Court File and Parties

NEWMARKET COURT FILE NO.: FC-16-50937-00 DATE: 20190305 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Dorothy Cavarra-Aitoro, Applicant AND: Aaron J. Aitoro, Respondent AND: Marcel Aitoro, Third Party for Purpose of this Motion

BEFORE: The Honourable Mr. Justice D.A. Jarvis

COUNSEL: Cheryl S. Williams, Counsel for the Applicant Herschel I. Fogelman, Counsel for the Respondent Sean W. Plat, Counsel for Marcel Aitoro

HEARD: February 27, 2019

Ruling on Motion

[1] The applicant, Dorothy Cavarra-Aitoro, and the respondent, Aaron Aitoro, are spouses. They shall be called “the wife” and “the husband” for the purpose of this motion. Marcel Aitoro is the husband’s father. He shall be called “Marcel” for this motion.

[2] The wife has brought a motion for the production of financial information/disclosure by, and questioning of, Marcel. While he has provided some of the disclosure, and is prepared to provide more, Marcel opposes production of the full range of documents requested, and opposes being questioned. The husband is aligned with his father.

[3] The relief sought by the wife involves a number of companies owned by Marcel, a company owned by him and the husband, realty owned by a company or entities owned by Marcel and allegedly used by the husband (including properties in the Innisfil area, a cottage and undeveloped land in the Haliburton area) and related financial information. At the root of the wife’s requests are her assertions that the disclosure made by the husband and Marcel so far reveals a significant intertwining of the business and other property affairs of him and Marcel. The issues involve assets and transactions in the many millions of dollars. The husband and Marcel contend Marcel has already provided significant disclosure voluntarily and that the motion is not really about disclosure but rather the materiality and proportionality of the remaining disclosure requested that Marcel has refused to produce. He is a non-party to these proceedings and claims legitimate privacy rights.

[4] In addition to an Order for Marcel’s questioning, the wife asks for the following disclosure from him:

a. For Assissi Industries Corporation (“Assissi”): i. Federal corporate income tax returns for fiscal 2014 through 2018; ii. Financial statements for fiscal 2014 through 2018; iii. Detailed general ledgers for fiscal 2014 through 2018; iv. Trial balances for fiscal 2014 through 2018; v. Adjusting journal entries for fiscal 2014 through 2018; vi. Bank statements for fiscal 2014 through 2018;

b. For Future Sales Corporation (“FSC”): i. Federal corporate income tax returns for fiscal 2014 through 2018; ii. Financial statements for fiscal 2014 through 2018; iii. Detailed general ledgers for fiscal 2014 through 2018; iv. Trial balances for fiscal 2014 through 2018; v. Adjusting journal entries for fiscal 2014 through 2018; vi. Distribution Agreement with Future Sales Building International;

c. All credit card statements for credit cards used by Aaron or his companies or on behalf of Aaron or his companies; and

d. A copy of the Agreement of Purchase and Sale, the real estate lawyer’s reporting letter, offers, and proof of the source of the funds for the purchase of the following properties: i. Friday Harbour condo located at 311 Big Bay Point Road, Innisfil, ON L9S 2N4 (unit number unknown); ii. Friday Harbour townhouse located at 311 Big Bay Point Road, Innisfil, ON L9S 2N4 (unit number unknown) X2 townhomes; and iii. Haliburton cottage located at 311 Big Bay Point Road, Innisfil, ON L9S 2N4.

[5] Assissi and FSC are owned by Marcel. The Innisfil and Haliburton properties are owned by Assissi.

[6] The husband raised a preliminary objection to the material upon which the mother was relying and sought to have struck out portions of the wife’s affidavit sworn February 5, 2019, as being non-compliant with an Order that I made on December 19, 2018, giving directions for the hearing of this motion, and Family Law Rules 14(20) and 20(8). Most of the impugned paragraphs referred to the husband’s transcript (which, according to counsel, only became available at some time in December 2018) and which the wife said in her affidavit either contradicted or contained answers inconsistent with the affidavit evidence of the husband and Marcel. After hearing the parties’ submissions, I dismissed the objection for reasons delivered in court. While I indicated that further reasons would be given later, I am satisfied from my review of the transcript that it adequately addresses the husband’s objections. A transcript of my reasons accompanies this Ruling.

Background to Motion

[7] The wife had originally brought this motion returnable on October 10, 2018. It was adjourned to December 19, 2018, a regular motions’ day that limits the duration of motions to one hour. It was clear then that the motion would take much longer than permitted and so a long motion date for February 27, 2019, was scheduled. Directions were given with respect to filing of the parties’ material. As of that date, the following material and steps relevant to the motion had taken place:

(a) the original motion was supported by an affidavit and financial statement sworn by the wife on September 26, 2018, her Certificate of Financial Disclosure and an affidavit sworn on September 28, 2018, from the expert that she had retained (Paula White). The wife’s affidavit outlined why she had brought her motion, alleging “… a very close interpersonal and interfamilial relationship between the husband and [Marcel] and very strong connections/ties between their respective businesses”. Ms. White’s affidavit attached a disclosure/relevancy chart that explained what had been requested, the responses to the requests made by the husband and Marcel, the relevancy of the request, and the issue(s) to which the requests related. Ms. White did not update her affidavit to deal with the disclosure provided after it was sworn but the wife’s factum did contain an updated disclosure/relevancy chart;

(b) Marcel swore an affidavit on October 3, 2018. It was in excess of two hundred pages, most of which appended part of the disclosure that he was willing to provide. Marcel swore that he and his son had completely separate business interests. Marcel’s businesses involve the manufacturing and distribution of steel building structures which is conducted through two companies: FSC, which Marcel controls, and Future Steel Buildings International (“FSBI”) in which Marcel has two partners, neither of whom is his son. FSC is the manufacturing company and FSBI the distribution company. Marcel indicated in his affidavit that he discovered in 2014, shortly before the spousal parties separated, that the husband had been stealing his business customers. He forgave his son but required him to sign service agreements that between 2015 and 2018 obligated the husband’s companies to pay over $12,000,000 to his company, Assissi. The husband’s companies took over FSBI’s distribution business and paid a fixed percentage of sales to Marcel’s companies. The wife contends that Marcel’s prodigal son treatment of the husband’s “fraud” is suspicious. Assissi is Marcel’s holding company: it holds his personal and business interests, including his interests in the Innisfil and Haliburton realty;

(c) the husband was questioned on October 5, 2018;

(d) on October 10, 2018, the motion was adjourned on consent to December 19, 2018;

(e) the wife swore an affidavit on November 23, 2018, in response to Marcel’s affidavit. She identified some modest disclosure provided by Marcel and referred to the husband’s third party and other public representations about his ownership interests in Marcel’s companies, the commonality of trademark usage by the companies owned by the husband and Marcel, the alleged fraud perpetrated on Marcel by his son ($10,000,000), the illogic of the service agreements (allegedly backdated to 2014), the realty purchased by Assissi (excepting the Haliburton property) the documents for which were signed by the husband, a utility document identifying the husband’s particulars for the cottage and credit cards that Marcel admitted giving to the husband to use and which the wife said funded the parties’ lavish lifestyle;

(f) an affidavit from the husband sworn on December 11, 2018, and an affidavit from Marcel sworn on the next day, the substance of which (in the case of the husband’s affidavit) was that the information requested by Ms. White had been produced but that the information relating to Marcel’s companies was not relevant and (in the case of Marcel) explained his distrust of his son’s financial integrity (paragraphs 7-10) and that he had allowed his son to use his personal credit cards;

(g) in my endorsement made on December 19, 2018, the wife was ordered to file her affidavit responding to the affidavits of her husband and Marcel by February 7, 2019. Directions were given with respect to the exchange and filing of Facta. No other material was to be filed for the motion. The parties complied with these directions;

(h) on February 11, 2019, the parties attended a Settlement Conference held by Kaufman J. The endorsement noted this upcoming motion and that the parties were going to attempt mediation in May, 2019. A further settlement conference date was scheduled (August 12, 2019) and so was a trial scheduling conference (October 7, 2019), the intent being (also as noted) that any trial proceed in the November 2019 sittings of this court;

(i) Exhibit “A” to the wife’s affidavit sworn on February 5, 2019, appended a transcript of the husband’s questioning. As noted, the wife contended that the transcript showed the commingling of the business activities of the husband and Marcel as well as inconsistencies between their affidavit evidence and the transcript evidence. The husband had asked that paragraphs 5 (inclusive of the transcript of his questioning), 6, 7, 12, 19, 22(d), 23, 25, and 35 be struck from the wife’s affidavit. This was his preliminary objection which I dismissed. Neither the husband nor Marcel asked for an adjournment.

Disclosure

[8] The issues raised by the parties and Marcel test the balancing of fairness to litigants dealing with disclosure, its relevance and proportionality to the issues framed by the pleadings and the privacy interests of non-parties.

[9] The importance of disclosure in family law cannot be understated, as pointed out by the Court of Appeal in Roberts v. Roberts, 2015 ONCA 450:

[11] The most basic obligation in family law is the duty to disclose financial information. This requirement is immediate and ongoing.

[12] Failure to abide by this fundamental principle impedes the progress of the action, causes delay and generally acts to the disadvantage of the opposite party. It also impacts the administration of justice. Unnecessary judicial time is spent and the final adjudication is stalled.

[10] Family Law Rules 19(11) and 20(5) structure the court’s discretion when considering non-party disclosure and questioning:

DOCUMENT IN NON-PARTY’S CONTROL

19.(11) If a document is in a non-party’s control, or is available only to the non-party, and is not protected by a legal privilege, and it would be unfair to a party to go on with the case without the document, the court may, on motion with notice served on every party and served on the non-party by special service,

(a) order the non-party to let the party examine the document and to supply the party with a copy at the legal aid rate; and

(b) order that a copy be prepared and used for all purposes of the case instead of the original. O. Reg. 114/99, r. 19 (11).

ORDER FOR QUESTIONING OR DISCLOSURE

20.(5) The court may, on motion, order that a person (whether a party or not) be questioned by a party or disclose information by affidavit or by another method about any issue in the case, if the following conditions are met:

1. It would be unfair to the party who wants the questioning or disclosure to carry on with the case without it.

2. The information is not easily available by any other method.

3. The questioning or disclosure will not cause unacceptable delay or undue expense. O. Reg. 114/99, r. 20 (5).

[11] I adopt the thoughtful summary made by Madsen J. in Weber v. Merritt, 2018 ONSC 3086 of the applicable principles and the contextual considerations relevant to ordering non-party disclosure and questioning:

29. The onus on a motion for non-party disclosure and/or questioning is on the moving party. Ontario (Attorney General) v. Ballard Estate, 1995 CarswellOnt 1332 (Ont. C.A.) at 16.

30. The starting point is to consider the context, and the purpose for which the Rule is invoked. Ireland v. Ireland, 2011 ONCA 623 (Ont. C.A. [In Chambers]) at 28.

31. The Court has held that the test under rule 19(11) is an objective test which requires an analysis outside the litigant’s belief system: “suspicion and conjecture will not suffice.” See Santilli v. Piselli, 2010 Carswell Ont 3317 (Ont. S.C.J.) at paragraph 12. There is no reason that the test would not be the same under rule 20(5).

32. In Ontario (Attorney General) v. Ballard Estate, supra at 15, in the context of the Rules of Civil Procedure, the Ontario Court of Appeal set out six factors to be considered by the Motions judge when faced with a motion for non-party disclosure:

a. The importance of the documents in the litigation;

b. Whether production at the discovery stage of the process as opposed to production at Trial is necessary to avoid unfairness to the Applicant;

c. Whether the discovery of the defendants with respect to the issues to which the documents are relevant is adequate and if not, whether the responsibility for that inadequacy rests with the defendants;

d. The position of the non-parties with respect to production;

e. The availability of the documents or their informational equivalent from some other source which is available to the moving party;

f. The relationship of the non-parties from whom production is sought, to the litigation and the parties to the litigation. Non-parties who have an interest in the subject matter of the litigation and whose interests are allied with the party opposing production should be more susceptible to a production order than a true “stranger” to the litigation.

33. Rule 20(5) has been held to be more permissive than the comparable Rule in the Rules of Civil Procedure, and to give judges more liberal and generous discretion. As noted by Justice Turnbull in Hagey-Holmes v. Hagey, 2005 CarswellOnt 2840 (Ont. S.C.J.) at 32:

That makes eminent sense when one considers that in matrimonial litigation, spouses and family members may be “used” to shield income or other assets that might be relevant in the assessment of spousal support, child support, or net family equalization issues.

34. So too in Loeb v. Loeb, 2013 CarswellOnt 3247 (Ont. S.C.J.) at 42, the Court noted that it is not uncommon in the family law context for family members and their businesses to align themselves to support and protect a family member defending a property or support claim.

35. At the same time, as set out in Boyd v. Fields, 2006 CarswellOnt 8675 (Ont. S.C.J.) at 12, as with all disclosure requests in the family law context, whether from parties or non-parties, while full and frank disclosure is a fundamental tenet of the Family Law Rules, “there is also an element of proportionality, common sense, and fairness built into these rules.” Disclosure obligations must be assessed in light of Rule 2(3).

36. As stressed by Justice Kristjanson in Politis v. Politis, 2018 ONSC 323 (Ont. S.C.J.), in the family law context, the test for compelling third party disclosure set out in Ontario (Attorney General) v. Ballard Estate, supra, “must be supplemented to take into account two critical values, privacy and proportionality.” She notes, in the context of new partners, that privacy interests of third parties must be carefully balanced against the interests of the parties in the proceeding.

37. Non-parties are generally protected from potentially intrusive, costly, and time-consuming processes of discovery except in circumstances specifically addressed by the Rules. See Santilli v. Piselli, supra. As Justice McGee noted therein at paragraph 13: “The discovery process must be kept within reasonable bounds.”

38. There must be an evidentiary basis to show that the documents sought or the questioning requested is relevant. The request for disclosure from a non-party and the request for questioning should not amount to a fishing expedition. Campbell v. Wentzell, 2015 CarswellOnt 15086 (Ont. S.C.J.) at 47. Disclosure is not a weapon and is not intended to overreach. Saunders v. Saunders, 2015 CarswellOnt 2209 (Ont. S.C.J.) at para. 13.

[12] To this summary I would add the contextual filter noted by Kane J. in Loeb v. Loeb (cited above, at para.48) that “[w]hat is fair, relevant and needs to be produced increases with the complexity of the circumstances of the parties.”

[13] The parties did not dispute that Marcel had provided disclosure to the wife but rather that the remaining items that she was seeking amounted to over-reaching: they were disproportionate, unnecessary and would infringe on Marcel’s privacy rights.

(a) The Companies

[14] The wife claims that the disclosure from Assissi and FSC relate to the issues of the husband’s income and net family property. In essence, the claim is that the husband is laundering a portion of his corporate revenue through its diversion to Marcel’s companies then recycling it back to the father as debt to support his lifestyle and that of the family. Or, in the case of the cottage, its purchase by Assissi was purposed to shield the husband’s beneficial interest in it. Although admitting that the husband had no legal interest in Marcel’s businesses, the wife alleged that he was the controlling force and mastermind for them and that the business affairs of the husband and Marcel are so intertwined that they must be part of a larger entity of corporations operating in unison.

[15] It is obvious from the evidence that the husband and Marcel have a close business relationship that has extended into, allegedly gratuitous, financial assistance from Marcel to the parties and their family over the years. There are many prima facie inconsistencies between the evidence of the husband and Marcel but the wife’s key concern relates to what her expert described was the legitimacy of the service agreements between the husband’s companies pursuant to which millions of dollars have passed between the those companies and FSC.

[16] Marcel opposes the requested disclosure as being too broad and, in the case of Assissi, because that company holds other assets personal to him. He was prepared to provide ledger statements reflecting the realty (i.e. the condominium and Haliburton properties, their purchase and, in the case of the cottage its rental revenue). FSC is the contracting party with the husband’s companies. Marcel was not prepared to disclose all that the wife wanted except for tracking the service fees revenue and his concern was that FSC’s distribution agreement with FSBI would disclose terms involving other third parties.

[17] There is no evidence that Assissi is other than Marcel’s holding company. FSC is a different matter. The integrity of the arrangements between it and the husband’s companies are incapable of independent verification on the evidence before this court. Marcel has legitimate privacy interests worthy of respect but given the close business and personal financial relations between him and his son, it would be unfair to the wife to carry on this case without most of the disclosure she has requested from FSC.

[18] Marcel has already provided the Shareholder’s Register for Assissi. He must also provide the ledgers from Assissi referenced in [16] above for the period January 1, 2014 to February 28, 2019, redacting all entries that he maintains do not relate to the realty, the husband, his girlfriend, credit card payments made for those credit cards used by the husband, loans, and payments for the husband’s Audi. I shall reserve this court’s right to review the unredacted ledger statements should the need arise, but not at this time.

[19] As for FSC, it is my view that the disclosure requested by the wife and her expert is reasonable given the interconnection of the business activities of the husband and Marcel and the many unanswered questions she has raised. She is entitled to have her expert review the recording and reporting of FSC to ensure that the husband’s income and asset disclosure can be fairly determined.

(b) Credit Cards

[20] The wife alleged that the parties are “an extremely high net worth family” and that Marcel paid some of the credit card expenses for the family and the husband either directly or indirectly through one of his companies. Her expert maintained that disclosure of the husband’s use of credit cards provided to him by Marcel was relevant to establishing the lifestyle of the husband (and, by extension, the family), the source of that financial assistance and, ultimately, to determining the husband’s income for support purposes.

[21] Marcel admitted that he let his son use his personal, not corporate, credit cards freely to fund his living expenses, and that from September 2016 to July 2018 the husband spent just over $400,000 using Marcel’s cards ($287,375.95 on AMEX and $115,553.39 on Visa). As of October 3, 2018, Marcel said that he had provided or lent to his son on account of credit cards, loans and payment for the husband’s Audi the sum of $833,361.85, of which the husband had repaid $412,874.80. Marcel indicated that he was prepared to disclose copies of all relevant credit card statements from January 2014 to September 2018 provided that redactions were made for those expenses which didn’t relate to his son or to his (i.e. the son’s) companies. Marcel indicated that he wanted to protect the privacy of his credit card transactions.

[22] The husband claimed that Marcel did not fund his lifestyle. He also said that Marcel had advanced him, and that he had repaid him, what his father stated. [3] It is unclear from the evidence when this advance was made, whether it was the aggregate of a number of individual advances or only one transaction and whether the advances were by cash, cheque, credit card or third party payments for the husband and whether the payments were made personally by Marcel or by one of his companies. In her affidavit sworn on November 23, 2018, the wife pointed out (paragraph 26) that Marcel had not disclosed who was “…paying the balances on these credit cards and whether Assissi is funding these expenses”. Despite the obvious relevance of this information to the relief claimed by the wife, Marcel’s responding affidavit was silent about these concerns.

[23] It was revealed during argument that there were three credit cards used by the husband. Two of these (AMEX and a TD Visa) had secondary cards used by the husband. In other words, the monthly statement would separately distinguish use between the primary card holder (i.e. Marcel) and the secondary card holder (i.e. the husband). The third card (a Scotiabank Visa) did not provide any breakdown. In no case were representative statements, even redacted, produced to the court to assist.

[24] I am prepared at this time to order Marcel to produce his credit card statements from January 1, 2014 to February 28, 2019 redacted, in the case of the cards that separate Marcel’s use from the husband’s use, to show only the husband’s charges and, in the case of the card where no such distinction is made, showing only those charges relating to what Marcel alleges is his son’s use or the use of anyone associated with the husband. As with my order dealing with Assissi, I shall reserve this court’s right to review the unredacted account statements if necessary.

(c) Realty

[25] The wife questioned whether the husband had purchased at least three, possibly four, properties and registered those in Marcel’s name so as to intentionally deplete his net family property. She needed the Agreements of Purchase and Sale, solicitors’ reporting letters, the offer to purchase and proof of the funding sources for the purchases. The evidence was relevant to the issues of the husband’s qualifying support income, equalization of the parties’ net family properties and whether the service agreements were a sham.

[26] Marcel swore that he purchased four condominium properties and a cottage and that the funds for each purchase came from Assissi. Excepting the cottage, each of the properties was under construction at the time that Marcel’s affidavit was sworn on October 3, 2018. The purchase agreements for the condominiums were signed in early 2015. Marcel said that there were no reporting letters for the condominiums because the transactions had not closed. Attached to his affidavit were copies of the purchase agreements, an Assissi bank statement reflecting the deposits made for the condominiums and a copy of the cottage transfer showing Assissi as purchaser. Marcel agreed to produce all documentation relating to each of the purchases. The wife is entitled to this disclosure. Marcel, as did the husband, denied that any of the funds used to purchase any of the properties came from the husband, directly or indirectly, or that anyone other than Assissi was the legal and beneficial owner of the realty.

(d) Questioning

[27] I am not persuaded that questioning of Marcel is required at this time pending his compliance with the terms of this Order; that determination is reserved at this time but may be revisited. Marcels’ ostensible interest (so he claimed) is protecting his private affairs. The Family Law Rules recognize this interest. Rule 20(24) provides,

OBLIGATION TO KEEP INFORMATION CONFIDENTIAL

20.(24) When a party obtains evidence under this rule, rule 13 (financial disclosure) or rule 19 (document disclosure), the party and the party’s lawyer may use the evidence and any information obtained from it only for the purposes of the case in which the evidence was obtained, subject to the exceptions in subrule (25). O. Reg. 114/99, r. 20 (24); O. Reg. 69/15, s. 8 (2).

[28] In my view, the Orders made balance Marcel’s privacy interests with the wife’s right to independently review and, where appropriate, verify the husband’s income and assets in circumstances where both the husband and Marcel have acknowledged the husband’s financial misconduct and there are material deficiencies in the husband’s disclosure to date.

[29] In the event that the wife’s expert should form the view, after receipt and review of the disclosure ordered, that the disclosure, and questioning, requested but reserved are necessary because it would be unfair to the wife to proceed without it, then the wife may bring a motion in that regard supported by an affidavit from her expert. I shall remain seized of any disclosure motion(s) in this matter, without prejudice to any future disclosure Order that the case management judge may order.

[30] One last point.

[31] The parties indicated that they have each retained experts to assist them in this case. Counsel are reminded of Family Law Rule 1(7.2)(k) which provides as follows;

PROCEDURAL ORDERS

1.(7.2) For the purposes of promoting the primary objective of these rules as required under subrules 2(4) and, particularly, (5), the court may make orders giving such directions or imposing such conditions respecting procedural

(k) that any expert witnesses for the parties meet to discuss the issues, and prepare a joint statement setting out the issues on which they agree and the issues that are in dispute;

[32] Given this family’s net worth and the complexity of their financial issues, such a joint statement as contemplated by this sub-rule, even if only addressing the issues in dispute, should be considered, if not for the mediation proposed in May 2019 then certainly for the August 12, 2019 settlement conference.

Disposition

[33] The following is ordered:

(a) Marcel shall produce the disclosure set out in paragraphs 18, 19, 24 and 26;

(b) the court reserves its decision whether to Order Marcel to produce additional disclosure relating to Assissi, his credit cards and whether he should be questioned, as referenced in paragraphs 18, 24 and 27;

(c) Marcel shall produce to the wife copies of the Offers made to purchase the four condominium, and the cottage, properties, and any revised Offers, the Agreements of Purchase and Sale for the four condominiums (if not already produced) and for the cottage property, including any amendments to any of the Agreements, complete copies (i.e. with all enclosures) of the solicitors’ reporting letters (which will include the solicitors’ ledger and trust account statements relating to each purchase), and copies of all cheques written (front and back) relating to each of the purchases and copies (unredacted) of the bank account statement(s) on which the cheques were drawn; and

(d) I shall remain seized of any future disclosure motion in this matter subject to any Order otherwise by the case management judge.

[34] If the parties are unable to resolve the issue of costs of this motion, their costs submissions shall be delivered as follows:

(a) the wife, by March 18, 2019;

(b) the husband and Marcel, by March 27, 2019;

(c) the wife’s reply (if any), by April 5, 2019.

[35] Costs submissions (i.e. (a) and (b) above) shall be no longer 4 pages double-spaced, 3 pages in the event of reply by the wife, and shall be filed in the Continuing Record. Offers to Settle, Bills of Costs and any authorities upon which a party may wish to rely shall be filed by the same deadlines. Counsel shall advise the judicial secretary (Meghan.Billings@ontario.ca) when they have filed their material.

Justice David A. Jarvis Date: March 5, 2019

Superior Court of Justice - Family Court

IN THE MATTER OF: The Family Law Act, R.S.O. 1990, c. F.3, s. 44

BETWEEN:

DOROTEA CAVARRA-AITORO Applicant

• and -

AARON AITORO Respondent

• and -

MARCEL AITORO Third Party

Reasons for Ruling

BEFORE THE HONOURABLE MR. JUSTICE D.A. JARVIS on February 27, 2019, at NEWMARKET, Ontario

APPEARANCES: C. Williams Counsel for the Applicant C. Paterson Counsel for the Respondent S. Plat Counsel for Third Party

WEDNESDAY, FEBRUARY 27, 2019

Reasons for Ruling

Jarvis J.: (Orally)

This ruling deals with a preliminary objection by the Respondent husband and his father to certain paragraphs of an affidavit from the Applicant wife sworn the 7th of February, 2019 as being non-compliant with Family Law Rules 14(20) and 20(8).

One of the paragraphs to which objection is made references a transcript of the Respondent husband’s questioning held on the 5th of October, 2018. Objection is taken to references being made to that transcript in this motion.

The Respondent husband says that the affidavit is not proper reply, that the Applicant wife is splitting her case, and that he has no opportunity to answer the transcript references in the affidavit or the transcript itself.

The Respondent’s father says that he was not provided with a copy of the transcript before, so the court understands, delivery of the wife’s 7th of February affidavit and that he is troubled by the alleged inconsistencies between his evidence to date and the questioning as indicated in his son’s transcript.

Neither the husband nor his father wish an adjournment. There seems to be a consensus that this matter needs to proceed.

Family Law Rules 2(2), (3), and (4) state as follows:

(2) The primary objective of these rules is to enable the court to deal with cases justly.

(3) Dealing with a case justly includes,

(a) ensuring that the procedure is fair to all parties;

(b) saving expense and time;

(c) dealing with the case in ways that are appropriate to its importance and complexity; and

(d) giving appropriate court resources to the case while taking account of the need to give resources to other cases.

(4) The court is required to apply these rules to promote the primary objective, and parties and their lawyers are required to help the court to promote the primary objective.

Given these directives, the rules are, in my view, to be given a broad and liberal interpretation and adjusted to the circumstances of each individual case.

Family Law Rule 14(20), upon which the husband relies, provides a guideline with respect to motion evidence. It is intended, and the framers of the rules intended, this kind of rule to avoid what before 1999 was a serial affidavit war between the parties. But importantly the framers of the rules recognized that there may be circumstances in which strict application of that rule would not serve the primary directive. That is found by the reference in rule subsection (20) “unless the court ordered otherwise”.

Rule 20(8) is another rule to which the Respondent husband and his father referred, but it was not clear to the court exactly how that was to apply in the circumstances of this case where the Respondent’s father had voluntarily provided that affidavit evidence. The rule, in my view, is prospective in nature, not retroactive in terms of application.

Given the importance of disclosure in family cases and the manner in which the motion and questioning in this case have proceeded on parallel but not exclusive lines, it is my view that the Applicant wife’s affidavit should be admitted in its entirety. And so, in accordance with Rule 14(20), I am making an order otherwise in that regard.

A more comprehensive explanation with respect to this ruling will be provided when my ruling with respect to the substantive issues on the motion is released and may be slightly different and somewhat expanded than this. I think, as the parties can, or should have, anticipated when they prepared their material, I will be reserving, most likely, my ruling on this matter after argument is concluded.

FORM 2

CERTIFICATE OF TRANSCRIPT (SUBSECTION 5(2))

Evidence Act

I, Tracey Beatty, certify* that this document is a true and accurate transcript of the recording of Cavarra-Aitoro v. Aitoro in the Superior Court of Justice, Family Court, held at 50 Eagle Street West, Newmarket, Ontario, on February 27, 2019 taken from Recording No. 4911_304_20190227_090834_10_JARVISDAV.dcr which has been certified by A. Jagdeo in Form 1.

Tracey Beatty, ACT ID#7742785329 March 4, 2019

Transcript Ordered: February 27, 2019 Transcript Completed: March 4, 2019 Ordering Party Notified: March 4, 2019

(*this certification does not apply to these Reasons for Ruling which were judicially edited)

[1] Roberts v. Roberts, 2015 ONCA 450

[2] Weber v. Merritt, 2018 CarswellOnt 8494, 2018 ONSC 3086, 293 A.C.W.S. (3d) 360

[3] The only financial statement in the Record filed by the husband was sworn on June 27, 2016. There is a reference in an August 7, 2018 affidavit from a clerk in the offices of the husband’s lawyer that the husband swore a financial statement on January 25, 2018, but there was no other information before the court. The June 2016 financial statement did not disclose anything owing to Marcel. In her February 5, 2019 affidavit the wife pointed out (para. 32) that the husband has not produced any evidence of repayment nor disclosed this information in his financial statement. Presumably this last point was made in reference to the unfiled January 2018 financial statement.