



COURT OF APPEAL FOR ONTARIO

CITATION: Peerenboom v. Peerenboom, 2020
    ONCA 240

DATE: 20200331

DOCKET: C66482, C66483, C66075

Tulloch, van
    Rensburg and Zarnett JJ.A.

BETWEEN

Nicole
    Peerenboom

Applicant (Respondent)

and

Robert Peerenboom and Harold
    Peerenboom

Respondents (Appellants)

AND BETWEEN

Nicole
    Peerenboom

Applicant (Respondent)

and

Robert Peerenboom
and Harold Peerenboom

Respondents (
Appellant
)

Symon Zucker, for the appellant Harold
    Peerenboom

Nancy J. Tourgis and Laney Paddock, for
    the appellant Robert Peerenboom

Dani Z. Frodis, for the respondent

Heard: February 5, 2020

On
appeal from the orders of Justice J.
    Patrick Moore of the Superior Court of Justice, dated October 1, 2018, with
    reasons reported at
2018 ONSC 5796, 16 R.F.L. (8th)
    451,
and December 20, 2018, with reasons reported at 2018 ONSC 7562, and
    the costs order, dated February 22, 2019.

van Rensburg J.A.:

i.

THE APPEALS

[1]

These reasons address three appeals arising out of proceedings following
    the breakdown of the marriage between the appellant, Robert Peerenboom
    (Robert) and the respondent, Nicole Peerenboom (Nicole). The appeals are
    from orders made by Moore J. following two trials heard one after the other.

[2]

The first trial, in proceedings commenced by Nicole in 2016 (the Civil
    Action), was to determine the validity of a default judgment obtained by the
    appellant, Harold Peerenboom (Harold), Roberts father, against Robert. The
    trial judge ruled against Nicole and refused to set aside the default judgment.
    There is no appeal from the dismissal of the Civil Action and the award of
    costs against Nicole.

[3]

The second trial was in the matrimonial proceedings commenced by Nicole
    in 2014.

[4]

Nicole added Harold as a respondent to the matrimonial proceedings.
    Ultimately, the trial judge granted an order in favour of Nicole, staying enforcement
    of the writ of execution Harold obtained under his default judgment against the
    home she and Robert occupied in Toronto on Old Forest Hill Road (OFH). Harold
    appeals that order in Appeal C66482.

[5]

At the commencement of the matrimonial trial, the trial judge made an
    order, on Nicoles motion, striking Roberts pleadings. Robert appeals that
    order in Appeal C66075.

[6]

Assuming that the order striking his pleadings is set aside, or he is
    otherwise permitted to advance his appeal before this court, Robert, in Appeal
    C66483, appeals two aspects of the trial judges final order: the award to
    Nicole of a one-half interest in OFH under the parties domestic contract, and
    the equalization payment of $87,734 in favour of Nicole. He also seeks to
    appeal the costs award.

ii.

RELEVANT FACTS

[7]

The facts relevant to the three appeals can be briefly stated.

[8]

Robert and Nicole married in 2002 and separated in 2013.

[9]

In October 2003, Mandrake Properties Inc. (MPI), a company controlled
    by Harold, purchased OFH for $1.3 million. Robert and Nicole and their children
    moved into the home in April 2004. For the first several years, they rented OFH,
    paying monthly rent of $2,000 to MPI. The house was transferred from MPI to
    Robert on October 30, 2008 at a price of $1.2 million, with title taken in
    Roberts name. Harold paid the down payment of $250,000, and the balance was
    provided by a bank loan, secured by a $950,000 mortgage. In February 2015,
    Harold advanced Robert $200,000, secured by a mortgage on OFH. Nicole consented
    to the mortgage. In October 2017, OFH was appraised at $2.93 million.

[10]

On
    October 15, 2007, and at a time when there were difficulties in the marriage,
    Robert and Nicole entered into a domestic contract (the Domestic Contract).
    The parties subsequently disagreed about whether the effect of the Domestic
    Contract was to provide Nicole with a one-half interest in OFH on marriage breakdown.
    More on this will follow later in these reasons.

[11]

Before
    the couples separation, Harold subsidized an affluent lifestyle for Robert and
    his family. While Harold provided many gifts of money, he also made loans to
    Robert, documented by promissory notes, dated between 2008 and 2015. Harold did
    not demand repayment of the loans before the separation.

[12]

On August 22, 2014, Nicole registered a
    matrimonial home designation on title to OFH.

[13]

On
    March 31, 2015, Harold sent Robert a notice of demand for payment, and Robert
    signed an acknowledgment of the debts he owed his father. Harold commenced an
    action against Robert on June 3, 2015 and obtained default judgment for
    $948,840 on August 27, 2015. A writ of execution was issued on August 31, 2015,
    filed with the sheriff of the City of Toronto and entered in the sheriffs
    electronic database.

[14]

At
    the opening of trial in the Civil Action, Nicole moved to add a request for
    relief, seeking to set aside Harolds writ of execution as against OFH. The
    trial judge denied the motion and directed that this issue be determined in the
    matrimonial proceedings.

[15]

Nicole
    was unsuccessful in the Civil Action. The trial judge dismissed the Civil
    Action, with costs, concluding that the default judgment was not a sham, as it
    accurately described the legal relationship between Harold and Robert by virtue
    of the promissory notes. The trial judge also found that there was insufficient
    evidence that Harold and Robert had an agreement to deprive Nicole of her
    spousal rights. More on the findings in the Civil Action will follow later in
    these reasons.

iii.

HAROLDS APPEAL

[16]

Harold
    appeals the order of the trial judge staying the writ of execution dated August
    31, 2015, in relation to his default judgment. He essentially makes two
    arguments in this appeal.

[17]

First,
    Harold submits that a writ of execution is not an encumbrance within the
    meaning of this term in ss. 21 and 23 of the
Family Law
    Act
, R.S.O. 1990, c. F.3 (the FLA), such that the trial
    judge was without authority to stay his writ of execution. Harold also contends
    that the circumstances did not warrant relief under s. 106 of the
Courts of Justice Act
, R.S.O. 1990, c. C.43

(the
    CJA), that s. 106 was not relied upon in the judgment, and that relief under
    this provision was not available in any event because it had not been sought by
    Nicole.

[18]

Second,
    Harold asserts that the trial judges decision to stay the writ of execution
    reflects a palpable and overriding error because it was inconsistent with
    findings the trial judge made in dismissing the Civil Action. He argues that,
    as the trial judge had already determined that the loans underlying Harolds
    judgment were
bona fide
, and that there was a
    legitimate commercial intent in respect of the loans, there was no basis to
    stay the execution of his judgment.

(1)

Analysis

(a)

The stay of the writ of execution

[19]

I will first address Harolds argument concerning the appropriate
    authority for the trial judges order.

[20]

In staying the writ of execution, the trial
    judge referred to provisions of the FLA, in particular ss. 21 and 23.
    Subsections 21(1), (2), and 23(d) of the FLA provide as follows:

21(1) No spouse shall dispose of or encumber an interest in a
    matrimonial home unless,

(a) the other spouse joins in the instrument or consents to the
    transaction;

(b) the other spouse has released all rights under this Part by
    a separation agreement;

(c) a court order has authorized the transaction or has
    released the property from the application of this Part; or

(d) the property is not designated by both spouses as a
    matrimonial home and a designation of another property as a matrimonial home,
    made by both spouses, is registered and not cancelled.

(2) If a spouse disposes of or encumbers an interest in a
    matrimonial home in contravention of subsection (1), the transaction may be set
    aside on an application under section 23, unless the person holding the
    interest or encumbrance at the time of the application acquired it for value,
    in good faith, and without notice, at the time of acquiring it or making an
    agreement to acquire it, that the property was a matrimonial home.



23. The court may, on the application of a spouse or person
    having an interest in property, by order,



(d) direct the setting aside of a transaction disposing of or encumbering
    an interest in the matrimonial home contrary to subsection 21(1) and the
    revesting of the interest or any part of it on the conditions that the court
    considers appropriate.

[21]

Subsection 21(1) of the FLA applies to
    dispositions and encumbrances made by a spouse without the consent of the other
    spouse.

[22]

The term encumbrance may have different
    meanings, depending on the context. As used in the FLA, encumbrance has been
    interpreted by this court to include a burden on property, a claim, a lien or liability
    attached to the property, but to require more than simply incurring a debt or
    entering into a loan agreement:
Bank of Montreal v. Bray
(1997), 36
    O.R. (3d) 99 (C.A.), at pp. 113-114.

[23]

It is beyond the scope of this appeal to fully
    explore the extent of the rights a writ of execution affords a judgment
    creditor when the judgment debtor holds title to land. It is sufficient to say
    that the writ provides an enforcement mechanism, binding the land against which
    it is issued once the sheriff has complied with the statutory obligations
    listed at s. 136(1) of the
Land Titles Act
, R.S.O. 1990, c. L.5:
Land
    Titles Act
, s. 136(2);
Execution Act
, R.S.O. 1990, c. E.24, s.
    10(1). A writ of execution permits the judgment creditor to seize and sell the
    property:
Execution Act
, s. 9(1). While some consider that, from
    a practical perspective, an execution, in effect, creates a lien against title
    to land (see e.g. Marguerite E. Moore,
Title Searching and Conveyancing in
    Ontario
, 7th ed. (Toronto: LexisNexis, 2017), at c.12 (QL)), the lien
    is not an interest in land
per se
but rather in the proceeds of sale
    of the debtors interest in such lands: see
Ferrier v. Civiero
(2001),
    147 O.A.C. 196 (C.A.), at para. 8 (dealing with the sheriffs application for
    partition of property jointly held);
Ferrier v. Wellington (County) Sheriff
(2003), 40 C.P.C. (5th) 344 (Ont. S.C.), at para. 45 (upholding an order
    setting aside a certificate of pending litigation against the same property).

[24]

The matrimonial home occupies a special place in
    family relations:
Bank of Montreal
, at p. 113. Sections 21 and 23 of
    the FLA are intended to protect the interests of spouses in matrimonial
    property by prohibiting unilateral dealings that threaten to interfere with
    their interest: see
Walduda v. Bell
(2004), 7 R.F.L. (6th) 205 (Ont.
    S.C.), at para. 14.

[25]

While a writ of execution may be an
    encumbrance within the meaning of that term in ss. 21 and 23(d) of the FLA, there
    is an issue as to whether, and in what circumstances, a writ of execution by a
    third-party creditor can be an encumbrance by a spouse. Under s. 23(d) of the
    FLA, the court may set aside a transaction encumbering an interest in a
    matrimonial home, and revest the interest if the encumbrance occurred contrary
    to s. 21(1)  that is, contrary to the prohibition against a spouse encumbering
    the interest without the consent of the other spouse. Therefore, to engage this
    section, the
spouse
must have done something to directly encumber the
    interest in the matrimonial home. As such, this provision does not typically
    apply to executions by third-party creditors: see
Maroukis v. Maroukis
,
    [1984] 2 S.C.R. 137, at p. 144.

[26]

It is unnecessary in this case to determine
    whether there are circumstances in which ss. 21 and 23 of the FLA would apply
    to an execution by a third-party creditor. Assuming, without deciding, that
    these provisions could be available to permit the court to stay an execution by
    a third-party creditor, they would only be available where the court can
    conclude that, by virtue of the execution, the
spouse
effectively
    encumbered the interest in the matrimonial home.

[27]

For example, in
Walduda
the spouse
    borrowed money from her sister to fund the litigation against her husband

knowing that she would be unable to repay the debt

and then consented to judgment in the action to recover the debt.
    In these circumstances, the application judge found that the spouse had entered
    into the transaction with the intent of tying up the interest in the
    matrimonial home. The spouse used the third-party transaction to encumber the
    matrimonial home, thereby doing indirectly what she could not do directly.

[28]

In this case, and unlike the spouse in
Walduda
,
    Robert did not execute the promissory notes that led to the judgment for the
    purpose of tying up Nicoles interest in the matrimonial home. As noted by the
    trial judge in the Civil Action, the debts behind the promissory notes were
    legitimate marital debts. Moreover, there is no evidence that Robert was
    using the debt he owed Harold to encumber OFH. Harold did not consult or confer
    with Robert before he sued or executed on the judgment and Robert chose not to
    defend Harolds claim only after obtaining legal advice that led him to believe
    that there were no valid defences to Harolds claim. The fact that Harold knew
    of Nicoles interest in the matrimonial home is not sufficient to engage s.
    21(1) of the FLA. Speaking of a comparable provision under Nova Scotias
    legislative framework, Bryson J.A. noted that it contemplates some positive
    act by an owner that grants an interest to a third party, and he concluded
    that third party judgments would not be caught merely because a creditor knows
    that a debtor owns a matrimonial home:
Hurst v. Gill
, 2011 NSCA 100,
    342 D.L.R. (4th) 583, at paras. 65-66.

[29]

In my view, the requirements of s. 23(d) of the
    FLA were not met in this case because Harolds writ of execution was not an
    encumbrance of the matrimonial home
by Robert
. As such, the trial judge
    ought not to have stayed the writ of execution under that provision.

[30]

Nevertheless,
    as I will explain, the stay of the execution of Harolds judgment was justified
    under s. 106 of the CJA. Section 106 provides that [a] court on its own
    initiative or on motion by any person, whether or not a party, may stay any
    proceeding in the court on such terms as are considered just. This general
    authority of the court to stay a proceeding can be applied to the enforcement
    of a judgment. See
Zanetti Estate

v. Roltford Developments Ltd.
,
    [1990] O.J. No. 2584 (S.C.);
Buttarazzi v. Buttarazzi
(2009), 84 R.F.L. (6th) 240 (Ont. S.C.); and
1247902 Ontario
    Inc. v. Carlisle Power Systems Ltd.
, [2003] O.J. No. 6300 (Div. Ct.), at
    para.10, affd 2005 CanLII 691 (Ont. C.A.).

[31]

Harold
    submits that the circumstances of this case did not meet the high threshold for
    relief under this provision, and that it would be inappropriate to uphold the
    stay under the CJA because it was not relied on by Nicole.

[32]

I
    disagree. The courts authority under s. 106 to stay the execution of a
    judgment was before the court at trial. Although the trial judge expressly
    relied on the FLA provisions when granting the stay, he adverted to the
    authority under s. 106 of the CJA when referring to the
Buttarazzi
case, stating at para. 175:

[
Buttarazzi
] confirmed that it
    is important that spouses are well and truly advised that an execution creditor
    who is not at arms length and who takes with notice of a competing spouses
    claim does so subject to the courts discretion and the courts discretion can
    be exercised by an order setting aside the offending judgment or by a stay of
    execution per section 106 of the
Courts of Justice Act.
In
    the result, the court stayed execution of the judgment.

[33]

In
    any event, it is appropriate to determine whether the trial judges order, if
    not properly made under the FLA, was nevertheless a proper exercise of
    discretion under s. 106 of the CJA: see

CJA, s.
    134(1)(a);
L.M. v. Peel Childrens Aid Society
, 2019 ONCA 841, at
    para. 54; and
Ontario (Attorney General) v. 855 Darby Road, Welland (In
    Rem)
, 2019 ONCA 31, 431 D.L.R. (4th) 243, at para. 30.

[34]

A
    stay of execution of a judgment may be granted in rare circumstances where the
    conduct of the judgment creditor is oppressive or vexatious or an abuse of
    process of the Court, and where the stay would not cause an injustice to the
    plaintiff:
1247902 Ontario Inc.
, at paras. 8,
    10, citing
Gruner v. McCormack
(2000), 45
    C.P.C. (4th) 273 (Ont. S.C.), at para. 30,
per
Epstein
    J. This test for the stay of proceedings was cited with approval by this court
    in
Yaiguaje v. Chevron Corporation
, 2013 ONCA
    758, 370 D.L.R. (4th) 132, at paras. 54-55, affd 2015 SCC 42, [2015] 3 S.C.R.
    69, a case involving the stay of an action for the enforcement of a foreign
    judgment.

[35]

Contrary
    to Harolds submission, I do not agree that the trial judge lowered the bar
    for granting a stay of the execution of his judgment. The trial judge did in
    fact articulate and apply the appropriate test. He stated, at para. 180:

In the instant case it is clear that Harold took legal advice
    and then instituted his action to crystalize Roberts debt to him as supported
    by the promissory notes. Nicole submits, and I accept as proven, that the
    enterprise Harold put in place in order to obtain the default judgment was
    initiated because of Nicole and more specifically what Harold considered to be
    her greed and Harolds belief that she had reneged on various agreements.
    Harold specifically acknowledged that he was aware of Nicoles matrimonial home
    designation and her court application seeking an interest in the matrimonial
    home and that this was the only method by which he could have obtained an
    encumbrance against [OFH] without Nicoles consent. As well, Harold knew that
    Robert could not repay him the amount claimed (except from the equity in the
    home) and he was upset at Nicole for claiming an interest in the home, which he
    had put money into. The default judgment had nothing to do with actually
    securing repayment from Robert and everything to do with ensuring that the
    equity in the home was put beyond Nicoles reach.

[36]

The distinctive factor in this case is that, although Harold had
    legitimate claims against Robert that he was entitled to pursue, and had
    obtained a valid judgment, there was no question that his objective in
    enforcing the judgment by filing the writ of execution against OFH was to put
    the equity in the home beyond the reach of Nicole. Harold was not entitled to
    pursue Nicole for the debts, as his judgment was against Robert only, who had
    signed the promissory notes. Although Harold had advanced money for the
    purchase and improvement of OFH, he could not have obtained a mortgage against
    the property without Nicoles consent (as he had done in 2015 in respect of a
    $200,000 mortgage obtained with Nicoles agreement). Harold not only pursued
    the execution of his judgment against OFH with knowledge of Nicoles claims, he
    did so for the purpose of defeating her claims.

[37]

A
    stay of execution of Harolds judgment against OFH was warranted in this case.
    In essence, where Harold took the steps he did admittedly to secure repayment
    of the loans, and where he could not have obtained a mortgage against the home
    without Nicoles consent, filing a writ of execution against the home would
    permit him to do indirectly what he could not do directly.

[38]

Accordingly,
    I would not interfere with the trial judges stay of execution of the default
    judgment against OFH.

(b)

Inconsistent findings

[39]

I
    now turn to Harolds argument that a stay of the writ of execution was
    inconsistent with the trial judges findings in the Civil Action.

[40]

Harold
    submits that the trial judge had determined in the Civil Action that the debts
    in respect of which the promissory notes were issued were legitimate marital
    debts, that Harold was not trying to interfere with Nicoles rights, and that
    there was no collusion. Moreover, he argues that the trial judge affirmed the
    writ of execution as a legitimate transaction and, in his costs decision,
    concluded that there was no malfeasance or bad faith on the part of Harold.
    According to Harold, in these circumstances, it was a palpable and overriding
    error for the trial judge to grant the stay of execution.

[41]

I
    do not accept this argument. There is nothing in the trial judges findings in
    the Civil Action upholding Harolds judgment or in his costs decision that
    would preclude a stay of an execution that was for the sole purpose of
    preventing Nicole from obtaining what she was entitled to under the Domestic
    Contract.

[42]

There is no contradiction between the trial judges finding in
    the Civil Action that the debts behind the promissory notes were legitimate
    marital debts, and his conclusions in the matrimonial proceedings that the
    transactions in creating the promissory notes were not commercial
    transactions and that the default judgment had everything to do with ensuring
    that the equity in the home was put beyond Nicoles reach. The trial judge
    specifically reserved the question of the enforceability of the judgment
    against OFH in his reasons in the Civil Action. He stated, at para. 40:

The matter of whether Harold can enforce the default judgment
    against Robert and the writ of execution lodged against Roberts ownership in
    [OFH] and/or in priority to Nicoles spousal interests will be determined in
    the matrimonial litigation.

[43]

Harold
    asserts that his intention in obtaining the judgment, which was found to be
    legitimate in the Civil Action, simply carried through in his enforcement of
    the judgment through the writ of execution. He argues that his execution
    against OFH was justified by the significant monies he had contributed to the
    acquisition and improvement of the property  in this sense, it was a
    legitimate commercial transaction. I disagree. Although Harolds money went
    into the purchase and improvement of OFH, his loans were to Robert, not to
    Nicole. Robert alone signed the promissory notes. Even if Harold wanted to
    recover against Nicole, he had no right to do so. His pursuit of the execution
    in the circumstances, apart from the fact that it was between non-arms length
    parties, could not be described as a legitimate commercial transaction
    because it was motivated by his desire to recover against Nicoles interest.

iv.

ROBERTS APPEAL OF THE ORDER STRIKING HIS pleadings

[44]

At
    the hearing of Roberts appeal of the order striking his pleadings, his counsel
    indicated that, if Robert were successful, he was not seeking to reopen the
    matrimonial application, and to have a new trial. Rather, he proposed to argue,
    and to have this court determine on a final basis, the limited issues raised on
    his appeal, based on the existing record.

[45]

We
    decided to give Robert a right of audience on the issues in his appeal. As
    such, his appeal of the order striking his pleadings is of no practical effect
    and it is unnecessary to address this appeal in detail. It is therefore
    sufficient to state briefly why I conclude that there was no error, and then to
    explain why, in any event, we granted Robert a right of audience on the limited
    grounds he is appealing.

[46]

Roberts
    pleadings were struck at the outset of the matrimonial trial, on Nicoles
    motion. There were two bases for the motion: Roberts non-compliance with costs
    orders, including the order of Hood J., dated December 18, 2017, requiring
    Robert to pay Nicole $150,000 for her interim costs and disbursements (he paid
    her $30,000 on the eve of trial), and Roberts breach of his financial
    disclosure obligations, including those ordered by Goodman J. on November 10,
    2015. In making his decision, the trial judge considered and rejected Roberts
    arguments, including arguments made to this court: that he had not in fact
    breached his disclosure obligations, and that he was impecunious.

(1)

Analysis

[47]

A
    decision to strike pleadings and to deny participation at trial is entitled to
    deference if exercised on proper principles and in the absence of a material
    misapprehension of the evidence:
Purcaru v. Purcaru
,
    2010 ONCA 92, 75 R.F.L. (6th) 33, at paras. 49-50;
Chiaramonte
    v. Chiaramonte
, 2013 ONCA 641, 370 D.L.R. (4th)
    328, at para. 33. Robert has failed to demonstrate any such error here.

[48]

First,
    the trial judge cited and applied the correct test. He did not lower the
    threshold, as Robert asserts. He recognized that striking pleadings is a remedy
    of last resort, which is justified only in exceptional circumstances and where
    no other remedy would suffice:
Chiaramonte
, at
    paras. 31-32.

[49]

Second,
    the trial judge carefully considered the evidence with respect to Roberts
    defaults, which were significant. His finding that the defaults were wilful was
    supported by the evidence and is entitled to deference.

[50]

The
    argument that Robert had an excuse for non-compliance with outstanding orders
    to pay costs was properly rejected. It had already been determined that Robert
    had the ability to pay the costs ordered, namely when each of the four judges
    who made such orders rejected Roberts argument of impecuniosity. The trial
    judge properly concluded that it was not open to Robert to make this argument
    once again, in response to the motion to strike.

[51]

As
    for Roberts argument that he was only in default of Hood J.s order for nine
    days, the order, although stayed while Robert pursued an appeal of it, was made
    in December 2017, nine months earlier. Robert ought to have known that he might
    well not succeed in the appeal, and that the order would be operative as soon as
    the appeal was disposed of. It was also plain that the purpose of the order was
    to provide Nicole with funds so that her counsel could prepare for and attend
    at trial. The trial judge reasonably considered whether Robert made any efforts
    to comply with the order and whether his assertions that he was unable to pay
    were true and made in good faith.

[52]

As
    for Roberts failure to make full financial disclosure, the trial judge
    properly found that he remained in default of certain obligations under the
    Goodman J. order, dated November 10, 2015.
Contrary to
    Roberts argument, the order did not limit or constrain his financial
    disclosure obligations.
Moreover, there was no error in the trial
    judges conclusion that Robert was not justified in refusing to value certain
    property on the basis that it was excluded under the Domestic Contract: see
Montemarano v. Montemarano
, 2018 ONSC
    1481, 10 R.F.L. (8th) 212, at para. 47
.

[53]

Finally,
    the striking of pleadings was a proportionate response to Roberts defaults.
    The Hood J. order contemplated that Nicole would have the funds sufficient to
    proceed with the matrimonial trial.
Roberts default therefore
    prejudiced her ability to proceed with the litigation. In addition, as noted by
    the trial judge, Robert had a history of non-compliance with costs orders and
    disclosure obligations. The trial judge considered that the alternative remedy
    proposed by Robert

the sale of OFH to fund the
    outstanding costs awards

would not be appropriate in
    the circumstances.
The trial judge was well-positioned to understand the
    implications of the order striking Roberts pleadings for the trial of the
    issues that were before him.

[54]

Despite
    his pleadings being struck, Roberts evidence and position were before the
    court. His updated financial statement was filed as an exhibit by Nicole. The
    transcript of his evidence from the trial of the Civil Action was entered as
    evidence in the trial of the matrimonial proceedings. Robert was called as a
    witness by Harold, and he provided oral evidence over several days. Moreover,
    Harolds closing submissions addressed various issues relevant to Roberts
    position in the matrimonial proceedings, including the interpretation of the
    Domestic Contract and equalization.

[55]

There
    is simply no basis to interfere with the decision to strike Roberts pleadings.

[56]

Where
    an order has been made striking pleadings in the court below, and it has not
    been set aside, typically this court will not hear an appeal by the party from
    the order made in the unopposed proceedings, but may choose to do so: see
Higgins v. Higgins
, 2007 ONCA 663, at paras. 17-18. (In
    some cases, this court, without commenting on the issue, has considered an
    appeal on the merits, after refusing to reopen an appellants pleadings: see
    e.g.
Purcaru
).
In this case,
    w
e have exercised our discretion to consider Roberts appeal. The
    grounds of appeal are confined to issues in respect of which Roberts position
    was before the court below, and he does not seek to reopen the proceedings.
    Rather, he accepts the record in its current state.

v.

ROBERTS APPEAL OF THE TRIAL JUDGMENT AND COSTS

[57]

Robert
    submits that the trial judge erred (1) in his interpretation of the Domestic
    Contract, with the result that Nicole is entitled to half the proceeds of sale
    of OFH; (2) in valuing Roberts debts to Harold at zero for the purpose of
    equalization; and (3) in his costs award, including the failure to direct that
    costs are net of the $130,000 Robert paid under the Stevenson J. and Hood J.
    interim costs and disbursements orders.

(1)

Analysis

(a)

The interpretation of the Domestic Contract

[58]

The
    Domestic Contract contains the following provisions:

5.1 (a) Rob may soon be the beneficiary of certain gifts or
    other transactions by which he acquires an interest in [OFH] which may or may
    not become a matrimonial home of the parties, as well as an interest in various
    other corporations. [OFH] was acquired for approximately $1.3 million and its
    current value may well be in excess of that figure. These corporate interests
    may be worth hundreds of thousands of dollars now, and millions of dollars in
    the future. Nikki hereby releases all her Rights to these assets should Rob
    acquire them in any fashion as well as any assets or property into which they
    can be traced in the future.



6.1 The parties present residence is leased. The lease expires
    in approximately two years. At a reasonable period of time before the expiry of
    the lease Rob and Nikki will jointly purchase a Matrimonial Home. Although it
    may be financed, Rob will be responsible for the deposit and down payment,
    which will total between $150,000 and $250,000. The title will be held in joint
    tenancy. Notwithstanding paragraph 5 hereof, on any Marriage Breakdown the net
    equity (or proceeds of sale in the case of a sale of the Matrimonial Home) will
    be shared equally between the parties, but Nikkis one half of the equity will
    be excluded from the calculation of her Net Family Property.

[59]

Robert
    argues that the trial judge erred in concluding that Nicole was entitled to a
    one-half interest in the current equity of OFH under the Domestic Contract. He
    submits that, fairly construed, OFH was to be excluded property, pursuant to
    the Domestic Contract. Robert asserts that the errors here were in failing to
    look at the entirety of the contract, and
in considering the
    subjective intentions of the parties, as well as extrinsic evidence of events
    that occurred after the formation of the contract.

[60]

I
    disagree.

[61]

The trial judges interpretation of the Domestic Contract is a
    question of mixed fact and law that is entitled to deference on appeal:
see
MacDougall v. MacDougall
(2005), 262 D.L.R. (4th) 120
    (Ont. C.A.), at para. 33;
Sattva Capital Corp. v. Creston Moly Corp.
,
    2014 SCC 53, [2014] 2 S.C.R. 633, at paras. 50-55; and
Housen v.
    Nikolaisen
, 2002 SCC 33, [2002] 2 S.C.R. 235, at para. 36.

[62]

Contrary
    to Roberts assertion, the trial judge examined the relevant wording of the
    Domestic Contract. Based on a plain reading of the Domestic Contract, he
    concluded that Nicole was entitled to a one-half interest in OFH and that this
    is the result that Robert and Nicole would have reasonably expected at the time
    the contract was signed. His conclusion is reasonable and reveals no error.

[63]

Matrimonial
    Home is capitalized in s. 6.1 but not in s. 5.1(a). This does not mean that
    OFH, in which the parties were living at the time the Domestic Contract was
    signed, could never become a Matrimonial Home and subject to the operative
    provisions of s. 6.1. The trial judge reasonably concluded that this was the
    effect of the notwithstanding language in s. 6.1. As noted by the trial
    judge, Robert agreed at trial that s. 5 does not state that OFH is an excluded
    property, and that s. 5 is overridden by s. 6.

[64]

I
    see no reversible error in the trial judges interpretation of the Domestic
    Contract.

(b)

Equalization

[65]

Robert
    submits that, if Harolds default judgment had been properly valued at its face
    value, Robert would not have owed any equalization payment to Nicole. According
    to Robert, in valuing the judgment at nil, the trial judge committed a palpable
    and overriding error by failing to give effect to his earlier findings that
    Harolds judgment was legitimate.

[66]

Again,
    I disagree. Notwithstanding the trial judges findings in the Civil Action
    regarding the validity of the judgment and debts,
it was open
    to him to conclude, as he did, that there was no reasonable prospect that
    Harold would pursue Robert for the repayment of the debt.

[67]

Contingent
liabilities are only to be taken into account if they are
    reasonably foreseeable:
Greenglass v. Greenglass
, 2010 ONCA 675, 99
    R.F.L. (6th) 271, at para. 26. The reasonable foreseeability of the liability
    is determined at the valuation date, not the date of the trial:
Greenglass
,
    at para. 27. At the valuation date, Harold had not made any demand for
    repayment and Robert had not included the debt in his first two financial
    statements. Further, Harold stated in cross-examination that he had, in the
    past, forgiven debts owed by his children.

[68]

I see no error in the trial judges decision to value Roberts debt
    to Harold at zero for equalization purposes.

(c)

The costs issue

[69]

I now consider Roberts costs appeal. Since
    Robert was not successful in his appeal of the merits, leave is required to
    appeal the costs order:

CJA,

s. 133(b);
Murano v. Bank of
    Montreal
(1998), 41 O.R. (3d) 222 (C.A.), at paras. 74-80. Robert sought
    leave to appeal the costs order, and in the circumstances, I would grant such
    leave. There are strong grounds to find that the trial judges costs award, in
    failing to consider the advances made under previous orders, was plainly wrong:
    see
Hobbs v. Hobbs
, 2008 ONCA 598, 240 O.A.C. 202, at paras. 32-33;
Hamilton
    v. Open Window Bakery Ltd.,
2004 SCC 9, [2004] 1 S.C.R. 303, at para. 27.

[70]

Robert contends that the trial judge overlooked his advances to
    Nicole of $100,000 (under the Stevenson J. order) and $30,000 (under the Hood
    J. order). He submits that these amounts should have been credited against the
    costs award of $285,000. Robert points to the trial judges reasons for
    judgment in the matrimonial proceedings where the trial judge stated that
the treatment of the interim costs and disbursements totaling
    $100,000, which Nicole received pursuant to the June 16, 2016 order of
    Stevenson J. should be addressed as part of the overall costs analysis
    following trial.

Nicole did not address the
    advances in her written costs submissions, and Robert was not given the
    opportunity to make submissions on costs (because his pleadings had been
    struck).

[71]

This
    court was advised that the trial judge declined to provide clarification on
    whether the intention was to credit Robert for the $130,000 he advanced,
    indicating that his decision spoke for itself.

[72]

Nicole
    asserts that the intention was to provide her with full recovery of her costs,
    and that this would not include any credit for the $130,000 already paid by
    Robert under the earlier orders.

[73]

On
    a plain reading of the trial judges reasons, it is apparent that he overlooked
    the $130,000 advance by Robert when he awarded $285,000 in costs to Nicole. If
    Nicole were correct, she would have received a costs award of $415,000
    ($285,000 plus $130,000), which was more than the
$377,847
amount
    she requested from Robert in her written costs submissions.

[74]

While
    Nicole is correct that a costs award may exceed the amount sought by a party,
    if and when that happens, it should be explained. I do not accept Nicoles
    assertion that this is what happened in the present case. Contrary to her
    submission, there is no indication from the reasons that the trial judge
    awarded her costs in an amount greater than she requested (or deliberately did
    not credit the amounts already advanced) because of Roberts bad faith. The
    reasons make it plain that the trial judge did not intend to award Nicole the
    amount she was seeking, let alone any additional bonus amount. Specifically,
    at para. 32, the trial judge stated, [i]n the result, it is appropriate that I
    make adjustments to Nicoles recovery of full recovery costs to take into
    account Nicoles lack of success on many issues at trial.

[75]

I would
reject Roberts argument that the
    quantum of the costs award was otherwise excessive. Aside from failing to
    discount the sums advanced under the Stevenson J. and Hood J. orders, the trial
    judge properly exercised his discretion in fixing costs and considered the
    relevant principles. His decision with respect to the quantum of costs is
    entitled to deference on appeal, unless he erred in principle or his costs
    award is plainly wrong:
Hamilton
, at para. 27.

vi.

DISPOSITION

[76]

For
    these reasons, I would dismiss Harolds appeal. I would dismiss Roberts
    appeals, except to the extent of varying the costs award in the court below, to
    award Nicole costs of $155,000, after credit for the sum of $130,000 Robert has
    already paid under the Stevenson J. and Hood J. orders.

[77]

I
    would award Nicole her costs of the appeals, in the amounts agreed between the
    parties: $15,000 to be paid by Harold in Harolds appeal, $10,000 to be paid by
    Robert in his appeal of the order striking his pleadings, and $15,000 to be
    paid by Robert in his appeal of the December 20, 2018 order, and the costs
    order. All amounts are inclusive of disbursements and applicable taxes.

Released: March 31, 2020 (M.T.)

K. van Rensburg J.A.

I agree. M. Tulloch J.A.

I agree. B. Zarnett J.A.


