“When an order is made requiring a payor to pay table child support based on an imputed income, that, in itself, becomes controversial going forward. Section 25 of the Child Support Guidelines requires a payor to produce annually, not more than once a year after the making of the order, disclosure referred to in s. 25 and in s. 21(1). As indicated below, I am modifying the disclosure he is required to provide to avoid disclosure becoming yet another area of conflict. As long as he remains self-employed, his documentation will continue to reflect a line 150 income that ought not to be the basis of establishing his table child support payment. I agree that Mr. S. must comply with s. 25 and s. 21(1) and provide disclosure. However, the amount that Mr. S. is now ordered to pay for table child support will not change automatically dependent on his line 150 income because, so long as he is self-employed, his line 150 income may be below the minimum income and he would assert that he has no obligation to pay table amount of child support. That would not reflect his actual financial circumstances. While he will be required to disclose annually, the table child support amount will not change automatically each year. The amount ordered below will not be subject to change unless Ms. D. brings a motion to change final order that is granted. On that basis, Ms. D. will receive the annual disclosure but will decide whether it is worthwhile emotionally and financially to press for additional table amount of child support.”
March 10, 2022 – Statutory Qualified Privilege
“More relevant to the issue of whether the Defamatory Statements were made on an occasion of qualified privilege is s. 125 of the Child, Youth and Family Services Act, 2017, S.O. 2017, c. 14, Sched. 1 (“CYFSA”). That section sets out the obligation of a person to report information to a society where there are reasonable grounds to suspect that a child has suffered various kinds of harm. Section 125(10) creates a form of statutory qualified privilege:
This section applies although the information reported may be confidential or privileged, and no action for making the report shall be instituted against a person who acts in accordance with this section unless the person acts maliciously or without reasonable grounds for the suspicion. [Emphasis added.]
This statutory qualified privilege attaches to statements made in a complaint to a society, as well as to statements made by a person to the society in the course of an investigation: W. (D.) v. White, 2001 CarswellOnt 5892 (S.C.), at paras. 85-92, aff’d (2004), 2004 CanLII 22543 (ON CA), 189 O.A.C. 256 (C.A.), leave to appeal refused, [2004] S.C.C.A. No. 486; Nadejda Ryabikhina v. Stanislav (Stan) Savranskiy, 2010 ONSC 3860, at paras. 24-25, aff’d 2011 ONCA 219, leave to appeal to S.C.C. refused, 35927 (July 24, 2014); Sullivan v. Draper-Sereda, [2006] O.J. No. 4671 (Small Claims).
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In his discussion of the applicable legal principles, at para. 68 of the Second Reasons, the trial judge recognized that the defence of qualified privilege could be defeated by actual or express malice or if CC’s statements exceeded the limits of the applicable duty or interest: Korach v. Moore (1991), 1991 CanLII 7367 (ON CA), 1 O.R. (3d) 275 (C.A.), at pp. 278-80, leave to appeal refused, [1991] S.C.C.A. No. 30; Bent v. Platnick, 2020 SCC 23, 449 D.L.R. (4th) 45, at paras. 128 and 136. The limits of the privilege were explained by this court in RTC Engineering Consultants, at para. 18:
Not everything said or written on an occasion of qualified privilege is protected. As is evident from the term “qualified privilege” itself and from the previous discussion, the privilege is not absolute. It may be lost in one of two ways. First, it may be lost if the dominant motive for making the statement was malice. In this context malice means not just ill will towards another but any ulterior motive that conflicts with the interest or duty created by the occasion. And it includes recklessness. Both dishonesty and a reckless disregard for the truth may amount to malice. Second, a privilege may be lost if the statement is not commensurate with the occasion, either because the statement is not germane and reasonably appropriate to the occasion or because the recipients of the statement have no interest in receiving it. Put differently, to maintain privilege a defendant must communicate appropriate information to appropriate people. [Emphasis added.]
In considering whether malice by the maker of the statement defeats qualified privilege, the primary consideration is the state of mind of the maker at the time the words were published: Brown, at ch. 16.2(2). The presence of an improper motive is the critical consideration. The privilege will be lost if it is shown that the statement was published for a collateral motive unrelated to the privilege’s purpose: Brown, at ch. 16.3(1). Accordingly, malice is essentially a question of good faith. The privileged occasion must be used for the purpose for which it is given; it must not be misused or abused by a defendant: Brown, at ch. 16.3(1).
In RTC Engineering Consultants, this court, at para. 18, identified some aspects of the factual inquiry when it stated that malice in the context of qualified privilege “means not just ill will towards another but any ulterior motive that conflicts with the interest or duty created by the occasion. And it includes recklessness.””
March 9, 2022 – Amendments to the Divorce Act
“On March 1, 2021, important amendments to the Divorce Act (the Act) came into force. These amendments are applicable in this case because s. 35.3 of the Act expressly states that the amendments to that legislation will apply to any case decided on or after March 1, 2021 (even if the case was started but not determined before March 1, 2021). Section 35.3 says:
PROCEEDINGS COMMENCED BEFORE COMING INTO FORCE – A proceeding commenced under this Act before the day on which this section comes into force and not finally disposed of before that day shall be dealt with and disposed of in accordance with this Act as it reads as of that day.
Although the amendments were originally scheduled to take effect last year, it was delayed because of the COVID-19 pandemic. All of this came into force as of March 1, 2021 and therefore I must and shall use and apply that language in this decision. The amendments changed and modernized the language in the Act in many ways to remove any reference to the terms like “custody” or “access” for children. These terms were replaced with terminology focused on parent’s responsibilities for their children, with the goal of helping to reduce parental conflict. The Act introduced some new terminology relating to “parenting orders”, “parenting time” and “decision-making responsibility”, and further added other terms and definitions including “family dispute resolution process”, “family justice services”, “family member” and “family violence”. Similar changes were also made to provincial statutes like the Children’s Law Reform Act (CLRA), contained in the Moving Ontario Family Law Forward Act, 2020, (also coming into force on March 1, 2020). In my view, these changes are very welcome to the family court and it is my hope they will do exactly what they were intended to do, which is to help reduce parental conflict (in the best interests of children).
Section 2 of the Divorce Act provides definitions for some of the new terminology. The definition of “custody” and “custody order” were repealed. Now, instead of making a custody order, the courts will now make a “parenting order” pursuant to s. 16.1 (1) of the Act. In the parenting orders, the court may, among other things: allocate parenting time and day-to-day decisions (in accordance with s. 16.2 of the Act; allocate decision making responsibility (in accordance with s. 16.3 of the Act); and requirements regarding communication between the persons that have been allocated parenting time.
Under the Act, a parenting order would be available to either or both spouses; or a person, other than a spouse, who is a parent of the child, stands in the place of a parent or intends to stand in the place of a parent. Parenting tim may be allocated by way of a schedule and unless the court orders otherwise, the parent who has been allocated parenting time has exclusive authority to make the day-to-day decisions affecting the child when the child in in their care. This would include time when the child is not physically in the care of that person, such as when the child is at school or in daycare. If there is a particular issue that would normally be a day-to-day decision, but it is of certain significance to a particular child, it could provide for any other matter that the court considers appropriate. The amendments preserved the principle that a child should spend as much time with each parent so long as it is consistent with the best interests of the child. The “maximum contact principle” is now the “maximum parenting time” principle. It is important to note that above all else, this principle is subject to the “primary consideration” that the court must consider a child’s physical, emotional and psychological safety, security and well-being. This is especially significant in cases of family violence. Lastly, none of the above creates a presumption of equal time because if the contact conflicts with the best interests of the child, the court may impose restrictions.”
March 8, 2022 – The Many Faces of “Set-Off” Under the Guidelines
“In Contino, where Bastarache J. also wrote for the majority, he considered various approaches to the interpretation and application of ss. 9(a) at paras. 40 – 44:
The first factor requires that the court take into account the financial situations of both parents (instead of the sole income of the spouse against whom the order is sought, as in s. 3). It is important to highlight the fact that the final and fully considered version of s. 9 does not include a conclusive formula to determine how the Table amounts are to be considered or accounted for.
The Court of Appeal, while it agreed that the use of a formula is not explicitly required in the section, concluded that the set-off approach in s. 8 could be a useful starting point to bring consistency and objectivity to the determination, especially in cases where there is limited information and the incomes of the parties are not widely divergent. I agree, but would caution against deciding these issues without proper information. I would particularly caution against a rigid application of the set-off which can entail, in the case of a variation order, a drastic change in support, dubbed the “cliff effect” by commentators (M. S. Melli and P. R. Brown, “The Economics of Shared Custody: Developing an EquiTable Formula for Dual Residence” (1994), 31 Houst. L. Rev. 543, at p. 565; Rogerson, at p. 74; Wensley, at p. 70), that may not be warranted when a close examination of the financial situation of the parents and standard of living in both households is considered. The value of the set-off is in finding a starting point for a reasonable solution taking into account the separate financial contribution from each parent. A court will depart from the set-off amount or make adjustments to it if it is inappropriate in light of the factors considered under ss. 9(b) and 9(c). The set-off amount must therefore be followed by an examination of the continuing ability of the recipient parent to meet the needs of the child, especially in light of the fact that many costs are fixed. As mentioned by numerous commentators, this is a problem in many cases where there is a great discrepancy in the incomes of the parents (see Rogerson, at p. 64). It is also a problem in cases where one parent actually incurs a higher share of the costs than the other (taking responsibility for clothing or activities for instance). I would also note that the 40 percent threshold itself should be irrelevant to this evaluation; the cliff effect is not merely a result of the threshold; it is a result of the different methodology.
The Court of Appeal (as well as the father) summarized a number of applications of the set-off approach adopted by Canadian courts (see Fletcher v. Keilty (2004), 269 N.B.R. (2d) 302, 2004 NBCA 34 (N.B.C.A.); Slade v. Slade (2001), 195 D.L.R. (4th) 108, 2001 NFCA 2 (Nfld. C.A.); Dean v. Brown (2002), 209 N.S.R. (2d) 70, 2002 NSCA 124 (N.S. C.A.); Hill v. Hill (2003), 213 N.S.R. (2d) 185, 2003 NSCA 33 (N.S.C.A.); Cabot v. Mikkelson (2004), 242 D.L.R. (4th) 279, 2004 MBCA 107 (Man. C.A.); Dennis v. Wilson (1997), 1997 CanLII 1933 (ON CA), 104 O.A.C. 250 (Ont. C.A.); Wylie v. Leclair (2003), 2003 CanLII 49737 (ON CA), 64 O.R. (3d) 782 (Ont. C.A.); Green v. Green; Berry v. Hart; E. (C.R.H.) v. E. (F.G.) (2004), 29 B.C.L.R. (4th) 43, 2004 BCCA 297 (B.C. C.A.); Luedke v. Luedke (2004), 198 B.C.A.C. 293, 2004 BCCA 327 (B.C. C.A.); Gieni v. Gieni (2002), 29 R.F.L. (5th) 60, 2002 SKCA 87 (Sask. C.A.); see also Children Come First Report: A Report to Parliament Reviewing the Provisions and Operation of the Federal Child Support Guidelines, Vol. III (2002) (”Children Come First Report”), at pp. 68-70; J. C. MacDonald and A. C. Wilton, Child Support Guidelines: Law and Practice (2nd ed. (loose-leaf ed.)), vol. 1, at pp. 9-11 to 9-16).
The three main applications of the set-off formula adopted by the courts are:
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- Simple (or straight) set-off: The support payment is calculated by determining the Table amount for each of the parents as though each was seeking child support from the other. The amount payable is the difference between the two amounts (see, e.g., Middleton v. MacPherson(1997), 1997 CanLII 11517 (AB QB), 204 A.R. 37 (Alta. Q.B.); Luedke v. Luedke).
- Pro-rated set-off: The Table amount for each of the parents is reduced by the percentage of time the child spends with each parent. The recipient parent’s amount of time with the children is multiplied by the payor’s Guidelines amount and the payor parent’s amount of time with the children is multiplied by the recipient parent’s Guidelines amount. These two pro-rated amounts are then set-off against one another (see, e.g., Moran v. Cook(2000), 2000 CanLII 22542 (ON SC), 9 R.F.L. (5th) 352 (Ont. S.C.J.); Harrison v. Harrison(2001), 2001 CanLII 60967 (ON SC), 14 R.F.L. (5th) 321 (Ont. S.C.J.); E. (C.R.H.) v. E. (F.G.) ). A variation of this approach is the “straight pro-rate” which takes the percentage of time the recipient parent has custody of the children multiplied by the Guidelines amount for the payor parent.
- Set-off plus multiplier: The set-off amount (simple set-off or pro-rated set-off) is increased by a multiplier (usually 1.5), based on the assumption that a portion of the recipient parent’s costs are fixed, and therefore, unaffected by the increased time the child spends with the other parent.
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I agree with the father and the Court of Appeal that the simple set-off is preferable to the pro-rated set-off as a starting point for the s. 9 analysis in view of the language used by the legislator in para. (a). …”
March 7, 2022 – Mareva Injunctions
“A Mareva injunction is an extraordinary remedy because it constitutes a form of pre-trial execution. In Aetna Financial Services Inc. v. Feigelman, 1985 CanLII 55 (SCC), [1985] 1 S.C.R. 2, the Supreme Court of Canada cautioned that the imposition of such a remedy can be harsh and care must be taken to ensure that its use is not a form of “litigious blackmail”. The Ontario Court of Appeal in Chitel v. Rothbart (1982), 1982 CanLII 1956 (ON CA), 141 D.L.R. (3d) 268 held that Mareva injunctions are the exceptions to the rule.
The requirements for a Mareva injunction are as follows:
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- The moving party should make full and frank disclosure of all matters in his knowledge which are material for the judge to know;
- The moving party should give particulars of his claim against the defendant/respondent, stating the ground of his claim and the amount thereof, and fairly stating the points made against it by the defendant/respondent;
- The moving party should give some grounds for believing that there is a risk of the assets being removed before the judgment or award is satisfied;
- The moving party must, of course, give an undertaking in damages;
- The moving party should give some grounds for believing that the defendant/respondent has some assets here: Third Chandris Shipping Corp. v. Unimarine S.A., [1979], Q.B. 645 (Eng. C.A.); Chitel.”
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March 4, 2022 – Other Side Not Complying With An Order? Follow These Steps
“As set out by Chappel, J., in “Striking Pleadings in Family Law – Part 1: Introduction and Overriding Principles”, 2019 CanLIIDocs 3941, the case-law has established the following analytical framework and considerations that apply when dealing with a motion to strike the party’s pleadings on the basis of non-compliance with court orders or Rules:
a. First, the judge must be satisfied there has been non-compliance (Mullin v. Sherlock, 2018 ONCA 1065 (CanLII), at para. 44. At this step, it is critical that the motion judge outline in detail their findings respecting the party’s non-compliance with any relevant orders or Rules (Kovachis v. Kovachis, 2013 ONCA 644).
b. Second, if the court is satisfied that there has been non-compliance, the court must assess the most appropriate remedy based on the particular facts of the case before the court. In undertaking this task, the court should consider and weigh the following factors:
i. The extent and persistence of the non-compliance (Horzempa v. Ablett, 2011 ONCA 633 (C.A.), at para. 7;
ii. Whether the disobedience of the orders and Rules was wilful in nature (Marcoccia, supra, at para. 13; Kovachis, supra, at para. 3; Manchanda v. Thethi, 2016 ONCA 909, at para. 9);
iii. Whether the non-compliant party made reasonable efforts to comply and is able to provide acceptable explanations for the breaches (Chiaramonte v. Chiaramonte, 2013 ONCA 641, at para. 37; Brisson v. Gagnier, 2014 ONCA 909 (C.A.) at para. 3; Marcoccia, supra, at paras. 10-12; Horzempa, supra, at para. 6; Mullin, supra, at para. 45;
iv. Where the non-compliance relates to support orders, the payor’s financial circumstances and their ability to pay support (Higgins v. Higgins, 2006 CarswellOnt 5893 (C.A.); and
v. The remedy should be proportionate to the issues in question and the conduct of the non-compliant party (Kovachis, supra, at para. 3; Manchanda, supra, at para. 9; Mullin, supra, at para. 49). It should not go beyond what is necessary to express the court’s disapproval of the conduct in issue (Marcoccia, supra, at para. 14; Pucaru, supra, at para. 49).”
March 3, 2022 – Relying on Legal Advice Not a Waiver of Privilege
“The wife seeks disclosure of the husband’s confidential communications with his lawyer wherein he gave instructions to his lawyer about disclosure; however, there is nothing in the husband’s evidence about his instructions to counsel. His evidence is that he relied on his advisers, including his lawyer, to prepare his disclosure.
There is no suggestion that the husband has expressly waived privilege. The question is whether, by giving evidence that he relied on his advisers, including his lawyer, to make his financial disclosure during the negotiation of the marriage contract, the husband has waived privilege over his lawyer’s file.
In my view, the husband’s evidence does not rise to the level of a waiver of privilege.
Family law lawyers routinely prepare financial disclosure, whether in the context of proceedings arising after relationship breakdown or the preparation of a domestic contract. The fact that they do so, and that clients rely on them to do so, is not a disclosure of confidential communications. I agree with the husband that it is no different than a party saying they relied on their lawyer to do her job.
If saying that one relied on one’s lawyer was enough to find a waiver of privilege, privilege frequently would be waived. In my view, such an approach to waiver of privilege would be inconsistent with the guidance from the Supreme Court of Canada that privilege must be as close to absolute as possible.
I adopt the reasoning in Spicer, supra, [2015 ONSC 4175] to the effect that the mere disclosure of the receipt and reliance upon legal advice is not sufficient to give rise to a waiver of privilege. In this case, the husband has not given any evidence that legal advice he received when negotiating the marriage contract formed the basis of his state of mind, disclosed legal advice he received from his lawyer, or relied upon or put in evidence any legal advice he received. Simply saying he relied on his lawyer is not enough to waive privilege.”
Montemarano v. Montemarano, 2020 ONSC 1393 (CanLII) at 21-26
March 2, 2022 – Costs Levied Against Counsel – Rule 24(9)
“Both parties on this motion agree that an order awarding costs against a lawyer personally should only be ordered in exceptional circumstances and are rare.
Rule 24(9) of the Family Law Rules states:
(9) If a party’s lawyer or agent has run up costs without reasonable cause or has wasted costs, the court may, on motion or on its own initiative, after giving the lawyer or agent an opportunity to be heard,
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(c) order the lawyer or agent personally to pay the costs of any party.
The Supreme Court of Canada held that costs are rewarded as compensation for the successful party and not to punish a lawyer: see Young v. Young, 1993 CanLII 34 (SCC), [1993] 4 S.C.R. 3 and F.(V.) v. F.(J.), 2016 ONCJ 759, 86 R.F.L. (7th) 452, at paras. 9-11. Courts must be extremely cautious in awarding costs personally against a lawyer, given the duties upon a lawyer to guard confidentiality of instructions and to bring forward with courage even unpopular cases or positions (see Young, at para. 263).
Although the rules are not identical, the test used under Rule 57.07(1) of the Rules of Civil Procedure, applies to rule 24(9) of the Family Law Rules. The two-part test was set out by the Court of Appeal in Galganov v. Russell, 2012 ONCA 410, 350 D.L.R. (4th) 679. Specifically, the court must first determine if the lawyer’s conduct falls within the ambit of the rule in the sense that he or she caused costs to be incurred or wasted unnecessarily or without reasonable cause; and second, as a matter for discretion whether an order for costs personally is warranted in the circumstances of the case: see paras. 18 and 22 and see F.(V.) v. F. (J.).
In Covriga v. Covriga, 2010 CarswellOnt 3602 (SCJ), Justice Horkins found that the lawyer supported and encouraged her client’s unreasonable conduct and ordered the lawyer to pay costs: see paras. 111 and 184. The lawyer’s unreasonable conduct was described as “shocking” (at para. 185). Specifically, Justice Horkins found that the wife did not do what she did alone. The lawyer must bear responsibility for much of the conduct. She “had a duty to take all reasonable steps to ensure that her client complied with court orders and the Family Law Rules. Instead, she pursued Ms. Covriga’s application with a breathtaking disregard for the Family Law Rules, court orders and the Rules of Professional Conduct”: at para. 185. The lawyer’s behaviour was found to have “aggravated and perpetuated the existing problems and numerous new problems arose”: at para. 186. A lawyer may not rely on a client’s instructions as a defence when a lawyer acts in a manner inconsistent with the goals of the justice system: MacMull v. MacMull, 2015 ONSC 5667, 258 A.C.W.S. (3d) 342, at para. 19. I find that much of the description of the lawyer in Justice Horkin’s order aptly describes Mr. Maltz’s behaviour in the case before me.
Amongst other reasons, the Court of Appeal in Galganov stated that the cost rule is intended to apply “when a lawyer pursues a goal which is clearly unattainable or is clearly derelict in his or her duties as an officer of the court” (emphasis added): at para. 18; see also F.(V.) v. F.(J.), at para. 11. In determining whether the rule applies, the court must examine “the entire course of the litigation that went on before the application judge”: Galganov, at para. 20; F.(V.) v. F.(J.), at para. 11. This requires a “holistic examination of the lawyer’s conduct” in order to provide an “accurate tempered assessment”: Galganov, at para. 20; F.(V.) v. F.(J.), at para. 11. As stated by Justice George Czutrin in R. (C.) v. Children’s Aid Society of Hamilton,2004 CanLII 34407 (ON SC), 2004 CarswellOnt 1414 (S.C.), any person whose conduct “flies in the face” of the primary goals of the Family Law Rules may be subject to cost consequences (at para. 51). In that case, he was referring to costs ordered against the Office of the Children’s Lawyer, but the statement is equally applicable in this case.
There is no bad faith requirement in the Family Law Rules: see Covriga at para. 11. In MacMull, Justice McGee held that “The wording of Rule 24(9) as it refers to ‘fault’ within the heading, requires a finding of negligence, inappropriate conduct, or abuse of process on the part of the lawyer, even if the conduct does not amount to bad faith”: at para. 18.”
March 1, 2022 – Consequences of Being Struck – Rule 1(8.4)
“This court’s decision in Abu-Saud v. Abu-Saud, 2020 ONCA 824, reaffirmed that an audience will not be granted to a party who is in default of court orders: see also Dickie v. Dickie, 2007 SCC 8, [2007] 1 S.C.R. 346, at para. 6.
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The Family Law Rules, O Reg 114/99, provide that the court may deal with a party’s failure to follow the rules, including a failure to make proper disclosure, by striking out any or all documents filed by that party. This consequence stems from the need to sanction and deter non-disclosure of assets, which has been described as the “cancer of family law”: Leskun v. Leskun, 2006 SCC 25, [2006] 1 S.C.R. 920, at para. 4, citing Cunha v. Cunha (1994), 1994 CanLII 3195 (BC SC), 99 B.C.L.R. 93 (S.C.).
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Rule 1(8.4) of the Family Law Rules, which establishes the consequences of striking out documents, does not automatically exclude the defaulting party from the proceeding. Instead, it intentionally removes the party’s entitlement to notice and participation. The court may nevertheless permit participation by the defaulting party, to the extent it will assist the court.”
Manchanda v. Thethi, 2021 ONCA 127 (CanLII) at 4, 6 & 10
February 28, 2022 – Costs When A Case Settles?
“Justice Pazaratz asks in Scipione v. Scipione, 2015 ONSC 5982, “who got what they asked for”. Isn’t this the primary question in every costs decision?
Rule 24 sets out that this is the presumption. The successful party is entitled to costs.
I agree with Justice Pazaratz that it is completely unreasonable to not get what you ask for and then argue that somehow success was divided or that you were in fact successful. There are situations where there is divided success, or where in examining a comprehensive settlement it may be impossible to unravel who got what and whether it was valuable to them or not. Caution must be exercised in situations where a settlement has been presented to a court and then the court asked to assess costs. Where there are allegations of unreasonable behaviour, bad faith or where the minutes of settlement are so intricate as to be enmeshed in a global structure, this initial caution may lead to a refusal to order costs in such circumstances. There will clearly be compromises made and settlements reached, where the motivation and considerations are unknown. It may then be impossible to determine who was successful, to assess reasonableness and reach a just and equitable order of costs. It may be impossible to adequately consider the factors under Rule 24(11).
In my view in situations where a matter settles and it is clear that one side has been successful, it is entirely appropriate to assess costs and determine whether someone should pay costs to the other. If you can’t look at the matter and clearly sort out who won or who was the more substantially successful party, how can you decide costs in any direction? If you can, you should assess costs in the usual manner. You can only work with what you have. It is therefore incumbent on counsel and the parties to be clear in their settlement terms as to what has transpired. If the consent is complex and intertwined, “global” in nature it may increase the likelihood that a court will not be in a position to assess costs. That is my view of the cases and is what I find reasonable in the circumstances of this case.”
Hmoudou v. Semlali, 2020 ONSC 1330 (CanLII) at 19-22