Fraser v Fraser, 2017 ONSC 3774

Fraser v. Fraser, 2017 ONSC 3774

Court File and Parties

Court File No.: FD1080/16 Date: 2017/06/19 Superior Court of Justice - Ontario

Re: Natasha Tara Fraser, Applicant And: Douglas Dale Fraser, Respondent

Before: Justice I.F. Leach

Counsel: Hillary Houston, for the Applicant William R. Clayton, for the Respondent

Heard: June 16, 2017

Endorsement

1Before me are a motion by the Respondent, and a cross-motion by the Applicant, both of which seek various forms of interim relief.

2The two motions have somewhat of an extended history. By way of overview:

• The parties separated on or about July 18, 2016, after 12 years of marriage. They nevertheless continued to live in the matrimonial home, along with four children of the marriage, (now ages 17, 12, 10 and 7), for a time. That situation came to an end when the Applicant left the matrimonial home on September 2, 2016, taking the four children with her.
• The Applicant, (who works primarily for the federal government, albeit with recent efforts to earn supplemental income as an event planner), was first off the mark with formal litigation, commencing her application on the day she and the children left the matrimonial home.
• The Respondent, (a paediatrician who works primarily at a London hospital, albeit with recent efforts to earn supplemental income through work with ORNGE), was first off the mark in terms of bringing a motion. In particular, he brought his initial motion for interim relief returnable on September 28, 2016. Initially, interim relief requested by the Respondent was focused on return of the children, including desired residence, care, access and travel arrangements.
• The Applicant responded with a cross-motion also returnable on September 28, 2016. Initially, interim relief requested by the Applicant addressed various matters relating to the children, (e.g., desired residence, access, transportation, counselling and a desired referral to the Office of the Children’s Lawyer), as well as retroactive child support, (including “table” support in accordance with the federal Child Support Guidelines as well as “section 7” contributions to extraordinary child-related expenses), retroactive spousal support, and various disclosure and proprietary orders. The latter included requests for various orders relating to the jointly owned matrimonial home, (e.g., to obtain exclusive possession of certain specified items located the home, facilitate partition and sale of the home, and have resulting net proceeds from sale of the home payable to the Respondent preserved in trust to secure the Applicant’s claim to an equalization payment), as well as a more general interim order restraining the Respondent from “depleting, charging or diminishing” his net family property.
• At the initial return of the parties’ respective motions, on September 28, 2016, interim orders were made that included the granting of interim joint custody, with associated terms relating to the children’s schooling, medical treatment and extracurricular activities.
• The litigation thereafter progressed through the mandated conferencing and scheduling procedures, (interspersed with production and disclosure orders, further interim orders on consent, as well as ongoing negotiation), resulting in the matter now being scheduled for trial in November of 2017. In the meantime, a special appointment hearing of the parties’ respective motions for interim relief was adjourned repeatedly, up until the scheduled hearing before me on June 16, 2017.
• Along the way, the parties filed voluminous material, (now expanded into a seven volume continuous record, supplemented by successive facta and books of authorities), and amended their respective notices of motion to request various other forms of interim relief. For example:
  • The Respondent sought confirmation and continuation of interim joint custody, the setting of “week about” residential care arrangements and a holiday access schedule, as well as interim orders addressing child transportation rights and responsibilities, and the setting of child support and spousal support without any arrears. In relation to property, the Respondent requested interim orders permitting equal distribution of net sale proceeds to be realized from the anticipated sale of the jointly owned matrimonial home, (subject to the continued holding of $100,000 in trust pending completion of the litigation); permitting distribution of all net proceeds from the sale of a cottage to the Respondent alone; and directing the Applicant to assume all formal responsibility in relation to a Honda Odyssey vehicle leased in the Respondent’s name.
  • The Applicant sought interim orders granting her interim sole custody, (with the children residing primarily in her care), different arrangements governing access between the children and the Respondent, different child transportation arrangements, and more generous child and spousal support, (including both being awarded on a retroactive basis). In addition to various orders for further production and disclosure, the Applicant also sought various forms of further specified proprietary relief, including an order directing the Respondent’s payment of half the sale proceeds realized on the sale of a boat said to be jointly owned by the parties, and orders requiring preservation of net sale proceeds from the matrimonial home and cottage otherwise payable to the Respondent, (apart from specified allowances for payment therefrom to address capital gains tax on the cottage sale and retroactive support obligations alleged by the Applicant), to secure the Applicant’s claims for equalization and support. The Applicant also seeks leave to amend her pleadings, in order to assert a trust claim in relation to at least part of the net sale proceeds from the cottage property sale.
• Shortly before the hearing before me, many of the accumulated issues raised by the parties were resolved by way of agreement. In particular, custody and access issues were resolved on a final basis by way of Partial Minutes of Settlement signed and filed the morning of the hearing before me, (on June 16, 2016), and interim child and spousal support issues were resolved by the Respondent’s acceptance, (also on the morning of the hearing before me), of an offer to settle made by the Applicant. The settlement arrangements generally contemplate that residence and care of the three younger children will be shared equally between the parties, while the oldest child continues to reside primarily with the Applicant. As indicated in my handwritten endorsement, orders are to go accordingly, in accordance with the parties’ documented final and interim agreements.
• The parties nevertheless were unable to address the remaining interim issues addressed below.

3There is a degree of urgency to the parties’ request for court resolution of at least some of the remaining interim issues.

4The Respondent in particular seeks early direction of the manner in which net sale proceeds from sale of the cottage and sale of the matrimonial home may be distributed, as he wishes to expedite payment of substantial debt owed to the Canada Revenue Agency, which is subject to very high rates of compounding interest. The Respondent also hopes to use those net sale proceeds to facilitate his purchase of a new home for himself and the three younger children, in respect of which he already has committed to an agreement of purchase and sale scheduled to close on July 14, 2017; i.e., in advance of the contemplated sale of the matrimonial home, pursuant to a separate agreement of purchase and sale now scheduled for completion on August 1, 2017.

5I agree with the Applicant that the latter time pressures, in particular, would seem to be of the Respondent’s own making.

6Having said that, I think the Applicant also understandably requires resolution of the remaining interim issues as soon as possible; e.g., as her material indicates that she herself has been obliged to deplete assets and accumulate debt while waiting for progress on her claims and realization of her interest in the matrimonial home.

7In the circumstances, and with a view to providing the parties with an early decision, I will not be reviewing, at length, all of the very substantial evidence filed by the parties in relation to the remaining issues. It nevertheless should be emphasized that I had an opportunity before and after the hearing to review, at length and in detail, the evidence, authorities and written submissions tendered by the parties. My reference below to certain more relevant considerations, without mention of others, should not suggest otherwise.

Amendment of Pleadings

8I think it appropriate to start with the Applicant’s request for leave to amend her application.

9In that regard, the Applicant seeks, in her amended notice of motion, leave “to amend her pleadings to contain a trust claim with respect to the property known as 1080 Pine Needle Point Road, Gravenhurst, Ontario”.

10In order to understand the nature and context of that request, some background is required.

11According to uncontradicted evidence before me:

• The Gravenhurst property in question is a cottage property located in the Muskokas.
• The Respondent purchased the cottage property on May 21, 2009. Title to the property was placed in the Respondent’s name alone. The purchase was made with funding assistance provided through a mortgage of $525,000, owed by the Respondent alone to a chartered bank, and registered against title to the cottage property on the same date as the Respondent’s purchase.
• From the time of the cottage property’s acquisition to the time of its disposition, the associated mortgage debt was serviced by the Respondent alone. However, during the course of the parties’ relationship, both parties and their children attended the cottage property on a regular basis.
• Following the parties’ separation, the Respondent made arrangements to sell the cottage property. In particular, it was listed for sale in or about May of 2017, and the Applicant was advised through counsel of the Respondent’s intentions. The Applicant also was asked to sign any necessary consent to the transaction; e.g., in case use of the property exposed it to characterization as a second matrimonial home.
• The cottage property was sold on June 12, 2017, (just four days before the hearing before me), for $769,000, representing a capital gain of approximately $75,000 for the Respondent between the time of purchase and the time of sale.
• Pursuant to a mutual understanding by the parties and their respective counsel, the sale proceeds of the cottage property have been or are being used to pay the outstanding balance of the associated purchase mortgage, mortgage penalties, property tax arrears relating to the cottage property, a line of credit secured by the cottage property, the associated real estate commission, and legal expenses incurred in relation to the sale. The remaining net sale proceeds, (approximately $328,000), are being held in trust by the Respondent’s real estate solicitor, in Port Carling, pending further court orders or the agreement of the parties.
• As the cottage property was not the Respondent’s principal residence, (a status held by the parties’ matrimonial home in London), the Respondent also will be obliged to pay capital gains tax in relation to his capital gain. In particular, approximately half the capital gain ($37,500) will have to be included in the Respondent’s income and, given the relatively high level of the Respondent’s other income, he expects to pay approximately half of that amount, ($18,000), in capital gains tax.

12The Respondent has sworn that he needs the remaining net sale proceeds from the cottage property to pay down his debts, including an agreed debt of $236,171.00 owed to the Canada Revenue Agency for tax arrears, interest and additional interest accrued pending payment of tax arrears. That burden stems from the Respondent’s voluntary revelation to the Canada Revenue Agency, following separation, that insufficient income had been declared and insufficient tax had been paid, by the Respondent, for the tax filing years 2009 through 2015 inclusive.

13In his amended notice of motion, filed on or about June 2, 2017, the Respondent accordingly seeks an order, (addressed in more detail below), permitting the net sale proceeds from the cottage property, currently being held in trust, to be distributed to the Respondent.

14In her amended notice of motion, filed on or about June 8, 2017, the Applicant seeks orders, (also addressed in more detail below), charging the net sale proceeds from the cottage property and other assets of the Respondent as security for various claims by the Applicant, and restraining the Respondent from depleting, charging or diminishing all of those assets, (including the net sale proceeds from the cottage property). The Applicant nevertheless also indicates that she is agreeable to the Respondent’s capital gain tax liability, stemming from sale of the cottage property, to be paid from its net sale proceeds.

15With the above in mind, I return to the Applicant’s request for leave to amend her pleadings.

16Information supplied by the Applicant in that regard is, on any objective view I think, somewhat threadbare. It seems limited to the following:

• In a single paragraph of her most recent affidavit, (sworn June 8, 2017), the Applicant swears to the following: “I have debt on the joint line of credit incurred to pay for the cottage renovation. That debt should be paid from the net sale proceeds of sale of the cottage. The cottage was renovated, thus increasing its value, with my money. I am seeking to amend my pleadings to make a trust claim with respect to the cottage.”
• In a single paragraph of the most recent factum filed by Applicant counsel, reference is made to the above paragraph of the Applicant’s affidavit, with the following written submission: “The renovation of the cottage was funded by a joint line of credit secured on the matrimonial home. The property’s value was increased with the Applicant’s money. The Applicant seeks leave to amend her pleadings to include a trust claim with respect to the cottage.”
• As noted above, the Applicant’s amended notice of motion, filed June 8, 2017, seeks an order “granting leave for the Applicant to amend her pleadings to contain a trust claim with respect to the property municipally known as 1080 Pine Needle Point Road, Gravenhurst, Ontario”.

17The Applicant and her counsel did not supply the court with any draft of an amended application, clarifying the precise nature of the contemplated amendments.

18However, the nature of the contemplated trust claim would seem to be based on allegations of unjust enrichment and constructive trust, (e.g., rather than express trust or resulting trust).

19In particular, reading the limited indications generously, it seems that the Applicant intends to assert:

• that there was a relevant enrichment enjoyed by the Respondent, (i.e., increased value of the cottage through renovations);
• that there was a corresponding deprivation of the Applicant, (i.e., increased joint indebtedness of the Applicant, resulting from cottage renovations being funded by the line of credit secured by the jointly owned matrimonial home);
• that there was no juristic reason for the enrichment and corresponding deprivation, thereby establishing “unjust enrichment”; and
• that an appropriate remedy for such unjust enrichment would be the finding of a constructive trust, granting the Applicant a proprietary interest in the cottage property equal to the amount of her effective financial contribution to the cottage renovations, as well as any proportionate increases in the cottage’s value that may have occurred after the making of such financial contributions.

20Having said that, it seems self-evident that a proprietary remedy of constructive trust, in relation to the cottage property itself, is no longer available. Again, with the knowledge and consent of the Applicant and her counsel, the cottage itself now has been sold by the Respondent to third parties.

21In the circumstances, it seems to me that what the Applicant really contemplates now is the assertion of a claim for unjust enrichment, and a proprietary tracing remedy in relation to some portion of the net proceeds of sale realized by disposition of the cottage property.

22In other words, it seems to me that the Applicant inherently now is confined to a monetary claim as far as the cottage property is concerned, (based on the alleged existence of what should have been a constructive trust ordered in relation to the cottage property, the disposition of which has resulting in identifiable funds into which the relevant property has been converted), but a monetary claim that nevertheless may have proprietary aspects. In particular, the Applicant would go beyond assertion of a mere unliquidated debt to assert that a portion of the cottage sale proceeds themselves actually belong to the Applicant rather than the Respondent. Such a finding would give the Applicant a superior claim to such funds vis-à-vis other creditors of the Respondent.

23In the family law context, pleading amendments are governed by Rule 11 of the Family Law Rules. That rule allows for amendments to an application without the court’s permission in certain prescribed circumstances, none of which apply to the situation before me. Where the court’s permission is required to amend an application, Rule 11(3) governs and reads in part as follows:

11.(3) AMENDING APPLICATION … WITH COURT’S PERMISSION

On motion, the court shall give permission to a party to amend an application, … unless the amendment would disadvantage another party in a way for which costs or an adjournment could not compensate.

24Various decisions of our court have confirmed that Rule 11(3) generally is mandatory, absent prejudice or disadvantage to another party that cannot be cured by either an award of costs or the granting of an adjournment or both. It generally does not matter whether the amendment is prompted by a change in the case, is merely an afterthought, raises a new issue, or comes as a surprise to the responding party. However, unfairness to a party resulting from a proposed amendment must be curable by costs, or an adjournment, or both. Moreover, the existence of bad faith is an exception to everything. In particular, where it can be shown that an amendment is motivated by bad faith, there is an inherent jurisdiction in the court to refuse the amendment. See, for example: Stefureak v. Chambers (No. 3), 2005 ONSC 16090, [2005] O.J. No. 1949 (S.C.J.), and Canabate v. Ayala, 2009 ONCJ 415, [2009] O.J. No. 3904 (S.C.J.).

25In the case before me, I am not persuaded by Respondent counsel’s submission that the amendment should be denied owing to suggested weakness of the Applicant’s contemplated additional claim, or its suggested likelihood of failure. For example, Respondent counsel highlighted the paucity of supporting evidence filed to date by the Applicant to support such a claim, and suggested difficulties that might be encountered by the Applicant in proving the circumstances unjust, insofar as the Applicant admittedly enjoyed fulsome use of the cottage property for many years before the parties’ separation, without any associated financial obligations. For such reasons, Respondent counsel suggested in his supplementary factum that the “Applicant’s belated suggestion of a claim to an equitable ownership interest in the cottage property is sufficiently meritless that a trial is not required.”

26This is not a motion for summary judgment in relation to the parties’ claims or contemplated claims. Nor are the merits of a contemplated claim a relevant consideration in the exercise of the court’s powers pursuant to Rule 11(3) of the Family Law Rules.

27I similarly am not persuaded by Respondent counsel’s oral submission that the Applicant’s proposed amendment is being advanced “just to bolster” the Applicant’s simultaneous claim for orders restraining disposition of the cottage property proceeds, in order to provide security for her other claims seeking equalization of the parties’ net family property and retroactive support.

28In that regard, I agree that the timing and threadbare descriptions of the proposed amendments to the Applicant’s pleading are somewhat troubling. They are not inconsistent with a perception that the Applicant’s belated advancement of such a trust claim, in relation to the cottage property, may be primarily tactical at this point.

29Certainly, the matters apparently relied upon by the Applicant, in support of such a claim, seem to be matters that would have been known to the Applicant from the outset of the litigation. The record also confirms that the Applicant has been assisted actively by experienced counsel, in a thorough and diligent manner, from the outset of the litigation if not earlier. (As noted above, the Applicant was in a position to issue her Application on September 2, 2016, when she left the matrimonial home with the children.) The matter also has been scheduled for trial.

30In the circumstances, it seems surprising that a bona fide claim for unjust enrichment and constructive trust in relation to the cottage property would not have been advanced well before now, and not merely in conjunction with efforts to restrain the Respondent’s proposed use of net sale proceeds from the cottage property.

31Having said all that, I think the evidence before me nevertheless falls short of establishing bad faith, on the part of the Applicant, in seeking her proposed adjournment.

32As noted above, the fact that amendments have been prompted by changes in the case, or are merely an afterthought, does not suffice to thwart an amendment. In this case, the Applicant and her counsel may simply not have directed their minds to all possible issues relating to the cottage property until their attention was focused by recent developments and changes; i.e., the Respondent’s efforts to sell the cottage property and make use of the resulting net sale proceeds.

33The remaining consideration, pursuant to Rule 11(3) is whether the contemplated amendments to the Applicant’s pleading may result in unfairness to the Respondent, incapable of being addressed by costs or an adjournment.

34I think they arguably might have such an effect if an unquantified claim to a proprietary remedy, advanced in relation to some unspecified portion of the net sale proceeds from the cottage property, effectively cast doubt over the Respondent’s ownership in relation to any those net sale proceeds, in turn suggesting a need to prevent the Respondent from accessing any portion of those net sale proceeds for such reasons alone. In particular:

• As noted above, the relevant “enrichment” the Applicant intends to rely upon, in support of her contemplated claim, is the increase in the cottage property’s value allegedly resulting from renovations said to have been funded by draws on the joint line of credit secured by the matrimonial home.
• However, the undisputed evidence indicates that the total capital gain enjoyed by the Respondent through increases in the cottage property’s value, over the entire course of his eight year ownership of the cottage property, was only $75,000.
• Moreover, the Respondent’s actual enrichment from that nominal capital gain effectively will be reduced to $57,000, once required payment of the anticipated capital gains tax is taken into account.
• Furthermore, even if renovations to the cottage were funded entirely by draws on the joint line of credit secured by the matrimonial home, (which is contrary to the evidence of the Respondent indicating that such renovations were funded at least in part by his previously undeclared taxable income), and even if such renovations were entirely responsible for the realized increase in value of the cottage property over the full period of the Respondent’s ownership, (which also may be unlikely), funding of the renovations through the joint line of credit would suggest that the jointly renovation expense and any resulting benefits of the renovations should be shared jointly and therefore equally by the parties. That in turn would further reduce the maximum value of the Applicant’s proprietary claim, in relation to the cottage property and its net sale proceeds. In particular, making all assumptions favourable to the Applicant, consistent with the stated basis of her contemplated additional claim, would result in a proprietary claim with a maximum value of $28,500, (i.e., half of the net capital gain on the property, after the corresponding capital gain tax liability has been addressed).
• If the stated basis of the additional claim proposed by the Applicant inherently restricts its maximum value in such a manner to $28,500, (not including interest and costs), I think it would be unfair to permit an amendment whereby the Applicant could assert an undefined and therefore unrestricted proprietary interest in relation to all net sale proceeds of the cottage totalling $328,000. On its face, such an indeterminate and therefore unrestricted claim inherently calls into question, and therefore compromises, the Respondent’s entitlement to a sizeable portion of the net sale proceeds from the cottage property in respect of which the Applicant realistically has no claim, according to the stated basis of the claim she herself has put forward. Similarly, insofar as the court should not readily permit disposal before trial of property in which a claimant asserts an ownership interest, advancement of an unquantified and therefore effectively unlimited claim, in relation to all of the net sale proceeds from the cottage property, arguably might require the court to impose restrictions unfairly inhibiting the Respondent’s ability to access and part with any of those funds, until the merits of the Applicant’s proprietary claim to some of those funds, and precise quantification of that claim if successful, have been finally established at trial.
• Moreover, based on the evidence before me, in my view such an outcome is not unfairness that can be addressed by mere costs or an adjournment. In particular, mere costs and/or an adjournment would not provide compensation if an unnecessarily unrestricted proprietary claim by the Applicant, in relation to the net sale proceeds from the cottage property, results in the Respondent’s having to pay avoidable interest payments and penalties, and/or suffer the consequences of an otherwise avoidable bankruptcy. In addition to costs and/or an adjournment, compensation would be required to offset such avoidable damages.

35I nevertheless also think such fairness concerns will be addressed sufficiently if the Applicant is granted leave to advance her contemplated trust claim, in relation to the cottage property and/or its resulting net sale proceeds, but only to a maximum value of $28,500, (not including interest or costs), for the reasons outlined above.

36An order shall go accordingly.

Distribution of Net Sale Proceeds

37In dollar value, at least, the most significant and contentious aspects of the motions before me concerned possible distribution of net sale proceeds from the cottage property, and possible distribution of anticipated net sale proceeds resulting from disposition of the matrimonial home.

38For the reasons outlined above, net sale proceeds from the cottage property already have been quantified at approximately $328,000.

39As for the matrimonial home, the parties now have entered into an agreement of purchase and sale, set to close on August 1, 2017, whereby the home will be sold for $905,000.

40While not yet the subject of affidavit evidence, by the time of the hearing before, counsel indicated and agreed during the course of oral submissions that proceeds from sale of the matrimonial home would be used to satisfy all joint debts of the parties secured by the matrimonial home, (including a first and second mortgage, as well as the joint line of credit noted above), as well as applicable taxes, real estate commission fees, and legal fees incurred in relation to the sale.

41Respondent counsel indicated, and Applicant counsel expressly agreed, that anticipated net sale proceeds after satisfaction of such obligations would be approximately $320,000 to $340,000, with approximately $160,000 to $170,000 payable to each of the parties if the net sale proceeds of the jointly owned matrimonial home are distributed evenly.

42In the result, unfettered access to the net sale proceeds from the cottage property and the matrimonial home would result in:

• the Applicant having a total of $160,000 to $170,000 at her disposal; and
• the Respondent having a total of $488,000 to $498,000 at his disposal.

43For her part, the Applicant has filed evidence indicating that she has been struggling financially since leaving the matrimonial home with the children.

44In particular, the Applicant says her challenges in that regard have been caused or aggravated by such considerations as the Respondent’s alleged failure to pay adequate child and spousal support in a timely way, the respondent’s unilateral disposition of jointly owned assets, (and a motorboat in particular), and delays in quantification and receipt of an appropriate equalization payment, while the Applicant has been obliged to rent and furnish a new home. In support of such assertions:

• The Applicant tendered considerable evidence to indicate why the Respondent may have sizeable retroactive child and spousal support obligations. Her detailed calculations in that regard necessarily depend on assumptions that the Respondent should have been paying such support from the date on which the Applicant left with the children and commenced her application, as well as alternate assumptions concerning the levels of income, (and Respondent income in particular), that should be used for support calculations. In that regard, there is no disputing the reality that there is a very sizeable income differential between the parties. For example, in their partial settlement arrangement, (which deals with child and spousal support commencing July 1, 2017), the parties have agreed that the predicate income for the Applicant shall be $55,079 while the predicate income for the Respondent shall be $391,622. In her retroactive support calculations, (for the period from September 2016 to June of 2017 inclusive), the Applicant assumes that the full amount of Respondent income previously diverted to her pursuant to previous income splitting arrangements should be attributed in its entirety to the Respondent, that the court should employ a three year average of the Respondent’s now reported taxable income, and that either $40,000 or as much as $80,000 in additional Respondent income from ORNGE should be included. The Applicant also makes assumptions in relation to what she says are proper “section 7” expenses which she has incurred, in respect of which the Respondent has not made proper proportionate contributions. I will not replicate all of those specific assumptions and various calculations here. However, the Applicant says her calculations make it clear that the Respondent’s retroactive child and spousal support obligations could total as much as $87,219, (according to the table submitted during oral submissions) or $91,374, (according to the Applicant’s sworn affidavit evidence). The Applicant says that, at the very least, such calculations indicate that the Respondent will owe at least $79,074 in retroactive child and spousal support, (e.g., if one just looks to the Respondent’s 2016 income and her lower assumptions regarding income from ORNGE).
• The Applicant also expects a sizeable equalization payment. That expectation is driven in large measure by the Applicant’s assertion that the Respondent should not be permitted to reduce his net family property by the sizeable tax arrears obligation ($236,371) now owed to the Canada Revenue agency, on the basis it was an “inchoate and uncrystallized” liability on the date of separation, and a debt that stems from wrongdoing on the part of the Respondent in which the Applicant says she was not complicit. (The Respondent admittedly failed to disclose $430,174.50 in income to the Agency from 2009 to 2015, but with the assistance of legal counsel, subsequently made a voluntary disclosure and negotiated the agreed arrears obligation, in addition to substantial interest charges until that obligation is paid.) Excluding that debt from the Respondent’s net family property calculation would, by that change alone, increase the Respondent’s equalization payment exposure from his estimate of $53,712.38, (in his net family property statement dated January 25, 2017), to approximately $290,083. Moreover, the Applicant says that figure arguably should be higher, as the Respondent has attributed no value to the rights he has in relation to certain patents, (which relate to blood tests for concussion and received worldwide attention). In any event, quantification and receipt of the Applicant’s equalization entitlement will be delayed pending the outcome of the trial currently scheduled to proceed in November.
• In the meantime, the Applicant says the Respondent also has disposed of a jointly owned motorboat without the Applicant’s knowledge or consent, and without providing the Applicant with her equal share of the relevant net sale proceeds. In that regard:
  • The uncontradicted documentary evidence filed by the Applicant indicates that the relevant motorboat was purchased for $71,584,000 in September of 2010, in the names of both parties, and that both parties assumed corresponding debt obligations.
  • The Respondent’s own financial statement, sworn June 2, 2017, indicates that he has disposed of the relevant motorboat for a sale price of $30,000.
  • The Applicant’s sworn indication that she received no payment of funds, in relation to sale of the motorboat, is not disputed.
• The Applicant says that, pending satisfaction of the Respondent’s equalization payment and retroactive support obligations, she has been required to deplete assets, (including approximately $7,500 of RRSP investments), and to incur debt, (including $72,000 borrowed from the Applicant’s parents). In the relatively near future, the Applicant also will be required to incur the expense of finding and relocating to a new residence, as the rental property she and the children have been occupying now has been sold by its owner.

45For all of these reasons, the Applicant accordingly says she requires immediate and unrestricted access to her share of the net sale proceeds from the matrimonial home, to which she unquestionably is entitled.

46The Applicant also says that, apart from payment of the capital gains tax owed in relation to sale of the cottage property, and possible payment of at least $15,000 owed to the Applicant from the Respondent’s unilateral and unauthorized sale of the jointly owned motorboat, the Respondent generally should be restrained from spending any further portion of the net sale proceeds from the cottage property, or his share of the net sale proceeds from the matrimonial home, in order to provide security for the Applicant’s sizeable claims.

47In that regard, the Applicant relies on the Respondent’s own indication that he has contemplated filing for bankruptcy.

48Applicant counsel also emphasized that, if the Applicant ultimately is obliged to enforce her anticipated entitlements vis-à-vis the Respondent by looking to assets other than the liquidated net sale proceeds belonging to the Respondent, that self-evidently will make any necessary execution process more challenging from the Applicant’s perspective.

49For his part, the Respondent disputes many of the fundamental assertions of the Applicant. For example:

• He disputes the Applicant’s entitlement to retroactive support, relying in part on the Applicant’s unilateral and opposed removal of the children from the matrimonial home. In particular, the Respondent says that, had the Applicant not engaged in such unilateral self-help, and persisted in her refusal to return the children notwithstanding the Respondent’s repeatedly adjourned motion in that regard, there would have been no need for the Respondent’s payment of formal child support.
• The Respondent disputes the assumptions being made by the Applicant concerning his income for retroactive support calculations. For example, the Respondent says it is an error to assume that he now receives all income previously attributed to the Applicant pursuant to income splitting arrangements, as he now requires the assistance of a professional accounting firm to perform work previously done by the Applicant, which justified the previous income splitting in the eyes of the Canada Revenue Agency. (This is disputed by the Applicant, who says she performed very minimal and simple receipt gathering and sorting in that regard.) The Respondent also says the Applicant has over-estimated his income from ORNGE, and questions whether income averaging is appropriate.
• The Respondent says the Applicant was fully complicit in the failure to fully disclose all of the Respondent’s taxable income from 2009 to 2015, knowingly enjoyed the benefits of that untaxed income while it was being received, and accordingly should not be permitted to oppose inclusion of the associated debt obligation in the Respondent’s net family property calculations. (All such assertions are flatly denied by the Applicant.) Moreover, the Respondent contends that, as a matter of law, his obligations to the Canada Revenue Agency formed part of his “debts and other liabilities” within the meaning of section 4 of the Family Law Act, supra, regardless of whether they were undocumented and unquantified on the date of separation.
• Relying on written confirmation provided by the Lawson Health Research Institute, the Respondent emphasizes that he does not own the two patents referred to by the Applicant in support of her suggestions that the Respondent’s net family property is higher than indicated. The Institute is the owner of the relevant patents. Moreover, the Institute also has confirmed that it has “no commercialization revenue or proceeds of any form to distribute” to the Respondent or his co-inventors, in relation to the patents, as of May 31, 2017. The correspondence does indicate that there is no such revenue or proceeds to distribute “at this time”, suggesting that the Respondent enjoys some form of rights to potential income in that regard, although nothing has materialized to date. However, the Respondent emphasizes that the Applicant has the burden of establishing that the Respondent’s rights in that regard have any significant value, and there currently is no evidence to support the Applicant’s position.
• The Respondent emphasizes that, as set forth in his material, his contemplation of possible bankruptcy was prompted by and linked with his current significant debt obligations. He says such concerns self-evidently will lessen considerably if he is permitted to use net sale proceeds from the cottage property to satisfy his obligations to the Canada Revenue Agency. In the meantime, his financial stability is threatened and compromised by the onerous interest charges associated with that obligation, which are designed to encourage prompt payment. (Although Respondent counsel suggested that the arrangement agreed upon by the Canada Revenue Agency was time limited, and in danger of being withdrawn in favour of more onerous obligations if the Respondent failed to satisfy the obligation in short order, I agree with Applicant counsel that there seem to be no indications of that in the evidence before me. For the time being, at least, the accruing substantial interest charges would seem to be the contemplated penalty for delayed satisfaction of the Respondent’s now established tax arrears obligation. Having said that, it does seem that those obligations are relatively onerous.)
• The Respondent emphasizes that he too will need a new home for himself and the children, in the wake of the matrimonial home being sold, and implementation of the equal time sharing contemplated by the settlement agreement resolving custody and access issues. He says that, to that end, he canvassed potential rental accommodation within the children’s school district, and found nothing that would satisfy that school district’s residential requirements while maintaining some degree of stability and security for the children. He has instead now located and agreed to purchase a home in the relevant area for $745,000, with a scheduled closing date of July 14, 2017. To secure a mortgage at a reasonable rate of interest and avoid high mortgage insurance costs, the Respondent says he needs to make a down payment of at least 20 percent of the purchase price, (or $150,000), in relation to the purchase. In that regard, he hopes to make use of the net sale proceeds from the cottage, (after payment of the relevant capital gains tax and his obligation to the Canada Revenue agency), as well as his share of the net proceeds realized from sale of the matrimonial home.
• More generally, the Respondent disputes the need for the imposition of any restraints on his ability to use available net sale proceeds from the cottage property and matrimonial home to reduce his pressing debt obligations, and purchase a suitable home for himself and the children. In that regard, he emphasizes that debt reduction and asset conversion do not represent squandering of assets or asset depletion, respectively. He notes that he has other substantial assets, including substantial RRSP investments worth $424,681.51 according to his most recent financial statement, sworn on June 2, 2017. Moreover, he is firmly established in the community, with a very substantial annual income, as acknowledged by both parties in their partial settlement agreement.

50Having regard to all the circumstances, the Respondent says the Applicant’s desired restraining orders are not reasonably required to protect the Applicant’s potential interests, and reflect an inappropriate desire on the part of the Applicant for liquidity rather than security. He says their imposition would inflict financial consequences on the Respondent that otherwise are entirely avoidable.

51The Respondent submits that, at most, it would be reasonable to hold back $100,000 of the jointly owned net sale proceeds of the matrimonial home, (i.e., $50,000 from each party’s entitlement therein), as security for the as yet undetermined obligations each party might have towards the other.

52The court’s authority to impose the charging and preservation orders sought by the Applicant are set forth in sections 9, 12, 34 and 40 of the Family Law Act, supra, which read in part as follows:

9. POWERS OF COURT – (1) In an application under section 7, [i.e., an application for equalization of net family property and determination of a spouse’s entitlement to an equalization payment], the court may order …

(b) that security, including a charge on property, be given for the performance of an obligation imposed by the order ; …

12. ORDERS FOR PRESERVATION – In an application under section 7 … , if the court considers it necessary for the protection of the other spouse’s interests under this Part , the court may make an interim order or final order,

(a) restraining the depletion of a spouse’s property; and

(b) for the preservation, delivering up, safekeeping and preservation of the property.

33. POWERS OF THE COURT – (1) In an application under section 33, [i.e., an application for support], the court may make an interim or final order, …

(h) requiring the securing of payment under the order , by a charge on property or otherwise.

40. RESTRAINING ORDERS – The court may, on application, make an interim or final order restraining the depletion of a spouse’s property that would impair or defeat a claim under this Part .

[Emphasis added.]

53I pause to note that all of the aforesaid provisions are focused on orders that may be required to provide security in relation to the substantive relief capable of being claimed under Parts I and III of the Family Law Act, supra, respectively dealing with claims in relation to family property and support obligations.

54In particular, the provisions do not authorize the making of orders effectively aimed at providing security for costs. That jurisdiction is addressed separately by Rule 24(13) of the Family Law Rules, which reads as follows:

24 (13) ORDER FOR SECURITY FOR COSTS – A judge may, on motion, make an order for security for costs that is just, based on one or more of the following factors:

1. A party ordinarily resides outside Ontario.

2. A party has an order against the other party for costs that remains unpaid, in the same case or another case.

3. A party is a corporation and there is good reason to believe it does not have enough assets in Ontario to pay costs.

4. There is good reason to believe that the case is a waste of time or a nuisance and that the party does not have enough assets in Ontario to pay costs.

5. A statute entitles the party to security for costs.

[Emphasis added.]

55I highlight the above legislative provisions at the outset of analysis in relation to these particular issues, because I frankly see no basis for making any order imposing any restrictions on the Applicant’s ability to receive or use any portion of the net sale proceeds from the matrimonial home to which she otherwise may be entitled. In particular:

• the Respondent sought no such relief in his notice of motion or amended notice of motion;
• there was no evidence to persuade me that the Applicant will owe anything to the Respondent by way of an equalization payment, or that any orders are required to ensure the Applicant’s ability to satisfy any such obligation;
• there was no evidence to persuade me that the Applicant will owe anything to the Respondent by way of support, or that any orders are required to ensure the Applicant’s ability to satisfy any such obligation;
• the Respondent has not brought any motion pursuant to Rule 24(13), seeking security for costs from the Applicant; and
• there is no evidence before me to suggest that the requirements of Rule 24(13) would have been satisfied, had the Respondent brought such a motion.

56I therefore specifically reject the Respondent’s suggestion of an order effectively directing a hold back and retention in trust, pending further order of the court, of $50,000 of the matrimonial home net sale proceeds to which the Applicant otherwise may be entitled.

57To the contrary, I see no reason why the Applicant should not receive distribution of her complete share of those net sale proceeds generated as soon as possible, after those net sale proceeds have been quantified with finality.

58In my view, the real question for determination is whether it would be appropriate, in the circumstances, to make orders effectively providing the Applicant with security for her claims by charging or restraining disposition of the Respondent’s assets.

59General principles and considerations applicable to the exercise of the legislative provisions permitting such orders, set forth above, include the following:

• The onus lies on the party requesting such a charging or preservation order to demonstrate, on a balance of probabilities, that such an order is necessary to protect his or her interests under Part I of the Family Law Act, supra, and/or to prevent impairment or defeat of his or her claims for support under Part III of that legislation. [1]
• While a party with a court-determined claim is in a stronger position to request such relief, such orders are commonly and frequently made in family law matters to protect such claims in advance of trial. [2]
• Our courts generally agree that the standard for granting such relief, essentially injunctive in nature, is not the high threshold required for the granting of a Mareva injunction; i.e., a threshold that includes a need for demonstration of a strong prima facie case on the merits. [3]
• Beyond that, different court decisions have applied different standards. Some consider whether there is a “real risk that assets could be dissipated” before a claim is determined on the merits. [4] Others suggest that an order should be made “out of an abundance of caution”. [5] Others indicate that the appropriate approach is similar to that generally applicable to the granting of interlocutory injunctive relief set forth in R.J.R. Macdonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311, which requires the court to focus on:
  • Whether the party seeking injunctive relief has shown that there is a serious issue to be tried;
  • Whether the party seeking such relief has demonstrated that he or she will suffer irreparable harm if the requested relief is not granted; and
  • Which party will suffer the greater harm from granting or refusing the requested relief, pending a decision on the merits, (often called “the balance of convenience”). [6]
• More generally, however, it has been emphasized that the remedies available pursuant to such legislative provisions are discretionary, making it “difficult, dangerous and, perhaps, undesirable” to lay down explicit formulations or guidelines, as each decision properly will depend on the particular circumstances before the court. The exercise fundamentally is one of balancing risks. [7]

60In the case before me, I do not propose to review, in detail, the substantial material filed by the Applicant in support of her claims for equalization or retroactive support.

61Much of her evidence in that regard, (including her assertions that an urgent departure from the matrimonial home with the children was required, that she knew nothing of the Respondent’s failure to declare all of his taxable income, and that the Respondent has rights in relation to patents that have considerable value), is flatly denied and/or contradicted by evidence tendered by the Respondent.

62The factual and legal positions of the Respondent may or may not ultimately prevail, defeating the Applicant’s claims to a substantial equalization payment and a substantial retroactive support order. For present purposes, however, in my view the Applicant clearly has demonstrated that there are serious questions to be tried in that regard.

63As for irreparable harm, I normally would be disinclined to make the protective orders requested if the evidence before me was limited to that of a responding party, with a stable and secure high paying job, significant roots in the community, and other significant assets, proposing sensible measures to address definite and pressing claims being advanced by other legitimate creditors, and conversion of liquid funds into a real estate asset that inherently is more secure and likely to increase in value over time.

64In my view, those facts alone do not suggest the threat of irreparable harm to the Applicant; e.g., in the sense of presenting any reasonably perceived threat that the Respondent unreasonably will alienate or encumber his assets in such a manner that the Applicant will be frustrated in attempts to enforce any relief she obtains at trial.

[65] However, those facts do not stand in isolation. In particular: a. The Respondent admittedly was willing to structure his affairs improperly and illegally, over a prolonged period of five to six years, to hide significant amounts of taxable income from the government. Whether or not the Applicant was complicit in such efforts, I think there is no escaping the reality that the Respondent has demonstrated a capacity for significant and sustained inappropriate conduct in the structuring of his financial affairs, so as to reduce his financial obligations to others. b. I do find it troubling that the Respondent unilaterally disposed of the jointly owned motorboat, at a price significantly less than its acquisition cost, without notifying the Applicant or obtaining her consent. In that regard, the depreciating nature of the asset obviously should be recognized, and may explain a significant drop in value that made the disposition a provident one. Similarly, the court ultimately may accept that the Respondent simply forgot that the motorboat was jointly owned by the parties. However, in light of the uncontradicted documentary evidence confirming joint ownership of the motorboat, it seems to me that the Respondent unequivocally should have recognized and acknowledged, albeit belatedly, his obligation to provide the Applicant with at least half of the relevant sale proceeds. c. The Respondent himself has raised the prospect of filing for bankruptcy. On the one hand, I understand the assertion that there will be no need for such drastic measures if the Respondent is permitted to employ the available net sale proceeds in the manner he has suggested. On the other hand, I can understand why the open contemplation of such drastic measures makes the Applicant concerned about conduct by the Respondent which may thwart or impair the Applicant’s ability to ensure satisfaction of any relief awarded at trial.

66On the whole, I am prepared to find that the Applicant has established a legitimate risk of irreparable harm to her interests.

67As for balance of convenience, however, it seems to me that the specific relief requested by the Applicant is unnecessarily Draconian.

[68] In particular, I do not think it necessary, for the protection of the Applicant, to freeze most of the Respondent’s substantial “cash” assets in their current form until trial, thereby effectively obliging the Respondent: a. to maintain such assets in a form usually generating comparatively modest yet taxable rates of return, (e.g., as opposed to converting them into a real estate asset, in the London market, that will constitute a new principal residence for the Respondent that is exempt from capital gains taxation); b. to incur substantial and entirely avoidable interest penalties on his obligation to the Canada Revenue Agency; and c. to risk the prospect of being petitioned into bankruptcy by other legitimate creditors, if he fails to address his other debt obligations in a timely way.

69Without limiting the generality of the foregoing, I agree with the Respondent that the purpose of preservation and restraining orders is security not liquidity.

70Moreover, I think the Applicant can be provided with adequate security in ways other than the specific relief requested, (bearing in mind that she does not inherently stand in priority to any other creditors of the Respondent, except in relation to the proprietary claims she intends to assert in relation to the cottage property and its proceeds).

[71] In particular, having regard to all the circumstances of the case, I think it just and appropriate that an order go as follows: a. Pending further order of the court, the Respondent shall not transfer, alienate, deplete, charge or otherwise encumber his RRSP investments currently being held with Scotiabank, as described on page 7 of his Financial Statement sworn June 2, 2017, located at Tab 52 of the continuing record. The Respondent may continue to make contributions to those RRSP investments, but any augmentation of the said RRSP investments shall be bound by the same restrictions that apply to the RRSP investments which exist on the date of this order. b. Pending further order of the court, a $28,500.00 portion of the net sale proceeds from the cottage property shall be segregated from the remaining net sale proceeds from the cottage property, and thereafter shall continue to be held in trust as security for the Applicant’s intended proprietary claim in relation to the cottage property and net proceeds from its sale into which such a claim may be traced. c. The Respondent shall pay, and be permitted to pay to the Canada Revenue Agency, from the cottage property net sale proceeds currently being held in trust, whatever sum is required to satisfy the capital gain tax liability incurred as a result of the cottage property’s sale. d. The Respondent shall pay, and be permitted to pay to the Canada Revenue Agency, from the cottage property net sale proceeds currently being held in trust, (and from his share of the matrimonial net sale proceeds if necessary), whatever sum may be required to satisfy his obligation for tax arrears and any accumulated interest in that regard. e. The Respondent shall pay, and be permitted to pay, to the Applicant, from the cottage property net sale proceeds currently being held in trust, (and from his share of the matrimonial net sale proceeds if necessary), the sum of $15,000, representing half of the sale proceeds realized by the sale of the motorboat that was jointly owned by the parties. f. The Respondent shall pay, and be permitted to pay, from the cottage property net sale proceeds currently being held in trust, and/or from his share of the matrimonial net sale proceeds, at least $150,000.00 towards the contemplated purchase of his new residential property, (known by its municipal address as 173 Devonshire Avenue, in the City of London), title to which shall be taken in the name of the Respondent alone. Apart from any purchase mortgage registered against that residential property at the time of purchase, the Respondent shall thereafter not charge or encumber his interest in the property, or otherwise transfer or alienate that property, without further order of the court, obtained on notice to the Applicant. g. Once the funds described by sub-paragraph (b) of this particular order have been segregated and placed in a separate trust, and the payments authorized and required by the remaining sub-paragraphs of this particular order have been made, the Respondent shall have unrestricted access to the remaining balance of the net sale proceeds from the cottage property and matrimonial home to which he otherwise may be entitled. He may direct all or part of such remaining proceeds towards the purchase of his new residential property, but is not obliged to do so. h. The Applicant shall be entitled to full disbursement of her share in the net sale proceeds of the matrimonial home as soon as that share has been quantified and finalized.

72In my view, the above orders strike an appropriate balance between the interests of the parties, pending trial, in the particular circumstances of this case.

73The Respondent generally will be at liberty to pay down his debt and purchase his new residence as desired.

74In the meantime, the Applicant will have the security of substantial assets whose after tax value seems likely to approximate the total value of her currently estimated equalization and retroactive support claims, if all issues in that regard are decided in her favour at trial. [8]

Honda Odyssey

75During the course of the parties’ relationship, a 2015 Honda Odyssey vehicle was leased, in the Respondent’s name, for principal use by the Applicant. The Applicant used the vehicle in that manner, and has continued to do so after the parties’ separation, having taken the vehicle with her on her departure from the matrimonial home.

76The Respondent accordingly has no control over the vehicle, but continues to bear formal responsibility for all lease payments, licensing and insurance obligations, automated highway tolls, and parking violations associated with the vehicle. He also continues to be the person responsible to the vehicle’s owner for its proper maintenance and return, with corresponding enhanced obligations if the vehicle is returned with a mileage exceeding prescribed allowances, or in a damaged state beyond normal and reasonable “wear and tear”.

77All of this understandably is a matter of concern to the Respondent, who led evidence of possible delays in the tendering of lease payments and insurance premiums by the Applicant, parking tickets, mileage in excess of the permissible allowances specified in the vehicle lease agreement, and unrepaired collision damage to the vehicle.

78For her part, the Applicant filed evidence in reply outlining how the above concerns had been or were being addressed. In particular, her sworn evidence indicates that she has been paying the relevant lease payments, insurance premiums and parking tickets, and that she has made arrangements for appropriate repairs to the vehicle. That evidence also confirmed her willingness to assume any additional costs associated with mileage allowances being exceeded.

79Beyond that, the Applicant’s evidence indicates that she has made inquiries of the lessor to discuss her assumption of the relevant vehicle lease obligations, but was told the Applicant did not qualify under the lessor’s financing policies given her debt servicing ratio at the time of her inquiry. In particular, her employment income was approximately $53,000, while the total of her joint debt obligations relating to a first mortgage, second mortgage and joint line of credit secured by the jointly owned matrimonial home totalled more than $500,000.

80Ongoing arrangements which unnecessarily perpetuate integrated financial obligations and associated sources of tension and conflict between the parties obviously are less than ideal. Such tensions include allegations by the Applicant that the Respondent continues to enter the vehicle without her permission, (e.g., during child transfers, and apparently on one additional occasion where the Respondent attended at the Applicant’s home to take photographs of the exterior and interior of the vehicle for purposes of this litigation), which the Respondent may or may not have an entitlement to do while he remains the formal lessee of the vehicle.

81However, the Applicant needs a vehicle, seems content to continue with the current vehicle for the time being, and apparently has been attending to obligations associated with it, albeit belatedly on occasion. Moreover, I think I can take judicial notice of the reality that premature termination of the lease agreement is likely to carry additional financial penalties with immediate impact on the Respondent as lessee, and corresponding indirect impact on the Respondent’s ability to address financial obligations to the Applicant and his children.

82Furthermore, it seems to me that the current financial impasse preventing the Applicant’s willing assumption of formal responsibilities associated with the vehicle is likely to be short-lived. In particular, if sale of the matrimonial home closes on August 1, 2017, as anticipated, that will result in payment of the parties’ jointly held debt relating to the mortgages and line of credit secured by the matrimonial home, which in turn should have a drastic and immediate impact on the Applicant’s formal debt servicing ratio.

[83] In the result, as far as the 2015 Honda Odyssey vehicle is concerned, an order shall go as follows: a. From the date of separation until such time as responsibilities associated with leasing of the vehicle are formally transferred from the Respondent alone to the Applicant alone, or final return of the vehicle to the lessor, (whichever comes first), the Applicant shall have exclusive possession and control of the vehicle, (with no ability of the Respondent to enter therein without the express permission of the Applicant), but the Applicant also shall bear exclusive responsibility, (as between the parties but not vis-à-vis third parties), for any and all obligations associated with possession, use and operation of the vehicle, including but not limited to payment of all associated lease payments, insurance premiums, highway tolls, parking tickets or other charges, and all financial obligations relating to maintenance and repair of the vehicle, and/or use of the vehicle in excess of mileage allowances specified by the relevant lease agreement. The Applicant similarly shall bear responsibility, (vis-à-vis the parties but not third parties), for any further and consequential financial responsibilities arising from any failure on her part to address, in a timely way, such primary responsibilities and obligations relating to the vehicle. b. To facilitate prompt efforts by the Applicant to address and satisfy such primary responsibilities and obligations relating to the vehicle, and Respondent assurance that such obligations are being addressed and satisfied in a timely way: i. The Respondent shall relay any written notices received in relation to such responsibilities and obligations forthwith to the Applicant; ii. Within two weeks of receiving any such written notice from the Respondent, the Applicant shall provide the Respondent with written confirmation that such responsibilities and obligations have been addressed; and iii. The Applicant shall, in any event, provide the Respondent with monthly confirmation relating to all intervening satisfaction, by the Applicant, of any financial responsibilities and obligations concerning the vehicle. c. Notwithstanding the above arrangements, following sale of the matrimonial home, and the satisfaction of all joint indebtedness of the parties currently secured by the matrimonial home, the Applicant also shall use her best efforts to contact the lessor for the purpose of requesting and securing a formal transfer of all current vehicle lease obligations associated with the vehicle from the Respondent to the Applicant exclusively, providing the Respondent with written confirmation of her attempts in that regard and the result of those attempts. d. Upon completion of any such contemplated transfer of lease obligations from the Applicant to the Respondent, the Applicant similarly shall take all steps necessary to ensure that she alone will have responsibility for all other obligations associated with lease and use of the vehicle, including but not restricted to all relevant insurance obligations and liability for all parking tickets or other obligations stemming from use of the vehicle.

Contents of Matrimonial Home

84The evidence before me suggests that, when the Applicant left the matrimonial home with the children, most of the home’s contents were left behind.

85Although the Applicant returned to the matrimonial home on occasion after the parties’ separation, (e.g., to assist in efforts to “declutter” the home and make it more presentable for sale), the Respondent also expressly asked that the Applicant limit her removal of items from the home pending resolution of the parties’ dispute.

86In the result, the Applicant apparently removed certain items from the matrimonial home, but not all that she wanted, in the course of furnishing a new home for herself and the children since the time of separation.

87Proprietary disputes accordingly remain relating to contents of the matrimonial home, (even if those contents will be the subject of further relocation because of that home’s pending sale), and those disputes accordingly will form part of the matters to be addressed and resolved at trial, in the absence of further party agreement.

88In her notice of motion and amended notice of motion, the Applicant’s requests for interim relief included claims for interim orders granting her exclusive possession of items specified in an attached schedule, (Schedule “A”), containing 34 numbered entries.

[89] During the course of the hearing before me, counsel for the Respondent indicated: a. that the Respondent was asserting ownership, (e.g., based on alleged acquisition of property before marriage), of the items listed in entries 3, 6, 7, 10, 19, 26 and 27; b. that the item listed in entry 13, (a trampoline used by the parties’ daughters for cheerleading practice), admittedly belonged to the Applicant and could be taken by the Applicant; c. that the item listed in entry 14, (an electric scooter and helmet), was used primarily by the parties’ younger son Axel, and went back and forth to each of the party’s homes during transfers of the children; d. that the item listed in entry 31, (the drum set kit used by the oldest child Zander), could be taken by the Applicant if Zander wants it; and e. that the remaining items of the Applicant’s schedule already had been taken by the Applicant.

[90] During the hearing before me, counsel for the Applicant indicated: a. that, contrary to the indirect submission by Respondent counsel, the Applicant actually has not yet taken or received the items listed in entries 1, 2, 4, 8, 15, and 28 of the schedule; b. that many of specified items the Respondent seeks to retain “belong to the kids”, (such as item 3 of the schedule, relating to “all of Zander’s bedroom contents including but not limited to his bed, end tables, desk, etc.”), such that they should be with the children accordingly; and c. that the Applicant accordingly was maintaining a proprietary claim, and a corresponding claim for interim exclusive possession, in relation to all the items on her schedule not already voluntarily surrendered by the Respondent.

91Orders relating to possession of the matrimonial home and its contents are addressed by section 24 of the Family Law Act, R.S.O. 1990, c.F.3, as amended, which reads in part as follows:

24. ORDER FOR POSSESSION OF MATRIMONIAL HOME –

(1) Regardless of the ownership of a matrimonial home and its contents , and despite section 19 (spouse’s right of possession), the court may on application, by order,

(a) provide for the delivering up, safekeeping and preservation of the matrimonial home and its contents; …

(d) direct that the contents of the matrimonial home, or any part of them, …

(ii) be removed from the house for the use of a spouse or child;

(2) TEMPORARY OR INTERIM ORDER – The court may, on motion, make a temporary or interim order under clause (1)(a) … [or]…(d)…

(3) ORDER FOR EXCLUSIVE POSSESSION: CRITERIA – In determining whether to make an order for exclusive possession, the court shall consider,

(a) the best interests of the children affected;

(b) any existing orders under Part I (Family Property) and any existing support orders;

(c) the financial position of both spouses;

(d) any written agreement between the parties;

(e) the availability of other suitable and affordable accommodation; and

(f) any violence committed by a spouse against the other spouse or the children.

(4) BEST INTERESTS OF CHILD – In determining the best interests of a child, the court shall consider,

(a) the possible disruptive effects on the child of a move to other accommodation; and

(b) the child’s views and preferences, if they can reasonably be ascertained. …

[Emphasis added.]

92As the emphasized wording of ss.24(1) and (2) makes clear, the court has the ability to make temporary or interim orders concerning contents of a matrimonial home regardless of ownership. The Respondent’s assertion of ownership in relation to the items he is not content to surrender, (e.g., based on his possible acquisition of the relevant items before marriage), accordingly is not decisive even if such ownership was not in dispute. The same is true concerning assertions by the Applicant that a number of the disputed items “belong to” the children.

93Beyond that, I make the following observations:

• In my view, several of the disputed numbered entries in the relevant schedule unfortunately employ descriptions, (e.g., “half” of the children’s photos, holiday decorations and children’s toys), which lend themselves to subjective and idiosyncratic evaluations, and corresponding disputes. The parties may very well feel that such items have been addressed or not, (by what may be undisputed levels of taking or retention in relation to such items), depending on their subjective views, (e.g., as to what quantity of such items, inherently varying in size, shape and expense, may fairly constitute an appropriate “half”). The minutia of such inevitable challenges, on marriage breakdown, is something that should be addressed and resolved by way of agreement rather than litigation, if at all possible. If they cannot agree on such matters, the parties can direct further time and expense to resolving such issues at trial, after the tendering of more relevant and detailed evidence in that regard. For the time being, I was presented with no such evidence, and am not inclined to embark on such minutia, or make correspondingly vague orders in respect of which compliance or non-compliance may be the subject of similar disputes before trial.
• To state the obvious, the parties and their belongings have been subjected to significant disruption and dislocation over the past 10 months, not all of which will have been the subject of detailed concentration and documentation. All contents of the matrimonial home either have been or will be packed for removal from that home in the near future, as the Respondent vacates the property and relocates to a new residence. Similarly, as noted above, the Applicant also will be relocating to a new residence in the near future, as the rental property she has been occupying now has been sold by its owner. In the circumstances, some of the items which are not the subject of any dispute as to who should have interim possession, but are the subject of disputes as to whether they already have been taken by the Applicant, (e.g., items 4, 15 and 28), eventually may be discovered and redirected accordingly. For now, it seems to me that interim orders premised on disputed retention or delivery of items are inappropriate and unwise.
• Of the items unquestionably retained by the Respondent, which he does not wish to surrender before trial, it seems to me that there is little or no urgency to the Applicant’s desire to have many or any of them delivered into her possession. To the contrary, the evidence before me indicates that, without the desired items, the Applicant has been able to establish and furnish a separate residence for herself and the children over the past 10 months; a residence which effectively has served, (albeit not without dispute), as the children’s primary home.
• Of the items unquestionably retained by the Respondent, which he does not wish to surrender before trial, it seems to me that, with the exception of item 3, (the contents of Zander’s bedroom), permitting the Respondent to retain almost all of those items, at least until trial, also generally will not harm or undermine the best interests of the children. They include appliances or decorative furnishings likely to be of more interest and use to the Applicant, rather than the children. Moreover, pursuant to the newly agreed parenting schedule, the three younger children, at least, will have the benefit of seeing and/or using such items half of the time, regardless of which parent’s home may contain the relevant items.
• As for the contents of Zander’s bedroom, (i.e., the contents of the matrimonial home specified in item 3 of Schedule A), I think the situation is different. The resolution of custody and access issues agreed upon by the parties does not expressly extend to Zander, no doubt reflecting the reality that he is almost an adult and quite capable of making his own decisions in relation to residence. However, the evidence also makes it clear that Zander has been residing primarily with the Applicant since his separation, and has not expressed any desire for that to change. It seems clear that he accordingly will not be returning to or staying at the Respondent’s new home in a manner similar to his significantly younger siblings. For the foreseeable future, Zander therefore is unlikely to be seeing or using the contents of his bedroom in the matrimonial home again, in any meaningful way, barring an order for interim exclusive possession in that regard. At trial, the Respondent may very well establish that he owned that property prior to the parties’ marriage, and/or the property may have significance or value to the Respondent that makes him unwilling to part with the property voluntarily, either or both of which may warrant a final order for its return to the Respondent. By that time, Zander himself may no longer have any need for or interest in the property; e.g., if he contemplates leaving the Applicant’s home to further his education, or for other reasons. In the meantime, however, bearing in mind that most teenagers place considerable value on the contents of the limited private space their bedrooms represent, and the reality that the relevant property is being readied for imminent relocation elsewhere in any event, I think it would be in Zander’s best interests, and help to minimize disruptions to him occasioned by the parties’ separation, to grant the Applicant an interim order for exclusive possession of the contents of the matrimonial home described in item 3 of Schedule “A” to the Applicant’s original and amended notices of motion, pending further order of the court.
• In my view, given the agreed residence and parenting schedule now agreed upon by the parties, in relation to the three younger children, it would be in their best interest if an inherently mobile item, such as the electric scooter and helmet identified in item 14 of Schedule “A”, continued to travel with the children in the manner described by Respondent counsel.

[94] In the result, and bearing in mind the additional submissions of the parties noted above, an order shall go directing the following: a. Pending written agreement of the parties to the contrary, or further order of the court, both parties shall be obliged to keep safe and preserve all contents of the matrimonial home specified in Schedule “A” to the Applicant’s notice of motion at Tab 7 of the continuing record, wherever such items may be located; b. Pending party agreement to the contrary or further order of the court, the Applicant shall retain exclusive interim possession of the items described in entries 5, 9, 11, 12, 16, 17, 18, 20, 21, 22, 23, 24, 25, 29, 30, 32, 33 and 34 of the said Schedule “A”; c. The items described in items 3, 13 and 31 of the said Schedule “A” shall be delivered by the Respondent to the Applicant, who may then retain interim exclusive possession of those items pending party agreement to the contrary or further order of the court; d. If located by the Respondent, the items described in entries 4, 15 and 28 of the said Schedule “A” shall also be delivered by the Respondent to the Applicant, with the Applicant then retaining interim exclusive possession of those items, (if they are delivered to her or she finds them already in her possession), pending party agreement to the contrary or further order of the court; e. Pending party agreement to the contrary or further order of the court, the items described in entries 6, 7, 10, 19, 26 and 27 of the said Schedule “A” shall remain in the interim exclusive possession of the Respondent; f. Pending party agreement to the contrary or further order of the court, the items described in entry 14 of the said Schedule “A” shall travel with the parties’ three younger children, and the child Axel in particular, in accordance with the residential and parenting schedule agreed upon by the parties.

Production Orders

95I see no reason why the Applicant should not be entitled to the disclosure and production requested in paragraphs 30, 31, 32 and 35 of the Applicant’s amended notice of motion. The documents and information referred to therein are relevant, and in my view such disclosure is likely to decrease mistrust and foster prospects of resolution.

96An order accordingly also should go directing such disclosure and production, to the extent it has not already occurred.

97For greater certainty, in my view the Respondent’s production of “proof of his income from all sources in 2016 to date and on a quarterly basis thereafter until the trial of this proceeding”, as sought in paragraph 30 of the Applicant’s amended notice of motion, should include particulars and documentary proof of the Respondent’s income from ORNGE, including but not limited to any monthly activity forms he is required to submit, the amount of hours he is working for ORNGE, the Respondent’s work schedule in that regard, as well as confirmation of income received by the Respondent from ORNGE, (including all pay stubs or records of payment received by the Respondent from ORNGE), along with copies of any and all contracts, correspondence or other documentation indicating whether the Respondent’s work commitments vis-à-vis ORNGE are, in terms of overall duration, being curtailed within or expanded beyond the one year period specified in the contract already disclosed by the Respondent to the Applicant.

98I frankly do not understand why that obviously relevant documentation and information relating to ORNGE has not been the subject of voluntary disclosure to date, (or explanation as to why such disclosure is either not possible or delayed), despite written requests made in that regard by the Applicant’s counsel. It provides an obvious example where the absence of appropriate confirming information has fostered mistrust, speculation, the making of contrary assumptions, (e.g., the Respondent’s earning of $80,000 in one year rather than $40,000 over the course of six months), and corresponding increased divergence in formal positions in the litigation.

Costs

99Because my decision was reserved, the parties were unable to make any submissions regarding costs.

100By way of preliminary observations and views in that regard:

• I note that the majority of material filed in relation to the parties’ respective motions, as well as preparation time associated with that material, related to issues which were settled by party agreement in advance of the hearing before me. For the reasons I outlined in Witherspoon v. Witherspoon, 2015 ONSC 5406, [2015] O.J. No. 5406 (S.C.J.), where parties make a settlement as between themselves, the court should be very slow to make an award of costs against one of the parties, in relation to the matters which have been settled, unless there are compelling reasons to do so. As I indicated in Witherspoon, that was not a novel approach, and subsequent cases have taken a similar path. See, for example, Talbot v. Talbot, 2016 ONSC 934, [2016] O.J. No. 934 (S.C.J.), and Krueger v. Krueger, 2017 ONSC 1108, [2017] O.J. No. 1108 (S.C.J.). However, other cases have emphasized that the court retains a discretion to award costs in relation to settled issues, in certain circumstances. See, for example, Herr v. Rebelo, 2016 ONSC 4082, [2016] O.J. No. 4082 (S.C.J.), and the authorities cited therein. In the circumstances of this case, my preliminary view is that no costs should be awarded for costs incurred in relation to the settled issues, and that cost submissions should instead focus on costs associated with the issues I was asked to decide. However, I obviously will hear from the parties and consider their respective submissions if they take a different view.
• As for the remaining issues, my preliminary view is that there clearly was a measure of divided success. Neither party obtained what they wanted, in the form they wanted it.
• Even a cursory review of this court file, and its voluminous pre-trial filings, readily indicates that the parties have been engaged to date in highly litigious conflict. That no doubt has resulted in considerable expense to go along with the emotional conflict and stress reflected in the parties’ material. As noted at the outset, the parties commendably engaged in further efforts, shortly before the hearing before me, to resolve and narrow many aspects of their dispute. It would be preferable, I think, if the parties could reach a similar agreement on the remaining cost aspects of their motions, given the time, expense and acrimony already devoted to this matter.

[101] If the parties are unable to reach an agreement on costs, I will receive and consider written cost submissions in accordance with the rather extended timetable requested by counsel, having regard to the time of year and the anticipated vacation absences of counsel and/or the parties. In particular: a. the Respondent may serve and file written cost submissions, not to exceed five pages in length, (not including any bill of costs, settlement offers, authorities or other necessary attachments), within three weeks of the release of this decision; b. the Applicant then may serve and file responding written cost submissions, also not to exceed five pages in length, (not including any necessary attachments similar to those described in the previous sub-paragraph), within three weeks of service of the Respondent’s written cost submissions; and c. the Respondent then may serve and file, within two weeks of receiving any responding cost submissions from the Applicant, reply cost submissions not exceeding two pages in length.

102If no written cost submissions are received within six weeks of the release of this decision, (i.e., the time within which each party was to have filed such submissions), there shall be no costs awarded in relation to the parties’ motions.

“Justice I.F. Leach” Justice I.F. Leach Date: June 19, 2017

[1] See, for example: Price v. Price, 2016 ONSC 728, [2016] O.J. No. 466 (S.C.J.), at paragraph 6. [2] See, for example: Bronfman v. Bronfman, 2000 ONSC 22710, 51 O.R. (3d) 336 (S.C.J.), at paragraph 19; Levan v. Levan, 2006 ONSC 63733, [2006] O.J. No. 4599 (S.C.J.); Taus v. Harry, 2016 ONSC 133, [2016] O.J. No. 133 (S.C.J.), at paragraph 32. [3] See, for example: Radosavljevic v. Radosavljevic (1986), 57 O.R. (2d) 51, 57 O.R. (2d) 51 (H.C.J.), at pp.53-54; Chi v. Wang, 2010 ONSC 1366, [2010] O.J. No. 874 (S.C.J.), at paragraph 10; Taus v. Harry, supra, at paragraph 33; and Price v. Price, supra, at paragraph 6. [4] See, for example: Davis v. Tangredi, 2006 ONSC 5312, [2006] O.J. No. 5312 (S.C.J.), at paragraph 23; and Taus v. Harry, supra, at paragraph 35. [5] See, for example: Barbini v. Edwards, 2014 ONSC 6762, [2014] O.J. No. 5601 (S.C.J.), at paragraph 91. [6] See, for example: Bronfman v. Bronfman, supra, at paragraph 28; Chi v. Wang, supra, at paragraph 11; and Price v. Price, supra, at paragraph 6. [7] See, for example, Bronfman v. Bronfman, supra, at paragraphs 26-27. [8] In saying that, I appreciate that subsequent developments, (such as evidence indicating that the Respondent’s rights in relation to the relevant patents have a quantifiable and substantial value), may change that equation and assessment. However, I am focused on the granting of appropriate relief based on the evidence currently before me. Both parties are free to seek further orders from the court, if subsequent developments warrant further or different relief.