Court File and Parties

COURT FILE NO.: FS-19-001278 DATE: 20210304 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Zahra Khorami Sheresht, Applicant AND: Ahmad Hossein Abadi, Respondent

BEFORE: M. Kraft, J.

COUNSEL: Nilufa Husein, for the Applicant Self-represented, for the Respondent

HEARD: In writing

Endorsement

[1]

Endorsement

The applicant, Zahra Khorami Seresht (“Ms. Sherest”), has brought a motion to strike the respondent’s, Ahmad Hossein Abadi’s (“Mr. Abadi’s”) pleadings on account of his failure to comply with four Court orders requiring him to make financial disclosure. In particular, Ms. Sherest seeks the following orders:

a. An order noting Mr. Abadi in contempt of court; b. An order striking Mr. Abadi’s pleadings and permitting her to proceed with an uncontested trial by filing a 23C Affidavit; c. An order for costs on a full indemnity basis against Mr. Abadi; d. An order for costs for each day disclosure remains outstanding if Mr. Abadi is given any further indulgences or adjournments; e. An order vacating any future court appearances scheduled in this case; and f. An order that all costs including unpaid costs and any other costs ordered on this motion, are to be paid in full and send by bank draft or money order, delivered by courier or process server to Ms. Sherest’s counsel.

2This motion is proceeding in writing as it is the continuation of a contempt motion I heard on October 23, 2020, and on January 8th, 2021, both dates which I adjourned to give Mr. Abadi further attempts to comply with the outstanding financial disclosure orders.

3In support of the motion, Ms. Sherest relies on the following:

a. Her Notice of Contempt Motion, dated September 3, 2020; b. Her affidavit, sworn on August 6, 2020; c. Her affidavit, sworn on August 20, 2020; d. Her affidavit, sworn on December 31, 2020; e. Her affidavit, dated January 13, 2021; f. Her Factum, dated August 20, 2020; g. Her Factum dated January 8, 2021; and h. Her reply affidavit, sworn on January 24, 2021.

4In support of the relief, Mr. Abadi is seeking, he relies on the following:

a. His affidavit, sworn on July 16, 2020; b. His affidavit, sworn on November 9, 2020; c. His financial statement, sworn on June 18, 2018; d. His financial statement, sworn on July 16, 2020; e. His financial statement, sworn on January 21, 2021; and f. His affidavit sworn on January 21, 2021.

Procedural History

[5]

Procedural History

On March 20, 2018, the mother issued an Application seeking, among other things, a divorce, sole custody of the parties’ three children, authorization to travel with the children without the father’s consent; child support, spousal support, restraining orders; a non-depletion order, equalization of net family property and exclusive possession of the matrimonial home.

6On April 24, 2018, Akbarali, J., made an order dismissing the mother’s motion to restrain the father’s depletion of property.

7On June 7, 2018, the father filed an Answer and Claim, in which he seeks, among other things, custody; a non-depletion order; an order for the sale of the matrimonial home; an order for the unequal division of net family property in his favour; and an order requiring the mother to partake in a mental health assessment.

8On July 9, 2018, a case conference was conducted by Paisley, J.

9On June 30, 2020, a case conference was held by Hood, J. His endorsement sets out that both parties wanted to bring motions. Ms. Sherest sought child support, financial disclosure and an order to appoint the OCL to assist the parties’ youngest son, S. Mr. Abadi sought parenting time with S. Hood, J. ordered as follows:

a. Mr. Abadi to provide an updated financial statement by July 17, 2020, and to provide by July 17, 2020, his last three years of bank statements as requested by Ms. Sherest. Mr. Abadi was to provide the statements by way of affidavit along with all third-party requests and responses as Exhibits to his affidavit, including all information relating to the closure of any bank accounts; b. Ms. Sherest was to provide an updated financial statement on or before July 17, 2020, along with her last two income tax returns by way of affidavit. If unable to do so, she was to provide all third-party requests and requests as Exhibits to her affidavit; c. A Settlement Conference was to be held before Hood, J. if available, on August 19, 2020; and d. A regular motion date was set for September 3, 2020 for Mr. Abadi’s motion for unsupervised access and the mother’s motion for child support. A schedule for the exchange of motion material was set. By separate endorsement, Hood, J. requested the involvement of the Office of the Children’s Lawyer (“OCL”).

10On August 19, 2020, a settlement conference was held by Hood, J. His Endorsement sets out that settlement discussions took place; the OCL agreed to become involved but the report was not completed; and a TMC/SC was set for November 23, 2020, before Hood, J., if available. The motion for September 3, 2020 was to proceed if necessary.

11On September 3, 2020, the motion was returnable before Boucher, J. Her Endorsement indicates that the court was not in a position to hear the father’s motion for access because the OCL report was not completed. Boucher, J. ordered Mr. Abadi to do the following:

a. To comply with Hood, J.’s disclosure order and to personally, or by agent, or attorney/power of attorney, obtain the financial documents referred to in that order; b. To provide copies of his written communications to the financial institutions or other third parties instructing them to obtain those documents, by attaching those communications to an affidavit that is to be provided to Ms. Sherest explaining the efforts he made to obtain the disclosure. c. To attach communications composed by himself, as well as any communications composed by his agents, solicitors, or attorney/power of attorney to that affidavit; and d. To provide a narrative account of his efforts to obtain the documents, in addition to providing copies of the communications in the affidavit, to be filed on the motion. Boucher, J. clarified that Justice Hood’s Order applied not only to Mr. Abadi’s account(s) in Kuwait but also anywhere in the Middle East or Iran.

12Boucher, J. adjourned the issue of Mr. Abadi’s motion for unsupervised access to S., along with the issues of contempt/financial disclosure to October 23, 2020, to verify his compliance with the endorsement and for the court to assess what other relief might be available and appropriate in the circumstances.

13On October 23, 2020, I heard Ms. Sherest’s motion to cite Mr. Abadi in contempt of both the orders of Hood, J., dated June 30, 2020 and Boucher, J., dated September 3, 2020, for his failure to deliver financial disclosure. At the motion, Mr. Abadi did not deny that he had not complied with either court order. His counsel made submissions that he was unable to comply with his obligation to produce financial disclosure as a result of being devastated upon receipt of the assessment report of the OCL on October 9, 2020. On October 23, 2020, I gave Mr. Abadi “one last opportunity” to comply with the prior disclosure orders. I extended the time frame within which he was to deliver his financial disclosure to November 9, 2020. In particular, I made the following order with respect to financial disclosure:

a. Mr. Abadi was to comply with the financial disclosure orders of Hood, J., dated June 30, 2020, and Boucher J., dated September 3, 2020 by producing the required financial disclosure and affidavits by no later than November 9th, 2020 at noon; b. If Mr. Abadi, did not comply with subparagraph (a) and produce the ordered financial disclosure by noon on November 9, 2020, Ms. Seresht was to return her motion to strike the father’s pleadings before me, if available, during the week of November 16, 2020 (on either Tuesday, November 17th, 2020 or Thursdays, November 19th, 2020), to be heard prior to the TMC/SC scheduled for November 23, 2020; and c. Mr. Abadi was ordered to pay Ms. Sherest costs of the motion in the fixed amount of $1,000 within 60 days.

14The parties adjourned the combined SC/TMC before Hood, J. from November 23, 2020 to March 1, 2021.

15On January 14, 2021, Ms. Sherest’s motion to strike Mr. Abadi’s pleadings was returned before me. Mr. Sabazevetan, as agent for Mr. Abadi, sought an adjournment on his behalf. Ms. Sherest opposed the adjournment of the motion. Mr. Sabazevetan advised the court that Mr. Abadi had provided Ms. Sherest with financial disclosure of his Canadian bank accounts but that he needed more time to obtain his banking records in the Middle East. Mr. Abadi had sworn an affidavit on November 9, 2020, which indicated that he had taken some steps to obtain banking records in Kuwait and that he was encountering difficulties. I gave Mr. Abadi a final adjournment, for a brief two-week period, to comply with the outstanding financial disclosure orders. In particular, the terms of my January 14, 2021 order contained the terms of the Orders of Hood J., dated June 30, 2020, Boucher, J., dated September 3, 2020, and my order of October 23, 2020. In addition, I added further specific disclosure Mr. Abadi was to provide as follows:

a. Mr. Abadi was to produce the bank statements to verify the valuation date figures listed in his two prior sworn financial statement, as well as provide current day balances for his bank accounts, whether the accounts are held in Canada, the Middle East, or anywhere else worldwide. The bank accounts listed in Mr. Abadi’s June 8, 2018 financial statement include a TD joint chequing account, account #6607086; a TD joint savings account, account #6044687; an HSBC joint chequing account, account #122-090485-150; an HSBC joint savings account, account #122-0940035-203; an RBC joint chequing account, account #02874-5237110; an RBC joint savings account, account #0287450057-72; an RBC chequing account, account #0287531-0; b. Mr. Abadi was to produce all of the necessary disclosure regarding his ownership in the two corporations listed in his June 8, 2018 financial statement, Foulath United Corp. in Canada and Foulath United Corp, including such documents such as corporate income tax returns; corporate financial statements; shareholders ledgers; share certificates, and any other necessary documentation to verify his interests in these corporations and the value of such interests as at the date of separation and the current date; c. Mr. Abadi was to produce all credit card statements for the past three years for all credit cards he holds in Canada, in the Middle East and worldwide, along with the statements to verify the valuation date figures listed in both sworn financial statements; d. Mr. Abadi was to produce supporting documentation for the new bank accounts at RBC, account #855 and account #310 he lists on his financial statement, sworn on July 16, 2020, and bank statements for the past three years for such accounts; or from the date such accounts were opened; documentation regarding the date of statement debts listed in financial statement sworn on July 16, 2020; and whatever details possible for the silk carpets, rugs and gold he lists on both of his sworn financial statements; e. Mr. Abadi was to produce financial disclosure for the accounts, whether bank accounts or credit cards, in the Middle East that are disclosed in the Canadian bank statements he has produces thus far to the applicant in these proceedings; f. Mr. Abadi was to file the document brief he delivered to Ms. Sherest on Jan 22, 2018 with the Court; g. If Mr. Abadi has not complied with this order and fails to produce the ordered financial disclosure by noon on January 22, 2021, Ms. Sherest was to proceed with her motion to strike Mr. Abadi’s pleadings before me on January 28, 2021, at 2:00 p.m.; h. If Ms. Abadi has complied with the financial disclosure set out in this order, then the parties were to file a confirmation with the Court that Ms. Sherest’s motion to strike his pleadings is no longer necessary; i. If necessary, by January 26, 2021, at 2:00 p.m., Ms. Sherest was to notify the court if she wishes that her motion to strike Mr. Abadi’s pleadings was to take place in writing or by video appearance; and j. Mr. Abadi was to pay Ms. Sherest’s costs of today’s attendance, in the fixed sum of $1,500 to be paid by no later than 5:00 p.m. on January 15, 2021.

16On January 21, 2021, Mr. Abadi did file an updated sworn financial statement and an affidavit attaching some financial disclosure. Notwithstanding this, on January 25, 2021, Ms. Sherest filed a Form 14C - Confirmation of Motion form that she was proceeding with her motion to strike Mr. Abadi’s pleadings in writing.

17The SC/TMC scheduled for March 1, 2021 did not proceed.

18This is my Endorsement and reasons for the order I have made arising from Ms. Sherest’s motion to strike Mr. Abadi’s pleadings.

Factual Background

[19]

Factual Background

The parties were married in Tehran, Iran on October 13, 1994. They were married for 23 years before they separated on February 21, 2018.

20They have three children. Sa. was born February 23, 1997 (23 years old); Si. was born February 23, 2000 (19 years old); and S. was born on November 3, 2008 and is 11 years old.

21The parties resided in Kuwait, prior to immigrating to Canada in September 2011, as Permanent Residents of Canada. After about 45 days, the parties left Canada and then return in August 2012.

22The mother and children are Canadian citizens.

23While in Kuwait, the father ran a successful construction company, Foulath United Corp., which he began in 2010. According to the father, he returned to Kuwait to attend to his company which was suffering in or around December 2017. The father would work in Kuwait and then return to Canada every 4-6 weeks. Both parties, in their pleadings, refer to the fact that while in Kuwait Mr. Abadi would send funds to Ms. Sherest for her support and the children in the amount of about $10,000 to $20,000 a month. Mr. Abadi, in his Answer, claims that he often sent much more money to Ms. Sherest than that in one month.

24The father incorporated his company, Foulath United Inc., in Canada in or about 2013-2014.

25The parties purchased the matrimonial home in Toronto in July 2015.

26In or about August 2016, the father returned to Kuwait to run his business from there. After several months in Kuwait, he applied to a visitor’s visa to Canada. He came to Canada in December 2017. It is the mother’s position that the father became addicted to gambling and crystal meth when he was in Kuwait.

27In addition to the matrimonial home, Mr. Abadi had purchased a condominium in Toronto. On November 2, 2017, Mr. Abadi sold the condominium located at 4968 Yonge Street, Unit 3015, Toronto, ON M2N 5N7, which transaction closed on December 14, 2017. Mr. Abadi received a portion of the net proceeds of sale in the sum of $151,290.78. There was a hold-back on the remainder of the proceeds since Mr. Abadi did not have status in Canada, in the approximate amount of $165,000, for income tax purposes. In Ms. Sherest’s Application she pleads that once the Canadian government issues a Tax Certificate and the real estate lawyers pays the taxes, the remainder of these funds will be released to Mr. Abadi.

28The marriage ended on February 24, 2018, when the father was charged with assaulting the mother; assaulting the oldest daughter, Sa., and with possession of methamphetamine, a schedule 1 substance. He served 21 days in jail, was released on a conditional discharge with 18 months’ probation and a weapons prohibition for 10 years.

29On March 7, 2018, the father was charged with failure to comply with recognizance. He received a conditional discharge and 18 months’ probation.

30On April 9, 2018, the father was charged with failure to comply with recognizance. He received a conditional discharge and 18 months’ probation. On August 15, 2019, the father was charged with failure to comply with his probation. This charge is pending in the criminal courts.

31On October 9, 2020, the OCL delivered its custody and access assessment report pursuant to s.112 of the Courts of Justice Act. The OCL report recommended sole custody to the mother; no access between S. and the father at this time; and no contact or communication between the mother and the father. On October 23, 2020, I granted Ms. Sherest custody of S. based on the recommendations of the OCL and dismissed Mr. Abadi’s motion for supervised or unsupervised access to S., leaving this issue to be determined at trial. I did, however, order that if the matter did not proceed to trial by January 20, 2021, that Mr. Abadi could renew his motion for access to S. Mr. Abadi has not renewed his motion for access to S.

Parties Position on Contempt/Striking Pleadings

[32]

Parties Position on Contempt/Striking Pleadings

Ms. Sherest seeks an order citing the father in contempt of the four court orders described above, for his failure to deliver financial disclosure as per the terms of all four orders. Ms. Sherest submits that she cannot advance her claims because she requires full and frank financial disclosure from Mr. Abadi to determine his income for support purposes and to determine his net family property as at the date of separation to finalize the property division issues. Mr. Abadi has had since June 30, 2020 to comply with the various financial disclosure orders.

33On January 14, 2020, when Ms. Sherest’s motion to strike Mr. Abadi’s pleadings came before me again, I was advised by an agent for Mr. Abadi that he had gathered some disclosure regarding his Canadian bank accounts and that he had taken steps to obtain the banking records from his bank accounts in the Middle East, including having attended the Kuwait Embassy in Toronto and signing a Power of Attorney to allow a friend/relative of his to obtain his bank statements. Accordingly, I gave Mr. Abadi a final opportunity to produce his financial disclosure by January 22, 2021.

34Mr. Abadi deposes that he has now provided Ms. Sherest with disclosure of his Canadian bank accounts for the past 3 years. Ms. Sherest acknowledges that she did receive some bank statements with respect to Mr. Abadi’s Canadian bank accounts but explains that the statements he has produced to date, do not assist her with determining his income for support purposes, nor in calculating his net family property, especially since most of his assets are in the Middle East. Further, Mr. Abadi deposes that he has never held any bank accounts in Iran and the only bank account he has held in the Middle East was in Kuwait, at the Gulf Bank.

35On January 21, 2020, Mr. Abadi swore second affidavit deposing as to the steps he has taken to comply with the various financial disclosure orders. To assess Mr. Abadi’s compliance with the various court orders made, the following chart summarizes the financial disclosure orders made by the Court and the steps taken by Mr. Abadi to comply with these orders. The chart indicates if Mr. Abadi has not complied with a Court order for financial disclosure or costs:

Court Order details	Steps Mr. Abadi has taken to comply
June 30, 2020 – Hood, J. To provide an updated financial statement by July 17, 2020 To provide his last three years of bank statements by July 17, 2020 to be provided by affidavit along with all third-party requests and responses as Exhibits, including all information relating to the closure of any bank accounts	Mr. Abadi did not provide an updated FS by July 17, 2020, nor did he provide his last three years of bank statement by way of affidavit.
September 3, 2020 – Boucher, J. To personally or by power of attorney obtain the financial documents set out in the Hood, J. order. To provide copies of his written communications to the financial institutions or other third parties instructing them to obtain those documents, by attaching those communications to an affidavit that is to be provided to Ms. Sherest explaining the efforts he made to obtain the disclosure. To attach communications composed by himself, as well as any communications composed by his agents, solicitors, or attorney/power of attorney to that affidavit. To provide a narrative account of his efforts to obtain the documents, in addition to providing copies of the communications in the affidavit, to be filed on the motion. Boucher, J. clarified that Justice Hood’s Order applied not only to the father’s account(s) in Kuwait but also anywhere in the Middle East or Iran.	Mr. Abadi did not produce any of the disclosure ordered, or prepare an affidavit setting out the narrative of the steps he had taken.
October 23, 2020 – Kraft, J. To comply with the orders of Hood, J. and Boucher, J. by November 9th, 2020 at noon, or Ms. Sherest was to return her motion to strike his pleadings during the week of November 16, 2020 For clarity, Mr. Abadi was to provide an updated financial statement on or before November 9th, 2020, along with his last three years of bank statements from all bank accounts in Canada, in the Middle East, including in Iran and Kuwait, and worldwide. He shall provide these statements by way of affidavit along with all third-party requests and responses as exhibits to his affidavit, including all information relating to the closure of any bank accounts; He was to provide any copies of his written communications to the financial institutions or other third parties instructing them to obtain the documents referred to (i) above, by attaching those communications to an affidavit that is to be provided to the mother explaining the efforts to obtain the disclosure; He was to provide all communications composed by himself, as well as any communications composed by his agents, solicitors, or attorney/power of attorney to the affidavit; He was to provide a narrative account of his efforts to obtain the documents, in addition to providing copies of the communications	Mr. Abadi did not file an updated financial statement by November 9th, 2020. He did not set out the steps he had taken to comply with the order or provide communications he had to obtain the bank statements or file the affidavit with the narrative as to what steps toward producing the financial disclosure by November 9th, 2020 as ordered.
January 14, 2021 – Kraft, J. Mr. Abadi was to provide an updated financial statement on or before January 22, 2021, at noon, along with his last three years of bank statements from all bank accounts in Canada, in the Middle East, including in Iran and Kuwait, and worldwide. He shall provide these statements by way of affidavit along with all third-party requests and responses as exhibits to his affidavit, including all information relating to the closure of any bank accounts; He was to provide any copies of his written communications to the financial institutions or other third parties instructing them to obtain the documents referred to (i) above, by attaching those communications to an affidavit that is to be provided to the mother explaining the efforts to obtain the disclosure; He was to provide all communications composed by himself, as well as any communications composed by his agents, solicitors, or attorney/power of attorney to the affidavit; and He was to provide a narrative account of his efforts to obtain the documents, in addition to providing copies of the communications. He was to produce the bank statements to verify the valuation date figures listed in his two prior sworn financial statements, as well as provide current day balances for his bank accounts, whether the accounts are held in Canada, the Middle East, or anywhere else worldwide. The bank accounts listed in the respondents June 8, 2018 financial statement include a TD joint chequing account, account #6607086; a TD joint savings account, account #6044687; an HSBC joint chequing account, account #122-090485-150; an HSBC joint savings account, account #122-0940035-203; an RBC joint chequing account, account #02874-5237110; an RBC joint savings account, account #0287450057-72; an RBC chequing account, account #0287531-0. He was to produce all of the necessary disclosure regarding his ownership in the two corporations listed in his June 8, 2018 financial statement, Foulath United Corp. in Canada and Foulath United Corp, including such documents such as corporate income tax returns; corporate financial statements; shareholders ledgers; share certificates, and any other necessary documentation to verify his interests in these corporations and the value of such interests as at the date of separation and the current date. He was to produce all credit card statements for the past three years for all credit cards he holds in Canada, in the Middle East and worldwide, along with the statements to verify the valuation date figures listed in both sworn financial statements. He was to produce supporting documentation for the new bank accounts at RBC, account #855 and account #310 he lists on his financial statement, sworn on July 16, 2020, and bank statements for the past three years for such accounts; or from the date such accounts were opened; documentation regarding the date of statement debts listed in financial statement sworn on July 16, 2020; and whatever details possible for the silk carpets, rugs and gold he lists on both of his sworn financial statements; He was to produce financial disclosure for the accounts, whether bank accounts or credit cards, in the Middle East that are disclosed in the Canadian bank statements he has produces thus far to the applicant in these proceedings. He was to file the document brief he delivers to the applicant on Jan 22, 2021 with the Court; He was to pay costs in the sum of $1,500, fixed	Mr. Abadi swore an updated financial statement on January 21, 2021. Mr. filed an affidavit, sworn on January 21, 2021, which sets out a narrative of the steps he has taken to obtain the documents required with regard to his Canadian and bank accounts in the Middle East. Attached as Exhibits #1-16 to Mr. Abadi’s affidavit sworn on January 21, 2021 are: Ex. #1: A letter from Gulf Bank, dated January 13, 2021, confirming that his bank account #25125681 is closed because it is overdrawn and that there is an available credit balance of ($21,303.74) Kuwait Dinar. Ex #2: Bank statements from TD Canada Trust, account #6607086 for the period July 1, 2017 until the account was closed on October 31, 2018. Ex. #3: Mr. Abadi deposed that he is unable to locate bank records for the joint account at TD, account #6044687; Ex. #4: A Summary of his Profile with HSBC as at January 13, 2017, which identifies his bank accounts, account #031-088597-150; and #031-088597-203; HSBC Premier credit line, account #031-088597-150; HSBC Mortgage, account #031-088597-800; for the period January 13, 2017 through to July 13, 2020. Ex. #5: His PDA history for his RBC account, account #5350855 for the period May 31, 2020 to January 18, 2021. Ex. #6: TD Aeroplan credit card statements, for the card ending in 5691 for the period January 2016 through to July 2020. Ex. #7: A statement from HSBC, identifying his savings, insurance plans and credit cards with the bank as at July 16, 2020; Ex. #8: TD Aeroplan credit card statements, for the card ending in 5691, for the period December 2020 to January 21, 2020; Ex #9: HSBC Mastercard statements, for the card ending in 1877 for the period April/May 2018; Ex #10: RBC account statement for Foulath United Inc. as at January 18, 2021, both bank account and credit card. Ex. #11: RBC bank account statements / PDA history, account #5350855 for the period May 31, 2020 to January 18, 2021; Ex. #12: RBC bank account statements, for account #5350855 for the period February 10, 2020 to July 2020; Ex. #13: TD account history for account #6113979 for the period June 30, 2020 to January 15, 2021; Ex #14: TD account history for account #6113979, for the period July 31, 2019 to July 7, 2020; Exhibit #15: Authorizations and Directions signed by Mr. Abadi, dated August 5, 2020 to provide all details of his bank statements and accounts at RBC, HSBC and one dated August 13, 2020 to TD Canada Trust, to Courtney G. Hughes; Ex #16: correspondence between Mr. Abadi’s agent and Ms. Sherest’s counsel regarding the outstanding costs.

36In addition to the financial production made by Mr. Abadi, he deposes as follows:

a. He only had one bank account overseas in the past three years with the Gulf Bank of Kuwait. This account is closed with a balance owing of -21,303.174 Kuwait Dinar. He claims to have no other bank accounts in Kuwait or the Middle East; b. On December 15, 2020, he signed a Power of Attorney to his bank in Kuwait to release his banking records by mail and sent a copy of this document to the embassy of Kuwait in Canada to certify the letter; c. With respect to his Canadian bank accounts, he attended at RBC, HSBC, and TD to obtain all of the statements that existed from January 2017 to July 2020; d. Between August 5, 2020 and August 13, 2020, he executed three Directions and Authorizations to allow Ms. Sherest to obtain his bank records directly; e. On August 5, 2002, he attended all three banks with his counsel and asked them to contact head offices to enable him to access his bank statements from January 2017 to July 2020, even for the closed bank accounts; f. In January 2021, he attended at RBC, HSBC and TD to obtain updated bank statements to provide additional disclosure to Ms. Sherest; g. With respect to account #6607080, his savings account at TD, his account was closed in October 2018. Mr. Abadi provided bank statements for this account from the period January 2017 until it was closed; h. With respect to account #6044687 at TD, he deposes that he was unable to locate any records relating to this account other than what he has disclosed to Ms. Sherest; i. With respect to the parties’ HSBC joint chequing account, account #122-090485-150, this account was closed in December 2018. Ms. Abadi has provided bank statements for this account beginning in January 2017; j. With respect to an HSBC joint savings account, account #122-0940035-203, Mr. Abadi advises that this account has a zero balance as of January 2021; k. With respect to an RBC joint chequing account, account #02874-5237110 and RBC joint savings account, account #0287450057-72, Mr. Abadi advised that he is unable to locate any records relating to this account. He deposes that when he made inquiries at RBC, he was advised that he only has the account numbered 028745350855 and provided him with a statement showing that only that account was active; l. With respect to RBC chequing account #0287631-0, Mr. Abadi deposes that he is unable to obtain additional information on this account because the number provided is an incomplete account numbered. He further deposes that he closed this account in February 2020 when he opened account #028745350855. RBC provided Mr. Abadi with a statement confirming that only the account ending in 855 remains open; m. With respect to RBC account, account #028745350855, Mr. Abadi produced statements for this account from its opening until the end of January 2021; n. Mr. Abadi also produced account statements from an account he has at TD, account 20786113979; o. With respect to his company, Foulath United Corp. (Canada), Mr. Abadi deposes that he is unable to obtain any further records for this corporation since it has been closed since November 2017 and CRA requires another three weeks to produce records to him. Mr. Abadi provides no information about the Foulath United Corp. company he ran in Kuwait. He provides no documents regarding the incorporation of either company. He produces no financial statements or income tax returns for either company; p. Mr. Abadi is unable to provide more details regarding the Gold, Rugs and jewellery he listed in his sworn financial statement, dated January 21, 2021, worth $100,000; q. Mr. Abadi listed land that he owns in Northern Iran on his financial statement, sworn on January 21, 2021. However, he advises that since there is no deed to this land, the land does not have any value and cannot be transacted. He does not provide an address for this land, a letter of opinion or an appraisal as to its value on the date of separation or at the current date; and r. With respect to the costs I ordered he pay in the fixed sum of $1,500, Mr. Abadi deposes that he borrowed $500 as a sign of show good faith and offered to pay Ms. Sherest in three payments of $500 until the costs order was fulfilled but, counsel for Ms. Sherest refused to accept the e-transfer of $500, demanding $1,500.

37Ms. Sherest filed a reply affidavit, sworn on January 24, 2021, after receiving Mr. Abadi’s affidavit and attached exhibits. In this affidavit, Ms. Sherest deposes that the disclosure provided by Ms. Abadi is of very little use. In particular, Ms. Sherest deposes that notwithstanding the documentation and disclosure provided, Mr. Abadi failed to:

a. produce disclosure regarding his income sources from the two corporations he owns in Canada and Kuwait, such as corporate income tax returns, corporate financial statements, a share register, etc.; b. explain the source of the $2,000 a month he now claims to be earning; c. produce bank statements from any bank accounts she insists he has in Kuwait and the Middle East; d. provide any evidence that his businesses are closed or whether they were sold; e. provide any evidence from which she can obtain a valuation of his two businesses Foulath United Corp. in Canada or Kuwait as at the date of separation or as at the current date; f. provide any disclosure regarding bank accounts she insists he had in Iran at Pasargad, Tehran which she deposes were active accounts when the parties’ separated in 2018; g. provide any disclosure regarding bank accounts she insists he held at Tijari Bank, Burgen Bank, NBK and Al-Ahli Bank in the Middle East; and h. provide an address for the land he owns in Northern Iran, or an opinion as to its value.

38According to Ms. Sherest, Mr. Abadi’s failure to follow the Family Law Rules and his failure to properly comply with the four disclosure orders has resulted in her not being able to advance her support claims or property division claims, increased her legal fees and resulted in her having exhausted her resources.

Analysis: Contempt/Striking of Pleadings

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Analysis: Contempt/Striking of Pleadings

Although Ms. Sherest took the steps to serve the notice of contempt motion, with the supporting affidavit, on the father personally in accordance with Rules 31(2) of the Family Law Rules (“FLRs”), when asked by this Court as to which relief she sought under Rule 31(5), she has indicated that she seeks an order striking the father’s pleadings.

40Rules 31(5) of the FLR’s is reproduced below:

CONTEMPT ORDERS (5) If the court finds a person in contempt of the court, it may order that the person, a. be imprisoned for any period and on any conditions that are just; b. pay a fine in any amount that is appropriate; c. pay an amount to a party as a penalty; d. do anything else that the court decides is appropriate; e. not do what the court forbids; f. pay costs in an amount decided by the court; and g. obey any other order. O. Reg. 114/99, r. 31 (5).

41In light of the order being sought by Ms. Sherest, it is not necessary for me to make a finding of contempt and determine whether the court is satisfied that the three elements of the alleged contempt are met.

42Given that Ms. Sherest seeks an order to strike Mr. Abadi’s pleadings as a result of his failure to obey the four court orders, I turn to Rules 1(2) of the FLRs. Pursuant to sub. 1(8) of the FLRs, if a person fails to obey an order in a case or a related case, the court may deal with the failure in making any order that it considers necessary for a just determination of the matter, including,

a. an order for costs; b. an order dismissing a claim; c. an order striking out any application, answer, notice of motion, motion to change, response to motion to change, financial statement, affidavit, or any other document filed by a party; d. an order that all or part of a document that was required to be provided but was not, may not be used in the case; e. if the failure to obey was by a party, an order that the party is not entitled to any further order from the court unless the court orders otherwise; f. an order postponing the trial or any other step in the case; and g. on motion, a contempt order.

43Pursuant to subrule 1(8.4), if an order is made striking out a party’s application, motion to change or response to motion to change in a case, the following consequences apply unless a court orders otherwise:

a. The party is not entitled to any further notice of steps in the case, except as provided by subrule 25(13) (service of order); b. The party is not entitled to participate in the case in any way; c. The court may deal with the case in the party’s absence; and d. A date may be set for an uncontested trial of the case.

44In Van v. Palombi, 2017 ONSC 2492 (Div. Ct.), the Divisional Court set out the legal principles governing the exercise of judicial discretion to strike a party’s pleadings. The court stated that these “three-pronged principles” are well-established in the case, citing several decisions of our Court of Appeal: at para. 31. The court stated the legal principles as follows:

a. Is there a triggering event justifying the striking of pleadings?; b. Is it appropriate to strike the pleadings in the circumstances of the case?; and c. Are there other remedies in lieu of striking pleadings that might suffice?

45While striking a party’s pleadings for non-compliance is a remedy available to the court, it is to be reserved for only the most serious and exceptional cases. It is to be used sparingly and with great care and even reluctance. See: Stulberg v. Batler, [2009] O.J. No. 4780, 78 R.F.L. (6th) 199 (Ont. C.J.), reversed on other grounds 2010 ONSC 5299, 94 R.F.L. (6th) 375.

46The Ontario Court of Appeal noted in Ablett v. Horzempa, 2011 ONCA 633, [2011] O.J. No. 4391, that “the courts must use the utmost caution in resorting to this sanction due to the seriousness of denying a litigant their right to participate in the court process. This is a drastic remedy of last resort which is restricted to particularly egregious cases of deliberate, persistent non-compliance, total disregard for the court process, and failure on the part of the offending party to either comply with or adequately explain non-compliance.”

47In Purcaru v. Purcaru, 2010 ONCA 92 (Ont. C.A.), [2010] O.J. No. 427), the Ontario Court of Appeal emphasizes that special care must be taken in family law cases,

The adversarial system, through cross-examination and argument, functions to safeguard against injustice. For this reason, the adversarial structure of a proceeding should be maintained whenever possible. Accordingly, the objective of a sanction ought not to be the elimination of the adversary, but rather one that will persuade the adversary to comply with the orders of the court. As this court said at p. 23 of Marcoccia v. Marcoccia 2008 ONCA 866, (2009), 60 R.F.L. (6th) 1 (Ont. C.A.), the remedy of striking pleadings is “a serious one and should only be used in unusual case”. The court also explained at p. 4 that the remedy imposed should not go “beyond that which is necessary to express the court’s disapproval of the conduct in issue.” This is because denying a party the right to participate at trial may lead to factual errors giving rise to any injustice, which will erode confidence in the justice system.

[48] As set out by Chappel, J., in “Striking Pleadings in Family Law – Part 1: Introduction and Overriding Principles”, 2019), at para. 44). At this step, it is critical that the motion judge outline in detail their findings respecting the party’s non-compliance with any relevant orders or Rules (Kovachis v. Kovachis, 2013 ONCA 644). b. Second, if the court is satisfied that there has been non-compliance, the court must assess the most appropriate remedy based on the particular facts of the case before the court. In undertaking this task, the court should consider and weigh the following factors: i. The extent and persistence of the non-compliance (Horzempa v. Ablett, 2011 ONCA 633 (C.A.), at para. 7); ii. Whether the disobedience of the orders and Rules was wilful in nature (Marcoccia, supra, at para. 13; Kovachis, supra at para. 3; Manchanda v. Thethi, 2016 ONCA 909, at para. 9); iii. Whether the non-compliant party made reasonable efforts to comply and is able to provide acceptable explanations for the breaches (Chiaramente v. Chiaramente, 2013 ONCA 641, at para. 37; Brisson v. Gagnier, 2014 ONCA 909 (C.A.), at para. 3; Marcoccia, supra, at paras. 10-12; Horzempa, supra, at para. 6; Mullin, supra, at para. 45); iv. Where the non-compliance relates to support orders, the payor's financial circumstances and their ability to pay support (Higgins v. Higgins, 2006 CarswellOnt 5893 (C.A.)); and v. The remedy should be proportionate to the issues in question and the conduct of the non-compliant party (Kovachis, supra, at para. 3; Manchanda, supra, at para. 9; Mullin, supra, at para. 49). It should not go beyond what is necessary to express the court’s disapproval of the conduct in issue (Marcoccia, supra, at para 14; Purcaru, supra, at para. 49).

49Following the analysis above, in this case, I have established that Mr. Abadi has not complied with the four court orders for disclosure. Contrary to the four disclosure orders made in this proceeding, Mr. Abadi did not produce the disclosure ordered as follows:

a. He failed to produce any documentation regarding his corporate ownership in Foulath United Corp. in Canada and Foulath United Corp, including such documents such as corporate income tax returns; corporate financial statements; shareholders ledgers; share certificates, and any other necessary documentation to verify his interests in these corporations and the value of such interests as at the date of separation and the current date. He produced on piece of paper identifying that Foulath United Corp. had a bank account at RBC and a credit card; b. He failed to produce all credit card statements for the past three years for all credit cards he holds in Middle East and worldwide, along with the statements to verify the valuation date figures listed in both sworn financial statements. He did produce credit card statements for his Canadian credit cards. Mr. Abadi deposes that he has no credit cards in the Middle East. However, Ms. Sherest has attached copies of credit cards Mr. Abadi did hold in Kuwait, including a Titanium Mastercard and a card for the Commercial Bank in Kuwait; c. He failed to produce his bank statements for any bank accounts he held in Kuwait or the Middle East. He provided a bank statement from the Gulf Bank which shows a bank account with a negative balance. He deposes that he holds only one Gulf Bank account in Kuwait. However, Ms. Sherest deposes that he had many accounts in the Middle East, including accounts at the Commercial Bank of Kuwait; d. He failed to produce any documentation to verify the value he places on his financial statement for rugs, silk carpets and jewellery listed at $100,000; e. He failed to produce bank accounts statements for his TD account #6044687, claiming that he cannot locate records for this account; f. He failed to produce bank accounts statements for his RBC chequing and savings accounts 5327110 and 50057-72, claiming he is unable to locate records relating to these accounts; and g. He failed to list an address for the land he owns in Northern Iran, claiming that there is no deed to the land and, therefore, it has no value. He has not produced a single document for this asset demonstrating ownership. He has failed to provide a letter of opinion or appraisal in connection with this property.

50To date, Mr. Abadi has sworn three financial statements in this proceeding on June 8th, 2018; July 16th, 2020 and January 21st, 2021. The three sworn financial statements are inconsistent.

51In Mr. Abadi’s financial statement, sworn on June 8th, 2018, he lists no income. He values his rugs/silk carpets and gold at $100,000 on the date of separation; bank accounts with a value of $31,249 on date of separation; no corporate interests; lists land in Iran at no value; debts of $113,700 on the date of separation, with a net family property of $992,500.

52In Mr. Abadi’s financial statement, sworn on January 21, 2021, he deposes that he is unemployed but shows income of $2,000 a month from an unknown source. He values his rugs/silk carpets and gold at $100,000 (even though he deposes that he has no evidence or documentation of this value); bank accounts with a value of $31,327 on date of separation; he now lists corporate interests in 2 companies, Foulath United Corp. in Canada and Foulath United Corp. in Kuwait, providing no value for either company on date of separation; debts of $1,169,500 on the date of separation (significant increase from the June 8th, 2018), with a net family property of zero.

53Given the inconsistent disclosure and his three sworn financial statements which are entirely inconsistent, it is impossible for Ms. Sherest to advance her property division claims with any certainty. Further, it is impossible for Ms. Sherest to determine what Mr. Abadi’s true income is for support purposes.

54In determining which remedy is appropriate, now that I have established and detailed Ms. Abadi’s non-compliance with four disclosure court orders, I have considered and weighed the following factors:

a. Mr. Abadi’s non-compliance with the disclosure order has gone on for six months and required four court attendances by Ms. Sherest. Notwithstanding the costs orders made against Mr. Abadi as a result of his non-compliance, he has not paid the costs to Ms. Sherest; b. However, Mr. Abadi’s disobedience with the orders and Rules has not necessarily, in my view, been wilful. It is true that he is the only individual who can access his bank accounts and records. However, Mr. Abadi has also been dependent on third parties in Kuwait to assist in the production of this disclosure, which has contributed to his failure to comply with the disclosure orders; c. Mr. Abadi is the only shareholder of his corporate interests and he has failed to produce even basic disclosure about these companies; d. Mr. Abadi has been self-represented for the most part since the disclosure orders were made. He deposes that he is not working or earning an income. He has demonstrated some effort in providing piecemeal disclosure, however, the disclosure produced has not been helpful and the manner in which it has been produced has increased Ms. Sherest’s legal fees substantially. While I do believe, it is within Mr. Abadi’s power to obtain the financial disclosure needed to enable Ms. Sherest to advance her case and bring this matter to conclusion, Mr. Abadi simply has been unable to do so; e. Mr. Abadi did, however, make reasonable efforts since my last order, dated January 14, 2021, to comply with the disclosure orders. He also made attempts to provide explanations for what documents were missing and to explain his breaches. Mr. Abadi did file an updated sworn financial statement. Mr. Abadi did file an affidavit, setting out the narrative of the steps he has taken to try and comply with the disclosure orders; and f. Mr. Abadi’s failure to pay Ms. Sherest’s costs, according to him, has been the result of an inability on his part to have the means to do so. He offered to pay the latest order of $1,500 in three installments of $500. That offer ought to have been accepted by Ms. Sherest in my view, but it was not.

55The difficulty in this case is that the information that has not been disclosed by Mr. Abadi is highly relevant and material to the issues that need to be resolved. Without the disclosure, Ms. Sherest cannot calculate Mr. Abadi’s net family property. Without the disclosure, the court cannot determine Mr. Abadi’s income for support purposes.

56All four of the disclosure orders were clear. They set out exactly what steps Mr. Abadi had to follow to comply with the disclosure requests. The time frames within which Mr. Abadi was given to gather and produce the disclosure have also been reasonable. He has now had six months from the first Order of Hood, J. on June 3, 2020, to obtain the production and produce it. The Court accepted that some of the delay in the production of Mr. Abadi’s financial disclosure involved assets in the Middle East and in the interest of dealing with the case justly, Mr. Abadi was given reasonable extensions in time by this Court to obtain the records from Kuwait.

57However, this is not simply a case, where the court can draw adverse inferences as a result of Mr. Abadi’s failure to disclose. The undisclosed information is important to Ms. Sherest’s case and she cannot proceed without it. To strike Mr. Abadi’s pleadings and allow Ms. Sherest to proceed with an uncontested trial will mean that the trial judge will not have all of the necessary and accurate information before him/her to reach a just result. As the case law warns, striking a party’s pleading is a severe remedy and should be resorted to in a cautious and restrained way.

58The risk of striking Mr. Abadi’s pleadings in this case, is similar to the risk discussed in Kovachis v. Kovachis, 2013 ONCA 663, namely, the risk that the trial judge will not have all of the necessary and accurate information before him/her to reach a just result. In Kovachis, the Court of Appeal set aside an order striking a party’s pleadings because it was not an “exceptional case” on the evidence before the court. In Kovachis, the Court of Appeal found that there had not been wilful non-disclosure by Mr. Kovachis; and he had provided substantial disclosure. Further, the disclosure that he had not provided was not material or important, so as to trigger the principal of proportionality. In this case, the disclosure that Mr. Abadi has not provided is material to the claims being sought by Ms. Sherest.

59I am mindful of Rule 2(2) of the FLRs, which provides that the primary objective of the rules is to enable the court to deal with cases justly. Rule 2(3) states that 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.

60Judges dealing with family law cases are frequently dealing with cases where financial disclosure is not forthcoming despite the fact that financial disclosure is a fundamental aspect of family law and a basic obligation. As stated by Benotto J.A. in Roberts v. Roberts, 2015 ONCA 450, at para. 12, “delinquencies add significant expense to proceedings and consume substantial judicial time and resources. Counsel and their clients should not expect that repeated adjournments and indulgences will be given to instances of non-disclosure. Furthermore, an effective remedy for inadequate or non-disclosure should be available.”

61I am extremely concerned about Mr. Abadi’s lack of candour. In my view, he should be required to bear Ms. Sherest’s costs in the litigation that resulted because of her efforts to obtain full disclosure from him. Further, Mr. Abadi cannot be trusted on his own to produce the necessary financial information. Accordingly, I am making orders requiring Mr. Abadi to retain an expert to value his interest in land in Iran, along with his corporate interests as at the date of separation and current date. I am also requiring Mr. Abadi to produce the corporate related documentation which, is clearly within his power to obtain and produce and, which will be necessary for an expert to having arriving at his/her valuation of his corporate interests as at the date of separation and current date. Finally, I am ordering Mr. Abadi to reach out to the various banks in Kuwait which Ms. Sherest has identified as institutions where he held accounts and to produce that documentation to Ms. Sherest to verify his account holdings and/or his corporation’s accounts at these institutions. If Mr. Abadi does not comply with my order within the time prescribed, Ms. Sherest’s motion to strike his pleadings shall return before the Court and be heard orally.

62In the meantime, I am making an order precluding Mr. Abadi from taking any further steps in the case without leave of the court until he has complied with all orders: Mullin, supra, Parham v. Jiang, 2014 ONSC 3293 (S.C.J.)). As well, I am staying Mr. Abadi’s claims against Ms. Sherest altogether until such time as he complies with the court order(s) and FLRs: Bourassa v. Magee, 2014 ONCJ 393 (O.C.J.); Martin v. Martin, [2005] O.J. No. 4567 (S.C.J.); Wreggbo v. Vinton, 2013 ONCJ 250 (O.C.J.); Easson v. Blase, 2017 ONSC 2982 (S.C.J.)).

Summary and Conclusion

[63]

Summary and Conclusion

Accordingly, this Court makes the following order:

a. Mr. Abadi shall produce corporate income tax returns; corporate financial statements; shareholders ledgers; share certificates, and any other necessary documentation to verify his interests in both Foulath United Corp. and Foulath Holdings Ltd. in Kuwait within 30 days; b. Mr. Abadi shall retain an expert to value his corporate interests as at the date of separation and as at the current date in Foulath United Corp. in Kuwait and in Canada and any related corporation as at the date of separation and the current date. He shall produce documentation evidencing that he has retained an expert(s) to value these corporate interests within two weeks, with the details as to when the expert(s) expects to be in a position to complete the report; c. Mr. Abadi shall produce an appraisal for the land he owns in Iran to determine its value on the date of separation and at the current date. He shall produce documentation evidencing that he has retained an expert to value this land within two weeks, with the details as to when the expert expects to be in a position to complete the report; d. Mr. Abadi shall email/write/correspond with Al-Tijari Bank, Burgen Bank, NBK and Al-Ahli Bank in Kuwait and request disclosure of any and all bank accounts in his name, in the name of Foulath United Corp. (Kuwait) or (Canada) and/or in the name of any any related corporation over which he has control, and/or credit card statements in his name or in the name of a corporation over which he has control, seeking disclosure of any and all statements for the period January 1, 2017 to the present date. He shall produce documentation evidencing that he has done this within two weeks, with the details as to when the bank(s) expects to be able to deliver the said bank account/credit card statements; e. If Mr. Abadi does not comply with the terms of this disclosure order, then Ms. Sherest’s motion to strike his pleadings shall be heard orally on April 27, 2021, at 10:00 a.m. No further materials need to be filed for Ms. Sherest’s motion; f. Mr. Abadi shall pay the costs of Ms. Sherest’s motion(s) to strike his Answer. Ms. Sherest shall serve and file costs submissions of no more than 3 pages, not including a Bill of Costs or offers to settle, detailing her costs within 2 weeks. Any responding costs submissions from Mr. Abadi shall be no more than 3 pages, not including a Bill of Costs or offer to settle, and shall be served and filed within 7 days of receiving Ms. Sherest’s costs submissions. Reply submissions, if any, shall be served and filed within 5 days of receiving the responding submissions from Mr. Abadi; g. Mr. Abadi shall pay all outstanding costs to Ms. Sherest ordered to this date, out of the net proceeds of sale from the sale of 4968 Yonge Street, Unit 3015, Toronto, ON, currently being held in trust by the real estate lawyer forthwith. Mr. Abadi shall execute any documentation necessary to effect the payout of these costs from the real estate lawyer; h. Mr. Abadi shall be precluded from taking any further steps in this case without leave of the court until he has complied with all prior court orders; i. Mr. Abadi’s claims against Ms. Sherest shall be stayed until such time as he complies with the outstanding financial disclosure orders; and j. There shall be a combined settlement conference/Trial Management Conference on July 21, 2021 at 10:00 a.m. The parties shall exchange comprehensive offers to settle in advance of the SC/TMC. The parties shall complete Trial Scheduling Endorsement Forms for the SC/TMC.

March 4, 2021

M. Kraft, J.