



COURT OF APPEAL FOR ONTARIO

CITATION: A.A. v. Z.G., 2020 ONCA 192

DATE: 20200309

DOCKET: C67193

Tulloch, Benotto and Jamal JJ.A.

BETWEEN

A.A.

Applicant (Appellant)

and

Z.G.

Respondent (Respondent)

AND BETWEEN

S.A.

Plaintiff (Appellant)

and

A.A. & Z.G.

Defendants (Respondents)

Lauren Daneman, Mark Russell and William Friedman, for
    A.A. and S.A.

David Weisman, for Z.G.

Heard: March 4, 2020

On appeal from the
    order of Justice Emile R. Kruzick of the Superior Court of Justice, dated June
    27, 2019.

REASONS FOR DECISION

[1]

This appeal arises from a
    long-standing, high-conflict family law dispute. At the conclusion of oral
    submissions, we advised the parties that the appeal was dismissed with reasons
    to follow. These are our reasons.

FACTS

[2]

A.A. (the husband) and Z.G (the
    wife)
[1]
were married in 1991. They purchased a property together and built a new house.
    S.A (the husbands father) advanced nearly $900,000 toward the construction
    costs. The couple signed a mortgage to the husbands father in the amount of
    $800,000.

[3]

The parties separated in 2008 and
    the husbands father sought to enforce the mortgage against them. He obtained
    default judgment from the husband. The action against the wife was consolidated
    with the family law proceedings. The matter would not reach trial until 2012.

[4]

In the meantime, in 2009 the wife
    purchased the husbands interest in the matrimonial home. The husbands
    interest in the home was held as security for support payments. (It has since
    been exhausted).

[5]

The wife then sold the home to
    third parties. From the sale proceeds, $800,000 was paid to the father. The
    parties agreed that the father would post a letter of credit to secure the
    ongoing payments to the wife for support and equalization. He did so.

[6]

The consolidated proceeding
    eventually wound its way to trial. A 64-day trial was heard over a period from
    2012 until 2014. The trial judge released his 426-paragraph judgment in 2015.

[7]

The trial judge ordered the
    husband to pay to the wife periodic spousal support of $7,000 per month or  at
    his option  a lump sum payment of $585,000. He also ordered that husband to pay
    retroactive child support of $196,462 and an equalization payment of $489,354
    plus interest dating back to 2008. He required the husband to provide a letter
    of credit to secure the payments.

[8]

The trial judge dismissed the
    fathers mortgage claim against the wife on the basis that the mortgage was a
    sham. (The father appealed. Although this court did not agree that the mortgage
    was a sham, the husbands father did not establish that he made advances on the
    mortgage, so his appeal was dismissed).

[9]

The husband has paid nothing to
    the wife since the judgment. (This court refused to hear his appeal as a
    result).

[10]

The husband filed for bankruptcy
    in 2017. When he was ultimately discharged, the wife received approximately
    $44,000.

[11]

By 2019 the husbands arrears of
    support alone exceeded $1 million. At this point, he decided that he wanted to
    pay the outstanding amounts for support by taking advantage of the lump sum
    option.

[12]

He brought a motion to the
    Superior Court for:

1.

advice and directions regarding the lump sum payment and spousal support
    provisions in the judgment; and

2.

an order that the wife be required to provide a satisfaction piece upon
    payment of certain sums and consent to release to his father the letter of
    credit for $800,000.

[13]

The wife brought a motion seeking
    to draw on the letter of credit to pay support. She also requested that the
    order of costs be apportioned as between support and other relief.

[14]

The husbands motion was
    originally returnable before Diamond J. At the courts suggestion and with the
    consent of the parties, it was transferred to Kruzick J., who had presided at
    the trial.

ORDER UNDER APPEAL

[15]

The motion judge dismissed
    husbands motion and provided clarification that: (i) the spousal support was
    $7,000 per month if the lump sum was not paid; and (ii) the letter of credit
    was to secure payments to the wife for support and equalization.

[16]

He allowed the wifes motion that
    the letter of credit be paid to her. By addendum to his decision, he
    apportioned the trial costs between support and property and awarded costs of
    $20,000 to the wife.

ISSUES ON APPEAL

[17]

The husband and his father appeal on the basis that the motion judge
    erred by:

1.

varying the judgment when he was
functus officio
;

2.

terminating the lump sum spousal support order and converting it
    into an obligation to pay periodic support indefinitely;

3.

misapprehending the impact of the bankruptcy;

4.

ordering the letter of credit to be paid to the wife; and

5.

apportioning
    the costs order.

ANALYSIS

[18]

We do not accept the appellants submissions.

The judge was not
functus officio
, nor did he convert
    the lump sum payment

[19]

The appellants submit that the motion judge had no jurisdiction to make
    the orders because he was
functus officio
. We disagree for two
    reasons.

[20]

First, the motion judge was asked for advice and direction on the support
    payment provisions in the judgment. The judgment required periodic payments or
    the husband may if he chooses, satisfy the periodic support obligation by a
    lump sum payment in the amount of $585,000.

[21]

The motion judge was perfectly positioned to address this, which he did
    as follows:

The order speaks for itself. The
    husband has an obligation to pay periodic support of $7,000 a month to the wife
    which
he could have satisfied
by a lump sum. he did not make a lump sum
    payment so that the periodic support obligation continues [Emphasis added].

[22]

The motion judge did not convert the lump sum payment to a periodic
    support payment. The periodic support payment was in the judgment. The
    husbands failure to pay the lump sum meant that the periodic support
    continued.

[23]

Second, even if there had been a change in the final order, the court
    has the authority to do so pursuant to r. 15 of the Family Law Rules, O. Reg.
    114/99. In this regard, we do not agree with the motion judges comment that he
    was
functus officio
.

[24]

By resolving the issues before him the motion judge was following the
    primary objective of the Family Law Rules to deal with cases justly by
    ensuring that the procedure is fair to all parties, saving time and expense and
    dealing with the case in the way that is most appropriate to its importance and
    complexity (r. 2). Rule 2 specifically grants judges some procedural freedom to
    resolve family law disputes fairly and expeditiously.  The motion judges
    approach was both fair and expeditious in the true spirit of r. 2.

The bankruptcy and the letter of credit

[25]

During oral submissions, we were advised that the letter of credit was
    released to the wife so this no longer formed part of the appeal. However, it
    does form part of the analysis with respect to the appellants submissions on
    the bankruptcy.

[26]

The appellants submit that the motion judge misapprehended the effect of
    the bankruptcy by explaining that the equalization payment remains owing. They
    submit that the bankruptcy extinguished the obligation to make the equalization
    payment. We do not agree. The motion judge indicated that the line of credit
    was to secure equalization and support and this creates an equitable trust.
    As an equitable trust it did not form part of the bankrupts estate.

[27]

Accordingly, the motion judge did not misapprehend the effect of the
    bankruptcy.

Allocation of costs

[28]

Under all the circumstances, it was appropriate for the trial judge to
    allocate a portion of the trial costs to support. The motion judge, having
    presided over a long trial, was well-positioned to know the percentage of the
    costs properly attributable to support claims.

[29]

For these reasons, we dismissed the appeal.

[30]

The evidence before the motion judge was that the husband owes over $1.7
    million to the wife, although she claims it is closer to $850,000. What is
    clear is that he has paid nothing towards spousal or retroactive child support.

[31]

Under these circumstances, and, given the reasonableness of the
    respondents bill of costs, we order that the appellants pay the respondent
    costs of $23,000 all inclusive, on a substantial indemnity basis.

M. Tulloch J.A.

M.L. Benotto J.A.

M. Jamal J.A.





[1]

Although the parties are divorced, for ease of reference we
    refer to them as husband and as wife.


