Court File and Parties
COURT FILE NO.: FS-19-00007707-0001
DATE: 20221028
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Kristina Teixeira
Applicant
– and –
Sergio Teixeira
Respondent
H. Cairns for the Applicant
Anne Fullerton for the Respondent
HEARD: October 20, 2022
Reasons for Judgment
SHORE, J.
[1] The Applicant Mother brought this motion to stay the Respondent Father’s motion to change child support until the Respondent has complied with the outstanding order for costs and child support. The Mother brought her motion under r.1(8), which gives the court directions on how to deal with a litigant who has failed to comply with a court order. The Father has failed to pay his ongoing child support obligation as set out in the order of Faieta J., dated January 12, 2021.
[2] Compliance with court orders is essential in family law and indeed, for the administration of justice. However, the Family Law Rules, O. Reg. 114/99, have as their primary objective, an obligation on the Courts to deal with cases justly (see: r. 2(2)-(4)). Rule 1(8) also refers to making an order that it considers necessary for a just determination of the matter.
[3] This is one of those cases where the facts of the case are unique and create exceptional circumstances. To deal with this case justly, I am exercising my discretion not to stay the Father’s motion to change.
[4] The Mother is also asking for an order for security for costs. For the reasons below, I am dismissing the Applicant’s motion.
Background:
[5] To understand my reasons, some background information is required.
[6] The parties lived together for 10 years and were married for almost six of those years. They have two children from their marriage. The parties separated in April 2010.
[7] In June 2011, an order was made on consent, placing the children in the Applicant’s primary care. In August 2013, the children, ages eight and five at the time, were placed in the Respondent’s care based on recommendations from CAS. This was due to concern for the children’s safety and well-being when in the Applicant’s care. By September 2013, the Applicant’s parenting was being supervised.
[8] The parties participated in a nine-day trial in March 2014, focused on parenting. By final order, the children were placed in the Respondent’s primary care and an order was made granting the Respondent sole custody of the children. The Applicant’s parenting time was to take place at a supervised access center.
[9] On November 28, 2014, an order was made requiring the Applicant to pay the Respondent child support in the sum of $200 per month.
[10] The Respondent incurred debt of $167,000 in legal fees for the above litigation and trial. The debt was financed by a line of credit on his parents’ home.
[11] In November 2014, the Applicant was ordered to pay costs of the trial to the Respondent in the sum of $85,000. The Applicant never paid the cost. She declared bankruptcy in 2016. The costs did not survive the bankruptcy because the trial had been mostly focused on parenting and not support. These facts are important in understanding my decision and I will refer to them later in my decision.
[12] The Applicant worked hard to overcome personal issues she had been struggling with and in June 2015 a consent order was made, providing for equal parenting time with the children, however the Respondent maintained sole custody of the children (as it was referred to then).
[13] The Applicant re-partnered and in July 2016 she had a child. The Applicant had complications with her pregnancy which curtailed her ability to work. She then took a one-year parental leave, until July 2017.
[14] In December 2018, the Applicant brought a motion to change both the parenting order and the child support order. She also sought an order eliminating her arrears of child support under the prior order. The Applicant was seeking an order for primary care of the children and sole custody, and an order for child support.
[15] The motion to change was ultimately heard on an uncontested basis in January 2021. The Respondent failed to file responding materials and he did not attend at the motion. As discussed above, on January 12, 2021, Faieta J. made an order that the Respondent pay set-off child support in the sum of $764 per month, plus $400 per month towards his outstanding arrears, and $12,500 in costs. The order did not address parenting issues.
[16] In September 2021, the Family Responsibility Office started garnishing the Respondent’s wages under the Support Deduction Order, but he remains in arrears.
[17] In February 2022, the Respondent brought a motion to set aside the order of Faieta J. for material non-disclosure/fraud by the Wife, or in the alternative, a motion to change the order of Faieta J. This is the motion that the Applicant is seeking to stay, pending compliance with the child support and cost order.
Should the Motion to Change be stayed pending compliance?
[18] The jurisdiction to stay a court proceeding is found in both the Courts of Justice Act, R.S.O., 1990, c. C.24, s.106[^1] and r.1(8) of the Family Law Rules. Rule 1(18) of the Rules provides as follows:
(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.
[19] The Court in Ferguson v. Charlton, 2008 ONCJ 1, set out a three-step process for when a party is seeking relief under r. 1(8) at para. 64:
Has there been a triggering event (i.e. non-compliance with a court order)?
If there has been a triggering event, is it appropriate to exercise the court’s discretion to not sanction the party’s non-compliance?
If the court determined it should not exercise its discretion in favour of the non-complying party, what is the appropriate remedy to impose?
[20] I will now turn to my analysis of the three-step process.
1. Has there been a triggering event?
[21] As for the first step, I find that there has been a triggering event.
[22] On January 12, 2021, Faieta J. made an order that the Respondent pay set-off child support in the sum of $764 per month, plus $400 per month towards his outstanding arrears, and $12,500 in costs. The Respondent failed to make the payments set out in the order.
[23] In September 2021, FRO started garnishing the Respondent’s wages pursuant to the Support Deduction Order. The Respondent remains in arrears of child support under the order of Faieta J. He has also not paid the outstanding costs.
[24] The Respondent submits that FRO has garnished over $17,000 to date and therefore he has paid the costs ordered. The problem with his argument is that child support takes precedence over other payments. Money garnished by FRO will first go to the child support owing. But in any event, the Respondent is still not in compliance with Faieta J.’s child support order and therefore the first step in the test has been met.
[25] The court may now exercise its discretion under r.1(8) and make an order to sanction the non-compliance. I must now turn my mind to the second step of the test.
2. Is it appropriate to exercise the court’s discretion not to sanction the party’s non-compliance?
[26] Having found that the Respondent has not complied with the order of Faieta J., the pertinent question becomes, should this Court exercise its discretion not to sanction the non-compliance?
[27] As stated in Pearce v. Kisoon, 2019 ONSC 4389, at para. 16, “the onus is on the non-complying party and the party seeking relief from the court to show why it would be appropriate for the Court to exercise its discretion in his favour.” For the reasons set out below, I find the Respondent has met his onus.
[28] In her factum, the Applicant aptly set out the case law that reiterates that an order is an order and not a mere suggestion and that failure to comply with court orders must have consequences. But the first part of r. 1(8) provides that the court “may deal with the failure by making any order that it considers necessary for a just determination of the matter” (emphasis added). This accords with the primary objective of the Family Law Rules which requires a court to deal with cases justly and s.106 of the Courts of Justice Act, which requires the order to be made “on such terms as are just”.
[29] In considering whether to exercise its discretion to stay the proceedings, this court must turn its mind to whether the outcome will be fair and appropriate in the circumstances. Cases are not decided in a vacuum.
[30] This is one of those exceptional cases in which I am exercising my discretion not to stay the Respondent’s motion to change, as it would not be fair in the circumstances.
[31] As discussed above, the Respondent incurred $167,000 in debt for the 2014 proceedings and trial. The costs in his favour in the sum of $85,000 were never paid because the Applicant declared bankruptcy in 2016. However, the Respondent continues to service the line of credit on his parents’ home, and he has been unable to pay down the principal to any significant extent.
[32] The Respondent works as a handyman. Although his income is unclear, he earned an average of around $60,000 per year until 2021, when he started working part time due to an injury. Neither party are large income earners.
[33] The Respondent’s evidence on the motion is that he is having difficulty servicing the debt. With the rising interest rates, his minimum monthly payments have increased. His mother has started cleaning houses to help maintain the home and to make ends meet. The Respondent submits that he cannot afford the set-off child support while servicing the debt. If he cannot service the debt, he will lose his mother’s home.
[34] The children are now aged 15 and 17. Although the parties disagree on how much time each child is spending with the other parent, the current arrangement is that the children spend, or are supposed to spend, equal time with the parties.
[35] The Respondent, and the children when they are with him, live in the home with the Respondent’s mother. I am satisfied on a preliminary basis that if I stay the Respondent’s motion, it may have an irreversible devastating effect. If I stay the motion, the Respondent will have to choose between losing his mother’s home to comply with the order or never being able to bring a motion to change and being subject to the other ramifications of being in breach of a court order. Being left with a heavy debt load because the $85,000 of costs were never paid by the Applicant creates a very unusual and exceptional circumstance in this case.
[36] The Respondent brought a motion to change the child support order and a motion to set aside the order of Faieta J., dated January 12, 2021, under r.24(19) of the Family Law Rules, or in the alternative, a motion to change the order on a retroactive basis.
[37] The Respondent submits that the Applicant mislead the court during her uncontested motion to change and this would be grounds to set aside the order of Faieta J. In Caldwell v. Caldwell (2007), 2007 CanLII 1913 (ON SC), 51 R.F.L. (6th) 399 (Ont. Sup Ct), the judge determined the equalization payment at a default motion relying on incomplete or improper information provided by the respondent wife. Justice Timms at para. 52, found that the wife failed to advise the court of material information and therefore the court decided the case on inaccurate grounds. A litigant moving on an uncontested basis has the same duty as a party seeking an order on a motion without notice. “The moving party has a high duty to make full and frank disclosure, and failure to do so is grounds for setting aside an order made without notice”: Caldwell at para. 53.
[38] In the case before me, the Respondent is to blame for not responding to the Applicant’s motion to change. Yet if the Applicant did not provide material information to the court on which to base its decision, the order may be set aside. At para. 65 of the decision, Timms J. grapples with a similar question, as the one before this court:
[65] Even if there are remedies available to the respondent, should the court exercise its jurisdiction? Was his prior disobedience of court orders such that he should not be allowed to participate in any further proceedings? Should he be required to pay all the amounts owing by the order of Wood J. before the court gives any consideration to any of his arguments? In lay terms, should the court take any pity on him?
[66] While it is tempting to say that the respondent’s prior “bad conduct” should bar him from arguing that the order of Salmers J. should be changed, it is my view that justice requires that he be allowed to do so. As referenced in footnote 11 above, the primary objective of the Family Law Rules is to deal with cases justly…
[39] If the Respondent is successful on his motion, then the arrears may disappear. I do not know whether he will be successful on his motion to change, but on the materials before me, I do not find his motion to change to be vexatious, a nuisance, or a waste of time.
[40] I cannot ignore that the large debt the Respondent must service could have been paid down significantly had the Applicant paid her costs, freeing up income for the Respondent from which to pay child support. Further, Faieta J. may not have been given full information about the children’s schedules, or the financial circumstances of the parties. This will need to be addressed at the full hearing of this case.
[41] The motion to change properly proceeded to an uncontested trial. The Applicant is now asking this court to block the Respondent’s access to the court for the nonpayment of support and/or costs, made at an uncontested trial, where the factual foundation before the court may have been incomplete. On a prima facie basis I am satisfied that the Applicant may not have met her obligation to provide full and frank disclosure to the court in her material. The child support order and the parenting plan may not be based on a proper foundation of fact.
[42] In Caldwell, Timms J. stayed the original order. I am not prepared to do so here, nor have I been asked to by the parties as this goes to the very heart of the Respondent’s motion to change. However, I have decided to exercise my discretion and not stay the Respondent’s motion so that this very issue can be determined by the court.
[43] But more than this, I have the added concern that the Respondent’s inability to pay support has arisen as a result of him having to continue a large debt load vis a vis his income, for legal costs that the Applicant had been ordered to pay. I appreciate that the Applicant declared bankruptcy, but there is, to me, an element of unfairness at play.
[44] I am satisfied on a prima facie basis that there is a triable issue. It is premature in this circumstance to make a decision that would have such a devastating effect on the Respondent and the children.
[45] In light of my decision above, there is no need for the court to turn its mind to the third part of the test.
Security for costs
[46] Under r. 24(13), a judge may, on motion, make an order for security for costs that is just, based on one or more of these factors:
A party habitually resides outside Ontario.
A party has an order against the other party for costs that remains unpaid, in the same case or another case.
A party is a corporation and there is good reason to believe it does not have enough assets in Ontario to pay costs.
There is good reason to believe that the case is a waste of time or a nuisance and that the party does not have enough assets in Ontario to pay costs.
A statute entitles the party to security for costs. O. Reg. 114/99, r. 24 (13); O. Reg. 42/21, s. 14.
[47] I am not ordering security for costs. The only factor that would apply is r.24(13)(2). For the same reasons stated above, I do not find it just to order security for costs in these circumstances.
Costs of this motion
[48] At the end of the motion, neither party brought up costs. Although the Respondent was successful on his motion, given the circumstances of this case, this is not an appropriate case to award costs at this time to either party. Costs are reserved for the judge who hears the Motion to Change.
Order:
[49] Order to go as follows:
a) The Applicant’s motion to stay the Respondent’s Motion to Change is dismissed.
b) The Applicant’s motion for security for costs is dismissed.
c) Costs reserved for the judge hearing the motion to change.
Justice Sharon Shore
Released: October 28, 2022
COURT FILE NO.: FS-19-00007707-0001
DATE: 20221028
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Kristina Teixeira
Applicant
– and –
Sergio Teixeira
Respondent
REASONS FOR JUDGMENT
Shore, J.
Released: October 28, 2022
[^1]: A court, on its own initiative or on motion by any person, whether or not a party, may stay any proceeding in the court on such terms as are considered just.