Mayowski v. Mayowski, 2011 ABQB 31

Court of Queen ’ s Bench of Alberta Citation: Mayowski v. Mayowski, 2011 ABQB 31 Date: 20110121 Docket: 4803 140393 Registry: Edmonton Between: Terri Aline Mayowski Plaintiff - and - Glen Ronald Mayowski Defendant _______________________________________________________ Memorandum of Judgment of the Honourable Madam Justice D.C. Read _______________________________________________________ Background: [ 1 ] Terri Mayowski and Glen Mayowski were married on August 24, 1979. Mr.

Mayowski initiated divorce proceedings on November 23, 2005 by a combined Statement of Claim for Divorce and Division of Matrimonial Property. On November 15, 2007, Ms. Mayowski counterclaimed for divorce and made various claims in respect to the matrimonial property. Since then, the parties have remained locked in high-conflict divorce proceedings. The matter is under case management. [ 2 ] On December 7, 2010, Ms. Mayowski made application for

summary judgment before the case management judge, alleging the parties had come to a binding agreement through a series of letters exchanged through their solicitors. Mr. Mayowski disputed that they had reached settlement and opposed the

summary judgment application. The alleged agreement purported to dispose of all matrimonial property issues as well as various issues concerning the divorce.

[ 3 ] Relevant to this application is the correspondence between the two lawyers over a number of months in the summer of 2010, which attempted to achieve a settlement of many of the matrimonial property issues. Issues: [ 4 ] The issues are as follows: 1. Is

summary judgment available in these circumstances? 2. If so are the terms of the agreement sufficiently clear for it to be binding?

Summary: [ 5 ]

Summary judgment is not available. This remains an active divorce action, and the Rules of Court AR 124/2010 (“ New Rules ”) make it clear that

summary judgment is not available in divorce matters. Further, the requirements of the Matrimonial Property Act , R.S.A. 2000, M-8 (“ Matrimonial Property Act ”) were not complied with in the alleged agreement. Whether or not the terms of the agreement are sufficiently clear, the agreement respecting the divorce matters cannot be enforced by

summary judgment and the agreement respecting matrimonial property is not enforceable. All issues must go to trial. Facts: [ 6 ] Negotiations began on June 23, 2010, when counsel for Mr. Mayowski, sent a letter to Ms. Mayowski, who was unrepresented at the time. This letter put forward an offer to settle various issues relating to the matrimonial property, arrears, spousal and child support and the custody of the one remaining child of the marriage. [ 7 ] After receiving the letter, Ms. Mayowski retained counsel, who responded by letter to counsel for Mr. Mayowski on July 13, 2010.

The response set out a counteroffer of settlement in respect to matrimonial property, the residence of the remaining child of the marriage, spousal support and child support. The two following clauses are relevant: “8. Mr. Mayowski will obtain refinancing to payout[sic] the existing mortgage on the matrimonial home and the equalization payment to Ms. Mayowski.” “16. If Mr. Mayowski does not qualify for financing necessary to payout[sic] the existing mortgage and the equalization payment, then the matrimonial home will forthwith be listed for sale with a realtor as agreed upon between the parties.

The net proceeds of sale will be divided equally with adjustment in accordance with the attached Statement of Property...” [ 8 ] Counsel for Mr. Mayowski replied by letter of August 4, 2010, confirming that his client agreed with most of the clauses of the July 13, 2010 letter. However, he added several qualifications. Importantly, counsel stated his concern that Mr. Mayowski would be unable to obtain financing, as the mortgage encumbering the matrimonial home was in arrears. [ 9 ] Counsel for Ms. Mayowski responded on August 9, 2010, stating that “Ms.

Mayowski accepts the counteroffer of settlement”, setting out the equalization amount. Counsel asked to be notified when Mr. Mayowski knew if he would qualify for financing.

[ 10 ] On August 10, 2010, counsel for Mr. Mayowski replied indicating that he had emailed his client and “instructed him to contact the bank to arrange for mortgage financing”. He added that he would “attempt to have the Minutes of Settlement to [opposing counsel] by the end of next week”. [ 11 ] However, in a further letter to counsel for Ms. Mayowski, dated September 17, 2010, counsel for Mr. Mayowski advised that Mr. Mayowski had failed to obtain the financing necessary to pay Ms. Mayowski the equalization payment required under the terms of the alleged settlement. Further, counsel for Mr.

Mayowski now disputed the value of the home, and alleged that the negligence of Ms. Mayowski had caused the house to lose the value as calculated on the Statement of Property. He also now disputed that Justina, the remaining child of the marriage, was living with Ms. Mayowski. He disputed, as well, Ms. Mayowski’s employment and wages. He ended the letter by stating that “as a result, there is no settlement”. [ 12 ] The final relevant piece of correspondence was sent on September 23, 2010 by counsel for Ms. Mayowski. Her position was that the parties had reached a binding agreement.

She advised that she intended to bring the issue of the alleged agreement to court. However, because she said the collapse of the agreement left Ms. Mayowski in financial difficulty, she also included provisions for a proposed interim agreement respecting certain aspects of the matters at issue between the parties. Ms. Mayowski proposed this agreement be documented as an Interim Consent Agreement. Is

Summary Judgment Available? [ 13 ] There are two reasons that

summary judgment is not available in these circumstances. Firstly, the Rules of Court specifically disable resolution of Divorce Act, R.S.C. 1985, c. 3 (2nd Supp) (“ Divorce Act” ) proceedings by

summary judgment. This application was made just after the New Rules came into effect in Alberta. However, as was the case under the Rules of Court , Alta. Reg. 390/68 ( “Old Rules ”) , the New Rules bar actions involving the Divorce Act from being resolved by way of

summary judgment. [ 14 ] The Old Rules said the following respecting

summary judgment: 159 ...

(3) On hearing the motion, if the court is satisfied that there is no genuine issue for trial with respect to any claim, the court may give

summary judgment against the plaintiff or a defendant. ...

(7) This Rule does not apply to the following: (

a) any divorce proceeding as defined in Rule 561.1(b); (

b) any combined action consisting of a divorce proceeding as defined in Rule 561.1(

b) and the division of matrimonial property pursuant to a matrimonial property proceeding as defined in Rule 561.1(c.1). [emphasis added] [ 15 ] Although the wording has changed somewhat, Rule 12.48 of the New Rules has maintained this exclusion, outlining its operation in more detail: 12.48 Despite rule 7.3, an application for

summary judgment (

a) is not available in (

i) a proceeding under the Divorce Act (Canada) , notwithstanding that the corollary relief has been severed,

(ii) a proceeding that is both a proceeding under the Divorce Act (Canada) and a proceeding under the Matrimonial Property Act , or (iii) a proceeding under the Family Law Act , but (

b) is available in proceedings under the Matrimonial Property Act , including a proceeding under the Matrimonial Property Act that was combined with a proceeding under the Divorce Act (Canada) and then separated from the proceeding under the Divorce Act (Canada) under rule 3.71. [emphasis added] [ 16 ] It is patently clear from R. 12.48 that

summary judgment is not available in any action under the Divorce Act . Although

summary judgment is available in proceedings under the Matrimonial Property Act , if the action was commenced as a combined proceeding with the Divorce Act , because of R. 12.48(b), a

summary judgment application under the Matrimonial Property Act can be made only after that action has been severed from the Divorce Act proceedings. [ 17 ] The alleged agreement purported to settle a number of the issues that pertain to the Divorce Act proceedings: custody and residence of the remaining child of the marriage, child support, and arrears of child support, spousal support and arrears of spousal support are all part of the purported settlement.

Clearly, these are claims related to the divorce action and not to the matrimonial property action. [ 18 ] There is no suggestion that the Divorce Act claims have been severed from the Matrimonial Property Act proceedings and given that a number of the claims that purport to be settled relate to the divorce action, even assuming that an implicit severance would be sufficient, there is nothing to suggest implicit severance here. [ 19 ] Thus, as the purported settlement deals with claims made under the Divorce Act and as Rule 12.48 makes clear,

summary judgment is not available. [ 20 ]

Summary judgment is unavailable for a second reason as well. There is no indication that either party consented before a lawyer to the waivers required in sections 37 and 38 of the Matrimonial Property Act . [ 21 ] The Matrimonial Property Act allows parties on the breakdown of a marriage to make consensual agreements opting out of the protections set out in the Act . However, in order to do so, both parties must conform with the strict requirements found in sections 37 and 38 of the Matrimonial Property Act : 37

(1) Part 1 does not apply to property that is owned by either or both spouses or that may be acquired by either or both of them, if, in respect of that property, the spouses have entered into a subsisting written agreement with each other that is enforceable under

section 38 and that provides for the status, ownership and division of that property . (2) ...

(3) An agreement under subsection (1) (

a) may provide for the distribution of property between the spouses at any time including, but not limited to, the time of separation of the spouses or the dissolution of the marriage, and (

b) may apply to property owned by both spouses and by each of them at or after the time the agreement is made.

(4)... 38

(1) An agreement referred to in

section 37 is enforceable if each spouse or each person, in the case of persons referred to in section37(2), has acknowledged, in writing, apart from the other spouse or person (

a) that the spouse or person is aware of the nature and the effect of the agreement, (

b) that the spouse or person is aware of the possible future claims to property the spouse or person may have under this Act and thatthe spouse or person intends to give up these claims to the extent necessary to give effect to the agreement, and (

c) that the spouse or person is executing the agreement freely and voluntarily without any compulsion on the part of the otherspouse or person.

(2) The acknowledgement referred to in subsection (1) shall be made before a lawyer other than the lawyer acting for the other spouse orperson or before whom the acknowledgement is made by the other spouse or person. [emphasis added] [22] While letters between counsel may result in settlement agreements, such letters cannot constitute a binding matrimonialagreement until the requirements of s. 38 have been complied with. Here no waivers under s. 38 were signed and on the plain wording ofs. 38, the agreement is not enforceable.

Summary judgment is not available to enforce an unenforceable agreement. [23] In Corbeil v. Bebris, (AB CA), 141 A.R. 215 (Alta. C.A.), at page 8, Kerans J.A. outlined the rationale fora strict approach to the requirements found in the relevant sections of the Matrimonial Property Act: The purpose of the statutory formalities of execution is to offer some protection to spouses from agreements that are not the result of freeand informed consent. As I earlier said, the statutory formalities of execution do not offer total protection. But, such as they are, I see noreason to limit their application.

It also follows that, if that assurance of informed and free consent is not present, the default rule is notdisturbed: the property is to be divided equally unless a judge finds, in the special circumstances of the case, that an equal distribution isnot just or equitable. [24] In Rarog v. Rarog, 2007 ABQB 98, para. 21, McDonald J. (as he then was) stated: The clear weight of authority is to the effect that non-compliance with s. 38 of the Matrimonial Property Act renders any agreement thatwas in fact made, legally unenforceable: Miles v. Miles 2003 ABQB 688 , 20 Alta.

L.R. (4th) 26 and the authorities citedtherein. [25] This position was re-stated by Bielby J. (as she then was) in Voll v. Voll, 2008 ABQB 89, which case, was also an applicationfor

summary judgment on a settlement agreement. Unlike the case at bar, in Voll the parties, themselves, had signed the letter. TheCourt found that the agreement was not enforceable because it lacked the

section 37 and 38 requirements of the Act. At para. 1, Bielby J. said this:

Summary judgment cannot issue to enforce the terms of a settlement of a matrimonial property and divorce action recorded by way of a

solicitor's letter which each party personally signed because neither signed the matrimonial property acknowledgement required by s. 38 of the Matrimonial Property Act , R.S.A. 2000, c. M-8. [ 26 ] The most recent Alberta Court of Appeal decision on this issue is Diegel v. Diegel , 2008 ABCA 389 , relied upon by Ms. Mayowski.

In Diegel , the Court was not required to make a determination on the requirements of sections 37 and 38 , but stated as obiter at para. 35: An issue on the re-hearing of this matter will be whether the exchanges between counsel make it plain that the clients were consulted and approved or pre-authorized and ratified their counsel's actions for the purposes of reaching an enforceable agreement.

A key question will be whether there were in existence written acknowledgments by the parties that met the requirements of s. 38(1) of the Act to render any agreement reached enforceable. [ 27 ] In the case at bar, the purported agreement dealt mainly with claims under the Matrimonial Property Act . However, s. 38 has not been complied with. As a consequence the agreement is unenforceable. Clearly, therefore,

summary judgment is not available. [ 28 ] Clearly, there are outstanding issues and the matter must proceed to trial. I pause, here, however to note that s. 8 (

g) of the Matrimonial Property Act provides that agreements which do not meet the statutory formalities of execution may be considered by a judge in making an order dividing matrimonial property. This provision reads as follows: 8. The matters to be taken into consideration in making a distribution under

section 7 are the following: (

g) the terms of an oral or written agreement between the spouses [ 29 ] Whether or not the series of letters constitutes an agreement pursuant to s. 7 of the Matrimonial Property Act , and, if it is what weight it should be given, is an issue to be resolved at trial. Therefore, I will not consider the second issue. [ 30 ] To conclude, there are two significant bars to this application for

summary judgment and even if an agreement that is sufficiently clear can be found in the correspondence between counsel, there is still a child of the marriage and there are still significant non-property divorce issues that are highly contested set out in the alleged agreement. There has been no severance of the divorce issues from those under the Matrimonial Property Act . Beyond that, the Matrimonial Property Act requirements have not been met. [ 31 ] It seems apparent that these parties cannot resolve their dispute by agreement. I direct that they proceed immediately to alternate dispute resolution and, if that is unsuccessful, to trial. A

summary trial may be an efficient way to resolve the issues between the parties. [ 32 ] A further case management meeting may be held on application by either party to resolve any procedural issues which affect the ability to proceed immediately to alternate dispute resolution. [ 33 ] Costs may be spoken to if required. Heard on the 6 th day of December, 2010. Dated at the City of Edmonton, Alberta this 20 th of January, 2011.

D.C. Read J.C.Q.B.A. Appearances: Diana J. Gosselin for the Plaintiff Dennis E. Bayrak for the Defendant