Davids v. Davids
Marvin Davids, petitioner/appellant, and
Esther Davids, respondent
 O.J. No. 3930
Docket No. C30317
Ontario Court of Appeal
Labrosse, Doherty and O'Connor JJ.A.
Heard: September 30 and October 1, 1999.
Judgment: October 22, 1999.
On appeal from the judgment of the Honourable Mr. Justice Shaughnessy dated July 3, 1998.
Counsel:Thomas G. Bastedo, Q.C. and Karen Or, for the appellant.
Kenneth Cole and S. Shore, for the respondent.
The following judgment was delivered by
¶ 1 THE COURT: The appellant (husband) appeals from the judgment of Shaughnessy J. dated July 3, 1998. The relevant parts of that judgment can be summarized as follows:
the divorce was granted;
the respondent (wife) was awarded spousal support in the amount of $3,000.00 per month;
the husband was ordered to pay child support of $2,524.00 per month;
upon equalization of the net family property, it was determined that the wife owed the husband $178,514.10 from which $125,810.55 was subtracted to pay arrears owing on interim support orders made against the husband; and
the matrimonial home was ordered sold and it was directed that the amount payable to the husband from the equalization of the net family property (about $52,000.00) should be held by the wife in trust as security for payment by the husband of the spousal and child support ordered.
¶ 2 The support orders were premised on the trial judge's finding that the husband's imputed income was $168,000.00 per year. That figure was based largely, but not exclusively, on the evidence of a forensic accounting expert called by the wife at trial. The husband operated his own business through two corporate entities. The expert arrived at his calculation of the husband's imputed income after detailed examinations of the husband's and the corporations' records for the years 1993, 1994 and 1996. The husband did not provide a current financial statement at the time of trial. The imputed income came in the form of salary from the corporations, cash from unknown sources, corporate income available to the husband, and payments made by the corporations but attributable to the husband.
¶ 3 The trial judge also found that the wife was entitled to her costs on a solicitor-and-client basis almost from the outset of the proceedings and gave detailed directions to the assessment officer to assist in the assessment of those costs.
¶ 4 The husband was not represented at trial. He was represented in the proceedings which led to the costs order made by the trial judge.
¶ 5 The husband asks that the judgment be set aside and a new trial ordered. Counsel for the appellant advanced two grounds of appeal:
the trial judge erred in refusing the appellant's request for an adjournment and forcing the appellant to proceed to trial without counsel; and
the trial itself was so unfair as to result in a miscarriage of justice.
¶ 6 The appellant also seeks leave to appeal the costs order. In oral argument, counsel limited his argument to the question of whether the trial judge erred in providing detailed directions to the assessment officer.
¶ 7 The wife cross-appeals the trial judge's order with respect to the distribution of the net family property. Counsel for the wife indicated that this appeal would be pursued only if any part of the main appeal succeeded.
The refusal of the adjournment
¶ 8 These proceedings were commenced by the husband's petition in February 1995. The wife's answer and counter-petition were dated May 23, 1995. An interim-interim spousal and child support order was made in May 1995. In July 1996, both parties moved for interim support and custody orders. After a hearing, McLean J. ordered that the interim-interim order made a year earlier remain in force until trial. In his endorsement, McLean J. indicated "trial is expected to be in November or December 1996." In his order, he directed that "the matter should be tried as soon as possible."
¶ 9 The husband and wife both were represented by counsel on both motions and filed material in support of their respective positions. Neither party appealed or moved to vary the order of McLean J.
¶ 10 A pre-trial was held on September 30, 1996 and the trial was scheduled for February 1997. In October 1996, the husband retained Mr. Edwin Flak. Mr. Flak raised the possibility of resolving the issue between the parties by way of a mediation/arbitration arrangement. The wife agreed to attempt to resolve the issues in that way and Mr. Stephen Grant was selected as the arbitrator. The trial did not proceed in February 1997 but the case remained on the trial list.
¶ 11 In the fall of 1997, the trial was adjourned on consent to the next sittings in the spring of 1998 so that the parties could proceed with their mediation/arbitration attempts. Those attempts continued into 1998. By March 1998, it was apparent that the mediation/arbitration efforts could well fail. Mr. Cole, counsel for the wife advised Mr. Flak that his client was anxious to know how the matter would proceed. He indicated that the spring sittings were rapidly approaching. An assignment court was held in March. Both parties were notified but neither attended. The trial was scheduled for May. In keeping with the local practice, the husband could have brought a motion for an adjournment of the trial at the assignment court. He did not do so.
¶ 12 By the end of March, Mr. Cole wrote to Mr. Flak stating that it did not appear that matters would be settled and he would prepare to proceed for trial. Mr. Cole did indicate that the wife was prepared to proceed with the mediation/arbitration if there was any hope of success.
¶ 13 By early April, the possibility of resolving the issues by way of mediation/arbitration had all but disappeared. The husband had not responded to the wife's requests to extend the mediation/arbitration arrangement and had not made the final payment to the arbitrator as he was required to do.
¶ 14 On April 24, 1998, the husband filed a notice of an intention to act in person. He had discharged Mr. Flak taking the position that Mr. Flak's retainer extended only to the mediation/arbitration proceedings. Mr. Cole was never told that Mr. Flak's retainer was limited and that he would not act if the matter proceeded to trial.
¶ 15 On May 4, 1998, the husband applied for an adjournment of the trial for a period of about six weeks. In his affidavit filed in support of the motion, the husband said he had "almost no funds" and had been denied legal aid. His application for legal aid had been made on April 28, 1998. The motion was heard by Madam Justice Klowak on May 4, 1998. The husband was unrepresented. She refused the adjournment and indicated that the trial would proceed the next day.
¶ 16 On May 5, 1998, the parties appeared before Mr. Justice Shaughnessy. The husband was represented by Mr. Wrock. Mr. Wrock said that he had been retained the previous night solely for the purpose of seeking an adjournment of some three or four weeks. He said that if the adjournment was granted his firm would represent the husband. Mr. Wrock indicated that a "difference of opinion" had developed between the husband and Mr. Flak in late April and that as a result, Mr. Flak no longer acted for the husband. Counsel also advised that the husband had told him that he did not appreciate that the trial would proceed at these sittings. Counsel acknowledged that it was difficult to accept that one would not understand that the trial could proceed as scheduled.
¶ 17 Mr. Cole opposed the adjournment. He advised that the arrears on the support orders amounted to over $100,000.00 and that any payments the wife had managed to extract from the husband had been obtained only after various enforcement proceedings had been taken. He pointed out that the parties and their counsel had known since March that the mediation/arbitration efforts could well fail and that he had taken the position that the matter should proceed to trial if those efforts failed. Mr. Cole stressed that the husband's failure to abide by the terms of the interim orders had put the wife under severe financial and emotional pressure. As an example, Mr. Cole referred to the husband's refusal to make mortgage payments on the home and the wife's need to search out alternate financing or risk losing the home. He submitted that an adjournment would significantly add to the wife's costs and place her under added pressure. Finally, Mr. Cole pointed out that if the matter was adjourned for three weeks, the sittings would be over and the case would not be heard until the next sittings in November.
¶ 18 Shaughnessy J. was clearly concerned that the husband should be represented, if reasonably possible. He asked Mr. Wrock if he could be available to start the case in two days. Mr. Wrock, quite properly, indicated that he could not give that undertaking but that he was prepared to attempt in the next two days to "get up to speed" as much as possible and report the results of his efforts to Shaughnessy J.
¶ 19 Counsel for the wife maintained his primary position that the matter should proceed. He did indicate, however, that he would be prepared to consent to an adjournment if "very stringent payments requirements were attached to it." It seems clear that counsel for the wife was anxious to have the husband represented as long as the wife's and children's financial needs could be properly addressed by terms of the adjournment needed to allow the husband to be represented.
¶ 20 After a brief adjournment, both counsel reported to Shaughnessy J. that if the trial was adjourned for more than one or two days, it could not proceed until the next sittings commencing November 2, 1998. Mr. Wrock suggested that the husband would make a lump sum payment of $10,000.00 towards the arrears and would pay $2,500 per month pending the trial in November. The $10,000.00 payment equalled less than 10 per cent of the amount owing and the suggested monthly payments were less than half of the payments required under the existing interim order. Mr. Cole took the position that a payment of $30,000.00 should be made and that the monthly payments should be in the amount required under the interim order. Other terms were discussed, but they are not germane to these reasons.
¶ 21 After considering counsel's submissions, Shaughnessy J. said:
... I am gravely concerned about the delay in this matter. However, I also, in the best interests of the conduct of the trial, in hoping that Mr. Wrock will be appearing as counsel and acting on Mr. David's behalf, and that in turn they lead to a resolution either in the court or outside the court, which will be of great benefit to the parties financially and otherwise. Reviewing the court record, it is apparent to me that this case may not be completed in four days with an unrepresented Mr. Davids.
I am going to adjourn this matter, but I am going to adjourn it on essentially stringent terms as requested by Mr. Cole [counsel for the wife].
¶ 22 The terms imposed by the trial judge included the requirement that the husband make three $10,000.00 payments to the wife between May 15th and July 15th and that he comply with the existing interim orders.
¶ 23 Mr. Wrock then told Shaughnessy J. that the husband had asked him to inform the court that he "could not live with that order and would become in default." Counsel advised that the husband was prepared to represent himself, and that he requested "a couple of days" before the beginning of the trial. As I understand this request, it did not involve Mr. Wrock assisting the husband during this two-day period.
¶ 24 Shaughnessy J. declined to allow the appellant a two-day adjournment and directed that the trial should proceed. At the outset of the trial, Shaughnessy J. gave the husband a "thumbnail sketch" of the procedures and indicated to the husband that he would call his case first and that "presumably you will be your first witness." The trial proceeded on May 5, 6, 7, 8 and 11. The matter could not proceed beyond May 11th as a jury trial had been scheduled for that court. The trial was adjourned to June 8th. The husband was still presenting his case when the trial was adjourned. He had testified and called several witnesses. The husband advised Shaughnessy J. that he might retain counsel to represent him when the trial resumed.
¶ 25 The trial recommenced on June 8th after a four-week adjournment. The husband was still unrepresented, and there is no suggestion that he attempted to obtain counsel during the adjournment. The trial proceeded through June 8, 9 and was completed on June 10th.
¶ 26 The husband and no one else must take responsibility for the decisions which resulted in him being unrepresented as of May 5th. He knew well in advance of that date that there was a real possibility that the trial would proceed at that sittings. There is no suggestion that he was abandoned by his lawyer, or that Mr. Flak had not kept him informed of Mr. Cole's position. He clearly chose to appear unrepresented and to seek an adjournment. He first tried to obtain that adjournment on his own. When that effort failed, he went to Mr. Wrock and retained him for the limited purpose of seeking an adjournment so that Mr. Wrock could be properly retained for trial. He offered no support for his claim that he could not pay the amounts ordered by the court and gave no explanation for his failure to attempt to have the interim order varied in the two years since it had been made. It could be inferred from the husband's conduct that he was attempting to prolong the proceedings with a view to forcing his wife to accept settlement on his terms rather than continuing with the litigation.
¶ 27 In our view, the events leading up to the husband's request for an adjournment before Shaughnessy J., his apparent determination to avoid his financial obligations to his wife and children pending trial, and the financial and emotional hardship caused to the wife by further delay in the resolution of this matter could well have led Shaughnessy J. to refuse outright the husband's request for an adjournment.
¶ 28 Shaughnessy J. did not do so. He obviously wanted the husband to be represented by counsel if that representation could be achieved while maintaining the integrity of the process and giving proper weight to the interests of the wife. Shaughnessy J. proposed an adjournment on terms. In doing so, he exercised his discretion. The husband declined the terms. The question on appeal becomes - were the terms set out by Shaughnessy J. unreasonable? If they were not, then there can be no criticism of his decision to proceed with the trial after the husband rejected those terms.
¶ 29 Counsel for the husband submits that the trial judge could not impose the terms he did without satisfying himself that the husband could meet the financial conditions of those terms. He also submits that the trial judge should have made inquiries into the wife's financial condition. We cannot agree.
¶ 30 The appellant had failed to meet his obligations under an existing court order. That order was made after a hearing in which the husband had a full opportunity to present his position through counsel. He made no attempt to challenge that order or to seek any variation. Instead, he allowed the arrears to climb to over $100,000.00. Absent compelling evidence that the husband had made his best efforts to comply with the orders and was financially unable to do so, the trial judge could not relieve the husband of his obligations under those orders. The husband's mere assertion that he could not pay was hardly a sufficient basis upon which to vary his obligations. Certainly, the suggested terms of the adjournment put forward on behalf of the husband indicate that he could pay considerably more than he had been paying.
¶ 31 Nor do we find anything in the record to support the submission that Shaughnessy J. somehow denied the husband an opportunity to lead evidence of his financial circumstances and inability to pay the support required under the outstanding orders. The husband showed no inclination to share his true financial situation with the court.
¶ 32 We think that it was not only reasonable for the trial judge to require the husband to comply with the existing judicial orders as a term of any adjournment, but that any other order would have been unreasonable in the circumstances of this case.
¶ 33 We also find nothing unreasonable in the trial judge's requirement that the husband make some payment on the arrears as a term of the granting of any adjournment. Such a term is common where the party in arrears seeks an adjournment. The trial judge's order that the husband pay less than 30 per cent of the amount owed over a 3 1/2 month period was not an unreasonable exercise of his discretion.
¶ 34 The terms proposed by the trial judge were reasonable. The husband's decision not to comply with those terms was, in effect, a decision to proceed to trial unrepresented. We see no basis upon which to hold that Shaughnessy J. erred in the exercise of his discretion.
Was the trial so unfair as to result in a miscarriage of justice?
¶ 35 Mr. Bastedo, in forceful submissions on behalf of the husband, submits that even if the trial judge did not err in refusing an adjournment, the trial was so unfair as to result in a miscarriage of justice. In Mr. Bastedo's submission, the husband could not represent himself effectively in this complex litigation. This submission proceeded on the premise that the fairness of the trial must be considered by comparing what happened at the trial with how the trial might have been conducted had the husband been represented by competent counsel. It is argued that competent counsel would have presented expert evidence in support of the husband's position with respect to his income and would have challenged many parts of the testimony of the expert called by the wife. Mr. Bastedo argues that had the husband been represented by competent counsel, his imputed income would have been much lower than the figure arrived at by the trial judge.
¶ 36 We cannot accept the premise of Mr. Bastedo's argument. The fairness of this trial is not measured by comparing the appellant's conduct of his own case with the conduct of that case by a competent lawyer. If that were the measure of fairness, trial judges could only require persons to proceed to trial without counsel in those rare cases where an unrepresented person could present his or her case as effectively as counsel. Fairness does not demand that the unrepresented litigant be able to present his case as effectively as a competent lawyer. Rather, it demands that he have a fair opportunity to present his case to the best of his ability. Nor does fairness dictate that the unrepresented litigant have a lawyer's familiarity with procedures and forensic tactics. It does require that the trial judge treat the litigant fairly and attempt to accommodate unrepresented litigants' unfamiliarity with the process so as to permit them to present their case. In doing so, the trial judge must, of course, respect the rights of the other party.
¶ 37 Shaughnessy J., who observed the husband over a lengthy trial, described him as "a very articulate and intelligent person." Nothing in the record causes us to doubt that assessment. The husband understood the issues to be litigated. He had been involved in them for many years.
¶ 38 It is true that the assessment of the husband's income was complicated. That complication, however, arose primarily from the husband's own machinations and efforts to limit his obligations to his wife and children. There is no reason to doubt that he had a full appreciation of his own financial situation and the financial circumstances of his corporations.
¶ 39 The husband had a full opportunity to present his case and challenge the case presented for the wife. He did both. The introduction of an updated report from the wife's expert during the trial did not materially affect the case the husband had to meet and is explained by the wife's inability to gain timely access to the husband's financial information.
¶ 40 It is telling that, even when the trial was adjourned for some four weeks, the husband chose to continue to represent himself rather than retain counsel. In the light of that considered decision, it is hard to give any credence to the claim that he felt overwhelmed by the proceedings and was unable to adequately present his case. He presented the case he chose to present. It may have been very different from the case a competent lawyer would have presented, but that does not make the trial unfair.
¶ 41 It is also submitted that the husband was treated unfairly by the trial judge. The parts of the record relied on by the husband to support that submission do not lead us to conclude that the husband was treated unfairly or that the appearance of fairness was compromised. Clearly, on occasion, the trial judge was required to correct the husband and to limit the scope of some of the husband's answers and submissions. Such rulings are commonplace in all trials, even when counsel are involved.
¶ 42 Nothing has been placed before us that would give us cause to doubt the reliability of the essential findings of the trial judge. Those findings include his determination that the husband's annual income was very substantial and that he could have made the interim support payments had he chosen to do so. Submissions which do no more than present arguments that might have been made and which, if accepted, could have reduced the husband's income somewhat do not undermine the fairness of the proceedings or the reliability of the result.
¶ 43 It is clear from a review of the trial judge's reasons, that the husband's problem at trial was not that he was unrepresented. His real problem was that he was determined to give his wife and children as little as possible and was prepared to lie and cheat to achieve that goal. The trial judge said:
Regretfully, I find that Mr. Davids has unequivocally demonstrated a profound lack of consideration for his family, and that it is highly unlikely that he will pay periodic child and/or spousal support at least with a degree of regularity consistent with the best interest of the children. I find that he has deliberately diverted assets to avoid seizure of them to satisfy support orders. He has consistently manipulated both his income and his assets for no other purpose than to defeat court orders.
The fact that he has alienated several of his children appears to be of little importance to him. I find that Mr. Davids was not a credible witness. His testimony is replete with fabrication and deception. In particular, his answers were unresponsive or deliberately evasive when he was questioned about the incorporation of Renart Construction, the transfer of his shares to his parents and the transfer of vehicles to his father. Mr. Davids is a very articulate and intelligent person who I find feigned misunderstanding and incomprehension on major substantive issues where he had purposefully mislead the court concerning his income and assets.
¶ 44 The husband was capable of representing himself in these proceedings. He was not treated unfairly by the trial judge. There is no cause to doubt the reliability of the result. The husband is very much the author of whatever misfortune he perceives may have befallen him in the course of this litigation.
The costs appeal
¶ 45 Shaughnessy J. had a discretion to give directions to the assessment officer. We see nothing wrong with the directions he provided and would not interfere with the exercise of his discretion.
¶ 46 As the main appeal fails, it is unnecessary to deal with the merits of the cross-appeal.
¶ 47 The appeal is dismissed with costs. The cross-appeal is dismissed without costs.