Thomson v. Thomson, 2012 ONCJ 141

Milton Registry No. 158/11 DATE : 31·I·2012 CITATION: Thomson v. Thomson , 2012 ONCJ 141 ONTARIO COURT OF JUSTICE RE: ANNE MARGUERITE THOMSON — Applicant (Respondent on motion) PETER ANDREW THOMSON — Respondent (Applicant on Motion) BEFORE: Justice Roselyn Zisman COUNSEL: Linda V. Joe, counsel for the applicant mother, Anne Marguerite Thomson Annie Noa Kenet, counsel for the respondent father, Peter Andrew Thomson HEARD ON: 31 January 2012 JUSTICE R.

ZISMAN ( endorsement ):— [ 1 ] This is a motion by the respondent (“father”) to stay the proceedings commenced by the applicant (“mother”) pursuant to subsection 7(1) of the Arbitrations Act, 1991 , S.O. 1991, c. 17 . 1: BACKGROUND FACTS [ 2 ] The parties were married on October 17, 1987 and after almost fifteen years of marriage separated on August 31, 2002. There are two children of the marriage, Matthew Robert Thomson, born October 21, 1992 and Gregory Andrew Thomson, born August 9, 1994. [ 3 ] Following the separation, the mother commenced legal proceedings.

Both parties were represented by counsel throughout. Both parties agree that the legal proceedings were emotionally, physically, mentally and financially exhausting. In addition to financial issues, the parties litigated the issues of custodial and residential arrangements regarding the children. [ 4 ] Dr. Irwin Butkowsky was retained to conduct a

section 30 assessment pursuant to the Childre’s Law Reform Act , R.S.O. 1990, c. C-12 , as amended. However, during the initial intake process, Dr. Butkowsky determined that the parties were motivated to resolve the parenting dispute through mediation. With the assistance of Dr. Butkowsky, the parties reached an agreement regarding the children that was summarized by Dr. Butkowsky in a memorandum of understanding. The agreement provided for joint custody and that the children would reside equally with each parent. [ 5 ] The parties then agreed to attend with Mr.

Philip Epstein to mediate the property and child and spousal support issues. The parties were able to resolve those issues and Mr. Epstein drafted a memorandum of understanding. The memorandum of understanding also clarified that, if there was a dispute regarding he children, Dr. Butkowsky would act as an arbitrator and provided that, if there was a dispute regarding any financial issues, Mr. Epstein would act as the mediator/arbitrator.

It was agreed that the terms would be incorporated into a formal separation agreement. [ 6 ] The parties executed a formal separation agreement on October 6, 2005 that incorporated the agreements reached with Dr. Butkowsky regarding the children and with Mr. Epstein regarding the financial issues. [ 7 ] The separation agreement requires the father to pay child support on a set-off basis, as the children were to reside equally with both parents. The agreement provides the father pay $339.00 per month, based on the father’s income of $75,000.00 and the mother’s income being imputed at $30,000.00.

The parties are to share all extra-ordinary expenses equally. The agreement

acknowledges that the parties currently have two RESPs for the children’s future educational expenses and stipulates how to allocate those funds. When the children attend a post-secondary institution the issue of each party’s contribution to the education costs and the child support payable is to be reviewed by Mr. Epstein in his capacity as the mediator/arbitrator. [ 8 ] The separation agreement also requires that the father pay the mother spousal support of $1,324.00 per month. The spousal support could be varied after June 2007 if there was a material change in circumstances.

There is a further provision that child and spousal support would be reviewed de novo in May 2007 by Mr. Epstein.

All relevant financial disclosure was to be exchanged prior to the review. [ 9 ] The separation agreement also contains the usual provision that the parties exchange their notices of assessment annually by June 15th, and review their child support obligations and, if they do not agree, they will resolve their dispute in accordance with the dispute resolution clause of the separation agreement. [ 10 ] In addition to the annual disclosure requirement, the separation agreement provides that either party can request, in writing, inter alia , the documents required in subsection 21(1) of the Child Support Guidelines , O.

Reg. 391/97, as amended, and other information needed to review child support. The other party shall within thirty days provide the requested information. [ 11 ] The separation agreement contains the following dispute resolution clause: If a dispute arises as the

interpretation of this Agreement or the obligations of the parties hereunder, other than with respect to the matters referred to the parenting coordinator, Dr. Butkowsky, in ss. 5 and 6, within thirty (30) days all such matters shall be referred to Mr. Philip Epstein, Q.C. who shall decide such matters acting as a mediator/arbitrator whose decisions shall be final and binding upon the parties. If Mr. Epstein is unwilling or unable to act, the parties agree that an arbitrator/mediator chosen by the then Chair of the Family Law

Section of the Ontario Bar Association shall determine the dispute whose decision shall also be final and binding upon the parties without appeal. [ 12 ] The separation agreement also contains the following strict performance clause: The failure of either of the parties to insist, in any one or more instances upon the strict performance of one or more of the covenants or provisions of this Agreement, will not be and is not evidence of any waiver of, breach of, or relinquishment of for the future of such covenants or provisions, and the same will continue and remain in full force and effect. [ 13 ] In September 2007, the mother retained counsel for the purpose of moving forward with the variation and review provisions of the separation agreement.

Mother’s counsel corresponded with the father and noted that the notice of assessment he had provided to the mother was not adequate to the determination of his true income. The father was requested to provide three years of the financial statements of his company and the company’s tax returns as well as his personal returns of the last three years. [ 14 ] The father responded with a five-page letter quoting and interpreting various clauses of the separation agreement and complaining about the mother’s lack of compliance with the terms of the separation agreement.

It was his opinion that, since the de novo review by Mr. Epstein provided that there be no adjustments, no arrears and no retroactive support that he was not required to provide the requested information. He requested information from the mother and indicated that once he received that information a meeting could be arranged with Mr. Epstein. [ 15 ] Upon receipt of the mother’s tax return the father corresponded again with the mother’s counsel, he complained about the mother’s lack of income, her lack of attempts to obtain employment and detailed his understanding of the goals of spousal support.

The letter further states that he was looking forward to meetings being arranged with both Dr. Butkowsky and Mr. Epstein. The father wrote again about a month later with further complains about the mother and again stated he was seeking to confirm dates for the mediation/arbitration. [ 16 ] Mother’s counsel did not respond to father’s letters. Neither party took any steps to seek further financial disclosure or attend for mediation/arbitration with either Dr. Butkowsky or Mr.

Epstein. [ 17 ] The father deposes that, after September 2007, both children were becoming withdrawn and distant and by February 2008, the children told him that they did not want to see him further. The father deposes that he felt at the time that any further attempts to attend mediation/arbitration would only further cause a rift between himself and the children.

The father, in his correspondence to mother’s counsel, his e-mails to her and in his affidavit filed in support of his motion, blames the mother for alienating the children from him. [ 18 ] The mother on the other hand, deposes that the father takes no responsibility for his estrangement from the children. She alleges that, prior to the children’s coming to live with her full time, the father abandoned the children physically and emotionally. [ 19 ] In March 2009, the mother contacted the father by e-mail and made a further request for financial disclosure.

The father again refused to provide the financial disclosure and again advised the mother that the separation agreement required any dispute about the parenting issues be resolved by Dr. Butkowsky and any other dispute by Mr. Epstein. He offered to provide the requested financial disclosure at the meeting with Dr. Butkowsky or Mr. Epstein. [ 20 ] The mother made it quite clear in her e-mails that she required child support in accordance with the Child Support Guidelines , that child support was not negotiable.

The mother stated that she sought financial disclosure from the father so that the parties themselves could determine the proper amount of child support that father should be paying in view of the fact that both children were living with the mother on a full time basis. [ 21 ] The father sent several more emails, all of which were copied to Dr. Butkowsky and Mr. Epstein, continuing in insist on

proceeding with mediation/arbitration and that any required financial disclosure would be made or discussed at the mediation/arbitration. [ 22 ] In April 2009, the father emailed both Dr. Butkowsky and Mr. Epstein requesting clarification as to what enforcement mechanism he had available to enforce the dispute resolution clause of the separation agreement, whether the agreement was in full force and effect and a clarification of his rights. [ 23 ] On October 19, 2009, Mr. Epstein responded to the father’s inquiries. Mr.

Epstein apologized for his delay in responding but pointed out that he did reply to these same inquiries on December 4, 2007. [1] [ 24 ] Mr. Epstein makes the following comment in that letter: I am exceedingly sorry for your troubles and your estrangement from your children, I do not have the jurisdiction to deal with any of those issues unless the parties specifically wish to sign a new Mediation Arbitration Agreement and appoint me as mediator/arbitrator. [ 25 ] Mr.

Epstein goes on to confirm that he had jurisdiction to deal with the review of the child and spousal support based on the terms of the separation agreement. Although he felt that Dr. Butkowsky had the jurisdiction to deal with the parenting issues, he suggests that the father contact Dr. Butkowsky directly. Mr.

Epstein did not respond to the father’s inquiry as to possible enforcement mechanisms or tell him to seek legal advice. [ 26 ] The father deposes that based on this letter he believed that the mother had to consent to mediation/arbitration and that absent her consent he had no recourse available to him to enforce the dispute resolution clause in the agreement. [ 27 ] Neither party took any further action. [ 28 ] The father continued to pay the mother spousal support in accordance with the terms of the separation agreement.

The father also continued to pay child support based on the set off formula in the separation agreement of only $339.00 per month despite that fact that both children had resided with the mother full time since March 2008. [ 29 ] In September 2010, when Matthew began university and lived away from home, the father arbitrarily reduced child support to $169.50 per month. Although, the father deposes that he paid for all of Matthew’s post-secondary expenses, there appears to be some dispute about this fact.

There is also a dispute about whether the father is still required to pay some child support for Matthew as he returns to the mother’s home on weekends and holidays. [ 30 ] The mother did not seek further financial disclosure or seek increased child support until May 2011, when she retained her current counsel. [ 31 ] Ms. Joe, mother’s counsel, corresponded with the father requesting financial disclosure. Ms.

Joe reminded the father of his requirement to provide financial disclosure in accordance with the terms of the separation agreement and put him on notice that the mother was seeking a variation of child support and the residential

schedule in view of the fact that the children had been residing with the mother on a fulltime basis since March 2008. [ 32 ] In response, the father again provided his

interpretation of the separation agreement, requested the mother provide information as verify there had been a material change in her circumstances, requested the parties attend with Mr. Epstein and that he would only provide the financial information requested at the meeting with Mr. Epstein. [ 33 ] Ms. Joe again corresponded with the father on June 8, 2011 and again asked him to provide the financial information being requested.

The father replied on June 28, 2011 yet again refusing to provide financial disclosure. [ 34 ] The mother commenced the herein Application dated August 11, 2011 requesting the following relief: 1. An order for sole custody of the children; 2. An order that the father pay child support in accordance with the Child Support Guidelines for both children as of April 1, 2008; 3. An order that the father pay the children’s special expenses in proportion to the party’s respective incomes; 4.

An order that the father pay spousal support of $1,479.33 per month as of April 1, 2011; such support to be indexed in accordance with subsections 34 (5) and (6) of the Family Law Act retroactive to October 1, 2006; 5. An order that the father provide her with the disclosure set out in

section 21 of the Child Support Guidelines ; in the event such disclosure in not provided that an annual income of $150,000.00 be imputed to him; 6. An order for an accounting of the RESPs held in trust by the father for the benefit of the children; 7. An order that the father execute any necessary documents to transfer the RESPs to the mother for the benefit of the children; 8. An order that the father provide proof that his life insurance policy is in good standing or if not, purchase a policy in the amount of $500,000.00; 9.

Such further and other relief as this Honourable Court deems fit and just. [ 35 ] The father retained the firm of Goldhart & Associates [2] after being served with the mother’s application. The answer asserts that the court does not have the jurisdiction to grant the relief requested in view of the dispute resolution clause in the parties’ separation agreement. The answer requests that the parties attend at mediation/arbitration with Mr. Epstein pursuant to the terms of the separation agreement to deal with any and all issues relating to child and spousal support and that they attend arbitration with Dr.

Butkowsky to deal with all issues relating to parenting. In the alternative, various grounds of relief are requested. [ 36 ] It is unfortunate that neither counsel requested that the court adjudicate on the preliminary issue of jurisdiction prior to both parties incurring the unnecessary expense of attending the first appearance clerk court and attending and preparing for a case

conference. Either counsel could have used a Form 14B to obtain directions for scheduling a motion to adjudicate the preliminaryjurisdictional issue.

I simply point this out, as there is an outcry as to the length of time and expense of court proceedings and yet, withthe greatest respect to both counsel in this case, counsel do not use the tools available to them in the Family Law Rules to streamline thecourt proceedings. [37] Prior to the case conference, counsel agreed that they would attend the conference on a without prejudice basis to thefather’s position that the court had no jurisdiction to adjudicate the mother’s claims. [38] At the case conference, it was agreed that the father needed to proceed with a Motion to stay the Application before anyfurther steps could be taken.

A timetable for filing of motion materials and factas was set. The motion was argued on January 17, 2012and I reserved my decision. This is my ruling. 2: THE LAW [39] The Arbitration Act, 1991, S.O. 1991, c. 17, limits the court’s involvement in a dispute where the parties have agreed toarbitrate. [40]

Section 6 of the Arbitration Act provides the following limited instances in which a court may interfere with mattersgoverned by the Act: 6. Court intervention limited.— No court shall intervene in matters governed by this Act, except forthe following purposes, in accordance with this Act: 1. To assist the conducting of arbitrations. 2. To ensure that arbitrations are conducted in accordance with arbitration agreements. 3. To prevent unequal or unfair treatment of parties to arbitration agreements. 4. To enforce awards. [41] In Puigbonet-Crawford v. Crawford, , 152 A.C.W.S. (3d) 991, [2006] O.J.

No. 4626, 2006 Cars​well​-Ont 7282 (Ont. S.C.), Justice Peter H. Howden explained the policy reason for the primacy of the arbitration process over the judicialprocess as follows: “Its purpose is to encourage parties to resort to arbitration as a method of resolving their disputes in various matters,including family law matters, and to require them to hold to that course once they have agreed to do so.” [42]

Section 7 of the Arbitration Act provides for a stay after proceedings have been commenced and the limited exceptions inwhich a stay will not be granted by the courts as follows: 7. Stay.—

(1) If a party to an arbitration agreement commences a proceeding in respect of a matter tobe submitted to arbitration under the agreement, the court in which the proceeding is commenced shall,on the motion of another party to the arbitration agreement, stay the proceeding.

(2) Exceptions.— However, the court may refuse to stay the proceeding in any of the following cases: 1. A party entered into the arbitration agreement while under a legal incapacity. 2. The arbitration agreement is invalid. 3. The subject-matter of the dispute is not capable of being the subject of arbitration under Ontariolaw. 4. The motion was brought with undue delay. 5. The matter is a proper one for default or

summary judgment. [43] The onus of establishing that one of the exception under subsection 7(2) of the Arbitration Act applies is on the personclaiming the exception. See Puigbonet-Crawford v. Crawford, supra. [44] The approach taken by courts in determining whether to stay a claim pursuant to subsection 7(1) of the Arbitration Act isas follows: (

a) The court must first interpret the arbitration provision. The court then analyses the claims to determine whetherthey must be decided by an arbitrator under the terms of the agreement as interpreted by the court. (

b) In interpreting an arbitration clause, the court should not make a final determination about its scope. Where it isarguable whether a claim falls within the scope of the arbitration provision that issue should be left to thedetermination of the arbitrator. (

c) If the answer to (

a) is yes, then the court must stay the action and refer the claims to arbitration unless the personwho commenced the court proceeding establishes that one of the exceptions to subsection 7(2) of the ArbitrationAct applies. See Dalimpex Ltd. v. Janicki, , 64 O.R. (3d) 737, 172 O.A.C. 312, 228 D.L.R. (4th) 179, 35 B.L.R. (3d) 41, 35 C.P.C.(5th) 55, [2003] O.J. No. 2094, 2003 Cars​well​Ont 1998 (Ont. C.A.), at para. [21]; Mantini v. Smith Lyons LLP, , 64O.R. (3d) 505, 174 O.A.C. 138, 228 D.L.R. (4th) 214, 34 B.L.R. (3d) 1, [2003] O.J. No. 1831, 2003 Cars​well​Ont 1732 (Ont. C.A.), atpara. [17]. 3: ANALYSIS 3.1: Is the relief claimed within the scope of the dispute resolution provision of the

separation agreement? [45] I find that the relief claimed by the mother in her application falls within the scope of the dispute resolution provision inthe parties’ separation agreement. This finding was not strenuously opposed by the mother’s counsel. [46] The dispute resolution provision of the separation agreement clearly provides that if a dispute arises with respect to theinterpretation or the parties’ obligations under the agreement “all matters shall (emphasis added) be referred to Mr. Philip Epstein, Q.

C.who shall decide such matters acting as a mediator/arbitrator whose decision shall be final and binding upon the parties.” [47] The obligations of the parties pursuant to the separation agreement include the payment of child support, spousal supportand financial disclosure.

The mother’s application claims relief relating to child support, spousal support and disclosure. [48] Although the application also claims new relief such as imputing income to the father, indexing spousal support, these areissues that arise and are encompassed in the support issues that the parties agreed would be submitted to mediation/arbitration. See G.S.v. A. F.S., 2010 ONSC 6609, 95 R.F.L. (6th) 364, [2010] O.J. No. 5493, 2010 Cars​well​Ont 9760 (Ont. S.C.) at paras. [20] and [28]. [49] The application also claims custody of the children.

The dispute resolution provision of the separation agreement furtherprovides that if there is a dispute arising with respect to the parenting issues Dr. Irwin Butkowsky shall arbitrate the issues. However,given that the children are now 19 and 17 years old, neither counsel pursued this issue. [50] I would add that although the case law I was referred to all deal with arbitration clauses, I draw no distinction between astrict arbitration clause and the hybrid model of mediation/arbitration used in the parties’ in their separation agreement. The parties intheir separation agreement agreed to Mr.

Epstein being appointed as a mediator/arbitrator; this model of dispute resolution is utilizedfrequently in family law disputes. Further, both parties were represented by experienced family law counsel when the separationagreement was negotiated and they both agreed to this form of dispute resolution. 3.2: Has the mother met the onus of establishing that this case falls within one ofthe exceptions outlined in subsection 7(2) of the Arbitration Act? [51] The mother did not specifically submit which exception within subsection 7(2) of the Arbitration Act she was relying on.

However the mother’s allegations can be grouped into three main headings namely, lack of compliance with the term of the separationagreement, failure to enforce the mediation/arbitration clause and her lack of financial resources to mediate/arbitrate. [52] Specifically the mother alleges that the father never complied with the terms of the separation agreement in that he: (

a) failed to provide financial disclosure despite requests to do so; (

b) failed to provide post-dated cheques; and (

c) failed to provide proof of his life insurance policy. [53] The mother alleges that the father failed to pursue enforcement of the mediation/arbitration provision of the separationagreement and is now relying on that provision as a means of avoiding payment of additional child support. [54] The mother submits that she does not have the financial means to pay for lawyers, or engage in the mediation/arbitrationprocess. [55] On behalf of the father it is submitted that none of the allegations made by the mother satisfy or establish any of theexceptions outline in subsection 7(2) of the Arbitration Act.

In the alternative, it is submitted that the only exceptions that might applywould be paragraph 7(2)¶2, the arbitration agreement is invalid or paragraph 7(2)¶4, the motion is brought with undue delay. 3.3: Does the lack of compliance render the dispute resolution invalid? [56] It is submitted by father’s counsel that the father’s failure to provide financial disclosure is not an exception undersubsection 7(2) of the Arbitration Act and that if either party has an issue with the other’s disclosure or lack thereof, the issue must beresolved with the assistance of Mr.

Epstein in the context of the mediation/arbitration. [57] The father’s counsel relies on the case of Kay v. Korakianitis, , 40 R.F.L. (6th) 402, [2007] O.J. No.2905, 2007 Cars​well​Ont 4748 (Ont. S.C.) for this proposition of law. In that case, in the context of a motion to disqualify Mr. MalcolmKronby, who was the arbitrator, because he communicated with Mr. Philip Epstein, who was the mediator, the court outlined the bestpractice for seeking financial disclosure.

The court stated that in the two-step procedure that the parties agreed to, the applicant shouldask the mediator to request financial disclosure as a condition precedent to continuing the mediation. If financial disclosure is notprovided before mediation then mediation would be a waste of time and the parties should move on to arbitration.

If the relevantfinancial disclosure is not made by a party voluntarily prior to arbitration then a motion before the arbitrator to compel financialdisclosure is available to the aggrieved party. [58] However in this case, the father was already compelled by the terms of the separation agreement to provide not justannual disclosure of his notice of assessment but further disclosure if requested. Specifically, the mother’s counsel wrote to the father inSeptember 2007 requesting financial documents relating to his business.

Such information was necessary so that the mother and hercounsel could determine if there was a need to even engage in mediation/arbitration. The father either ignored the request or stated thathe would provide it at the meetings with Dr. Butkowsky and Mr. Epstein. [59] The mother then again in March 2009 contacted the father by email to request financial disclosure. By this time the

children were living full time with the mother and the father must have been aware that he was required to pay more child support thatthe original agreement. In May 2011, mother retained counsel to again request financial disclosure. [60] Essentially it is the father’s position, that the mother could have compelled the father to provide financial disclosure or shecould have enforced the provisions of the separation agreement for financial disclosure by requesting a meeting with Mr.

Epstein, as themediator/arbitrator. [61] In reading the father’s responses to the requests for financial disclosure, I am sympathetic to the mother not movingforward with the mediation/arbitration in 2007and 2009 to compel the father’s compliance. It was clear from the father’s diatribe that hewould not co-operate voluntarily and that he intended to re-open all aspects of the separation agreement including the mother’sentitlement to spousal support.

The father’s failure to provide the requested financial disclosure was in my view a breach of the contractand nothing short of a sign of bad faith. [62] However, the question then becomes whether or not the dispute resolution clause can survive a repudiation or breach ofcontract? [63] In determining that a dispute resolution clause survives a potential repudiation or breach of contract, Justice Robert E.Zelinski in Mind Star Toys Inc. v. Samsung Co. (1992), (ON SC), 9 O.R. (3d) 374, 6 C.P.C. (3d) 241, [1992] O.J. No.932, 1992 Cars​well​Ont 425 (Ont. Gen.

Div.) cited with approval the following passages from Heyman v. Darwins Ltd., [1942] A.C. 356,[1942] 1 All E.R. 337, 111 L.J.K.B. 241, 166 L.T. 306, 58 T.L.R. 169 (H.L.), in which Lord MacMillan stated at pages 346-347 [AllE.R.] as follows: Repudiation, then, in the sense of a refusal by one of the parties to a contract to perform his obligationsthereunder, does not itself abrogate the contract. The contract is not rescinded. It obviously cannot berescinded by the action of one of the parties alone.

But, even if the so-called repudiation is acquiescedin or accepted by the other party, that does not end the contract. The wronged party has still his right ofaction for damages under the contract which has been broken, and the contract provides the measure ofthose damages. It is inaccurate to speak in such cases of repudiation of the contract. The contractstands, but one of the parties has declined to fulfill his part of it.

There has been what is called a totalbreach or a breach going to the root of the contract and this relieves the other party of any furtherobligation to perform what he for his part has undertaken. Now, in this state of matters, why should itbe said that the arbitration clause, if the contract contains one, is no longer operative or effective? Apartial breach leaves the arbitration clause effective. Why should a total breach abrogate it?

Therepudiation being not of the contract but of obligations undertaken by one of the parties, why should itimply a repudiation of the arbitration clause so that it can no longer be invoked for the settlement ofdisputes arising in consequence of the repudiation? I do not think that this is the result of what istermed repudiation.

I am, accordingly, of opinion that what is commonly called repudiation or total breach of a contract,whether acquiesced in by the other party or not, does not abrogate the contract, though it may relieve theinjured party of the duty of further fulfilling the obligations which he has by the contract undertaken tothe repudiating party. The contract is not put out of existence, though all further performance of theobligations undertaken by each party in favour of the other may cease.

It survives for the purpose ofmeasuring the claims arising out of the breach, and the arbitration clause survives for determining themode of their settlement. The purposes of the contract have failed, but the arbitration clause is not oneof the purposes of the contract. I venture to think that not enough attention has been directed to the true nature and function of anarbitration clause in a contract. It is quite distinct from the other clauses.

The other clauses set out theobligations which the parties undertake towards each other hinc inde, but the arbitration clause does notimpose on one of the parties an obligation in favour of the other. It embodies the agreement of bothparties that, if any dispute arises with regard to the obligations which the one party has undertaken to theother, such dispute shall be settled by a tribunal of their own constitution.

And there is this verymaterial difference, that whereas in an ordinary contract the obligations of the parties to each othercannot in general be specifically enforced and breach of them results only in damages, the arbitrationclause can be specifically enforced by the machinery of the Arbitration Acts. The appropriate remedyfor breach of the agreement to arbitration is not damages, but its enforcement. [64] The father’s failure to provide the financial disclosure regarding his business and the other disclosure being requested wasin my opinion a fundamental breach of his obligations under the separation agreement.

However, applying the above noted principles,that did not abrogate the separation agreement. The parties agreed in the separation agreement to arbitrate any disputes including theparty’s obligations under the separation agreement. Therefore, if the mother wished to pursue the issue of the father’s lack of financialdisclosure, her recourse was to bring a motion before Mr. Epstein, as an arbitrator, to compel disclosure.

She could have also soughtfinancial compensation as a result of the father’s breach of agreement. [65] The failure of the father to provide post dated cheques or proof of life insurance despite being breaches of the termsseparation agreement are not of such a significance that they would amount to a fundamental breach of the terms of the separationagreement.

However, the mother could have sought compliance by the father of these provisions through the dispute resolution clause inthe separation agreement. [66] For sound policy reasons, family law permits and encourages separating parties to work out their own arrangementsthrough separation agreements which include how to resolve future disputes. In this case, the parties were both represented byexperienced family law counsel when they entered into a comprehensive separation agreement that provided for a contractual obligationto mediation/arbitration.

Unless there are some exceptional circumstances, the parties should be required to abide by that agreement.

3.4: Are the mother’s concerns regarding the cost of mediation/arbitration or anabuse of process by the father an exception to the Arbitration Act? [67] The mother alleges that she does not have the financial means to incur the cost of mediation/arbitration. However, in theseparation agreement the parties negotiated agreed that any future disputes would be resolved through mediation/arbitration as opposedto using the court process. It must be presumed that the issue of the cost of such a process versus the cost of possible further courtproceedings was discussed by the mother with her counsel.

The cost of arbitration is not an exception under subsection 7(2) of theArbitration Act. Further, an arbitrator has the ability to apportion costs and fix costs to deal with any possible financial imbalancebetween the parties. [68] In family law cases, arbitration clauses have been upheld despite objections that a party could not afford to pay thearbitrator’s fees. See Puigbonet-Crawford v. Crawford, supra. [69] The mother submits that the father is simply delaying the resolution of the issues by now insisting on using themediation/arbitration provision of the separation agreement.

In the past whenever the mother or her counsel requested financialdisclosure, the father would delay the process by requesting disclosure from the mother, blame to mother for alienating the children,insisted on attending with Dr. Butkowsky to revisit the parenting arrangements and stating that he wished to terminate his obligation topay spousal support. At the same time, the father refused to voluntarily increase child support despite the change in the residentialarrangements for the children.

The mother submits that as a result she stopped moving forward to insist on compliance with the terms ofthe separation agreement. [70] The mother also submits that she was never satisfied with the agreement reached regarding the parenting arrangements orthe recommendations made at the mediation but she did have the wherewithal to continue with the litigation. [71] Experienced mediators and arbitrators are experienced at dealing with power imbalances and tactics to delay resolution. [72] Therefore, any of the mother’s concerns regarding the cost of mediation/arbitration or any concerns that the father isdelaying the resolution of the issues or unduly increasing the mother’s costs can be dealt with by Mr.

Epstein in the mediation/arbitrationprocess. 3.5: Has the father delayed in enforcement of the mediation/arbitration provisionand therefore rendered the provision invalid? [73] The fact that a motion has been brought with undue delay is the fourth exception under subsection 7(2) of the ArbitrationAct. However, in considering this exception the courts have held that the potential delay is from the time the proceedings commencedand not from the time the dispute arose. See Seguin and Masterson, , 5 R.F.L. (6th) 425, [2004] O.J. No. 2176, [2004]O.T.C. 441, 2004 Cars​well​Ont 2098 (Ont. S.C.); McLaughlin v.

Healthcare Employees’ Pension Plan, 2010 MBQB 98, [2010] M.J. No.146, 2010 Cars​well​Man 180 (Man. Q.B.). [74] In this case, the father immediately retained counsel after being served with the mother’s Application and raised the issueof the court’s jurisdiction in his Answer.

Thereafter, he attended the case conference on a without prejudice basis and with the court’spermission he proceeded with his motion to stay. [75] I find that there was no delay in the father articulating his position regarding the jurisdictional issue in the courtproceedings or bringing his motion to stay. [76] The mother submits that prior to the commencement of these proceedings the father chose not to rely on themediation/arbitration clause throughout the years. [77] In the case of McLaughlin v.

Healthcare Employees’ Pension Plan, supra, the court considered whether the party bringingthe motion to stay “knowingly and willingly” chose not to rely on the mediation/arbitration clause although in that case though the courtdid so in the context after the proceedings had commenced. [78] It is submitted by father’s counsel that the father did not “willingly and knowingly” chose not to rely on themediation/arbitration clause.

It is submitted that to the contrary, in all of his correspondence to the mother or her counsel he hasindicated that it was his intention to rely and enforce the mediation/arbitration provision. [79] It is also submitted that the father relied on Mr. Epstein’s correspondence to him. The father submits that Mr. Epstein didnot advise him of his enforcement options, did not clarify his rights pursuant to the terms of the separation agreement and did not advisehim to seek legal advice.

The father deposes that this led him to believe that if the mother did not agree to submit a financial dispute tomediation/arbitration then he had no recourse. [80] Ms. Kent, father’s counsel, was extremely clear in her submissions that she did not in any way fault Mr. Epstein butsubmitted that based on Mr. Epstein’s correspondence this was the belief of her client. [81] I reject that the father was not aware of his enforcement options.

It is inconceivable that father’s counsel would not haveadvised him of his rights to enforce the terms of the separation agreement or how the mediation/arbitration process worked when theagreement was being negotiated. How else could a party determine if it was more advantageous, cheaper or easier to use themediation/arbitration process than the court process. I also reject that the father would not have known he should seek the advice oflegal counsel if the mother was not complying with the terms of the separation agreement or that he would believe that he could donothing unless the mother agreed.

[82] Although it is correct that the father insisted that he wanted to attend mediation/arbitration in all of his correspondence, thiswas a pre-condition to providing any of his company’s financial information and on condition that the mother provide information tohim.

The father never followed through with arranging or trying to arrange mediation/arbitration and used it as a means to bully andintimidate the mother in not pursuing her request for obtaining financial disclosure or an increase child support. [83] I find that the father was aware of his rights and did lapse in enforcing his rights through the dispute resolution provision inthe separation agreement. [84] However, the separation agreement has a “strict performance” clause. Although this is frequently termed a “boiler plate”clause, nevertheless it must be interpreted in the context of contract law.

The clause provides as follows: The failure of either party to insist, in any one of more instances up on the strict performance of one ormore of the covenants or provisions of this Agreement, will not be and is not evidence of any waiver of,breach of, or relinquishment of for the future of such covenants or provisions, and the same willcontinue and remain in full force and effect. [85] For different reasons, neither of the parties required the other to comply with various provisions of the separationagreement. [86] The father alleges that the mother did not pursued increased child support until now because she waited for their youngestson to turn 17 years old so that he could no longer pursue a joint residential

schedule or deal with the parenting issues.

The motheralleges that the father intimidated that mother so she would not pursue increased child support. [87] Regardless of why each party did not earlier pursue compliance with the provisions of the separation agreement or pursuea change in the terms because of the changes circumstances, the plain meaning of this strict compliance provision is that none of theterms of the separation agreement, including but not limited to the dispute resolution clause can lapse, be waived or be relinquished andthat they always remain in full force and effect. [88] Accordingly, I find that the father cannot be held to have acquiesced or waived his right to now require that the reliefrequested by the mother be subject to the dispute resolution provision in the separation agreement. [89] The mother relied on the case of Davies v.

Davies, 2011 ONSC 6105, 208 A.C.W.S. (3d) 760, [2011] W.D.F.L. 5552,[2011] O.J. No. 4514, 2011 Cars​well​Ont 10947 (Ont. S.C.), wherein the court held that an agreement to mediate/arbitrate wasunenforceable where there is no resolve by the parties to participate in the process. However, that case is clearly distinguishable as in theDavies case the court found the agreement was ambiguous, one of the parties did not have independent legal advice and the did notunderstand the nature and scope of the agreement.

In this case, the mother had legal advice throughout the process and themediation/arbitration clause is clear and unambiguous. [90] Counsel for the mother also relied on the case Armstrong v. Armstrong (2006), 136 A.C.W.S. (3d) 1084, [2005] O.J. No.304, 2005 Cars​well​Ont 323 (Ont. S.C.), reversed in part by Armstrong v. Armstrong, , 215 O.A.C. 193, 32 R.F.L.(6th) 244, [2006] O.J. No. 3823, 2006 Cars​well​Ont 5782 (Ont. C.A.), for the proposition that a separation agreement is rendered invalidwhere the parties have not complied with its terms.

However, that case did not refer to the effect of a mediation/arbitration provision thatrequired any lack of compliance by the parties of their obligations pursuant to the agreement to be submitted throughmediation/arbitration. Further in this case, many provisions of the agreement were complied with. 4: CONCLUSION [91] I therefore find that the mother has not met the onus on her to meet any of the exceptions to subsection 7(2) of theArbitration Act. [92] I have considered whether or not the separation agreement could be set aside pursuant to

section 56 of the Family Law Act,R.S.O. 1990, c. F-3. For example, it may have been arguable that the provision regarding child support no longer complies with theChild Support Guidelines. [93] On behalf of the mother, in submissions it was argued that perhaps the agreement could be set aside as not being in thebest interests of the children or for non compliance.

However, the mother did not claim this relief and as a matter of procedural fairness,it is my view that it would be inappropriate to permit the mother to argue this ground of relief when it was not claimed in her applicationor raised in her factum. [94] I have also considered that there is no urgency in this matter. Although I accept that the father has paid significantly lesschild support than he should have paid since March 2008 when the children began to reside full time with the mother, the mother hadbeen able to manage financially.

Any claim for a retroactive readjustment to child support can be dealt with through themediation/arbitration process. [95] Counselfor the father advised the court that she had contacted Mr. Epstein’s office and that he was willing to act asmediator/arbitrator and would be able to commence the mediation/arbitration process in February. [96] I wish to be clear that I do not condone the father’s actions in not voluntarily providing financial disclosure or his refusal tosimply voluntarily increase his child support payments once the children began to live with the mother on a full time basis.

However,once parties have agreed to a formal contractual process to resolve their disputes, there is an obligation on the parties to abide by theiragreement. [97] Order as follows:

1. The respondent’s motion is granted, the application is stayed pending the mediation/arbitration by Mr. Philip Epstein who has agreed to act on all financial issues including the issue of financial disclosure. 2. The return date of March 7, 2012 is vacated unless the mediation/arbitration is not proceeding. [ 98 ] If the parties cannot agree on costs, the respondent shall submit brief submissions on costs, with a bill of costs within two weeks and the applicant will submit her response within the next two weeks. All submissions to be sent to the judicial secretary. __________________________ Justice Roselyn Zisman DATE: 31 January 2012