“As held by Justice Curtis in Tameanko v. Goldman 2014 ONCJ 580 (CanLII), where a party does not raise the existence or effect of an arbitration clause and its possible impact upon a legal proceeding, that party acquiesces to a waiver of the arbitration clause. Such a result is even more obvious when that party not only fails to raise the existence or effect of the arbitration clause, but then takes active steps in the legal proceeding to pursue his/her rights, interests and claims. This is exactly what the respondent did in this proceeding.”
October 12, 2022 – Asserting Constitutional Rights
“It is axiomatic that a person who has a constitutional right has the right to assert it in ordinary legal proceedings subject to the limitations in the jurisprudence to which I will refer later.
The constitutional issue to which Mr. Hill’s claim gives rise is whether s. 35 of the Constitution Act, 1982, together with any applicable treaties, completely displace or otherwise modify the application of the FLA, the CLRA and associated rules to this family law dispute between Indigenous parties who live in Ontario. This is a complex legal issue with serious implications for the immediate parties and more broadly.
The Superior Court of Justice has jurisdiction to decide the constitutional issue. It is a court of inherent and plenary jurisdiction, and has authority over disputes between citizens and residents subject to the provisions of legislation and the Constitution, with associated rights of appeal: Canada (A.G.) v. Law Society of British Columbia, 1982 CanLII 29 (SCC), [1982] 2 S.C.R. 307 at pp. 326-27.”
October 11, 2022 – Adjourning Trials
“All parties agree that a judge’s decision to adjourn or not adjourn a trial is highly discretionary. In Ariston Realty Corp. v Elcarim Inc. 2007 CanLII 13360 (ONSC), Justice Perell set out a helpful list of factors and principles for the Court to consider when exercising its discretion to grant or refuse an adjournment:
“Depending on the circumstances of each case, to judicially exercise the discretion to grant or refuse an adjournment, a judge or master may need to weigh many relevant factors including:
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- the overall objective of a determination of the matter on its substantive merits;
- the principles of natural justice;
- that justice not only be done but appear to be done;
- the particular circumstances of the request for an adjournment and the reasons and justification for the request;
- the practical effect or consequences of an adjournment on both substantive and procedural justice;
- the competing interests of the parties in advancing or delaying the progress of the litigation;
- the prejudice not compensable in costs, if any, suffered by a party by the granting or the refusing of the adjournment;
- whether the ability of the party requesting the adjournment to fully and adequately prosecute or defend the proceeding would be significantly compromised if the adjournment were refused;
- the need of the administration of justice to orderly process civil proceedings; and
- the need of the administration of justice to effectively enforce court orders.”
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Konstan et al. v. Berkovits et al., 2021 ONSC 6749 (CanLII) at 14
October 7, 2022 – Certificate of Pending Litigation
“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.”
October 6, 2022 – Hearsay
“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.”
October 5, 2022 – Court of Appeal’s Power to Stay Proceeding
“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).”
October 4, 2022 – Excellent Summary of Costs Principles
“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).”
October 3, 2022 – Deference to Arbitrator Awards
“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.”
September 30, 2022 – The Implied Undertaking Rule
“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]
September 29, 2022 – Best Interests & The Status Quo
“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.”