



COURT OF APPEAL FOR ONTARIO

CITATION: Kowalsky v. Asselin-Kowalsky, 2018 ONCA 539
DATE: 20180611

DOCKET: C64491

MacPherson, LaForme and Roberts JJ.A.

BETWEEN

Mark Kowalsky

(Respondent)
Applicant

and

Denise Asselin-Kowalsky

(Appellant)
Respondent

Patrick J. Kraemer, Justine A. Dalton and Michael A. van
    Bodegom, for the appellant

Kim S. Kieller and Ainsley Hunter, for the respondent

Heard: June 7, 2018

On appeal from the order of Justice
    Emile Kruzick of the Superior Court of Justice, dated December 7, 2007, and
    from the order of Justice Michael G.J. Quigley, dated March 27, 2008.

By the Court:

A.

Overview

[1]

The appellant appeals from the order
    finally determining the issues of equalization, child support and spousal
    support (the final trial order), and from the order dismissing her motion to
    set aside the final trial order. The appellant also seeks to file fresh
    evidence on appeal.

[2]

This appeal presents highly unusual
    circumstances in that it involves the appeal from orders that were granted over
    ten years ago to parties who have been separated for almost 15 years and whose children
    are now in their 30s. It is equally exceptional because the entire passage of
    time can be explained by the evidence of the appellants prolonged history of
    serious mental health issues, which this court accepted as the basis for
    granting the appellant an extension of time to appeal by order dated September
    29, 2017.

[3]

The appellant and the respondent were
    married for 22 years when they separated in 2003. The respondent instigated proceedings
    in 2005 to obtain a divorce and to determine finally the issue of equalization
    of the parties net family property, including the former matrimonial home. In
    response, the appellant raised claims for child and spousal support. The
    parties were granted a divorce in 2006.

[4]

The other issues finally came on for
    trial starting on November 27, 2007.  The appellant failed to appear and the
    trial proceeded in her absence, although her brother attended and advised that
    the appellants health did not permit her to attend. The appellants subsequent
    motion to set aside the final trial order was dismissed on March 27, 2008, when
    the appellant again failed to attend.

B.

Analysis

[5]

The appellant submits that she was
    unable to attend the trial or her motion because she was physically and
    mentally incapable of doing so. She maintains that in the circumstances,
    justice requires that the final trial order of the trial judge and the order of
    the motion judge be set aside. She asks that this court determine the issues
    that were before the trial judge or, alternatively, that there be a new trial.

[6]

We requested and the parties agreed to
    make submissions, first, on whether the decisions under appeal should be set
    aside, which included whether the appellants fresh evidence ought to be
    admitted, before proceeding with argument on the merits.

(1)

Motion to admit fresh evidence on
    appeal

[7]

The appellants fresh evidence consists
    of her affidavit in which she sets out her medical history, including various
    medical notes and records of her attending physicians, the affidavit of Dr. David
    A. Jones, who provided a psychological assessment of the appellant, the history
    of the proceedings, various financial statements and records, and the affidavit
    of Brad Borkwood, a chartered professional accountant and chartered business
    valuator, of Bluepoint Valuations Inc., who provided an earnings report about
    the respondent for support purposes.

[8]

We admit the appellants fresh evidence
    on appeal because it satisfies all of the criteria for its admission: it could
    not have been provided before trial; it is credible; and it is conclusive of
    the main issue on this appeal, namely, whether the justice of the case requires
    that the orders under appeal be set aside, in order to prevent an unjust
    result:
Sengmueller v. Sengmueller
, 1994
    CarswellOnt 375, at para. 34.

[9]

We do not accept the respondents
    submission that the issue to be determined is whether the trial judge and the
    motion judge erred by failing to adjourn the proceedings before them. The fresh
    evidence, by definition, was unknown to the presiding judges. The underlying
    merits of their orders are therefore largely irrelevant on this unusual appeal.
    The questions to be determined are whether, on the basis of the fresh evidence
    and the other evidence in the record, the appellant has excused her failure to
    attend the trial and her motion and, if so, whether the justice of the case
    requires that the orders under appeal be set aside on the basis of procedural
    fairness.

[10]

None of the fresh evidence could have
    been provided with due diligence prior to or at trial because, as this evidence
    (and the other evidence on the record) establishes, the appellant was mentally
    unable to attend. Moreover, the appellants litigation guardian and solicitor
    having been removed mere weeks before trial (respectively, on October 15, and
    November 14, 2007), the appellant lacked any means of assistance, other than
    her brother who, as noted earlier, attended at trial and advised the trial
    judge that the appellant could not attend because of her health. This situation
    continued past the motion date in March 2008 and persists to the present day.

(2)

Was the appellant incapable of
    attending the trial and her motion?

[11]

There is no issue that due to her
    scoliosis and a number of back surgeries, the appellant has been physically
    disabled from employment and in receipt of disability pension benefits since
    1999. The record, including the fresh evidence, demonstrates that the appellant
    has also struggled with serious mental health issues since at least 1995.

[12]

The respondent does not dispute that
    the appellant has suffered from various physical and mental disabilities over
    the years. In these proceedings, he instigated motions to have the appellant
    assessed and to appoint the Public Guardian and Trustee as her litigation
    guardian.

[13]

A year before trial, the respondent
    stated in an affidavit:

I have been increasingly concerned
    about the mental health of the respondent over the last three years of
    separation, as I see her withdraw from the world and retreat into her own
    little reality. Recent events have convinced me that she needs psychiatric help
    that she is not getting.

[14]

Nine months before trial, the
    respondent brought a motion seeking, among other relief, that the appellant
    submit to a mental examination by one or more health practitioners pursuant to
    section 105 of the
Courts of Justice Act
, R.S.O. 1990, c. C.43.

[15]

At trial, he produced photographs
    purporting to show that the appellant had randomly splattered paint all over
    the matrimonial home. Within days of the completion of trial and before the
    final trial order was released, the respondent assisted one of their sons in
    completing the necessary forms under the
Mental Health Act
, R.S.O. 1990, c. M.7, to have the appellant assessed in
    hospital.

[16]

However, the respondent disputes that
    the appellant lacked the capacity to attend trial or her motion. He submits
    that there is no formal opinion of incapacity by a qualified capacity assessor
    and that there is no evidence that the appellant was a special party under
    the
Family Law Rules
, O. Reg. 114/99.

[17]

We do not accept these submissions.

[18]

First, a fundamental purpose of the
    appellants fresh evidence is to explain her absence at trial and her motion. In
    order to succeed on her appeal, her explanation must be sufficiently cogent
    that it credibly excuses her absence and such that it would be procedurally
    unfair to allow the trial and motion orders to stand. The level of her
    inability to attend must obviously be serious to reasonably explain her absence.
    However, there is no requirement that she prove a certain level of incapacity including
    one that rises to the definition under the
Substitute Decisions Act
, S.O. 1992, C.30 or the
Mental Health Act
. We also note that incapacity for the purposes of the
    representation of a person under a disability under r. 7.04 of the
Rules
    of Civil Procedure
, R.R.O. 1990, Reg. 194,
    speaks to a person who is mentally incapable  in respect of
an
    issue
in the proceeding [
emphasis added]
, not
    necessarily for all purposes in all aspects of her life.

[19]

Second, the evidence establishes that
    the appellant was incapable of dealing with and attending at trial or her
    motion because of her mental health issues.

[20]

Crucially, within days of the trial,
    the appellant was found incapable. On December 5 and 7, 2007, the appellant was
    brought into hospital by police for mandatory assessment under the
Mental
    Health Act
.  On December 7, 2007, she was
    involuntarily admitted to Orillia Veterans Hospital where she remained until
    released on January 23, 2008. While in hospital, the appellant became aware of
    the final trial order and instigated a motion to set it aside on December 24,
    2007.  Obviously, the trial judge was not aware of this traumatic event nor of the
    appellants condition because her hospitalization occurred very soon after the conclusion
    of the uncontested trial.

[21]

Further, according to Dr. Jones
    assessment, the appellant meets the diagnostic criteria for Posttraumatic
    Stress Disorder (PTSD) and Major Depressive Disorder, Recurrent Severe, but
    those chronic depressive symptoms are part of the PTSD symptom complex and are
    secondary to that diagnosis.  Her chronic pain symptoms are described as a
    Somatic Symptom Disorder Persistent with Predominant Pain. His opinion is that
    her Paranoid Personality Disorder is a manifestation of extreme psychological
    defenses that have resulted from cumulative trauma over the years. Significantly,
    he opines that she has likely been chronically impaired from as early as 1995
    and remains highly impaired by her chronic PTSD and associated Major Depressive
    symptoms today. He estimates her current level of functioning is only 45-50 on
    a scale of 100. He concludes that the combined impairments of the appellants
    chronic physical problems and her chronic PTSD symptoms make it extremely
    difficult for her to take care of herself.

[22]

With respect to the appellants ability
    to deal with the extreme stress of the family law proceedings, Dr. Jones
    explains:

It is highly probable that she was in
    no state to understand the basic rules of the court and the steps she should
    have taken to protect her interests, including seeking spousal and child
    support and the equalization of net family property.  And even if she was able
    to maintain a rudimentary understanding of those rules, despite having PTSD,
    her paranoid defense system and her fear of confronting and standing up to the
    man whom she perceives as abusive could also have been powerful enough to
    emotionally paralyze her and prevent her from taking steps necessary to protect
    her interests.

[23]

We are satisfied that the appellant
    lacked the capacity to prepare for and attend at trial and the motion. The
    uncontested trial and motion resulted in orders that had disastrous financial consequences
    for the appellant. By the final trial order, she was required to make an
    equalization payment of $117,500.31 and her claims for spousal and child
    support were dismissed. The motion judge ordered that she pay additional monies
    to the respondent in the amount of $173,277.11.

[24]

After the trial in 2007 and until 2017,
    the appellants income flowed from a modest long-term disability pension
    ($1,664 to $2,989 monthly) and the Canada Pension Plan ($905 to $1,253 monthly).

[25]

By virtue of a report prepared by
    Bluepoint Valuations Inc., it appears that the respondents income as a family
    lawyer should have increased from $116,000 to $174,000 between 2003 and 2017. The
    respondent sold the former matrimonial home for $538,000 in 2015. He kept the
    entire proceeds of sale. He has remarried. He and his wife own a home in Midland
    and a condominium in a gated community in Costa Rica. They own three vehicles,
    two Mercedes cars and a BMW motorcycle.

[26]

For several years after the marriage
    ended, the appellant lived with her mother. Her mother died in December 2014. The
    respondent commenced garnishment proceedings to recover proceeds from the estate
    of her deceased mother. So far, he has obtained $248,609 and seeks to obtain an
    additional $100,000 plus from the garnishment proceedings against the
    appellant.

[27]

In our view, the outcome would likely
    have been dramatically different had the appellant been present at the trial
    and her motion, and had she been given the opportunity to challenge the
    respondents evidence with her own evidence and through cross-examination and
    submissions.

[28]

In particular, the appellant has raised
    serious issues as to the validity of the equalization of the former matrimonial
    home and the dismissal of her claim for spousal support. There is also a
    serious question as to whether the respondent gained an unfair advantage in
    both purchasing the matrimonial home at a greatly discounted value and
    receiving an award that the appellant pay for repair costs.   Similarly, on its
    face, the appellants claim for compensatory and needs-based spousal support is
    also a serious issue to be tried, given the length of the marriage, her
    financial support of the respondent through his education, her significant disability,
    and her impoverishment through supporting her two children without child
    support from the respondent.

[29]

As a result, in these highly unusual
    circumstances, justice requires that the final trial order and order of the
    motion judge be set aside. The garnishment order, which flows from these, must
    also therefore be set aside and the garnished monies in the amount of $248,609
    plus interest paid back to the appellant.

(3)

Should the merits of the family law
    proceedings be determined by this court or at a new trial?

[30]

The appellant submits that this court
    should determine all issues and, if necessary, provide an adjournment to allow
    the respondent to conduct cross-examinations and file further responding
    evidence. The respondent maintains all issues should be determined at a trial.

[31]

Regrettably, we are not in a position
    on this record to determine the issues of equalization, and child and spousal
    support, all of which require credibility assessments and findings of fact.
    These issues must be determined at a new trial.

C.

Disposition

[32]

Accordingly, we allow the appellants
    appeal, set aside the final trial order of Kruzick J. dated December 7, 2007,
    and the order of Quigley J. dated March 27, 2008, and order that the issues of
    equalization and support be determined at a new trial. We also set aside the
    garnishment order. The respondent must return to the appellant the garnished
    amount of $248,609, plus interest from the date of garnishment, within fourteen
    days of the release of these reasons.

[33]

Given the age of these proceedings, it
    is in the parties best interests, and they agree, that the trial should be
    case-managed and expedited.  We agree that the outstanding issues should be
    determined expeditiously through a fair and proportional process in keeping
    with the primary objective of the
Family Law Rules
.

[34]

While we have ordered that there be a
    new trial, this obviously does not preclude the parties from trying to resolve
    this matter out of court. We strongly encourage them do so. It is in the
    parties best interests to make every effort to settle their dispute entirely
    or at the least, significantly narrow the issues to be determined at trial. We
    would remind the parties of the potential cost consequences to a party who
    fails to accept an offer that was as favourable as or more favourable than the
    result achieved at trial.

[35]

The costs of this appeal are unusually
    high because of the myriad steps that were required. As a result, the appellant
    is entitled to her partial indemnity costs of the appeal, including the motion
    for an extension of time and the fresh evidence motion, in the amount of $80,000,
    inclusive of disbursements and applicable taxes.

Released: June 11, 2018

J.C. MacPherson J.A.

H.S. LaForme J.A.

L.B. Roberts J.A.


