Court File and Parties

Court File No.: FS-21-44401 Date: 2023 06 30

Superior Court of Justice – Ontario 491 Steeles Avenue East, Milton ON L9T 1Y6

Re: Kristen Phelan, Applicant And: Bryan Givlin, Respondent

Before: Justice R. Chown

Counsel: M. Fuller, for the applicant A. Nicholls, for the respondent

Heard: May 11, 2023, by video conference

Reasons for Decision

[1] Several times, the applicant demanded that the respondent file his answer. However, after that, the parties proceeded to mediation and attended two sessions with the mediator. Believing that settlement negotiations were ongoing, the respondent did not file his answer. On November 7, 2022, the respondent learned from the mediator that the applicant no longer wanted to proceed with the mediation. On November 10, 2022, without making further demands for the respondent to file his answer, the applicant filed a motion for an uncontested trial. On November 23, 2022, the respondent was shocked to receive the final order arising from the uncontested trial. The order dealt with all parenting, support, and property issues.

[2] For her part, the applicant was frustrated by the slow pace of the litigation and by the fact that respondent’s counsel of record had indicated she was no longer acting for the respondent, yet the respondent had not filed a notice of change of representation.

[3] The respondent now moves to set aside the order obtained through the uncontested trial. The applicant does not oppose the setting aside of the provisions in the order relating to property issues; however, otherwise the applicant takes the position that the order represents the appropriate outcome of this dispute.

[4] The parties have one child, age 4.

Timeline

[5] The timeline is as follows.

May 25, 2021 Separation date and date of initial letter from applicant’s counsel, Ms. Fuller, to applicant, as well as date of initial letter from Ms. Grandy advising she will be representing the respondent

July 19, 2021 After the applicant’s correspondence proposing ADR goes unanswered, the applicant issues the application

January 7, 2022 After the applicant’s correspondence requesting disclosure went unanswered, the applicant served the application on the respondent by way of email to Ms. Grandy

July 19, 2022 Ms. Fuller writes: "You have my consent to file your client's Answer and F.S. without his 2021 tax return, provided he undertakes to file it within 30 days."

July 28, 2022 Ms. Fuller writes: "Can we please be served with your client's Answer immediately?"

August 4, 2022 Applicant proposes mediation in text message to respondent (not sent through counsel): "I was thinking about what you said on Sunday and did you want to sit down and try to figure this all out or make a mediation appointment?" The respondent replied, "YES! Lawyers stink." It should be remembered, however, that at this point, the applicant had made, through counsel, multiple proposals for mediation.

August 16, 2022 Ms. Grandy sends respondent a draft answer for review. This is never filed. However, by this point the parties are proceeding to mediation.

August 18, 2022 Ms. Fuller writes to Ms. Grandy to again ask for the respondent's financial statement. Ms. Fuller does not receive a response. Around this time, Ms. Grandy confirmed that she would no longer be representing the respondent and that he was in the process of retaining new counsel.

September 1, 2022 The parties participate in a mediation session (without counsel)

September 14, 2022 Ms. Fuller writes to Ms. Grandy to follow up for a notice of change in representation.

October 1, 2022 The parties participate in a further mediation session (without counsel). The negotiations are advanced but not resolved.

October 20, 2022 In a text message, the applicant says to the respondent, "I wanted us to be a family so bad. I still do. I wish we could just go to couples therapy and really try." In further messages exchanged that day, the parties discuss the possibility of couples therapy. There is no evidence of further discussions along these lines.

October 31, 2022 The mediator writes the parties to outline the discussion. She states, "As a next step, I have proposed to have a call with your lawyers to fill them in on where you are in the negotiations and to determine next steps with their input." She also asks for a top up of her retainer. At this point, the applicant does not know for certain whether the respondent has a lawyer, although Ms. Grandy remains as lawyer of record.

November 1, 2022 Without advising the respondent that she was not prepared to proceed with the mediation process and that she was proceeding to an uncontested trial, the applicant swears her Form 23C affidavit for uncontested trial.

November 7, 2022 The respondent learns from an email from the mediator that the applicant does not wish to continue with the mediation. The mediator cancels the $1000 further retainer that the respondent sent.

November 10, 2022 The applicant prepares her notice of motion for an uncontested trial without serving or notifying the respondent. The materials disclose, in considerable detail, the history of the matter including the fact that the parties attempted mediation. However, the materials leave the impression that the mediation process was over, and that the respondent continued to be uncooperative and appeared to want to drag the negotiations out. The respondent’s perspective is very different. I will expand on this below.

November 21, 2022 Final order granted on uncontested basis.

November 23, 2022 The respondent learns of the order.

November 24, 2022 New counsel for the respondent writes counsel for the applicant and advises that he has instructions to bring a motion to set aside the order.

November 28, 2022 Applicant's counsel writes respondent's new counsel: "Bryan Givlin has now been in default for approximately 11 months. His solicitor of record has not responded to the bulk of my email correspondence over a period of two years and has now flatly ignored me since August 2022. There has never been any request or discussion about pausing the litigation or relieving Mr. Givlin from having to formally respond to Ms. Phelan's application. I have never once stopped asking for Bryan's Answer and Sworn financial Statement. ... I note that I am not required by the Rules to provide notice ... of my default application under these circumstances."

November 29, 2022 Counsel for applicant obtains earliest available motion dates.

March 30, 2023 Respondent serves his motion materials, exceeding permitted page limits.

April 25, 2023 Doi J. grants applicant’s request for order permitting increased page limit for motion materials.

Analysis

[6] Family Law Rule 14(19)(d) allows the court to change an order that “was made without notice” [emphasis added]. FLR 14(19)(e) allows the court to change an order “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” [emphasis added]. Which subrule is most applicable is debatable in this case because the respondent had notice of the proceeding, but not the hearing where the order was granted. Either way, the test to be applied in deciding the issue is settled. In similar circumstances, the Court of Appeal stated in Zia v. Ahmad, 2021 ONCA 495, at para. 4, that the court is to consider the following factors:

a. whether the moving party moved promptly, after learning of the order, to have it set aside;

b. whether the moving party has provided an adequate explanation for the failure to respond to the proceeding in accordance with the Family Law Rules;

c. whether the moving party has established an arguable case on the merits;

d. whether the moving party is acting in good faith and with “clean hands";

e. the prejudice that may be suffered by the moving party if the motion is dismissed and to the responding party if the motion is allowed; and,

f. whether, in the final analysis, the interests of justice favour setting aside the judgment.

[7] This description of the test mirrors the applicable test in civil cases set out by the Court of Appeal in Mountain View Farms Ltd. v. McQueen, 2014 ONCA 194, at para. 47 to 49. In that case, the Court of Appeal added, at para. 50, that these factors are not treated as rigid rules. The factors are not a series of hurdles for the responding party but rather factors to be weighed in the exercise of discretion: D'Alessio v. D'Alessio, 2010 ONSC 321, at para. 6; Lucreziano v. Lucreziano, 2021 ONSC 4106, at para. 42.

[8] The applicant does not dispute that the respondent moved promptly but submits that the other elements of the test have not been met.

Explanation and Clean Hands

[9] The evidence surrounding items b and d is related and I will deal with these two factors together.

[10] Although the applicant issued the application in July 2021, she did not serve it until January 2022. At that time, she served it by sending a copy to Ms. Grandy and she asked Ms. Grandy to acknowledge service. It appears from the correspondence that Ms. Grandy changed firms around that time. Ms. Grandy raised a concern about her address being incorrect in the style of cause but then accepted service in March 2022. The applicant continued to be frustrated by the respondent’s failure to provide a financial statement. Ms. Fuller’s correspondence to and after that point pressed for financial disclosure and an answer.

[11] After Ms. Fuller’s July 19, 2021 email to Ms. Grandy set a requirement that the respondent file his answer within 30 days, Ms. Grandy prepared a draft reply in time to meet this demand. She sent the draft to the respondent for approval on August 16, 2022. However, the parties (in direct communication and not through counsel) agreed to mediation. The respondent deposed that if the applicant had not asked for mediation on August 4, 2022, he would have had his materials filed in time. It is not difficult to accept this as true as the respondent has shown a draft answer had been prepared by August 16, 2022.

[12] This alone constitutes an “adequate” explanation for the failure to serve and file his answer. The respondent should have confirmed a further extension to serve his answer until after the mediation. Had he done so, that would be a “perfect” explanation. However, a perfect explanation is not required. There are parallels in the circumstance here to the circumstances commonly encountered in motions for dismissal for delay, where courts have held that an “acceptable” explanation is required, and that a “perfect” or even a “good” explanation is not required. An “adequate” or “passable” explanation will suffice: 3 Dogs Real Estate Corp. v. XCG Consultants Ltd., 2014 ONSC 2251, at para. 38. Furthermore, the cogency of the required explanation is contextual. For example, “the longer the delay, the more cogent the explanation must be”: Kara v. Arnold, 2014 ONCA 871, at para. 17; 366012 Ontario Inc. v. Boudreau, 2022 ONSC 2527, at para. 18.

[13] But there is more to the respondent’s explanation. In August, 2022, Ms. Grandy advised Ms. Fuller that she would no longer be acting for the respondent. Despite this, the parties arranged and attended two half-day mediation sessions in October of 2022. From the materials, I infer that Ms. Grandy was not involved in making those arrangements.

[14] The applicant’s Form 23C affidavit dated November 1, 2022 and filed in support of her motion for an uncontested trial (“23C”) described the history and stated: “To date we have not received a notice of change in representation and the Respondent has refused to confirm if he is changing counsel or who he intends to hire.” The respondent’s affidavit on this motion denies that this was true when the 23C was prepared. He says, “No request of any kind nor any inquiry was made about my counsel or who I intended on hiring. We were in active mediation talks.”

[15] The applicant’s 23C also says that Ms. Fuller had been “unable to get the Respondent’s solicitor of record, Ms. Grandy, to confirm anything at all.” Ms. Grandy came to be lawyer of record in the court file because she had been named as the respondent’s lawyer of record on the application. I infer that this was done without her knowledge and consent, because, as indicated, she had raised an issue about her address being incorrect on the form, and she did not immediately accept service of it. However, Ms. Grandy eventually did acknowledge service of the application, without objecting to the fact that it named are as respondent’s counsel. With that said, Ms. Grandy never filed any court documents in this matter. I am not sure if in these circumstances it can be fairly said that she was ever the respondent’s lawyer of record. Ms. Grandy is not a party and did not participate in the hearing. In any event, the applicant’s responding affidavit in this motion states, “I did my best to determine who was representing the Respondent” but that she did not know who to contact. That affidavit describes that Ms. Grandy had been unresponsive after August of 2022.

[16] For his part, the respondent deposes that he was “not receiving” the correspondence Ms. Fuller was sending to Ms. Grandy, and he implies that he was not aware of the demand for a notice of change of representation. I also note that, consistent with the respondent’s affidavit, there is no evidence from the applicant that a direct inquiry was made to the respondent about who his new lawyer was going to be. The respondent complains that the applicant should have contacted him directly as she knew Ms. Grandy was no longer representing him. The applicant responds that she was entitled to receive formal notification of the respondent’s lawyer of record, “failing which my lawyer is required to continue directing all correspondence to the listed solicitor of record.” But the circumstances were:

a. According to the applicant, in August of 2022, Ms. Grandy “confirmed that she would no longer be representing the Respondent and that he was in the process of retaining new counsel.”

b. Ms. Grandy was not responding to Ms. Fuller; and

c. the applicant and the respondent had engaged in mediation and had considerable direct communication in October of 2022.

In these circumstances, the applicant should have, at least, served the respondent with the notice of motion for uncontested trial.

[17] Again, Ms. Grandy is not a party and has not been afforded any chance to respond. I do not wish to imply that I have made any findings of misconduct on her part. To the contrary, I am simply responding to the evidence in the materials. In any event, these circumstances as described in the evidence add force to the respondent’s explanation for the failure to file his answer.

[18] The applicant’s 23C went on to state, “We have not succeeded in finalizing any of the parenting or financial issues on consent.” The respondent has proven he did not think the mediation process was over. He deposes that, from his perspective, “we were extremely close to a final resolution of all issues.” This claim is supported by an email dated October 31, 2022 from the mediator that outlines the progress towards resolution and asks that the parties each send the mediator a further $1,000 retainer. The respondent sent this additional retainer. It was only on November 7, 2022 that the respondent learned (from the mediator) that the applicant did not wish to continue with the mediation. Again, this supports the respondent’s explanation for his failure to file his answer. It also speaks to the “clean hands” of the applicant. Her 23C leaves the impression that the mediation process was over, when the applicant’s withdrawal from the mediation process was not communicated to the respondent until November 7, 2022, six days after the applicant swore her 23C.

[19] I would not elevate this non-disclosure to “bad faith” on the part of the applicant, but it is close. Her 23C does disclose the fact that the parties had participated in mediation in October of 2022. However, as of October 31, 2022 both the respondent and the mediator believed the mediation process was ongoing. Without even telling the respondent that she was withdrawing from the mediation process, the applicant proceeded to finalize her 23C on November 1, 2022, and in it she stated that the respondent had “perpetrated” “endless delay and total radio silence.” The applicant had legitimate complaints about the respondent’s conduct prior to August of 2022, but the mediator’s October 31, 2022 email and the respondent’s payment of the mediator’s further retainer shows he fully participated in the mediation.

[20] The “explanation” and “clean hands” factors strongly favour the respondent’s position in this motion.

Merits

[21] The applicant’s materials for this motion focus considerably on the merits. She includes a lengthy passage in her own affidavit that speaks to her larger role in parenting their child, and she states that joint decision making is unlikely to be viable because of the parties’ inability to communicate. She includes a lengthy affidavit from her father that is highly supportive of her position. She maintains that the order arising from the uncontested trial is “perfect” and should not be changed. It calls for equal parenting time. The child support ordered was strictly in accordance with the guidelines. The spousal support ordered was time-limited and in a relatively modest lump sum amount, $14,220. However, the final order gives sole decision making to the applicant and this is one focus of the respondent’s concern.

[22] It is not the function of the court on a motion under rule 25(19) to determine the case on its merits: Mountain View Farms, at paras, 61 to 63. The respondent does not have to show his claims will likely succeed. The question is whether there is an arguable case on the merits. The respondent’s affidavit raises enough concerns to create an arguable case on the merits.

[23] This factor favours the respondent’s position in this motion.

Prejudice

[24] If the motion is granted, the applicant will sustain added delay and costs. However, she will have an opportunity to remedy this prejudice by collecting costs of the proceeding if she is successful.

[25] If the motion is dismissed, the respondent will be unable to have the case determined on the merits. He will have no opportunity to remedy this prejudice in that the action will be ended.

[26] This factor favours the respondent’s position in this motion.

Final Analysis

[27] This is not a close call. The respondent has a strong explanation for not filing his answer and that factor deserves to be given the largest weight in this case. It is in the interests of justice that both sides be permitted to present their position before the court decides this matter.

[28] If parents cannot resolve their issues, it is generally in the best interests of their children for the court to hear from both parents and to receive a full evidentiary record before determining parenting issues. The courts maintain a general policy that it is preferable to decide cases on their merits rather than by default. It is best to allow this case to be decided or settled on its merits.

Practice Point

[29] In a growing number of civil cases, courts have required plaintiffs advancing default proceedings to serve the motion materials on a defendant when bringing a motion for default judgment: Mueller-Hein Corp. v. Donar Investments Ltd., [2003] O.J. No. 2302 (SCJ), at para. 52; Elekta Ltd. v. Rodkin, 2012 ONSC 2062, at para. 10; Casa Manila Inc. v. Iannuccilli, 2018 ONSC 7083 at para. 11; DCR v. Vector Card Services, 2013 ONSC 5881; Western Steel and Tube Ltd. v. Technoflange Inc., 2017 ONSC 2697; Natural Energy Systems Inc. v. Hallett, 2019 ONSC 1372; Grabenheimer v. Lala, 2019 ONSC 2811; Celik v. TD Bank, 2020 ONSC 1714; Advant Leasing Limited v. Kozicki, 2020 ONSC 4292; Alfonso Izzo v. Tonnina Ministro, 2020 ONSC 6703; and Strada Aggregates Inc. v. YSL Residences Inc., 2020 ONSC 7034; Dong v. Liu, 2021 ONSC 4626; Seecharran v. Seecharan, 2021 ONSC 6885; Lake v. Toronto District School Board, 2023 ONSC 1807.

[30] This jurisprudence has also been adopted in family cases: Roberts v. Santilli, 2019 ONSC 64; Provenzano v. Provenzano, at para. 10. An early example in a family case is Campeau v. Campeau, at para. 19. In it, the court adopted the reasoning in Mueller-Hein, saying that even where it is arguable that a rule may authorize an ex parte motion, a lawyer should consider whether the better practice would be to give notice, and that this will be an easy decision for the lawyer where it is apparent that, when the ex parte order comes to the attention of the adverse party, that party will probably move to set aside the order.

[31] I agree with the perspective that it is “by far the better practice” to give notice to the defendant or respondent when seeking default judgment in civil proceedings or in an uncontested trial in family proceedings. The outcome of this case demonstrates why. It should have been obvious to the applicant that the order made after an uncontested trial was very likely to only result in further proceedings.

[32] It is typically better for all concerned including the court and the non-defaulting client to ensure that the defaulting party has knowledge of the proceeding and the default hearing and appears to have chosen not to participate. When that is the case, the default judgment is much more likely to withstand a motion to have it set aside or changed. In the circumstances of this case, the applicant should have served her materials for the uncontested trial on the respondent.

Costs

[33] The applicant’s bill of costs seeks full recovery costs of $19,000. This claim is supported by detailed dockets.

[34] The respondent’s costs outline seeks costs of $16,000 on a full recovery basis.

[35] It is not uncommon for courts to decline to award costs to parties who have succeeded with a motion to set aside a default judgment. Often it seems just that the defaulting party should be deprived of costs because the ultimate cause of the problem was the defaulting party’s failure to follow the timelines in court rules.

[36] Here, the applicant points me to McDonald v. McDonald, 2015 ONSC 2605, where, even though a respondent was successful in his motion to have a default judgment set aside, he was ordered to pay the applicant’s costs. The respondent’s failure to file an answer and failure to participate in the proceeding caused the applicant to unnecessarily incur the costs of the uncontested trial.

[37] I do not think this case is equivalent to McDonald. In my view, while the applicant has legitimate concerns about the respondent’s laggard approach to this litigation at first, given his fulsome participation in the mediation process, it was reasonable for him to think the litigation was on hold. Also, as I said, the outcome of this motion was not a close call. Costs should follow the event.

[38] With that said:

a. I would not award full indemnity costs.

b. A sanction should apply for the respondent’s initial dilatory approach.

c. The respondent should not have exceeded the page limits for a short motion without leave and a modest costs sanction should be applied for that as well.

[39] In my view an appropriate disposition on costs is that the applicant should be required to pay the respondent, within 30 days, the costs of this motion fixed in the amount of $6,000 all inclusive.

Disposition

[40] An order shall issue in accordance with paragraph 1 of the notice of motion.

[41] The applicant shall, within 30 days, pay the respondent the costs of this motion fixed in the amount of $6,000 all inclusive.

[42] The parties shall exchange requests for information within 30 days.

[43] The parties shall, within 60 days, respond to each other’s requests for information by:

a. Providing the requested information or documentation;

b. Where the requested information or documentation is in the possession of third parties, providing a copy of the correspondence to the third party requesting it; or

c. Providing an explanation for why they will not provide the requested information or documentation.

Chown J. Released: June 30, 2023