Good morning.

There were four substantive decisions of the Court of Appeal last week.

Two were family law decisions. In Climans v. Latner, the Court confirmed that parties can be “spouses” for the purposes of spousal support under the Family Law Act even if they keep separate residences. The trial judge ordered over $50,000 per month in support for an indefinite period, having found that the “Rule of 65” applied. The Court of Appeal agreed that there was an entitled to support, but disagreed that the Rule of 65 applied based on the trial judge’s findings of fact. Accordingly, it reduced the duration of support from indefinite to ten years.

One decision related to a deceased’s intentions as to whether a loan made to her daughter would be forgiven upon her death or repayable to her estate. The other decision was a motion for leave to appeal a costs order arising out of litigation relating to a mortgage financing that did not materialize.

John Polyzogopoulos
Blaney McMurtry LLP
416.593.2953 Email


CIVIL DECISIONS

Auciello v. CIBC Mortgages Inc., 2020 ONCA 553

[Lauwers, Brown and Nordheimer JJ.A.]

Counsel:

VA, acting in person

Onofrio Ferlisi, for the responding party CIBC Mortgages Inc.

Amanda Jackson, for the responding party Home Trust Company

Keywords: Civil Procedure, Leave to Appeal, Costs, Adjournments, Colistro v. Tbaytel, 2019 ONCA 197, Carroll v. McEwan, 2018 ONCA 902, McNaughton Automotive Limited v. Co-operators General Insurance Company, 2008 ONCA 597, Hamilton v. Open Window Bakery Ltd., 2004 SCC 9

facts:

The moving party sought leave to appeal the costs order in the court below following a motion for summary judgment in a dispute regarding a failed mortgage financing.

issues:

1. Should this motion be adjourned?
2. Should leave to appeal the costs order be granted?

holding:

Motion dismissed.

reasoning:

1. No.

2. No. The test for leave to appeal an order as to costs is stringent. Leave to appeal will not be granted save in obvious cases where the party seeking leave convinces the court there are strong grounds upon which the court could find that the judge erred in exercising his discretion. This approach is consistent with the principle that a court should set aside a costs award on appeal only if the trial judge has made an error in principle or if the costs award is plainly wrong.

The moving party’s original submission to the court below that the responding parties’ requests were just too high is a submission losing parties often make, but the costs decision is conventional in its expression and the amounts awarded in light of the amount at issue are not obviously disproportionate. The moving party pointed to no error in principle or in fact that influenced the result.

The moving party submitted that the delay in and of itself caused him an injustice. However, initiating the machinery of the civil justice system as he did does not come cost free to those who do so. Nothing in this case proceeded with alacrity. The request for the mortgage refinancing was made in January 2010. The lawsuit was started in January 2012. An Amended, Fresh as Amended Statement of Claim was served in May 2016, and the summary judgment motion was argued and decided in April 2017. The appeal was argued and decided in April 2018. When the motion judge’s oversight in not issuing the costs decision was brought to her attention in June 2019, she decided it in October 2019. Then came this motion for leave. While the delay in the motion judge’s costs decision is regrettable, that does not, of itself, raise strong grounds upon which the Court could find that the motion judge erred in exercising her discretion.


Climans v. Latner, 2020 ONCA 554

[Gillese, Brown and Paciocco JJ.A.]

Counsel:

Chris G. Paliare and Andrew K. Lokan, for the appellant

Bryan R.G. Smith and Jennifer Cook, for the respondent

Keywords: Family Law, Definition of “Spouse”, Definition of “Cohabit”, “The Rule of 65”, Civil Procedure, Costs, Divided Success, Family Law Act, R.S.O. 1990, c. F.3, ss. 1(1), 29, Courts of Justice Act, R.S.O. 1990, c. C.43, ss. 133(b), Family Law Rules, O. Reg. 114/99, Rule 24, Spousal Support Advisory Guidelines, s. 7, Djekic v. Zai, 2015 ONCA 25, Molodowich v. Penttinen (1980), 17 R.F.L. (2d) 376 (Ont. Dist. Ct.), Campbell v. Szoke (2006), 45 R.F.L. (5th) 261, at para. 51. She observed that in M. v. H., [1999] 2 S.C.R. 3, Stephen v. Stawecki (2006), 32 R.F.L. (6th) 282 (Ont. C.A.), Stajduhar v. Wolfe, 2017 ONSC 4954, aff’d 2018 ONCA 256, leave to appeal refused, [2018] S.C.C.A. No. 431, Beaver v. Hill, 2018 ONCA 840, Tadayon v. Mohtashami, 2015 ONCA 777, at para. 70; see also Beaver v. Hill, 2018 ONCA 840, at para. 2, leave to appeal refused, [2019] S.C.C.A. No. 82, St. Jean (Litigation Guardian of) v. Cheung, 2009 ONCA 9

facts:

The respondent and the appellant were in a romantic relationship from October 2001 to May 2015, a period of almost 14 years. Throughout their relationship, they maintained separate homes in Toronto where each resided. They never married or moved in together. Both had children from previous marriages. The appellant was very wealthy. Early in their relationship, the appellant told the respondent that he would not marry her or live with her unless she first signed a domestic contract. At times, he prepared draft contracts and presented them to her but no such contract was ever signed. During their relationship, the respondent and the appellant lived together in July and August at the appellant’s Muskoka cottage. They spent weekends in Florida in the winter months. Sometimes, they spent March break week in Florida. The parties also vacationed together. Beginning early in their relationship, the appellant supported the respondent financially. During their relationship, he provided her and her children with a lavish lifestyle. The parties’ personal and social lives were closely interwoven and they presented as a couple in public.

When their relationship ended, the respondent brought an action in the Superior Court of Justice, asking that she be recognized as the appellant’s spouse and that he be required to pay her spousal support. The appellant resisted the claim, arguing that while they had had a romantic relationship, as they had never married or cohabited, the respondent was not his spouse.

Following an eight-day trial, the parties were declared to be spouses within the meaning of s. 29 of the Family Law Act (“FLA”). The appellant was ordered to pay the respondent spousal support of $53,077 per month, commencing January 1, 2019, for an indefinite duration on the basis of the “Rule of 65”.

As the successful party at trial, the respondent was found to be entitled to costs on a substantial indemnity basis in the amount of $324,179. The trial judge ordered costs on a substantial indemnity basis for two reasons. First, she viewed the appellant’s position that he and the respondent had not been spouses to be unreasonable. Second, she found that the appellant had not been “forthcoming” in his financial disclosure.

issues:

Did the trial judge err in:

  1. concluding that the parties met the definition of “spouse” in s. 29 of the FLA;
  2. concluding that the parties began cohabiting in the first five months of their relationship so as to meet the Rule of 65; and
  3. awarding the respondent costs on a substantial indemnity basis?
holding:

Appeal allowed in part.

reasoning:

1. No. There was no basis on which to interfere with the trial judge’s finding that the parties were spouses within the meaning of s. 29 of the FLA.

Pursuant to s. 29 of the FLA, the definition of “spouse” includes “either of two persons who are not married to each other and have cohabited continuously for a period of not less than three years.” Under ss. 1(1), “cohabit” means “to live together in a conjugal relationship, whether within or outside marriage.”

Lack of a shared residence is not determinative of the issue of cohabitation. As the trial judge’s review of the case law demonstrated, there are many cases in which courts have found cohabitation where the parties stayed together only intermittently. The trial judge recognized that cohabitation requires not only that the parties had a conjugal relationship but also that they lived together. There needs to be some element of living together under the same roof. Whether the parties lived together – despite having chosen to maintain separate residences – was a question that gave the trial judge pause. She wrestled at length with whether the intermittent periods during which the parties shared a roof – including the respondent’s overnight stays, the summers at the cottage, and the time spent in Florida – could, in all the circumstances, constitute living together in a conjugal relationship. She was entitled to conclude that they did and to find cohabitation. The trial judge took into consideration both the relevant factors for a conjugal relationship and her findings of fact on the parties’ relationship that led her to conclude that they had lived together. The trial judge correctly interpreted the legislation and articulated the governing legal principles in deciding whether the parties had been spouses. The Court was pointed to no errors in her factual findings, much less ones that are palpable and overriding. The appellant was asking the Court to reweigh the evidence – that is, to apply the law to the facts and come up with a different result than that of the trial judge. That was not the role of the Court. Absent reversible error, the Court must defer to the trial judge’s application of the law to the facts as she found them. Since the appellant had not established a basis for appellate intervention with the trial judge’s determination that the parties had been spouses, her determination must stand.

2. Yes. The trial judge erred in principle in concluding that the Rule of 65 applied. Consequently, the order for indefinite spousal support was set aside and substituted with an order requiring that spousal support be paid for a period of ten years.

Pursuant to the Spousal Support Advisory Guidelines (“SSAGs”), the Rule of 65 applies where the length of cohabitation in years plus the recipient’s age at the date of separation equals or exceeds 65. If the Rule of 65 applies, indefinite spousal support is appropriate.

The respondent could only meet the Rule of 65 if the parties were found to have begun cohabiting in the first five months of their relationship. The trial judge found that to be the case, however, she made a palpable and overriding error in doing so. The trial judge gave no reasons for why she concluded that the parties began cohabiting in the first five months of their relationship. She referred to no legal principles, factual findings, or evidence in support of that finding. However, in concluding that the parties were spouses within the meaning of ss. 29 and 1(1) of the FLA, the trial judge relied on her extensive factual findings to determine that the parties had cohabited. On those findings, the parties did not begin cohabiting within the first five months of their relationship.

While some aspects of their conjugal relationship began right away – for example, its sexual nature – others did not. For instance, the first time the parties lived together at the Muskoka cottage was in the summer of 2002. The trial judge’s findings that underpin her conclusion that the relationship was a committed one included the appellant’s proposal to the respondent and gift of a ring. However, those events took place in October 2002 – again, well after the first five months of their relationship. Other matters that the trial judge referred to were based on findings she made about the parties’ relationship as it progressed over time. Examples of this included the evidence on which the trial judge found that family and friends perceived the parties as a couple. Again, those events occurred later than the first five months of their relationship.

Importantly, the trial judge did not conclude that the parties had cohabited within the first five months of their relationship – she concluded that they had been in a conjugal relationship within the first five months. It was not sufficient to find that the parties had a conjugal relationship in order to conclude that they were “spouses” – it was necessary to find that they “lived together” in a conjugal relationship.

As the parties did not begin cohabiting within the first five months of their relationship, the Rule of 65 did not apply and it was an error in principle to find that it did. Consequently, time-limited support was warranted. Spousal support under the SSAGs was payable for between 7 and 14 years. Having regard to the purposes of a support order set out in s. 33(1) of the FLA, and the trial judge’s findings on the respondent’s contributions to the relationship, as well as the economic consequences of the relationship to her, spousal support was ordered to be paid for a period of ten years. Such an order will relieve the financial hardship the respondent was experiencing and make fair provision to assist her in becoming able to contribute to her own support.

3. Yes. There was no basis to award substantial indemnity costs. That costs order was set aside and substituted with a costs award on a partial indemnity basis.

There was no need for the appellant to seek leave to appeal. Leave is required where the appeal is only as to a discretionary costs order. However, when the disposition on appeal changes the decision under appeal, leave to appeal from a costs order is not necessary.

The general principle is that when an appeal is allowed, the order for costs below is set aside and the appellant is awarded costs below and on appeal. However, the appellant only enjoyed partial success on this appeal. Thus, the general principle did not apply. However, partial success on appeal still requires the Court to reconsider the costs disposition at trial.

The respondent enjoyed a reduced level of success at trial as a result of the Court’s decision on the appeal. However, she remained successful on the important issue on whether she and the appellant were “spouses” within the meaning of s. 29 of the FLA. She was also successful on the amount of support, which was unchanged on appeal. The appellant, however, was successful on the duration of support.

In considering the appellant’s conduct in ordering costs, the trial judge erred in principle in finding that the appellant acted unreasonably. The appellant’s legal position was reasonable. The trial judge expressly acknowledged that she struggled with whether the time the parties spent together during their relationship was sufficient to find that they “lived together” in a conjugal relationship. Second, the trial judge’s review of the case law demonstrated that where parties neither marry nor move in together, it is an open question as to whether they will be found to have cohabited. The fact that the appellant lost on the issue of whether the parties had been spouses does not mean his legal position was unreasonable.

Moreover, the appellant did not act unreasonably in his conduct of the litigation. The trial judge found that the appellant made offers to settle that showed a desire to settle. In light of his legal position on the issue of whether the parties had been spouses, the appellant’s consent to an order to provide interim spousal support showed that he acted reasonably.

Finally, the appellant did not act unreasonably with respect to disclosure. He met his obligation to make “reasonable disclosure”. The appellant was not unreasonable because he took the position that his actual annual income was irrelevant given that his ability to pay was not in issue. Reasonableness and proportionality were to be judged in context, which includes a consideration of the matters in issue and the positions taken by the parties. These factors should also reflect a consideration of the other party’s disclosure. In this case, the respondent also produced hundreds of documents only shortly before trial, a matter to which the trial judge did not advert.

There was no question that the appellant was a person of extraordinary means – financial disclosure beyond that which he provided was not necessary to demonstrate that. Second, as the trial judge found, the respondent played no role in the appellant’s financial success or in the acquisition or improvement of the family business. To the extent she had a compensatory claim, it was weak and related only to the fact that, as a result of the relationship, she had been out of the workforce for its duration. Accordingly, the appellant’s means – beyond his ability to continue to support the appellant at the level he had during the relationship – were not relevant.


Middleton Estate v. Middleton, 2020 ONCA 552

[Feldman, van Rensburg and Thorburn JJ.A.]

Counsel:

Robert J. Reynolds, for the appellant

Charles Hammond and Jennifer Ng, for the respondent

Keywords: Wills and Estates, Contracts, Interpretation, Debtor-Creditor, Promissory Notes, Civil Procedure, Fresh Evidence, Sengmueller v. Sengmueller (1994), 17 O.R. (3d) 208 (C.A.)

facts:

This was an appeal from a trial judgment that concluded that the first of two promissory notes reflected the true intention of the deceased, EM: the first note provides that a loan to her daughter, the appellant, LM, was repayable on her death, while the second provides that the loan be forgiven on death. There were six witnesses who testified on the circumstances of the signing of the promissory notes and EM’s discussions of her intentions relating to the notes.

issues:

Did the trial judge erred in his assessment of the evidence that corroborated her account of EM’s intentions and, in particular:

  1. in rejecting JW’s evidence about what EM said in respect of the second promissory note; and
  2. in his assessment of the evidence about the December 12, 2014 email, leading to his conclusion that EM did not send the email.
holding:

Appeal dismissed.

reasoning:

1. No. There was no reversible error in the trial judge’s conclusions on this issue. The credibility and reliability of the evidence of the witnesses is the province of the trial judge to which the Court owes deference. The appellant asserted that the trial judge erred in his treatment of the evidence of JW that would have supported her version of the events, in particular that the second promissory note was signed after her mother had decided that the note would be forgiven upon her death. JW witnessed the signing of both promissory notes at EM’s request but she did not read either of them. Nor did she have any discussions with EM about gifts to her children. The only relevance of JW’s evidence was to address the issue of what EM believed the second note said and any conversation she may have had with JW about why there was a second note. However, even if the trial judge had accepted JW’s evidence, there was nothing EM said to JW that indicated that EM intended to forgive the loan on her death or that the new note contained such a provision. Nor could what she said have overcome the direct evidence of EM’s intention. That evidence was EM’s subsequent actions in delivering her will and the first note to the lawyer who would handle her estate, and confirming her intentions to him.

2. No. The new evidence the appellant sought to introduce regarding the authenticity of the December 12, 2014 email did not meet the requirements for admitting fresh evidence. The appellant knew before the hearing commenced that CS would be testifying about EM’s emails. She was provided with copies of the emails that CS had exchanged with his grandmother and advised that the emails would be tendered to demonstrate that the December 12, 2014 email was fabricated by the appellant. The appellant was asked whether she wished to proceed in the face of this new allegation, and she agreed to proceed without an adjournment. The fact that EM was in the hospital on December 17, 2014 is information that was available to the appellant before and at the trial – EM was staying at her home, and the appellant testified that her mother was very sick, and went to the hospital the day after the December 12, 2014 email. Indeed, the evidence at trial was that EM was in and out of the hospital for the month of December. The appellant and her counsel had the opportunity to question the authenticity of the emails tendered by CS at the trial. The fact that they may not have turned their minds to the issue they now raise does not justify the admission of the proposed fresh evidence.

In any event, the admission of the proposed fresh evidence would not have changed the outcome of the trial. Even had the trial judge accepted the December 12, 2014 email as a genuine message from EM to the appellant, there could have been many explanations for it in the context of her illness. As with JW’s evidence, sentiment expressed vaguely in an email could not displace the only direct evidence of EM’s intention with respect to the loan and her estate, which was her delivery, just a couple of weeks earlier, of the first promissory note and her will to her lawyer. Even if EM had told the appellant that her intention was to forgive the loan on her death, based on the evidence that was available, the appellant was not able to prove that intention at trial in the face of her mother’s act of relying on the first note by giving it to her lawyer.


Sewbans v. Sewbans, 2020 ONCA 559

[van Rensburg, Pardu and Huscroft JJ.A.]

Counsel:

SS, acting in person

Sukhjinder Bhangu, for the respondent

Keywords: Family Law, Spousal Support, Child Support, Equalization of Net Family Property, Civil Procedure, Procedural and Natural Justice, Adjournments, Courts of Justice Act, R.S.O. 1990, c. C.43, s. 134, Toronto-Dominion Bank v. Hylton, 2010 ONCA 752

facts:

This was an appeal from a judgment following a family law trial in which the trial judge ordered spousal and child support, an equalization payment, an accounting of post-separation adjustments and the transfer of an investment property to satisfy the equalization payment and child support arrears.

issues:
  1. Did the trial judge err by refusing an adjournment?
  2. Did the trial judge misapprehend the evidence when she determined child and spousal support?
  3. Should a new trial be ordered so that the appellant can put forward additional evidence on the issues of imputing income and the disposition of the proceeds of the matrimonial home?
holding:

Appeal dismissed.

reasoning:

1. No. The trial judge carefully considered the relevant circumstances, including that the appellant had known about the trial date for six months, that he was aware that his former counsel would no longer be acting for him more than two months earlier, that he had contacted the lawyer he wished to retain only the day before the trial was to commence, and that, because of the trial list, any adjournment would mean that the trial would not be heard for approximately one year. A review of the record disclosed that the appellant, notwithstanding that he represented himself at trial, brought forward appropriate documents, testified, called and cross-examined witnesses, and made submissions. The trial judge, in refusing an adjournment, took into account the relevant considerations in balancing the competing interests and made a decision that was in keeping with the interests of justice. There was no basis to interfere with that decision.

2. No. The trial judge did not misapprehend the evidence that the appellant had a college education and her conclusion in that regard was reasonable based on the appellant’s own testimony. In any event, the appellant’s opportunity to pursue further education, while the respondent did not, was only one of a number of factors taken into consideration by the trial judge in concluding that the respondent was entitled to spousal support on both a compensatory and non-compensatory basis. In addition, in imputing income to the appellant, who was not working at the time of the trial, the trial judge referred to a number of factors apart from the appellant’s education: his age, health, work and earnings history, as well as his spending habits. Whether or not the appellant had a college education, in the sense of having earned a college diploma, was not the issue; rather the appellant, until 2017, had a long track record of gainful employment that was indicative of his income-earning capacity, and the trial judge reasonably concluded that, relying on his savings, investments, and a disproportionately large share of the marital assets, the appellant had not made sufficient efforts to become re-employed.

The trial judge also did not err in her assessment of the evidence when she refused to impute income to the respondent based on her ability to run a home daycare. The trial judge carefully reviewed the evidence brought forward by both parties on this issue. She concluded that the appellant had failed to establish that the respondent could earn more running a home daycare than in her employment outside the home. Moreover, the trial judge observed that the house in which the respondent had been operating a home daycare at the date of separation had been sold, and she was living in rented accommodation after the house had been sold, where it was unlikely she would be permitted to operate a home daycare. There was no error in the trial judge’s determination that support should be based on the respondent’s actual income from employment rather than an imputed amount as proposed by the appellant.

3. No. A new trial can be ordered when an appeal is allowed and the court is satisfied that some substantial wrong or miscarriage of justice has occurred. A new trial was not appropriate in this case. All of the issues that had to be determined in the parties’ matrimonial proceedings were addressed during the five-day trial, with evidence and argument. It was too late for the appellant, now, to assert that, if given the opportunity, he could bring forward more or different evidence respecting the respondent’s income or his disposition of the proceeds of sale of the matrimonial home.


SHORT CIVIL DECISIONS

Chowdhury v. Toronto (City), 2020 ONCA 539

[Lauwers, Brown and Nordheimer JJ.A.]

Counsel:

AC, acting in person

No one appearing for the respondents

Keywords: Civil Procedure, Vexatious Litigants, Striking Pleadings, No Reasonable Cause of Action, Frivolous, Vexatious, Abuse of Process, Appeals, Rules of Civil Procedure, Rule 2.1

Bancroft-Snell v. Visa Canada Corporation, 2020 ONCA 549

[Strathy C.J.O., MacPherson, Sharpe, Tulloch and Benotto JJ.A.]

Counsel:

Reidar Mogerman and Katie Duke, for Jonathan Bancroft-Snell and 1739793 Ontario Inc., moving parties (M50130), responding parties (M49808 & M50041)

Robert E. Kwinter, for Visa Canada Corporation, moving party (M50130), responding party (M49808 & M50041)

Jeffrey B. Simpson and James B. Musgrove, for Mastercard International Incorporated, moving party (M50130), responding party (M49808 & M50041)

Katherine L. Kay, for Bank of Montreal, Bank of Nova Scotia, Canadian Imperial Bank of Commerce, Royal Bank of Canada and Toronto-Dominion Bank, moving parties (M50130), responding parties (M49808 & M50041) (no submissions made)

Sean Griffin and Antoine Brylowski, for National Bank of Canada Inc., moving party (M50130), responding party (M49808 & M50041)

James C. Orr and Kyle R. Taylor, for Home Depot of Canada Inc., moving party (M49808), responding party (M50130)

Edward J. Babin, Cynthia L. Spry, and Michael Bookman, for Wal-Mart Canada Corp., moving party (M50041), responding party (M50130)

Keywords: Civil Procedure, Class Proceedings, Appeals, Costs, Class Proceedings Act, 1992, S.O. 1992, c. 6, 14(1), (2), 31(2), Practice Direction on Civil Appeals, s. 18.5, Trillium Motor World Ltd. v. General Motors of Canada Limited, 2017 ONCA 545, Dabbs v. Sun Life Assurance Co. of Canada, [1998] O.J. No. 1598 (Ont. Gen. Div.), Silver v. IMAX, 2012 ONSC 4064

Le Treport Wedding & Convention Centre Ltd. v. Co-operators General Insurance Company, 2020 ONCA 556

[Feldman, Lauwers and Huscroft JJ.A.]

Counsel:

Emily Stock and Brandon Cook, for the appellant

Robert W. Dowhan and Matthew J. McMahon, for the respondent

Keywords: Civil Procedure, Appeals, Trial Costs


The information contained in our summaries of the decisions is not intended to provide legal advice and does not necessarily cover every matter raised in a decision. For complete information or for specific advice, please read the decision or contact us.

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Photo of John Polyzogopoulos John Polyzogopoulos

John has been the editor of Blaneys Appeals since the inception of the blog in the Summer of 2014. He is a partner at the firm with almost two decades of experience handling a wide variety of litigation matters. John assists clients with…

John has been the editor of Blaneys Appeals since the inception of the blog in the Summer of 2014. He is a partner at the firm with almost two decades of experience handling a wide variety of litigation matters. John assists clients with matters ranging from appeals, to injunctions, to corporate, breach of contract, construction, environmental contamination, product liability, debtor-creditor, insolvency and other business litigation. He also handles professional discipline and professional negligence matters, as well as complex estates and matrimonial litigation. In addition, John represents amateur sports organizations in contentious matters, and advises them in matters of internal governance. John can be reached at 416-593-2953 or jpolyzogopoulos@blaney.com.