Hudema v. Moore

2021 BCCA 482 Hudema v. Moore

COURT OF APPEAL FOR BRITISH COLUMBIA Citation: Hudema v. Moore, 2021 BCCA 482 Date: 20211217 Docket: CA47449 Between: Jade Colin Alexander Hudema Appellant (Claimant) And Danièle Marie Bernadette Moore Respondent (Respondent) Before: The Honourable Madam Justice MacKenzie The Honourable Madam Justice Fenlon The Honourable Mr. Justice Grauer On appeal from: An order of the Supreme Court of British Columbia, dated March 31, 2021 (Hudema v. Moore, 2021 BCSC 587, Vancouver Docket E191473). Oral Reasons for Judgment Counsel for the Appellant: M.C. Ohama-Darcus J. Riddle Counsel for the Respondent: J.M.W. Cudmore A.L. Colpitts Place and Date of Hearing: Vancouver, British Columbia December 17, 2021 Place and Date of Judgment: Vancouver, British Columbia December 17, 2021 Summary: Following a two-day summary trial, Mr. Hudema appeals from an order dismissing his family law claim for division of property. The summary trial determined the enforceability of a domestic contract waiving entitlement to property division. The judge assumed, without deciding, that the parties were spouses and applied s. 93 of the FLA.to determine whether the agreement should be set aside. She concluded the agreement was enforceable and dismissed the claim for property division. The appellant says the judge erred in proceeding by summary trial. Held: Appeal dismissed. The appellant has identified no reviewable

error. The decision to proceed by summary trial is discretionary and entitled to deference. The decision to resolve the discrete issue of enforceability of the agreement was a proper exercise of discretion, consistent with the objectives of summary trials, the principle of proportionality, and the rule of law. MACKENZIE J.A.: Introduction [1] This appeal arises from the family law claim for division of property brought by the appellant, Jade Hudema. The respondent, Danièle Moore, applied for its dismissal by summary trial based on an agreement stating the parties were not in a marriage-like relationship and would not make property claims against each other (the "Agreement"). The summary trial judge allowed Ms. Moore's application and dismissed the claim. [2] Mr. Hudema asserts the judge erred in analyzing the claim by "assuming, without deciding" that the parties were "spouses" under the Family Law Act, S.B.C. 2011, c. 25 [FLA]--which Ms. Moore disputed. The judge applied s. 93 of the FLA and concluded the Agreement was enforceable. As a result, Mr. Hudema was not entitled to a division of family property. [3] Mr. Hudema appeals on the basis that his claim was not suitable for summary trial. He asks this Court to remit the matter for a 10-day trial. [4] Notwithstanding the able submissions of his counsel, I conclude Mr. Hudema has not identified any reviewable error. I would

dismiss the appeal. Background [5] The parties met in 2015, shortly after Ms. Moore had separated from her husband of 23 years. [6] The parties had a sexual relationship and Mr. Hudema moved into the basement suite of Ms. Moore's home, which she later came to own through her divorce (the "Clovelley Walk House"). The parties both lived in the Clovelley Walk House for approximately three years, beginning in March or April 2016. [7] In May 2017, Ms. Moore entered a separation agreement with her former husband. She obtained a final order for divorce on January 18, 2018. [8] The parties continued to live in the Clovelley Walk House until about April 2019. The Agreement [9] On January 11, 2018, the parties signed the Agreement mutually waiving entitlement to support and division of property. The Agreement is dated for reference November 27, 2017. [10] Clauses 3 and 4 of the Agreement provide: 3. Danièle and Jade each confirm that: (1) we understand that persons who live together and cohabit in a marriage-like relationship are considered to be spouses (or common law partners) for many purposes under both provincial and federal legislation, (2) although we have been living in the same residence, and may well continue to do so, we do not consider either that we are cohabiting or that our relationship is marriage-like, (3) we consider ourselves to be companions who spend time together

because we enjoy each other's company, but our companionship does not represent a life-long commitment to each other, nor a merging of our property or our economic interests, (4) in continuing our relationship, each of us is relying on the other not to make any claim against the property of the other or for support from the other based on being a spouse or common law partner: (a) if our relationship ends and we cease to be companions, and (b) on the death of either of us.

4. At the termination of Jade's tenancy, and in the event that the dating relationship between Danièle and Jade ends: (i) each of Danièle and Jade will keep their own property free of claims by the other; (ii) neither will seek support from the other; and (iii) neither will seek a share in the estate of the other. [11] In Clause 6, each party acknowledges they had an adequate opportunity to obtain legal advice and signed the Agreement voluntarily and without undue influence or coercion. [12] Ms. Moore obtained a certificate of independent legal advice, Mr. Hudema did not. Instead, he made the following notation on the Agreement: "Note: no solicitor involved after receiving solicitor advice." Statutory Provisions [13] Spousal status under the FLA is determined pursuant to s. 3(1): 3 (1) A person is a spouse for the purposes of this Act if the person (a) is married to another person, or (b) has lived with another person in a marriage-like relationship, and (i) has done so for a continuous period of at least 2 years, or (ii) except in Parts 5 [Property Division] and 6 [Pension Division], has a child with the other person. (2) A spouse includes a former spouse. [14] Whether parties have lived together in a marriage-like relationship pursuant to s. 3(1)(b) is a fact-specific inquiry that must be made on a "holistic" basis, having regard to all the evidence: Weber v. Leclerc, 2015

BCCA 492 at para. 22, leave to appeal ref'd [2016] S.C.C.A. No. 19, citing Austin v. Goerz, 2007 BCCA 586. [15] Agreements between spouses regarding property division are governed by s. 92 of the FLA, which provides: 92 Despite any provision of this Part but subject to section 93 [setting aside agreements respecting property division], spouses may make agreements respecting the division of property and debt, including agreements to do one or more of the following: (a) divide family property or family debt, or both, and do so equally or unequally; (b) include as family property or family debt items of property or debt that would not otherwise be included; (c) exclude as family property or family debt items of property or debt that would otherwise be included; (d) value family property or family debt differently than it would be valued under section 87 [valuing family property and family debt]. [16] Such an agreement may be set aside pursuant to s. 93, which provides: 93 (1) This section applies if spouses have a written agreement respecting division of property and debt, with the signature of each spouse witnessed by at least one other person. (2) For the purposes of subsection (1), the same person may witness each signature. (3) On application by a spouse, the Supreme Court may set aside or replace with an order made under this Part all or part of an agreement described in

subsection (1) only if satisfied that one or more of the following circumstances existed when the parties entered into the agreement: (a) a spouse failed to disclose significant property or debts, or other information relevant to the negotiation of the agreement; (b) a spouse took improper advantage of the other spouse's vulnerability, including the other spouse's ignorance, need or distress; (c) a spouse did not understand the nature or consequences of the agreement; (d) other circumstances that would, under the common law, cause all or part of a contract to be voidable. (4) The Supreme Court may decline to act under subsection (3) if, on consideration of all of the evidence, the Supreme Court would not replace the agreement with an order that is substantially different from the terms set out in the agreement. (5) Despite subsection (3), the Supreme Court may set aside or replace with an order made under this Part all or part of an agreement if satisfied that none of the circumstances described in that subsection existed when the parties entered into the agreement but that the agreement is significantly unfair on consideration of the following: (a) the length of time that has passed since the agreement was made; (b) the intention of the spouses, in making the agreement, to achieve certainty; (c) the degree to which the spouses relied on the terms of the agreement. [17] Section

93 provides a two-pronged approach for assessing enforceability under which courts consider both formation and substantive fairness of an agreement. This is a codification of the common law approach in Miglin v. Miglin, [2003] 1 S.C.R. 303 at 341. [18] In effect, there is a lower bar to set aside contracts between spouses, as described in Miglin at 346-347 and Rick v. Brandsema, 2009 SCC 10 at paras. 35, 47. [19] Summary trials are available pursuant to Rule 11-3 of the Supreme Court Family Rules [SCFR] to promote the just and efficient resolution of disputes. The same procedure is available under Rule 9-7 of the Supreme Court Civil Rules [SCCR]. A summary trial may proceed where the court is able, on the basis of the limited record, to answer the relevant questions of fact and law. Rule 11-3 includes the following: (15) On the hearing of a summary trial application, the court may (a) grant judgment in favour of any party, either on an issue or generally, unless (i) the court is unable, on the whole of the evidence before the court on the application, to find the facts necessary to decide the issues of fact or law, or (ii) the court is of the opinion that it would be unjust to decide the issues on the application, (b) impose terms respecting enforcement of the judgment, including a stay of execution, and (c) award costs. Mr. Hudema's Family Law Claim [20] Mr. Hudema brought his

family law claim on June 3, 2019. He argued the parties had been living in a marriage-like relationship since March 2016. Mr. Hudema sought equal division of family property and debt under the FLA, including equal division of the Clovelley Walk House. Mr. Hudema did not claim spousal support. [21] Mr. Hudema pleaded the Agreement was void and non-binding. He pleaded that he entered the Agreement as a result of duress, misrepresentations, and undue influence. Mr. Hudema alleged Ms. Moore coerced him to enter into the Agreement and without consideration, threatened him, and said the Agreement was a non-binding document that would only be used in divorce proceedings with her ex-husband. [22] In her response, Ms. Moore pleaded the parties were not spouses, had not lived together in a marriage-like relationship, and Mr. Hudema had signed the Agreement after receiving legal advice and without coercion. [23] By counterclaim filed January 22, 2020, Ms. Moore sought a declaration that the Agreement was binding. Ms. Moore maintained her primary position that the parties never lived in a marriage-like relationship and were not spouses under the FLA. Ms. Moore's Application for Summary Trial [24] On January 18, 2021, Ms. Moore applied for summary trial, seeking orders: (1) dismissing Mr. Hudema's claim in its entirety; (2) awarding her actual legal costs of the proceeding or, in the

alternative, special costs; and (3) granting judgment against Mr. Hudema for $8,500 in outstanding rent and vehicle storage fees. [25] Ms. Moore reiterated her position that the parties were not spouses. [26] Mr. Hudema, then self-represented, opposed the relief sought and argued the matter was not suitable for summary trial. He also maintained that the parties began living in a marriage-like relationship from March or April 2016 and the Agreement should be set aside. The Summary Trial and Reasons of the Judge [27] Ms. Moore's application was heard February 4 and 5, 2021. The focus of the summary trial was the enforceability of the Agreement. [28] Mr. Hudema deposed that Ms. Moore's counsel sent him the Agreement in late November 2017, he was confused by the Agreement, and Ms. Moore told him the Agreement was for the purpose of finalizing divorce proceedings with her former husband. Mr. Hudema said he signed the Agreement under pressure, but added the following notation to his copy, with Ms. Moore's consent: "this is in no way to apply to Jade and Danièle's relationship, it is strictly for the purposes of her divorce with Matthew". [29] Ms. Moore denied Mr. Hudema's version of events. Ms. Moore's friend, Dr. Castellotti, also tendered evidence contradicting Mr. Hudema's account based on her observations of January 11, 2018, when several copies of the Agreement were signed in

her presence. Suitability for Summary Trial [30] The judge found Mr. Hudema's claim was suitable for summary trial. She accepted the trial could be limited to the question of the enforceability of the Agreement, and that it was unnecessary to determine whether the parties had lived in a marriage-like relationship. [31] The judge said "[t]he issue at the heart of this summary trial application is simply whether there is any basis to set aside or vary the Agreement": at para.

69. She found this question was distinct from whether the parties were "spouses" for the purposes of the FLA--a question that could not be resolved by way of summary trial: at para.

68. Applicable Legal Framework [32] The parties did not agree on the legal framework for determining enforceability of the Agreement. Mr. Hudema argued that the judge should apply the framework for setting aside domestic contracts in s. 93 of the FLA: at para.

73. In contrast, Ms. Moore argued that s. 93 only applied to contracts between spouses and, as a result, the Agreement could only be set aside on the basis of the more stringent common law contractual defences: at paras. 76-77. [33] The judge adopted Mr. Hudema's approach and applied s. 93 of the FLA to assess whether the Agreement should be set aside. In doing so, the judge chose to "assume, without deciding the point that the Agreement entered into by the parties is an Agreement between spouses within the meaning of s. 93": at para.

88. This allowed Mr. Hudema to benefit from the less stringent test for setting aside the Agreement. The assumption favoured him over Ms. Moore. [34] The balance of the decision is premised on this assumption. Enforceability of the Agreement under the FLA [35] The judge found there was no basis to set aside the Agreement. [36] She preferred Ms. Moore's evidence on several points, finding Mr. Hudema's evidence to be implausible and inconsistent with other objective evidence. [37] The judge did not accept that Ms. Moore needed the Agreement for divorce proceedings with her ex-husband: at paras. 93-94. The judge also found there was no copy of the Agreement with the notation Mr. Hudema had described: at paras. 95-97. The judge did not accept that Mr. Hudema was pressured into signing the Agreement as a result of verbal and physical abuse: at para.

98. Finally, the judge rejected Mr. Hudema's argument that Ms. Moore had concealed assets which would have impacted his signing of the Agreement: at para. 99. [38] Based on these findings, the judge concluded there was no procedural unfairness that would justify setting aside the Agreement: the Agreement was voluntary, Mr. Hudema was informed and had the opportunity to consult counsel, and Ms. Moore did not make any misrepresentations: at para. 100. [39] The judge also concluded the Agreement should not be set aside on the basis that its terms were unfair, considering the factors in s. 93(5): at para.

109. The parties' intentions and financial circumstances had not changed drastically and only one year had passed since they signed the Agreement: at para. 103. [40] The judge rejected Mr. Hudema's claim for compensation for his investments in the relationship: at paras. 104-107. Mr. Hudema did not produce evidence of investments, other than approximately $1,000 of household expenses. The judge noted his claim for compensation had "dubious factual merit" and, in any event, was not recoverable under the property division provisions of the FLA: at para.

107. On the existing record, the judge was unable to resolve Ms. Moore's claim for outstanding rent and vehicle storage fees. She dismissed this claim with Ms. Moore's agreement: at para. 114. [41] In the result, the judge dismissed Mr. Hudema's family claim and allowed Ms. Moore's counterclaim for costs on an indemnity basis, as provided for in Clause 5 of the Agreement: at paras. 110, 118. Issues on Appeal: [42] Mr. Hudema appeals on the basis that his claim was not suitable for disposition by summary trial. He identifies three related sub-issues: (a) Did the judge err in finding the enforceability of the Agreement was a discrete issue, independent of spousal status under the FLA? (b) Did the judge err in proceeding by summary trial on the basis of an assumed fact? (c) Did the judge otherwise err in proceeding by summary trial in light of conflicting evidence? [43] On the analysis below, these sub-issues need not be separately addressed. Discussion [44] A decision as to a matter's suitability for summary trial is discretionary and entitled to deference, absent an error of law or principle: Hryniak v. Mauldin, 2014 SCC 7 at paras. 81-83; Gichuru v. Pallai, 2013 BCCA 60 at para.

34. Appellate interference is precluded unless the discretion has been wrongly exercised: Morin v. 0865580 B.C. Ltd., 2015 BCCA 502 at para. 46. [45] In my view, Mr. Hudema has identified no reviewable error. [46] Mr. Hudema sought property division under the FLA, which is only available where the parties are "spouses". If the parties are not spouses, Mr. Hudema's claim must fail. If the parties are spouses, but the Agreement is enforceable, Mr. Hudema's claim must also fail. In other words, if the Agreement were enforceable, there is no property division, whether the parties are spouses or not. The assumption that the parties are spouses, made for the purpose of resolving a discrete issue of enforceability of the Agreement, caused no prejudice to Mr. Hudema. It was not unjust. [47] An object of the SCFR is to secure the just, speedy and inexpensive determination of cases on their merits: SCFR Rule 1-3(1)(b). The SCCR have the same objective: SCCR Rule 1-3(1). This is achieved by conducting proceedings that are proportionate to the importance of the issues and the complexity of the matter: SCFR Rule 1-3(2). The civil rules direct consideration of the amount in issue when assessing proportionality of a proceeding: SCCR Rule 1-3(2)(c). [48] Section 8 of the Interpretation Act, R.S.B.C. 1996, c. 238, provides: 8. Every enactment must be construed as being remedial, and must be

given such fair, large and liberal construction and interpretation as best ensures the attainment of its objects. [49] The objectives of summary proceedings include the proportionate and efficient disposition of disputes: Morin at paras. 48-49. As the Supreme Court of Canada has explained, "if the process is disproportionate to the nature of the dispute and the interests involved, then it will not achieve a fair and just result": Hryniak at para. 29. [50] The Supreme Court of Canada has taken a principled approach to summary proceedings to advance the underlying values of timely, affordable, and fair access to justice: Hryniak at paras. 21, 23. Reading summary proceeding rules too narrowly can prevent the fair adjudication of disputes, ultimately compromising the rule of law: Hryniak at paras. 1, 4, 5. [51] To proceed by summary trial a judge must be able to find the facts necessary to resolve the issues, and must be of the opinion that it is not unjust to proceed summarily: Brissette v. Cactus Club Cabaret Ltd., 2017 BCCA 200 at para.

26. Proportionality is relevant to both considerations: Brissette at para. 26. [52] Relying on the s. 93 FLA framework to assess enforceability of the Agreement required an assumption in favour of Mr. Hudema. However, the judge made no assumptions within the s. 93 analysis itself. The judge was confident that she could find the necessary facts without a trial. She carefully explained her factual findings based on the available evidence and determined it was just to proceed by summary trial: at paras. 69-71. [53] Summary trials can be used to resolve only some issues in a dispute: Ferrer v. 589557 B.C. Ltd., 2020 BCCA 83 at para. 27, citing Greater Vancouver Water District v. Bilfinger Berger AG, 2015 BCSC 485 at para.

110. It was open to the judge to proceed by summary trial to answer the question of enforceability of the Agreement, which had the potential to dispose of the entire FLA claim. [54] An application for summary trial should not be granted if it would create confusion or give rise to inconsistent findings within a dispute: Hryniak at para. 60; Ferrer at para.

27. In this case, there was no possibility that a conclusion on the enforceability of the Agreement would be inconsistent with other parts of the proceeding. Whether the parties are "spouses," as defined in s. 3 of the FLA, is distinct from the existence or enforceability of a marriage contract. [55] In this case, the resolution of a discrete issue--enforceability of the Agreement--disposed of the FLA claim. It would have been disproportionate and unjust for the parties and the court to undergo ten days of conventional trial to determine an issue that may not be necessary to dispose of the claim: at para. 67; Hryniak at para. 29. [56] It is clear from the evidence in the record that the judge did consider the full context and nature of the relationship. She had the benefit of Mr. Hudema's numerous affidavits describing the relationship from its outset. The required s. 93 analysis is that which is set out in the section itself. In this case, the judge had extensive evidence that permitted her to conduct the analysis under s. 93. [57] The third sub-issue raised by the appellant is properly characterized as an attack on the judge's credibility findings. The appellant is attempting to frame findings of credibility as errors of law. The judge had ample evidence on which to make her findings of credibility. The appellant has identified no palpable and overriding error with those

findings. [58] The overarching issue is whether the judge properly exercised her discretion to proceed by summary trial. [59] In my view, the judge properly exercised her discretion. She put it succinctly in these words: [108] The best outcome that Mr. Hudema could hope for in this proceeding is a finding that he and Ms. Moore were spouses, and that the Agreement should be set aside. That would entitle Mr. Hudema to an equal division of property owned by Ms. Moore as of the date of separation that is not excluded property. For the reasons I have already explained, even if he achieved this best outcome, Mr. Hudema is unlikely to receive a significant sum of money given the appraisal evidence. [60] Mr. Hudema has identified no error in the judge's exercise of discretion, and there is no basis for this Court to interfere with her decision. Mr. Hudema's insistence on a 10-day trial is inconsistent with the principles and objectives of summary trials. Mr. Hudema's Claim for Unjust Enrichment [61] Mr. Hudema's claim for unjust enrichment is not before this Court. Mr. Hudema referred to unjust enrichment in his response to Ms. Moore's application for summary trial. On appeal, Mr. Hudema argues that his family law claim, which sought "legal and equitable tracing and accounting" as alternative relief, is a properly constituted claim for unjust enrichment. I do not agree. Neither the claim nor the material facts were properly pleaded. Disposition [62] In the result, I would dismiss the appeal. [63] FENLON J.A.: I agree. [64] GRAUER J.A.: I agree. [65] MACKENZIE J.A.: The appeal is dismissed. "The Honourable Madam Justice MacKenzie"