Author: dawi

“Section 103 of the Courts of Justice Act governs the issuance of CPLs.  It provides:

The commencement of a proceeding in which an interest in land is in question is not notice of the proceeding to a person who is not a party until a certificate of pending litigation is issued by the court and the certificate is registered in the proper land registry office under subsection (2).

The courts have long held that an action to set aside a fraudulent conveyance is an action in which an interest in land is brought into question: United States (Securities & Exchange Commission) v. Boock, 2010 ONSC 2340, para 9 cited in Wong v. Smith, 2017 ONSC 2721, para 16: 2017 ONSC 2721 (CanLII) Wong v. Smith | CanLII.

The Fraudulent Conveyances Act, s. 2 states:

Every conveyance of real or personal property and every bond, suit, judgment and execution heretofore or hereafter made with intent to defeat, hinder, delay or defraud creditors or others of their just and lawful actions, suits, debts, accounts, damages, penalties or forfeitures are void as against such other persons and their assigns.

The term, “creditor or others” is broad enough to contemplate a person who, while not a creditor at the time of the conveyance, may become one in the future.  If the transferor had the intention to defraud when the conveyance was made, it does not matter whether it was to defeat present or future creditors: Miller v. Debartolo-Taylor, 2015 ONSC 2654, para 4(e) and (f): 2015 ONSC 2654; Miller v. Debartolo-Taylor | CanLII; Indoco Building Corp. v. Sloan, 2014 ONSC 4018, para 48; and Beynon v. Beynon, 2001 CanLII 28147 (ON SC), [2001] O.J. No. 3653 at para. 51 (SCJ): 2001 CanLII 28147 (ON SC) Beynon v. Beynon | CanLII.

As explained by Smith J. in the Grefford v. Fielding decision:

The laws of Ontario do not prevent a defendant from continuing to deal with his or her assets after a claim has been made and before judgment is obtained. A defendant to any claim is permitted to sell any interest he or she may have in land. In order to obtain a CPL in an action alleging a fraudulent conveyance of land, before the claimant in the main action has obtained a judgment, where no interest in land is claimed in the main action, requires special circumstances to fairly balance the interest of both parties.

Jodi L. Feldman v. Foulidis confirms the test for a CPL in the context of a claim of fraudulent conveyance.  The Court determined that the Plaintiff (the Defendant’s prior family law counsel) met the test for a CPL on the Defendant’s home.  The Plaintiff claimed that the Defendant owed her the sum of $664,323 on account of unpaid invoices.  The CPL motion was brought after the Defendant registered a mortgage, in the amount of $525,000, against title to her property.  That mortgage was by the Defendant, in favour of her brother-in-law, shortly after being served the Statement of Claim.  Diamond J. held as follows:

The Test for a CPL

Traditionally, when a fraudulent conveyance is alleged, title to a property is brought into question.  In Keeton v. Cain 1986 CanLII 2854 (ONSC), Justice Scott held that a creditor need not have a personal interest in a property, but merely “need to claim title”.  As long as there are more than bare allegations supporting a fraudulent conveyance, a sufficiently reasonable claim to an interest in land will exist and warrant the issuance of a CPL.

The jurisprudence has since adapted to situations like the one before the Master, namely where a plaintiff is not yet a judgment creditor of the defendant who has alleged to have participated in a fraudulent conveyance.  Where a plaintiff has yet to obtain judgment in the underlying/main action, the test for a CPL is set out in the decision of Justice Smith in Grefford v. Fielding 2004 CanLII 8709 (ONSC):

a)  has the plaintiff satisfied the Court that there is a high probability that it will successfully recover judgment in the underlying/main action?

b)  has the plaintiff introduced evidence demonstrating that the impugned transaction was made with the intent to defeat or delay creditors?

c)  has the Plaintiff demonstrated that the balance of convenience favours the issuance of the CPL in the circumstances of the case?

As held by Justice Sachs in Claireville Holdings Ltd. v. Votiuk 2015 ONSC 694 (CanLII), the Grefford test “applies when the plaintiff has not yet obtained judgment in the underlying action.”

         Fewson v. Bansavatar, 2021 ONSC 6697 (CanLII) at 19-24

“Absent an exception, hearsay is inadmissible. Hearsay is an out-of-court statement offered for the truth of its contents. Concerns over hearsay evidence arise from the inability to test its reliability. In general, hearsay is not taken under oath, the declarant’s demeanor when making the statement is not observed, and hearsay is not tested in cross-examination: R. v. Bradshaw, 2017 SCC 35 at para 20. Hearsay may be inaccurately recorded, and the perception, memory, narration or sincerity of the declarant is not easily investigated: R. v. Khelawon, 2006 SCC 57 at para 2.

Nevertheless, some hearsay presents minimal danger such that its exclusion would impede accurate fact finding: Bradshaw at para 22; Khelawon at para 2. The presumptive inadmissibility of hearsay may be overcome in cases where its proposed admission meets the requirements of necessity and threshold reliability and satisfies the principled approach to hearsay: Bradshaw at paras 22-23; Khelawon at paras 42 and 47; R. v. Khan, 1990 CanLII 77 (SCC), [1990] 2 SCR 531 at paras 29-30; Ward v. Swan, 2009 CanLII 22551 (ONSC) at paras 2-3; Children’s Aid Society of Toronto v. G.S., 2018 ONCJ 124 at paras 9-17.

In family cases involving child hearsay, the necessity requirement takes into account what is reasonably necessary and considers the harm to a child of having to testify in court: Y. v. F.T., 2017 ONSC 4395 at para 134; C.A.S. v. C.L., 2018 ONSC 1241 at paras 27-28; Ward at paras 12-13; C.(S.E.) v. P.(G.), 2003 CanLII 2028 (ONSC) at para 32; Maharaj v. Wilfred-Jacob, 2016 ONSC 7925 at para 58.

The requirement for threshold reliability asks whether the child’s hearsay statement is sufficiently reliable to be admitted into evidence: Bradshaw at para 24; Khelawon at para 49; G.S. at para 12. Threshold reliability requires a consideration of all relevant factors surrounding the statement, such as the timing of the hearsay statement, the demeanour of the witness that is testifying, the child’s personality, intelligence and understanding, and the absence of any reason to expect fabrication, which are non-exhaustive factors: Y. at para 134; Khelawon at para 51; Khan at para 30. The court must be satisfied that the statement was accurately and objectively reported, and that the child was not manipulated, coerced or pressured into making the statement: Ward at para 15; Children’s Aid Society of Metropolitan Toronto v. M.(R.), [1992] OJ No 1097 (CJ) at paras 15-16. The court should also consider whether the witness that is giving evidence to provide the out-of-court statement has a vested interest in the outcome of the case; Ward at para 17.

A hearsay statement is admissible if substantive reliability is established, namely that the statement is inherently trustworthy given the conditions when it was made and any corroborating evidence: Bradshaw at para 30; Khelawon at paras 4, 62 and 94-100; G.S. at para 16.”

         Y.M.S. v. R.O.S., 2021 ONSC 6684 (CanLII) at 31-35

“A judge of the appeal court, whose order is being appealed to the Supreme Court of Canada, is authorized by s. 65.1(1) of the Supreme Court Act to order that the proceedings be stayed with respect to the judgment from which leave to appeal is sought, on the terms deemed appropriate. This authority may be exercised by a judge before the proposed appellant has served and filed a notice of leave to appeal “if satisfied that the party seeking the stay intends to apply for leave to appeal and that delay would result in a miscarriage of justice”: Supreme Court Act, s. 65.1(2).”

         N. v. F., 2021 ONCA 688 (CanLII) at 20

“Section 131(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43, as amended, provides that “subject to the provisions of an Act or rules of court, the costs of and incidental to a proceeding or a step in a proceeding are in the discretion of the court, and the court may determine by whom and to what extent the costs shall be paid.”

Pursuant to rule 24(1) of the Family Law Rules, the successful party is presumed to be entitled to recover costs. Rule 24(11) requires the court, in setting the amount of costs, to consider a number of factors including the importance, complexity and difficulty of the issues, the reasonableness or unreasonableness of each party’s behavior in the case, the lawyer’s rates, the time properly spent on the case, expenses properly paid or payable, and any other relevant matter. These factors are to be applied flexibly (see M. (C.A.) v. M. (D.) (2003), 2003 CanLII 18880 (ON CA), 67 O.R. (3d) 181 (Ont. C.A.) at para 42).

Consideration of the relative success of the parties on the issues in the case is the starting point in determining costs (see Butty v. Butty, 2009 CanLII 23111 (ON SC), [2009] O.J. No. 1887 (Ont. S.C.J.) at para. 4, citing Sims-Howarth v. Bilcliffe, 2000 CanLII 22584 (ON SC), [2000] O.J. No. 330 (Ont. S.C.J.)). In the case of Johanns v. Fulford, 2010 ONCJ 756 (Ont. C.J.) at para. 13, it was held that, for the purpose of rule 24(1), “success” is assessed by comparing the terms of an order against the relief originally requested in the pleadings and against the terms of any offers to settle.

In M. (C.A.) v. M (D.) the Court of Appeal confirmed, at paras. 40-42, that:

(a) although the Family Law Rules have circumscribed the broad discretion granted by s. 131(1) of the Courts of Justice Act, they have not completely removed the trial judge’s discretion;

(b) although the general provision, rule 24(1), enacts a “presumption” that the successful party is entitled to costs of the case it does not require that the successful party is always entitled to costs;

(c) a successful party may not obtain a costs award in his or her favour even in circumstances not falling within rule 24(4);

(d) there may be circumstances aside from the unreasonableness of the successful party’s conduct that rebut the presumption; and

(e) the financial situation of the parties can be taken into account in setting the amount of the costs award either under rule 24 or rule 18 pursuant to the direction in sub rule 24(11) that the court take into account “any other relevant matter”.

The Court of Appeal has observed that modern costs rules are designed to foster three fundamental purposes: (1) to indemnify successful litigants for the cost of litigation; (2) to encourage settlements; and (3) to discourage and sanction inappropriate behavior by litigants (see Fong v. Chan, [1999] O.J. No. 3707 (Ont. C.A.) at para. 24).

Importantly, the case law directs that a costs award must represent a fair and reasonable amount that should be paid, rather than an exact measure of the actual costs, must be consistent with what the unsuccessful party might reasonably have expected to have to pay, and must reflect some form of proportionality to the actual issues argued, rather than an unquestioned reliance on billable hours and documents created (see Mason v. Smissen, [2013] O.J. No. 4229 (Ont. S.C.J.) at paras. 5 and 6 and the cases therein referred to).”

         Aubin v. Koerber, 2021 ONSC 6350 (CanLII) at 10-15

“The decision of an Arbitrator deserves as much deference on appeal as does the decision of a trial judge:  Reati v. Racz, 2016 ONSC 1967, 81 R.F.L. (7th) 166 (Ont. S.C.J.), at para. 28.

Considerable deference is paid to decisions of first instance because trial judges and Arbitrators have the opportunity to observe first-hand both the witnesses and the family dynamics. An award should not be set aside where the arbitration award was based, in part, on findings of credibility and significant non-disclosure by a party, see Gragtmans v. Gragtmans, 2020 ONSC 5322.

Moreover, as the Court of Appeal held in Petersoo v. Petersoo, 2019 ONCA 624, 29 R.F.L. (8th) 309 (Ont. C.A.), at para. 35:

Mediation/arbitration is an important method by which family law litigants resolve their disputes. Indeed, the courts encourage parties to attempt to resolve issues cooperatively and to determine the resolution method most appropriate to their family. The mediation/arbitration process can be more informal, efficient, faster and less adversarial than judicial proceedings. These benefits are important with respect to parenting issues, which require a consideration of the best interests of children. The decision of an Arbitrator, particularly in child related matters, is therefore entitled to significant deference by the courts.

Appellate courts cannot interfere with a discretionary decision just because they would have reached a different conclusion. Only where the original decision exceeds a generous ambit within which reasonable disagreement is possible and is plainly wrong can an appellate court interfere: Slaughter v. Slaughter, 2013 ONCA 432 (Ont. C.A.), at para. 6.”

            Khan v. Khan, 2021 ONSC 8580 (CanLII) at 18-21

 “I am particularly troubled by the use of Orders granted on an ex parte basis by this Court to perpetuate the harassment of Sepideh.  The processes of the Court should not be abused.  The defendants reference the common law implied undertaking rule, which requires that a party that has received information under compulsion of a Court order or during discovery is deemed to give the Court an undertaking that the information will not be used for any collateral or ulterior purpose unrelated to the litigation.  In this regard, the Federal Court in Merck & Co. v. Apotex Inc. 1996 CanLII 4019 (FC), [1996] 2 F.C. 223 stated (at pp. 20-21):

In my opinion, if an undertaking is implied in regard to information produced in discovery, as is now recognized, the same may surely be said of information received by one party from another under compulsion of the court’s order.  The implied undertaking may be enforced by a court order to restrain release of information in collateral proceedings or activities (…).  The breach of the implied undertaking may constitute contempt of court (…).

The limits of that undertaking are that the information not be used for a collateral or ulterior purpose.  That means for any purpose other than those concerned with the proceedings in which the information is produced (…). [citations omitted]

Maison Prive v. Moazzani, 2020 ONSC 8199 (CanLII) at 66

“There is no dispute that the court must make this determination based on the best interests of the child, taking into account the various factors set out in s. 24 of the Children’s Law Reform Act, R.S.O. 1990 c. C12, (CLRA).

Often in these cases, “best interest” is determined by maintaining the status quo: Ursic v. Ursic, 2006 CanLII 18349 (ONCA), at para. 32; De Matos v. De Matos, 2015 ONSC 4554, at para. 18; Pancel v. Henri, 2012 ONSC 546, at paras. 25 and 26; McPhail v. McPhail, 2018 ONSC 735, at para. 15.

The status quo is particularly important on an interim motion because the court is often not in a position to make factual findings if there are, as in this case, conflicting affidavits: R.C. v. L.C., 2021 ONSC 1963, at para. 62.

The courts have also determined that a party cannot unilaterally alter the status quo by denying the other party parenting time without a court order or formal agreement. The status quo does not refer to a situation unreasonably created by one party after separation to create a tactical advantage in the litigation. The status quo may be established by reference to the parents’ practice or the child’s routine prior to separation, by any consensual arrangement made after separation, or by court order. Thus, the status quo in this case must be determined by examining the status quo before separation:  McPhail, at para. 17 and cases cited therein; Rifai v. Green, 2014 ONSC 1377, at para. 25.”

            C.C. v. I.C., 2021 ONSC 6471 (CanLII) at 46-49

“In L.M.P. v. M.D.P, 2021 ONSC 3577 (Ont. Sup. Ct.) at para. 58, MacPherson J. reviewed the case law and concluded that the considerations and questions to take into account by the Court when determining whether to exercise its discretion to attribute pre-tax corporate income can be condensed as follows:

a.   does the Respondent have control over dividend declarations?

b.   is there a business reason for retaining the earnings?

c.   should the court exercise its discretion and attribute pre-tax corporate income?”

Christodoulou v. Christodoulou, 2021 ONSC 6538 (CanLII) at 58

“The father shared his conviction with A.R. that there is “a rule” that at 16 she can make her own decisions and orders of custody will not be enforced against her. The language used by them in this regard mirror one another. The father’s entire position during the motion rested on this “rule”.

The case law does not support his position. At the age of 16 a child can withdraw from parental control. There are also certain rights and autonomy afforded to a 16-year old child under the law. A summary of some of these rights can be found in L. (N.) v. M. (R.R.), 2016 ONCA 915 (Ont. C.A.) (“N.L.”), starting at paragraph 112. That does not mean that every 16-year old can dictate where they live or ignore court orders with respect to custody and access, or that every sixteen-year old can withdraw from parental control.”

         Reid v. Reid, 2019 ONSC 5621 (CanLII) at 28-29

“This is set out in s.94(2) CYFSA. It is a two part test. The society has the onus to meet the test based on evidence. The evidence, at this stage, is whatever the court considers credible and trustworthy in the circumstances. The test is not terribly onerous as all it requires is reasonable grounds to exist. Moreover, the standard of proof is the balance of probabilities. The court is given four options, one of which it must choose when a case is adjourned. It is almost invariably adjourned as no one is ever ready for a hearing to determine if a child is in need of protection. The four choices are set out in section 94(2):

94 (2) Where a hearing is adjourned, the court shall make a temporary order for care and custody providing that the child, 

(a) remain in or be returned to the care and custody of the person who had charge of the child immediately before intervention under this Part;

(b) remain in or be returned to the care and custody of the person referred to in clause (a), subject to the society’s supervision and on such reasonable terms and conditions as the court considers appropriate;

(c) be placed in the care and custody of a person other than the person referred to in clause (a), with the consent of that other person, subject to the society’s supervision and on such reasonable terms and conditions as the court considers appropriate; or 

(d)     remain or be placed in the care and custody of the society, but not be placed in a place of temporary detention, of open or of secure custody.

The actual wording of the test is set out in s.94(4)

S.94 (4)  The court shall not make an order under clause (2) (c) or (d) unless the court is satisfied that there are reasonable grounds to believe that there is a risk that the child is likely to suffer harm and that the child cannot be protected adequately by an order under clause (2) (a) or (b).

Clauses (a) and (b) are non-removal orders. They do not remove the children from whoever had charge before the society’s intervention. Clauses (c) and (d) are removal orders and they do remove the children from the person who had charge of them. Where children are apprehended, this represents the society’s intervention. They are clearly removed from their former caregiver and custodian.

The first step in a temporary care and custody determination is always to decide who had charge of the children. In this case it was their mother.

The phrasing of the first branch of the test in s.94(4) makes it clear that all that is required of a society is to satisfy the court of the existence of “reasonable grounds” to believe that the child is likely to suffer harm. What is unsaid but understood is that the risk of the likelihood of such harm will exist if the child remains with the person who has charge. The second branch of the test is again the existence of “reasonable grounds” to believe that the child cannot be adequately protected by an order that returns the child to the person who had charge before the child was removed.

In terms of the options available to the court, clause (c) of s.94(2), to which I refer as the placement with ‘kin’ clause, is supported by s.94 (5) CYFSA:

S.94 (5)  Before making a temporary order for care and custody under clause (2) (d), the court shall consider whether it is in the child’s best interests to make an order under clause (2) (c) to place the child in the care and custody of a person who is a relative of the child or a member of the child’s extended family or community

Section 94(5) not only supports clause (c) of s. 94(2), it prohibits the court from making an order placing the child in the temporary care and custody of a society until it has considered whether it is in the child’s best interests to place the child with a relative of the child or a member of the child’s extended family or community. Persons who fall into these categories I consider to be ‘kin’ even though this word is nowhere found in the CYFSA statute. It is simply for convenience and ease of reference. This imposes on the court, where it decides that it cannot make a non-removal order, an obligation to look at kin of the child as persons to whom it may entrust temporary care and custody. This section 94(5) makes it crystal clear to this court that an order for temporary care and custody to a society is the last resort, to be made only if an order placing with kin is not appropriate. Moreover, identification of kin as candidates for temporary care and custody, while preferable, is not required. The court has to consider all of the evidence and, I suggest, might even be tasked, where information in the evidence is scarce or non-existent, with asking who the child’s relatives and extended family or community members are, and whether any may be interested in accepting temporary care and custody.

The CYFSA has implemented a number of changes some of which have been emphasized in the statute. Among these are canvassing the views and wishes of a child where decisions are being made or services are being provided to that child. In particular, in the context of temporary care and custody decisions, the court is not only mandated to consider, but in the case of views and wishes of a child, is prohibited from making a temporary care and custody order until it takes such views and wishes into consideration, if they are ascertainable, and until it gives them “due weight in accordance with the child’s age and maturity”.”

Nogdawindamin Family and Community Services v. S.S., 2019 ONCJ 732 (CanLII) at 9-16