Ballentine v. Ballentine (1999), 45 O.R. (3d) 706 (C.S.)

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  • Date: 2018

Ballentine v. Ballentine

45 O.R. (3d) 706

[1999] O.J. No. 3103

Court File No. 76 FT-48380

Ontario Superior Court of Justice

Cullity J.

August 12, 1999

 

 

Family law — Support — Spousal support — Arrears — “One year rule” which prima facie denies spouse right to enforce arrears of support after one year no longer applying even as guideline in exercise of court’s discretion — Question of whether delay justifying refusal to grant leave to issue writ of seizure and sale should be governed by same principles of equity that apply to enforcement of legal and equitable remedies generally.

The parties were divorced in 1976. The divorce judgment incorporated provisions of agreements between the parties under which the respondent was to pay spousal support in the amount of $1,447.31 per month, subject to cost of living adjustments. After June 1995, the respondent became increasingly in default in his support obligations. The petitioner commenced an application seeking, among other remedies, declarations that the respondent was in breach of his support obligations. She moved pursuant to rule 60.07(2) of the Rules of Civil Procedure for leave to issue a writ of seizure and sale against property of the respondent. The respondent submitted that the fact that the motion was brought approximately three and one-half years after the defaults began was, in itself, a factor that should strongly influence the court to deny the motion. That submission was based on authorities which have continued to apply the so-called “one-year rule”, formerly applied in the ecclesiastical courts, which prima facie denies a spouse a right to enforce arrears of support after one year.

 

Held, the motion should be granted.

 

The “one-year rule” is compatible with neither the provisions nor the spirit of the Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.) and should no longer be regarded as providing guidance for the court. The question of whether delay will justify a refusal to grant leave to issue the writ should be governed by the same principles of equity that apply to the enforcement of legal and equitable remedies generally. It should be relevant only where, and to the extent that, it supports a waiver or acquiescence or a finding that it would otherwise be inequitable to enforce the claim.

If the conclusion that the one-year rule should finally be put to rest is in error, and if it is to be applied as a guideline in the exercise of the court’s discretion, the evidence was sufficient to justify a conclusion in the petitioner’s favour in this case. There was evidence of continuing need and no suggestion of hoarding, and her conduct after the default was consistent with an intention to enforce her right to support. Aime v. Aime (1990), 65 Man. R. (2d) 195, 70 D.L.R. (4th) 667, 27 R.F.L. (3d) 1, [1990] 5 W.W.R. 537 (C.A.); Scott v. Scott (1980), 19 C.P.C. 184, 20 R.F.L. (2d) 278 (Ont. H.C.J.), consd

 

Other cases referred to

 

Denhann v. Denhann, [1992] O.J. No. 206 (Gen. Div.); Englar v. Englar (1978), 19 O.R. (2d) 561, 85 D.L.R. (3d) 609, 2 R.F.L.  (2d) 237 (C.A.); Eveleigh v. Eveleigh, [1969] 2 O.R. 664, 6 D.L.R. (3d) 380 (H.C.J.); Filipich v. Filipich (1996), 26 R.F.L. (4th) 53 (C.A.); Lear v. Lear (1974), 5 O.R. (2d) 572, 51 D.L.R. (3d) 56, 17 R.F.L. 136 (C.A.); Vine v. Vine (1986), 54 O.R. (2d) 580, 1 R.F.L. (3d) 425 (H.C.J.)

Statutes referred to

Divorce Act, R.S.C. 1970, c. D-8, s. 11(2)

Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.), s. 17 Family Law Act, R.S.O. 1990, c. F.3

Fraudulent Conveyances Act, R.S.O. 1990, c. F.29 Rules and regulations referred to

Rules of Civil Procedure, R.R.O. 1990, Reg. 194, rule 60.07(2)

 

MOTION for leave to issue a writ of seizure and sale.

 

Harold H. Elliott, Q.C., for petitioner. George S. Glezos, for respondent.

 

[1]  CULLITY J.: — At the conclusion of the hearing of this motion pursuant to rule 60.07(2) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, I granted the petitioner leave to issue a writ of seizure and sale against property of the respondent and I indicated that I would provide the parties with brief written reasons for my decision.

 

[2]  On the basis of the evidence filed, the material facts are not in dispute.

 

[3]  The parties were married in 1956 and divorced in 1976. The divorce judgment incorporated provisions of agreements between the parties under which the respondent was to pay spousal support of $1,447.31 per month. These payments were subject to cost of living adjustments. The judgment also provided that amounts paid to the petitioner from a family trust established by the respondent were to be credited against his support obligations.

 

[4]  Until 1979, the respondent paid support. From 1979 to 1991, payments were made, in part, by the respondent and partly from the family trust. From 1991 to June 1995 they were made exclusively by the trust.

 

[5]  In 1987 the respondent moved to vary, or rescind, his support obligations. For the purpose of that motion he disclosed income of $100,000 and net assets with a value of $831,731. Following a pre-trial he did not proceed with the motion.

 

[6]  After June 1995, the respondent became increasingly in default in his support obligations and there have been only seven or eight payments since that time. One of these was made shortly before the hearing of the motion.

 

[7]  On December 22, 1997 the petitioner commenced an application in which, among other things, she sought the removal of the respondent as a trustee of the family trust for alleged negligent or fraudulent dealings with the trust property, declarations that he and his present wife had wrongfully received benefits from the trust to the detriment of its beneficiaries, including the petitioner, tracing orders and declarations that the respondent was in breach of his support obligations, and his obligations as a trustee, to the petitioner.

 

[8]  For the purpose of the application, an investigation of the respondent’s dealings with the trust assets was conducted and an accounting was ultimately provided. Following this, a settlement was reached on most of the issues in the application and the petitioner withdrew her allegations of fraudulent breach of trust and her claims under the Fraudulent Conveyances Act, R.S.O. 1990, c. F.29 with respect to dispositions of the trust property.

 

[9]  The petitioner has not, however, released her claims to spousal support or her right to proceed against the respondent under the Fraudulent Conveyances Act with respect to dispositions of his own property. This latter point is relevant because, although he does not claim in an affidavit sworn for the purpose of this motion to be now bereft of assets or income, it was common ground between counsel that he has taken this position in the past. The petitioner has not accepted that he has no property on which execution can be levied.

 

[10]  The petitioner claims that the monthly payment to which she is entitled under the support order, adjusted for increases in the cost of living, is now $4,532.24 and that the arrears that have accumulated since June 1995 are approximately $187,000. Leave to issue a writ of seizure and sale is sought because of the stipulation in rule 60.07(2) that this is required if “six years or more have elapsed since the date of the order”. As I have mentioned above, the order here was made in 1976 and it has been accepted in previous decisions that the rule’s predecessors were applicable even in a case like this where the respondent’s obligations were to make continuing periodical payments and the breaches complained of occurred long after the six-year period had expired. An argument that the rule should not apply to such cases was made, and rejected, in Scott v. Scott (1980), 19 C.P.C. 184, 20 R.F.L. (2d) 278 (Ont. H.C.J.) where Carruthers J. stated that the purpose of the rule was to permit the order to be “updated” so that the sheriff could be sure that it was to be enforced. It is clear that the learned judge did not mean that the attention of the court should be given merely to the question whether the order was still in force and had not been satisfied. In his view the court had a discretion under the rule to refuse leave to enforce payment of arrears of support. It is also clear that he did not consider the principles governing the exercise of the discretion to be confined to those contained in s. 11(2) of the Divorce Act, R.S.C. 1970, c. D-8 which permitted orders for support to be rescinded or varied. I will return to this point.

 

[11]  In this motion counsel for the petitioner did not argue that rule 60.07(2) was inapplicable, or that its application should be dispensed with. He was content to accept its application and to rest his case simply on the proposition that, in the circumstances, leave should be granted. However, I consider the fact that the breaches complained of did not commence before July 1995 as relevant to the exercise of my discretion to grant, or refuse, leave pursuant to the rule. In the circumstances of this case, the age of the order does not seem to me to be a factor that should have any significant bearing on the right of the petitioner to enforce her claim and counsel for the respondent did not suggest otherwise.

 

[12]  In his material filed on the motion, the respondent has not expressly disputed the petitioner’s statements in her affidavits that she is in need of support, that her average income for the last four years was $16,456 and that she has had to place a mortgage of $100,000 on her home to pay for her living expenses, legal fees and business expenses. The evidence filed on the respondent’s behalf consists of an affidavit sworn by a legal assistant to his counsel on the motion. This affidavit exhibits affidavits of the respondent and his present wife for the purpose of the application concerning the family trust, correspondence from the solicitors for the petitioner that has little, if any, bearing on the issues in this motion and a copy of an assessment roll which shows the current value of the petitioner’s home on Rosedale Valley Road, Toronto, as $520,000. His counsel has relied on that fact, alone, to support a submission that the petitioner is not in need of support. This submission was not directed at establishing that there has been a sufficient material change in circumstances to justify expungement of the arrears pursuant to the provisions of s. 17 of the Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.). No such submission was made. Counsel’s submission with respect to the petitioner’s needs is made in the context, and in support, of his principal argument that the fact that the motion was brought approximately three and a half years after the defaults began is, in itself, a factor that should strongly influence me to deny the request for leave to issue the writ.

 

[13]  This submission is based on authorities — not all of them of great antiquity — which have continued to apply the so-called “one-year rule” formerly applied in the ecclesiastical courts. The justification for this rule — which prima facie denies a spouse a right to enforce arrears of support after one year — has been variously explained. The explanation most commonly advanced is that, if a wife (I use the noun advisedly) does not attempt to enforce arrears of support within one year, this is evidence that she does not need it and is engaged in “hoarding”. This justification has, I think, lost a great deal of the attractiveness it evidently had in the past.

 

[14]  Although it does not appear to be accepted that the one- year rule has been authoritatively repudiated in this province, the trend of the authorities here and elsewhere in Canada is, I believe, unmistakably against its continued application. While in some of the earlier authorities it was described as a rule of law, in the more recent cases in which it has been given some deference it has been described as a “rule of thumb” or, as in Scott v. Scott, supra, and Vine v. Vine (1986), 54 O.R. (2d) 580, 1 R.F.L. (3d) 425 (H.C.J.), a “guideline”.

 

[15]  In Scott v. Scott, the court refused leave to issue a writ of execution to enforce payment of arrears of support seven years after the judgment in which the order was made. The respondent had ceased to make payments three years before the application for leave was brought. Carruthers J. held that, although a refusal to grant leave would have the practical effect of a cancellation or variation of the order for support, this did not create a problem as the decision of the Court of Appeal in Englar v. Englar (1978), 19 O.R. (2d) 561, 85 D.L.R. (3d) 609 (C.A.) had established that the court had jurisdiction under s. 11(2) of the Divorce Act 1970, to cancel or vary arrears of alimony. The learned judge did not state that the existence of jurisdiction under the Divorce Act permitted the court, in effect, to exercise it on an application for leave to issue a writ of execution but, merely, that it removed a barrier that would otherwise exist to a refusal to gra nt leave under the rule.

 

[16]  Carruthers J. then proceeded to consider the one-year rule [at p. 187]:

The so-called “one-year rule” is not a rule of law but a guideline. The reasoning behind it has been suggested in a number of reported decisions, one of the most recent being that of MacKeigan C.J.N.S. in Hemeon v. Cross (1978), 29 N.S.R. (2d) 554 . . . . I have to think that in the final analysis, keeping in mind the purpose of support, and in the light of the philosophy of the Family Law Reform Act, 1978 (Ont.), c. 2 need for, and ability to pay support, is of the greatest significance in deciding if the obligor should be afforded any relief.

The mere failure to pay is not automatically equated with inability to pay. By the same token, the mere failure to do anything about the failure to pay is not automatically equated with lack of need. Each case must be looked at in the light of its own facts and circumstances.

In this case the respondent wrote saying in effect that he was unable to pay. The petitioner virtually did nothing to question or counter this position until three years later. I have to think she accepted it. There is some evidence about a conversation she had with a mutual friend that allows support for this conclusion. At the same time, I also have to think that in doing nothing for three years the petitioner has demonstrated a lack of need. I was not directed to any evidence that would suggest the contrary.

 

[17]  Despite the learned judge’s insistence that each case must be considered in the light of its own facts, and his finding that the petitioner acquiesced in the respondent’s inability to pay, it has been submitted that the concluding sentences in the passage quoted indicate that the lapse of time was regarded as raising a presumption of a lack of need and, to that extent that they reflect the policy behind the one-year rule.

 

[18]  Although there are several earlier cases in Ontario in which deference has been paid to the rule, it was emphatically rejected by Stewart J. in Eveleigh v. Eveleigh, [1969] 2 O.R. 664, 6 D.L.R. (3d) 380 (H.C.J.) in part of a longer passage that was quoted with approval by the Court of Appeal in Lear v. Lear (1974), 5 O.R. (2d) 572, 51 D.L.R. (3d) 56 (C.A.). The fact that the approval of the Court of Appeal has not been regarded as finally determining the status of the rule in Ontario may be attributable to the finding in Englar v. Englar, supra, that Lear v. Lear was decided per incuriam on a wider issue dealt with in the same passage from the reasons delivered in Eveleigh v. Eveleigh.

 

[19]  Since the decision in Scott v. Scott, a number of decisions in this jurisdiction, and elsewhere in Canada, have shown a reluctance to accept that the one-year rule should serve even as a guideline. It was repudiated by the Court of Appeal in the context of child support in Filipich v. Filipich (1996), 26 R.F.L. (4th) 53 (C.A.) and, for the purpose of spousal support, by Salhany J. in Dehann v. Dehann, [1992] O.J. No. 206 (Gen. Div.). The background and history of the rule and its present status were considered in depth by the Manitoba Court of Appeal in Aime v. Aime (1990), 27 R.F.L. (3d) 1, 70 D.L.R. (4th) 667. Although separate reasons were delivered, the court was unanimous in its conclusion that the one-year rule should not be regarded as providing guidance since the enactment of the Divorce Act 1985. After reviewing the earlier authorities in England and the subsequent decisions across Canada, the majority concluded [at pp. 27-28]:

The examination of the jurisprudence demonstrates clearly that any “one-year rule” dealing with “federal” arrears has been applied inconsistently over the years, both across Canada and within individual provinces as well. Put another way, the jurisprudence demonstrates the “rule” has been consistently rejected, ignored or considered but rarely applied. By virtue of the specific wording of s. 17 of the Divorce Act, 1985, Parliament has stipulated all the criteria to be taken into account by the court when dealing with either an ongoing support order or arrears. The underlying rationale for the existence of the “rule”, that is, relief against hoarding, the reluctance of the court to confirm an order which cannot be enforced, the equitable relief offered to a payor who has been induced into a sense of financial security are all criteria consistent with the broad discretion given to the court in s. 17 of the Divorce Act, 1985. It is of interest to note that s. 17(6) which deals with conduct refers only to the conduct which could not be considered in making an order in s. 15, that is, an original support order. Therefore, hoarding or resting on one’s rights are certainly forms of conduct the court can look at in dealing with a variation application.

 

[20]  I respectfully concur in these conclusions. As far as the Divorce Act is concerned — and I do not think the matter is materially different under the Family Law Act, R.S.O. 1990, c. F.3 — the legislature has specified the circumstances in which orders may be varied or rescinded. The one-year rule is, in my view, compatible with neither the provisions, nor the spirit, of the legislation. I am not suggesting that lapse of time should have no relevance on an application for leave under rule 60.07(2). The question whether delay will justify a refusal to grant leave to issue the writ should, in my view, be governed by the same principles of equity that apply to the enforcement of legal and equitable remedies generally. It should be relevant only where, and to the extent that, it supports a finding of waiver or acquiescence or a finding that it would otherwise be inequitable to enforce the claim. Delay is only a factor to be considered along with others including evidence of detrimental reliance or change of position. Nor do I believe that an inquiry into the application of the provisions of s. 17 of the Divorce Act is automatically called for whenever an application for leave is made under rule 60.07(2). Such an inquiry should, I believe, be made only when the obligor has moved to cancel arrears and has the onus of proving that the factual conditions for rescinding or varying an order have been satisfied. In any event, the evidence here falls far short of establishing that there has been the necessary material change of circumstances.

 

[21]  On this basis, I see no reason for withholding leave to issue the writ. There is no evidence from which it could be inferred that the respondent reasonably believed that the petitioner was abandoning her right to support or that he was misled in any way or to any extent. On the contrary, the petitioner has sworn that she has “always diligently pursued my rights under the Decree Nisi, the Separation Agreements and the Trust and did not tolerate nor accept, verbally or otherwise a reduction or cancellation of the arrears of support that are presently owing to me”. She has stated, further, that she advised the respondent of each month’s default and the amount of the arrears as they accumulated. None of this evidence has been contradicted.

 

[22]  If I am in error in my belief that the one-year rule should finally be put to rest, and if it is to be applied as a guideline in the exercise of the court’s discretion, I believe the evidence is sufficient to justify a conclusion in favour of the petitioner in this case. There is evidence of continuing need and no suggestion of hoarding. The respondent has not given evidence of his supposed lack of means and no explanation is provided for the disappearance of any of the substantial assets and the sources of income he claimed to have in 1987. After the default in 1995 occurred, the petitioner commenced an application to enforce her rights as a beneficiary of the trust from which she had most recently been receiving her payments of support. As the trust, like many family trusts, provided for payments to be made in the discretion of the trustees, her right to enforce payments from it was necessarily somewhat fragile. Her conduct has, however, been consistent with an intention to enforce her right to suppo rt and, as I have indicated, there is no suggestion that the respondent was not aware of her intention. In these circumstances, I see no merit in an argument that the policy considerations that are said to justify the alleged guideline would require it to be followed in this case.

 

Motion granted.