Sep 8, 2020

COURT OF APPEAL SUMMARIES (August 31 – September 4, 2020)

Climans v. Latner, 2020 ONCA 554 (CanLII)

[Gillese, Brown and Paciocco JJ.A.]

Counsel:

Chris G. Paliare and Andrew K. Lokan, for the appellant

Bryan R.G. Smith and Jennifer Cook, for the respondent

Keywords: Family Law, Definition of “Spouse”, Definition of “Cohabit”, “The Rule of 65”, Civil Procedure, Costs, Divided Success, Family Law Act, R.S.O. 1990, c. F.3, ss. 1(1), 29, Courts of Justice Act, R.S.O. 1990, c. C.43, ss. 133(b), Family Law Rules, O. Reg. 114/99, Rule 24, Spousal Support Advisory Guidelines, s. 7, Djekic v. Zai, 2015 ONCA 25, Molodowich v. Penttinen (1980), 17 R.F.L. (2d) 376 (Ont. Dist. Ct.), Campbell v. Szoke (2006), 45 R.F.L. (5th) 261, at para. 51. She observed that in M. v. H., [1999] 2 S.C.R. 3, Stephen v. Stawecki (2006), 32 R.F.L. (6th) 282 (Ont. C.A.), Stajduhar v. Wolfe, 2017 ONSC 4954, aff’d 2018 ONCA 256, leave to appeal refused, [2018] S.C.C.A. No. 431, Beaver v. Hill, 2018 ONCA 840, Tadayon v. Mohtashami, 2015 ONCA 777, at para. 70; see also Beaver v. Hill, 2018 ONCA 840, at para. 2, leave to appeal refused, [2019] S.C.C.A. No. 82, St. Jean (Litigation Guardian of) v. Cheung, 2009 ONCA 9

Facts:

The respondent and the appellant were in a romantic relationship from October 2001 to May 2015, a period of almost 14 years. Throughout their relationship, they maintained separate homes in Toronto where each resided. They never married or moved in together. Both had children from previous marriages. The appellant was very wealthy. Early in their relationship, the appellant told the respondent that he would not marry her or live with her unless she first signed a domestic contract. At times, he prepared draft contracts and presented them to her but no such contract was ever signed. During their relationship, the respondent and the appellant lived together in July and August at the appellant’s Muskoka cottage. They spent weekends in Florida in the winter months. Sometimes, they spent March break week in Florida. The parties also vacationed together. Beginning early in their relationship, the appellant supported the respondent financially. During their relationship, he provided her and her children with a lavish lifestyle. The parties’ personal and social lives were closely interwoven and they presented as a couple in public.

When their relationship ended, the respondent brought an action in the Superior Court of Justice, asking that she be recognized as the appellant’s spouse and that he be required to pay her spousal support. The appellant resisted the claim, arguing that while they had had a romantic relationship, as they had never married or cohabited, the respondent was not his spouse.

Following an eight-day trial, the parties were declared to be spouses within the meaning of s. 29 of the Family Law Act (“FLA”). The appellant was ordered to pay the respondent spousal support of $53,077 per month, commencing January 1, 2019, for an indefinite duration on the basis of the “Rule of 65”.

As the successful party at trial, the respondent was found to be entitled to costs on a substantial indemnity basis in the amount of $324,179. The trial judge ordered costs on a substantial indemnity basis for two reasons. First, she viewed the appellant’s position that he and the respondent had not been spouses to be unreasonable. Second, she found that the appellant had not been “forthcoming” in his financial disclosure.

Issues:

Did the trial judge err in:

1. concluding that the parties met the definition of “spouse” in s. 29 of the FLA;

2. concluding that the parties began cohabiting in the first five months of their relationship so as to meet the Rule of 65; and

3. awarding the respondent costs on a substantial indemnity basis?

Holding:

Appeal allowed in part.

Reasoning:

1. No. There was no basis on which to interfere with the trial judge’s finding that the parties were spouses within the meaning of s. 29 of the FLA.

Pursuant to s. 29 of the FLA, the definition of “spouse” includes “either of two persons who are not married to each other and have cohabited continuously for a period of not less than three years.” Under ss. 1(1), “cohabit” means “to live together in a conjugal relationship, whether within or outside marriage.”

Lack of a shared residence is not determinative of the issue of cohabitation. As the trial judge’s review of the case law demonstrated, there are many cases in which courts have found cohabitation where the parties stayed together only intermittently. The trial judge recognized that cohabitation requires not only that the parties had a conjugal relationship but also that they lived together. There needs to be some element of living together under the same roof. Whether the parties lived together – despite having chosen to maintain separate residences – was a question that gave the trial judge pause. She wrestled at length with whether the intermittent periods during which the parties shared a roof – including the respondent’s overnight stays, the summers at the cottage, and the time spent in Florida – could, in all the circumstances, constitute living together in a conjugal relationship. She was entitled to conclude that they did and to find cohabitation. The trial judge took into consideration both the relevant factors for a conjugal relationship and her findings of fact on the parties’ relationship that led her to conclude that they had lived together. The trial judge correctly interpreted the legislation and articulated the governing legal principles in deciding whether the parties had been spouses. The Court was pointed to no errors in her factual findings, much less ones that are palpable and overriding. The appellant was asking the Court to reweigh the evidence – that is, to apply the law to the facts and come up with a different result than that of the trial judge. That was not the role of the Court. Absent reversible error, the Court must defer to the trial judge’s application of the law to the facts as she found them. Since the appellant had not established a basis for appellate intervention with the trial judge’s determination that the parties had been spouses, her determination must stand.

2. Yes. The trial judge erred in principle in concluding that the Rule of 65 applied. Consequently, the order for indefinite spousal support was set aside and substituted with an order requiring that spousal support be paid for a period of ten years.

Pursuant to the Spousal Support Advisory Guidelines (“SSAGs”), the Rule of 65 applies where the length of cohabitation in years plus the recipient’s age at the date of separation equals or exceeds 65. If the Rule of 65 applies, indefinite spousal support is appropriate.

The respondent could only meet the Rule of 65 if the parties were found to have begun cohabiting in the first five months of their relationship. The trial judge found that to be the case, however, she made a palpable and overriding error in doing so. The trial judge gave no reasons for why she concluded that the parties began cohabiting in the first five months of their relationship. She referred to no legal principles, factual findings, or evidence in support of that finding. However, in concluding that the parties were spouses within the meaning of ss. 29 and 1(1) of the FLA, the trial judge relied on her extensive factual findings to determine that the parties had cohabited. On those findings, the parties did not begin cohabiting within the first five months of their relationship.

While some aspects of their conjugal relationship began right away – for example, its sexual nature – others did not. For instance, the first time the parties lived together at the Muskoka cottage was in the summer of 2002. The trial judge’s findings that underpin her conclusion that the relationship was a committed one included the appellant’s proposal to the respondent and gift of a ring. However, those events took place in October 2002 – again, well after the first five months of their relationship. Other matters that the trial judge referred to were based on findings she made about the parties’ relationship as it progressed over time. Examples of this included the evidence on which the trial judge found that family and friends perceived the parties as a couple. Again, those events occurred later than the first five months of their relationship.

Importantly, the trial judge did not conclude that the parties had cohabited within the first five months of their relationship – she concluded that they had been in a conjugal relationship within the first five months. It was not sufficient to find that the parties had a conjugal relationship in order to conclude that they were “spouses” – it was necessary to find that they “lived together” in a conjugal relationship.

As the parties did not begin cohabiting within the first five months of their relationship, the Rule of 65 did not apply and it was an error in principle to find that it did. Consequently, time-limited support was warranted. Spousal support under the SSAGs was payable for between 7 and 14 years. Having regard to the purposes of a support order set out in s. 33(1) of the FLA, and the trial judge’s findings on the respondent’s contributions to the relationship, as well as the economic consequences of the relationship to her, spousal support was ordered to be paid for a period of ten years. Such an order will relieve the financial hardship the respondent was experiencing and make fair provision to assist her in becoming able to contribute to her own support.

3. Yes. There was no basis to award substantial indemnity costs. That costs order was set aside and substituted with a costs award on a partial indemnity basis.

There was no need for the appellant to seek leave to appeal. Leave is required where the appeal is only as to a discretionary costs order. However, when the disposition on appeal changes the decision under appeal, leave to appeal from a costs order is not necessary.

The general principle is that when an appeal is allowed, the order for costs below is set aside and the appellant is awarded costs below and on appeal. However, the appellant only enjoyed partial success on this appeal. Thus, the general principle did not apply. However, partial success on appeal still requires the Court to reconsider the costs disposition at trial.

The respondent enjoyed a reduced level of success at trial as a result of the Court’s decision on the appeal. However, she remained successful on the important issue on whether she and the appellant were “spouses” within the meaning of s. 29 of the FLA. She was also successful on the amount of support, which was unchanged on appeal. The appellant, however, was successful on the duration of support.

In considering the appellant’s conduct in ordering costs, the trial judge erred in principle in finding that the appellant acted unreasonably. The appellant’s legal position was reasonable. The trial judge expressly acknowledged that she struggled with whether the time the parties spent together during their relationship was sufficient to find that they “lived together” in a conjugal relationship. Second, the trial judge’s review of the case law demonstrated that where parties neither marry nor move in together, it is an open question as to whether they will be found to have cohabited. The fact that the appellant lost on the issue of whether the parties had been spouses does not mean his legal position was unreasonable.

Moreover, the appellant did not act unreasonably in his conduct of the litigation. The trial judge found that the appellant made offers to settle that showed a desire to settle. In light of his legal position on the issue of whether the parties had been spouses, the appellant’s consent to an order to provide interim spousal support showed that he acted reasonably.

Finally, the appellant did not act unreasonably with respect to disclosure. He met his obligation to make “reasonable disclosure”. The appellant was not unreasonable because he took the position that his actual annual income was irrelevant given that his ability to pay was not in issue. Reasonableness and proportionality were to be judged in context, which includes a consideration of the matters in issue and the positions taken by the parties. These factors should also reflect a consideration of the other party’s disclosure. In this case, the respondent also produced hundreds of documents only shortly before trial, a matter to which the trial judge did not advert.

There was no question that the appellant was a person of extraordinary means – financial disclosure beyond that which he provided was not necessary to demonstrate that. Second, as the trial judge found, the respondent played no role in the appellant’s financial success or in the acquisition or improvement of the family business. To the extent she had a compensatory claim, it was weak and related only to the fact that, as a result of the relationship, she had been out of the workforce for its duration. Accordingly, the appellant’s means – beyond his ability to continue to support the appellant at the level he had during the relationship – were not relevant.