane, Richmond Hill, Ontario, L4B 2L4, shall be vested in the Respondent Hanieh Dajmar retroactively to the date of separation, such that the Applicant quitclaims all rights, title and interest in the matrimonial home.
The Respondent may register this vesting order on title with the land registry office if she so chooses to.
Pursuant to Rule 1(8)(b)(c) of the Family Law Rules, the Applicant’s pleadings shall be struck and the Respondent shall proceed by way of Form 23C: Affidavit for Uncontested trial, subject to paragraph 5 below. The matter will proceed in writing, with the ability to provide oral evidence should the Honourable Court require clarification on her Form 23C, and a date shall be set by the trial coordinator for the November/December 2022 trial sittings.
The Respondent’s affidavit in support of her 23C, if any, shall be limited to 25 pages of narrative with hyperlinked exhibits. The materials shall be served by email and filed by November 14, 2022 (with one paper copy delivered to the Court).
The father may move to restore his Answer and Claim on further order of the court in the event that each of the following conditions occurs within 21 days:
(a) he pays all outstanding costs awards, including the costs ordered herein;
(b) he pays $400,000 towards the support arrears, the daughter’s university expenses and his obligation to make payments on the matrimonial home;
(c) he produces a new sworn 13.1 Financial Statement with 2021 year-end income (global and converted into Canadian dollars, with evidence), and 2022 year-to-date income (as above); and
(d) he produces all of the outstanding financial disclosure (and complies with all disclosure orders including the third party authorizations), satisfy the conditions in paragraphs 4 and 5 of this order, the father is granted notice of the 23C, by way of receipt of a copy, by email, of the materials being submitted to the court.
- Costs of $4,200 are payable by the father to the mother, within seven days.
Justice A. Himel
Date: September 21, 2022
[^1]: Lamothe v. Ellis, 2021 ONSC 4883, at para 42.