Martin v. Sansome, (2014) 314 O.A.C. 375 (CA)

• Jurisdiction: Ontario
• Judge: Hoy, A.C.J.O., Laskin and Tulloch, JJ.A.
• Neutral Citation: 2014 ONCA 14
• Citation: (2014), 314 O.A.C. 375 (CA),2014 ONCA 14,118 OR (3d) 522,[2014] OJ No 27 (QL),(2014), 314 OAC 375 (CA),[2014] O.J. No 27 (QL),314 O.A.C. 375,118 O.R. (3d) 522,314 OAC 375
• Date: 08 October 2013
• Court: Court of Appeal (Ontario)

Martin v. Sansome (2014), 314 O.A.C. 375 (CA)

MLB headnote and full text

Temp. Cite: [2014] O.A.C. TBEd. JA.013

Delmer Bearinger Martin (applicant/appellant in appeal) v. Linda Lorraine Sansome (respondent/respondent in appeal)

(C55798; 2014 ONCA 14)

Indexed As: Martin v. Sansome

Ontario Court of Appeal

Hoy, A.C.J.O., Laskin and Tulloch, JJ.A.

January 10, 2014.

Summary:

In this divorce proceeding, the parties' dispute centred on the validity of a domestic contract and the ownership of a non-operating farm that had been in the husband's family for over 180 years. Retroactive child support for the parties' daughter (23 years old at trial) was also at issue. The trial judge denied the husband an adjournment to retain counsel. A difficult, lengthy trial followed. Ultimately, the trial judge set aside the domestic contract and declared the wife the owner of an undivided half interest in the farm. The trial judge also ordered the husband to pay retroactive child support from the date of separation, together with 10% interest. Further, the trial judge ordered the husband to repay half of a $27,000 loan advanced by his mother-in-law. The husband appealed, arguing that the trial judge: erred in denying his adjournment request and his conduct of the trial gave rise to a reasonable apprehension of bias; erred in setting aside the domestic contract; erred in concluding that there was unjust enrichment and the wife was entitled to a 50% interest in the farm through the proprietary remedy of a constructive trust (and provided inadequate reasons therefore); erred by not equalizing the parties' respective net family property; made a number of errors in ordering retroactive child support and in ordering the husband to repay half of the loan advanced by his mother-in-law; and did not give the husband an adequate opportunity to respond to the wife's cost submissions. The husband submitted that a new trial had to be ordered.

The Ontario Court of Appeal allowed the appeal in part. The court was not persuaded that the trial judge erred in denying the husband's request for an adjournment or that the record raised a reasonable apprehension of bias. The court held that the husband effectively conceded that, on the evidence adduced at trial, the trial judge did not err in setting aside the domestic contract. The court accepted that the trial judge erred by impressing the farm with a constructive trust in the wife's favour and by not equalizing the parties' net family property. The court ordered the husband to pay the wife an equalization payment of $390,646.77, plus pre- and post-judgment interest, and granted her a charge against the property to secure payment. The court reduced the rate of pre- and post-judgment interest on the child support arrears to three percent. The wife properly conceded that the trial judge had erred in ordering the husband to repay half of the loan advanced by her mother before the husband's bankruptcy. Accordingly, that provision was set aside. The court refused to interfere with the trial judge's costs award.

Courts - Topic 691

Judges - Disqualification - Bias - Reasonable apprehension of bias - In a divorce proceeding, the parties' dispute centred on the validity of a domestic contract and the ownership of a non-operating farm that had been in the husband's family for over 180 years - Retroactive child support was also at issue - The trial judge denied the husband an adjournment to retain counsel - A lengthy trial followed - On appeal, the husband argued, inter alia, that the trial judge erred in denying his adjournment request and his conduct of the trial gave rise to a reasonable apprehension of bias - The Ontario Court of Appeal rejected both grounds - Regarding reasonable apprehension of bias, the trial required a more proactive approach than was customary - Most of the trial judge's interventions in the examination of witnesses were motivated by an effort to focus the evidence on the matters in issue, clarify evidence and move a difficult trial along - In a few instances, the trial judge's questions were inappropriate, his language was ill-advised, or he transmitted his reaction to the distressing evidence that he heard - Some of his conduct reflected his impatience and annoyance - However, he also made clear efforts to assist the husband - The instances in which the trial judge's comments or questions were inappropriate, if taken alone, could have created the impression that he favoured the wife's case over the husband's - However, when considered in the context of the whole trial, a reasonable person would not have had the impression that the trial judge was predisposed to decide the issues in the wife's favour - See paragraphs 29 to 39.

Family Law - Topic 634

Husband and wife - Marital property - Matrimonial home - What constitutes - In a divorce proceeding, the parties' dispute centred on the validity of a domestic contract and the ownership of a non-operating farm that had been in the husband's family for over 180 years - The trial judge held that the wife was entitled to a 50% interest in the farm through the proprietary remedy of a constructive trust - On appeal, the Ontario Court of Appeal upheld the trial judge's finding of unjust enrichment but substituted a remedy of equalization of family property under the Family Law Act (FLA) - The farm's acquisition had been financed almost 42% by what the trial judge found were a gift to the husband and an advance against his inheritance - The fact that property acquired by a spouse was funded by gift or inheritance was a factor in the equalization scheme under the FLA and would also be a factor in calculating monetary damages on the basis of a joint family venture under Kerr v. Baranow (2011 S.C.C.) - The court agreed with the husband that the entire farm did not constitute a matrimonial home and excluded 114 acres of tillable land that was leased - The court found that the husband had not satisfied his burden of showing that the rest of the land was used in the ordinary course for purposes other than residential - The court determined how the gift and inheritance were to be allocated between the farm, and therefore excluded from distribution, and the matrimonial home, and therefore not excluded from distribution - See paragraphs 68 to 82.

Family Law - Topic 637

Husband and wife - Marital property - Constructive trusts - The Ontario Court of Appeal stated that "... if unjust enrichment as the result of a marriage has been found, and it has been determined that monetary damages can suffice, the aggrieved party's entitlement under the equalization provisions of the FLA [Family Law Act] should first be calculated. Where appropriate, s. 5(6) of the FLA, which provides for an unequal division of net family properties where equalization would be unconscionable, should be invoked." - See paragraph 66.

Family Law - Topic 637

Husband and wife - Marital property - Constructive trusts - In a divorce proceeding, the parties' dispute centred on the validity of a domestic contract and the ownership of a non-operating farm that had been in the husband's family for over 180 years - The trial judge held that the wife was entitled to a 50% interest in the farm through the proprietary remedy of a constructive trust - On appeal, the Ontario Court of Appeal agreed with the husband that the trial judge failed to first specifically consider whether the husband was unjustly enriched - However, reading the reasons as a whole, it was clear that the trial judge did find unjust enrichment - The wife contributed homemaking, child care and other support services for the duration of the relationship - She worked on the farm "shoulder to shoulder" with the husband for three years - She made improvements to the farmhouse while she and the husband were tenants - Her salary helped to finance the household, and she provided funds to the husband - The husband was enriched by her contributions - There was no juristic reason for his enrichment and her corresponding deprivation - The trial judge's main error, an error of law, was that, having found unjust enrichment, he failed to consider the first avenue of remedy, namely a monetary award, and instead went straight to a finding of a nexus to the farm - The court held that, here, monetary damages could suffice as a remedy for the unjust enrichment - The trial judge erred by impressing the farm with a constructive trust in the wife's favour and by not equalizing the parties' net family property under the Family Law Act (FLA) - The court also ordered, pursuant to s. 9(1)(b) of the FLA, that a charge be placed on the farm as security for payment of the equalization amount - See paragraphs 56 to 67 and 81.

Family Law - Topic 868.3

Husband and wife - Marital property - Distribution orders - Equalization payments - [See second Family Law - Topic 637].

Family Law - Topic 880.3

Husband and wife - Marital property - Distribution orders - Exempt acquisitions - Gift, trust, bequest or award - [See Family Law - Topic 634].

Family Law - Topic 2353

Maintenance of wives and children - Maintenance of children - Retroactive maintenance - In a divorce proceeding, the parties' dispute centred on the validity of a domestic contract and the ownership of a non-operating farm that had been in the husband's family for over 180 years - Also at issue was retroactive child support for the parties' daughter Brittany, who was 23 years old at trial - On appeal, the Ontario Court of Appeal held that the trial judge did not err in awarding retroactive child support to the wife from the time of the parties' separation (February 27, 2007) until Brittany's graduation from college (May 2010), including a six-month period when Brittany was working while living at home and presumably saving for college - After the separation, the husband absented himself from Brittany's life, paid no child support and made no other provision for Brittany, despite receiving $420,000 from his mother's estate and presumably earning an income from his trucking job - In these circumstances, neither the lack of a direct explanation why the wife waited some two years before claiming child support, or the trial judge's failure to comment on this factor, was fatal - However, the trial judge erred in awarding post-judgment interest on the child support arrears at the rate of 10% in the absence of reasons justifying a rate higher than provided for in ss. 128 and 129 of the Courts of Justice of Act - The court reduced it to 3% - The court also granted a charge on the husband's farm property, which it had subjected to equalization under the Family Law Act, pursuant to s. 15.2(1) of the Divorce Act to secure payment of the arrears of child support and interest thereon - See paragraphs 83 to 99.

Family Law - Topic 2419

Maintenance of wives and children - Practice - Adjournments - In this divorce proceeding, the parties' dispute centred on the validity of a domestic contract and the ownership of a non-operating farm that had been in the husband's family for over 180 years - Retroactive child support for the parties' daughter (23 years old at trial) was also at issue - The trial judge denied the husband an adjournment to retain counsel - On appeal, the husband argued that the trial judge erred in denying his adjournment request - The Ontario Court of Appeal noted that the trial judge considered the last-minute nature of the request, the fact that the husband had not done any of the things that a party who represented himself and was intending to proceed to trial would have done, and what he characterized as the parties' untenable living circumstances - The trial judge concluded that the husband's last-minute adjournment request was a deliberate ploy - The court stated that "The decision of a trial judge to grant or refuse an adjournment is highly discretionary. Having regard to the evidence before, and the submissions made by counsel to, the trial judge as to what had transpired prior to the start of trial, there is ... no basis to interfere with his decision to deny the adjournment sought." - See paragraphs 24 to 28.

Family Law - Topic 2530

Maintenance of wives and children - Enforcement - Orders - Security for payment of support - [See Family Law - Topic 2353].

Family Law - Topic 3391

Separation agreements, domestic contracts and marriage contracts - Grounds for setting aside - Lack of independent or competent legal advice - In a divorce proceeding, the parties' dispute centred on the validity of a domestic contract and the ownership of a non-operating farm ("the property") that had been in the husband's family for over 180 years - The parties had worked the farm for three years before the husband's parents transferred the property to the husband - At the time of the transfer, the wife was told that she was required to sign a domestic contract waiving all rights to the farm - The trial judge found that the wife had in effect no independent legal advice and "held the mistaken belief that it did not matter whether her name was on the property or not and that it did not matter that she willingly signed a formal agreement." - He found that the wife "had no clue about what the implications of such a significant legal document really meant. All she knew was that she had to sign it if the deal was going to close." - The trial judge also found that she mistakenly believed at the time of signing that once the couple received a clear execution certificate such that having her name on title no longer posed a barrier to financing, she would at that time go on title - The Ontario Court of Appeal held that the evidence supporting these findings was overwhelming - It included evidence from the lawyers who acted on the sale transaction and provided "independent legal advice" to the wife - In effect, the trial judge found on the evidence that the wife "did not understand the nature or consequences of the domestic contract" as provided by s. 56(4)(b) of the Family Law Act - The court held that the fact that the wife appreciated that the domestic contract was not good for her did not mean that she understood either the nature or consequences of the domestic contract - The court saw no error in the trial judge's finding that she did not - See paragraphs 6 to 16 and 40 to 45.

Family Law - Topic 3397

Separation agreements, domestic contracts and marriage contracts - Grounds for setting aside - Lack of understanding - [See Family Law - Topic 3391].

Family Law - Topic 4001.1

Divorce - Corollary relief - Maintenance and awards - Retroactive awards - [See Family Law - Topic 2353].

Family Law - Topic 4014

Divorce - Corollary relief - Maintenance and awards - Awards - To children and children defined - [See Family Law - Topic 2353].

Family Law - Topic 4014

Divorce - Corollary relief - Maintenance and awards - Awards - To children and children defined - At issue in a divorce proceeding was, inter alia, retroactive child support for the parties' daughter Brittany, who was 23 years old at trial - On appeal, the Ontario Court of Appeal held that, at the date that the wife filed her Answer claiming child support, Brittany was a student at college, and therefore had been unable to withdraw from her parents' charge - Accordingly, the trial judge did not err in treating Brittany as a "child of the marriage" and finding that he had jurisdiction to order support - See paragraph 86.

Family Law - Topic 4206

Divorce - Practice - Enforcement of judgments and orders - General - [See Family Law - Topic 2353].

Practice - Topic 5068.2

Conduct of trial - Adjournments - Self-represented litigants (incl. adjournment to consult counsel) - [See Family Law - Topic 2419].

Restitution - Topic 62

Unjust enrichment - What constitutes - [See second Family Law - Topic 637].

Restitution - Topic 123

Unjust enrichment - Remedies - Constructive trust - [See second Family Law - Topic 637].

Restitution - Topic 124

Unjust enrichment - Remedies - Damages - [See second Family Law - Topic 637].

Trusts - Topic 2346

Constructive trusts - Basis for imposition - Unjust enrichment - [See second Family Law - Topic 637].

Cases Noticed:

Wewayakum Indian Band v. Canada and Wewayakai Indian Band, [2003] 2 S.C.R. 259; 309 N.R. 201; 2003 SCC 45, refd to. [para. 31].

Chippewas of Mnjikaning First Nation v. Ontario et al. (2010), 265 O.A.C. 247; 2010 ONCA 47, refd to. [para. 33].

Rawluk v. Rawluk, [1990] 1 S.C.R. 70; 103 N.R. 321; 38 O.A.C. 81; 23 R.F.L.(3d) 337, refd to. [para. 47].

Kerr v. Baranow, [2011] 1 S.C.R. 269; 411 N.R. 200; 300 B.C.A.C. 1; 509 W.A.C. 1; 274 O.A.C. 1; 2011 SCC 10, appld. [para. 48].

McNamee v. McNamee (2011), 280 O.A.C. 372; 106 O.R.(3d) 401; 2011 ONCA 533, refd to. [para. 64].

Ward v. Ward (2012), 293 O.A.C. 63; 111 O.R.(3d) 81; 2012 ONCA 462, refd to. [para. 71].

Young v. Young, 1999 CarswellOnt 2706 (S.C.), affd. [2001] O.J. No. 42 (C.A.), refd to. [para. 76].

D.B.S. v. S.R.G., [2006] 2 S.C.R. 231; 351 N.R. 201; 391 A.R. 297; 377 W.A.C. 297; 2006 SCC 37, appld. [para. 84].

Statutes Noticed:

Family Law Act, R.S.O. 1990, c. F-3, sect. 56(4)(b) [para. 41].

Counsel:

Aaron Franks and Michael Zalev, for the appellant;

Pamela L. Hebner and Patrick W. Jocsak, for the respondent.

This appeal was heard on October 8, 2013, by Hoy, A.C.J.O., Laskin and Tulloch, JJ.A., of the Ontario Court of Appeal. Hoy, A.C.J.O., delivered the following decision for the court on January 10, 2014.