NEWMARKET COURT FILE NO.: FC-15-48597-01 DATE: 20220110 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

Marina Feigin Applicant – AND – Rafael Alter Respondent

Dani Frodis, Counsel for the Applicant Maxine Kerr, Counsel for the Respondent

HEARD: In Writing

Ruling on Motions

JARVIS J.

[1] There are two motions before the Court. They involve a disputed settlement between the former spousal parties [1] reached during a November 2017 family law trial in respect to which the wife has brought a Motion to Change, and an ongoing construction lien action (“the lien action”) against the parties by KMP Interiors Inc (“KMP”). One property (Thornridge) connects the proceedings. The wife seeks to set aside the settlement: KMP claims $736,675.83 in the lien action for unpaid services relating to Thornridge and $1,000,000 in damages.

[2] The motions seek the following relief:

(a) In the first motion dated September 21, 2021, the wife seeks disclosure from the husband and production of the file of his former lawyer (Heller) in the lien action;

(b) In her second motion dated October 4, 2021, the wife seeks an Order to question non-parties in the lien action, namely KMP’s principal (Zicherman) and the purchaser of Thornridge (Tieu). The wife also seeks directions governing the conduct of her proposed questioning of the husband and the non-parties.

[3] The relief sought by the wife is opposed.

Background

[4] Mid-trial in the family law proceeding being heard by MacLeod J., the parties reached what the parties dispute was a comprehensive settlement of their affairs. Among the terms of the settlement, the husband agreed to assign to the wife his interest in the lien action. Due to Thornridge connecting the family law proceeding and the lien action, I was assigned to case manage the cases. On April 26, 2021 a Case Management Ruling (“the CM Ruling”) was made, paragraphs 3 to 10 of which merit mention as they set out the background to the wife’s motions.

3. On June 22, 2018 McLeod J. made a final Order (“the Order”), paragraph 26 of which dealt with the KMP action,

Father’s interest in the construction lien action brought by KMP Interiors Corp. against the parties, bearing Court File No. CV-16-129176-00 is hereby vested in mother. Mother shall be solely responsible for defending the construction lien action commenced by KMP Interiors Corp., at her cost, and she shall indemnify and save father harmless in relation thereto. If mother is successful in defending the construction lien action, she shall be entitled to any recovery of the monies paid into court to the credit of the action, in the total amount of $786,675.83. To give effect to the foregoing, the applicant mother shall execute the Minutes of Settlement and Indemnity, in the form attached as Schedule “C”, no later than July 15, 2018.

4. In accordance with the Order the wife signed Minutes of Settlement and an Indemnity on June 26, 2018.

5. Paragraph 44 of the Order also provided as follows,

I shall remain seized of all issues of compliance and implementation arising from this Order including any reviews or variations.

6. In the KMP action, the spousal parties had pleaded in separate Statements of Defence that nothing was owing to KMP. On October 9, 2019 Vallee J. dealt with motions by the wife and KMP and observed that two weeks after McLeod J.’s Order the husband,

“…completely reversed the position that he pleaded in his Statement of Defence. His position now aligns with KMP’s position. To date, he has not withdrawn his Defence nor has he amended it.

[The husband] states that he has no evidence to show that [the wife] was aware that he would reverse his position before she signed the Minutes of Settlement in the family application.”

7. Vallee J. declined to grant the wife leave to deliver an amended Statement of Defence, Counterclaim and Crossclaim, ruling that the wife would need to bring a Motion to Change McLeod J.’s final Order and, if successful, the court could then consider whether she would be granted leave to amend her pleadings as requested. No steps in the KMP action would be permitted until disposition of the wife’s Motion to Change. [2]

8. The wife started a Motion to Change on January 2, 2020. She seeks an Order varying/setting aside the McLeod J. Order claiming that she relied on the husband’s defence when she agreed to the family law settlement. The husband has responded that the wife never appealed the Order, there is no material change in circumstance warranting any change and that what the wife is really seeking a “do-over” or re-litigating of issues already resolved. Shortly after the husband delivered his responding pleading, Covid. [3]

9. A Case Conference was scheduled to proceed in Newmarket family court on October 22, 2020. In light of paragraph 44 of the Order, the conference was traversed to McLeod J. On November 18, 2020 McLeod J. held a teleconference with counsel and, among other things, ruled on December 2, 2020 that while he would remain seized of the parenting time and support issues, the request to set aside the his Order as it related to the KMP action should properly be heard by another judge.

10. In accordance with Family Law Rule 39(9) I have been assigned management of the wife’s Motion to Change and the KMP action…The pivotal issue is whether paragraph 26 of the Order should be set aside. If the Order is not set aside, the KMP action can proceed: if the Order is set aside then the KMP action and the wife’s Motion to Change should be heard together.

[5] The CM Ruling contemplated that a Summary Judgment Motion would proceed at a later date dealing with the enforceability of paragraph 26 of the Order. The parties were also directed to file a jointly-agreed timetable for the exchange of their materials. Several teleconferences with counsel were held and during those conferences the wife sought, and was granted, an Order amending her Motion to Change. She then brought the motions now before the Court.

[6] The evidence relating to the first motion comprises:

(a) The wife’s affidavits sworn September13, 2021 and October 1, 2021 (reply);

(b) The husband’s affidavit sworn September 22, 2021.

[7] The evidence relating to the second motion comprises:

(a) The wife’s affidavits sworn October 4, 2021, October 20, 2021 (reply to the affidavits of the husband and Ms. Zicherman sworn October 13, 2021 and October 14, 2021, respectively) and November 5, 2021 (reply to the affidavit of Mr. Tieu);

(b) The husband’s affidavit sworn October 13, 2021;

(c) Ms. Zicherman’s affidavit sworn October 14, 2021;

(d) Affidavit of Mr. Tieu sworn October 29, 2021.

[8] If a summary judgment motion is to proceed, it cannot be scheduled until the issues raised in the wife’s motions are determined and questioning (if ordered) concluded.

Discussion

[9] The wife alleges that in the months preceding and following the parties’ separation the husband structured his and the family’s financial affairs “strategically and systematically” to reduce his net worth and defeat her family law claims. When the parties separated, the parties either owned or had interests in sixteen (16) different properties in the Greater Toronto Area, one of which was Thornridge, a planned 10,000 square foot residence for their family. The essence of the wife’s dispute with the family law settlement is that she relied on the husband’s representations in the lien action when she agreed to assume full responsibility for its outcome and, based on events that subsequently transpired after the settlement involving the Thornridge property, there is good reason to believe that the husband misrepresented his financial affairs. She requires disclosure from the husband, Ms. Zicherman and Mr. Tieu and questioning of them.

[10] The husband denies the wife’s allegations about his management of the family’s finances or of any intent to defeat her claims. The wife knew before the impugned settlement that he didn’t intend to defend the lien action. There was no actionable misrepresentation. He asserts that the Heller file in the lien action is protected by solicitor/client privilege. There is no justification for questioning Zicherman and Tieu.

[11] Ms. Zicherman disputes the wife’s allegations that she and the husband colluded to defeat her interests in the family law litigation. Putting her position in context, Ms. Zicherman claims that the wife’s allegations in the motions before this Court mostly mirror those in the lien action and are nothing more than a fishing expedition.

[12] Mr. Tieu’s position is that his sole objective in purchasing Thornridge was to develop and sell it. Due to a decline in realty market values in mid-2018 he decided to sell the property, so he listed it on MLS. There were a few showings and offers but none was acceptable until the husband made what Tieu described was “the highest and best offer”: it was lower than what he wanted but prospective purchaser interest was low and the real estate market in decline. At all material times he and the husband acted at arm’s length.

[13] The relevant facts are these:

(a) The parties married on August 19, 2001 and separated on May 1, 2015. There are four children of the marriage;

(b) The wife alleged, and the husband did not challenge, that he had developed and sold businesses worth several millions of dollars, the last about two weeks before the parties separated;

(c) Before the parties separated, they owned Thornridge, a property on which they were building a home. About two months after separation, in July 2015, the unfinished structure caught fire and burned down;

(d) The husband led the post-fire rebuilding effort. The wife was not involved in the process, although the parties disagree why. KMP had done interior design work for the parties before the fire. It was hired by the husband after the fire to act as general contractor, project manager and provide interior design services;

(e) In late 2016, the construction stalled. The husband claimed that he had exhausted the fire insurance proceeds and that there was nothing left to finish the project. The wife says that the construction was “about 45% complete… built just to the studs”. While the husband disagrees with that description, he concedes that “it was not a house, it was a project that had lots of risks and unknowns”;

(f) In December 2016 KMP started its lien action against the parties;

(g) The parties delivered separate pleadings defending the lien action lawsuit. The husband was represented by a lawyer (Heller). It is his file that the wife is requesting production in her first motion;

(h) In his Statement of Defence in the lien action, the husband pleaded that “all monies owing to KMP have been paid, and that in fact KMP has been overpaid for its services and work done to date” (paragraph 8); that “KMP did not complete the scope of work and failed to remedy deficiencies in the work” (paragraph 10); that KMP breached its contract with the parties (paragraph 12); that “part of the work done by KMP was done negligently, carelessly, and unskillfully and was not completed” (paragraph 16). Further allegations were made about KMP’s claim: a set-off was also pleaded if the parties were found liable. Although lacking in particulars, the pleading is comprehensive in scope, unambiguous in disputing liability, and appears well-crafted;

(i) The wife was questioned in the family law litigation on February 15, 2017. The husband’s lawyer said in an exchange between counsel that the husband was not defending the lien action;

(j) There is no evidence that Tieu knew either of the parties before purchasing Thornridge. A lawyer (Chan) acted for him in the transaction;

(k) On April 7, 2017 Thornridge was sold to Tieu for $3,588,000. From the sale proceeds, $786,675.83 was paid into court pending the outcome of the lien action;

(l) The unchallenged evidence is that after completion of the sale, Tieu arranged a $900,000 mortgage through a private company owned by a lawyer (Hahn) with whom Tieu had no prior dealings, and none afterwards. The wife says that the husband had used Mr. Hahn “on numerous occasions in the past”: the husband questioned the relevance of Tieu’s use of Mr. Hahn, a lawyer whom he and the wife “happen to have used in the past”;

(m) Tieu’s evidence is that he arranged for construction work on Thornridge;

(n) On June 8, 2017 the husband was questioned in the family law litigation. The husband stated that he wasn’t disputing the lien action, that he was “defending it because of legal obligation to do something… I was told I have to file a defence…”;

(o) The family law trial started in November 2017. Mid-trial (after about six days) MacLeod J. held a pre-trial. This resulted in the parties agreeing, in principle, to settle all their affairs. This was memorialized by MacLeod J.: the drafting of the settlement terms was left to counsel. The wife’s disagreement about those terms and what she alleges she relied upon and was led to understand by the husband are at the heart of her Motion to Change and the motions before this Court;

(p) Macleod J. made the final Order (“the Order”) on June 22, 2018;

(q) The wife signed the Minutes of Settlement and Indemnity on June 26, 2018;

(r) On July 5, 2018, as noted above by Vallee J., the husband reversed his lien action position that anything was owed to KMP when in responding to KMP’s Scott Schedule in that action he stated “Agreed to and owed in full” next to each item claimed by KMP;

(s) On July 18, 2018, Thornridge was listed for sale on MLS for $4,588,000;

(t) On October 14, 2018 a numbered company (“1029 Holdings”) owned by the husband offered to buy, and Tieu agreed to sell, Thornridge for $3,500,018. The completion date was February 28, 2019 but it did not close on that date;

(u) On April 10, 2019 an agreement (unsigned by Tieu in the material provided to this court) was apparently made between him and 1029 Holdings, the general terms of which provided that Tieu would remain legal and beneficial owner of Thornridge, and trustee for 1029 Holdings, while it completed work on Thornridge at its expense and risk. The purchaser was to “execute the Agreement of Purchase and Sale with a closing date of January 30, 2020”;

(v) The unchallenged evidence is that, after this agreement, the husband arranged for three mortgages to complete construction. These were registered against title in June, August and October 2019 for $3,517,000 in the aggregate. The husband has not disputed that all the mortgage funds were advanced by a friend (Suedi) and a company owned by another friend (“Wavecom”). He was guarantor;

(w) The wife and KMP brought motions in the lien action for disclosure from the husband and leave to amend her pleadings (wife) and disclosure from the wife and directions (KMP). These motions came before Vallee J. on October 9, 2019. In response to the wife’s motion, the husband delivered an affidavit sworn August 6, 2019 in which he resiled from his Statement of Defence in the lien action. He stated that he had “always been happy with the level of work performed by [KMP]” and that he had relied on the advice of counsel in choosing to submit a Statement of Defense denying liability;

(x) The motions were argued in court. The husband appeared, acting for himself. He told Vallee J. that Mr. Heller had been his lawyer in the lien action and he went on to add that “I understand that there’s privilege…but with that specific lawyer, I’m happy to waive privilege.” The husband also acknowledged to the Court that he had done a “complete about face” after MacLeod J.’s Order. Vallee J. noted that the husband told the Court that he had “no evidence to show that Marina was aware that he would reverse his position before she signed the Minutes of Settlement in the family application”. The Court also noted that the husband had not withdrawn his defence or amended it; there is no evidence before this court that the husband has done either since then;

(y) Vallee J. told the wife that before the Court would consider her request to amend her pleadings in the lien action she needed to bring a motion to change the Order;

(z) The wife started a Motion to Change in the family proceedings on January 2, 2020 [4];

(aa) Title to Thornridge was transferred to 1029 Holdings on September 17, 2020;

(bb) Thornridge is listed for sale for $12,800,000. Title is subject to a $5,500,000 mortgage in favour of Wavecom.

[14] The husband’s exchange with Vallee J. during the October 2019 court appearance is relevant.

MR. ALTER: And – and at the time, I had Julian Heller as my counsel. He seems to be still on the record even though I served a notice of change. And I understand that there’s privilege. And this might sound foolish, but with that specific lawyer, I’m happy to waive privilege. And why I say that is because at the time before I filed a Statement of Defence, I asked him to try to settle this case. And I said, “Settle for about half of the amount.” And he tried and [KMP’s lawyer] refused.... (bolding added).

[15] And later,

So my position – I was instructed at the time to file a Statement of Defence that was boiler plate denying all claims because, otherwise, I would somehow be responsible – or I risk – I risk being responsible for the whole amount regardless of the fact that it was a joint property and the fact that it was a joint asset or anything else. So that’s why I filed my Statement of Defence. But it was made very clear throughout the negotiations that the amounts were paid …(bolding added).

THE COURT: So it seems to me that one of the critical issues here is Marina says that you did a complete about face in your position after Justice McLeod’s order.

MR. ALTER: Yes....

[16] In his affidavit sworn September 22, 2021 the husband claimed that he “never expressly waived privilege” (paragraph 6) [5] and he explained his exchange with Vallee J. as follows,

31. Insofar as my attendance before Justice Vallee is concerned, I was unrepresented when I said I would waive privilege, a position that I now withdraw. The statement that follows, about being instructed to file a Statement of Defence, is not one I attributed to Mr. Heller…

Privilege

[17] Solicitor-client privilege is a right of fundamental importance in Canadian law. As observed in Laliberte v. Monteith, 2021 ONSC 4133 (Ont. Div. Ct.) [6],

Solicitor-client privilege is a principle of fundamental justice and a cornerstone of the Canadian justice system. It protects the fundamental and legal right of citizens to communicate in confidence with their lawyers. Solicitor client privilege has been elevated to a fundamental and substantive rule of law. The Supreme Court of Canada has made clear that solicitor client privilege “must be as close to absolute as possible to ensure public confidence and retain relevance. As such it will yield in only certain, clearly defined circumstances and does not involve a balancing on a case-by-case basis.”(R. v. McClure, 2001 SCC 14, Descoteaux v. Mierzwinski, Soprema Inc. v. Wolrige Mahon LLP, 2016 BCCA 471 at para.50.) [7]

[18] The privilege is not absolute. It may be statutorily abrogated by clear and unambiguous terms, where the purpose of the privileged communication is to further unlawful conduct, there is a risk to public safety or a genuine risk of a wrongful conviction. [8] Waiver may be expressed or implied. In S & K Processors Ltd. V. Campbell Ave. Herring Producers Ltd. [9], a case dealing with the production of documents, McLachlin J. (as she then was) was tasked with determining whether privilege had been waived with respect to all communications relating to an expert’s report.

[6] Waiver of privilege is ordinarily established where it is shown that the possessor of the privilege: (1) knows of the existence of the privilege; and (2) voluntarily evinces an intention to waive that privilege. However, waiver may also occur in the absence of an intention to waive, where fairness and consistency so require. Thus waiver of privilege as to part of a communication will be held to be waiver as to the entire communication. Similarly, where a litigant relies on legal advice as an element of his claim or defence, the privilege which would otherwise attach to that advice is lost Rogers v. Hunter.

[19] Implied (or implicit) waiver may arise by disclosure or reliance. The former involves, most often, the disclosure of a document (or documents), advertently or inadvertently, in respect to which the party claiming the privilege resists its later use in the case or resists the disclosure of the entire subject matter of the communications relating to it. Waiver by reliance involves party pleading or saying they are relying upon a privileged communication substantively relevant to their legal position in a case. Not uncommonly this is what may be described as “state of mind” pleading. Mere disclosure of the receipt of, and reliance upon, legal advice is not sufficient to give rise to an implied waiver of privilege. But where a party directly raises reliance on legal advice to explain their conduct, privilege is implicitly waived.

[20] In S & K McLachlin J. referenced as examples of implied waiver a party in a civil case pleading reliance on legal advice as a reason for delaying disclosure and, in a criminal matter, the accused pleading reliance on inadequate legal advice. [10]

[21] In Spicer v. Spicer, 2015 ONSC 4175 (Ont. S.C.) [11] privilege was waived where a party raised the nature of the legal advice given when explaining why access to a child, a material issue in the case, had not been earlier pursued.

[22] In Laliberte, a wife sought to set aside a Separation Agreement on the basis that the husband had misrepresented his financial circumstances. She pleaded that he had failed to disclose the increased value of a business interest whose sale was completed less than a week after the Agreement was signed: The Court found that privilege was waived. Although the husband avoided saying that the basis for his decision not to disclose was legal advice, that advice, by necessary implication, was relevant to the question whether he intentionally or deliberately misled the wife.

[23] In this case, the husband expressly waived any privilege relating to Mr. Heller’s lien action file in his exchange with Vallee J. on October 9, 2019. There is no evidence before this Court that the husband, a successful entrepreneur, did not understand privilege or what he was saying to Vallee J. He does not explain why he would say one thing to Vallee J. and then adopt a contrary position before this Court. Even if there was no express waiver, the husband implicitly waived privilege when he disclaimed the factual allegations in his Statement of Defence as being the product of Mr. Heller’s advice. Consistency is not the husband’s strong suit.

[24] Expressly, or impliedly by reliance, and in the interests of fairness and consistency, the court finds that the husband has waived privilege relating to Mr. Heller’s file.

Disclosure

[25] Schedule A to the wife’s first motion listed the disclosure sought from the husband comprising:

1. All credit applications made by Rafael Alter since January 1, 2015, in connection with any loans, including loans he guaranteed;

2. All appraisals of 143 Thornridge obtained by any lender or any other parties from January 1, 2017 to the present;

3. The entire file of the real estate lawyer who acted on Rafael’s behalf in connection with the sale and purchase of 143 Thornridge, including but not limited to the agreement of purchase and sale, reporting letters, and all enclosures;

4. The entire file of the real estate lawyer who acted on Rafael’s behalf in connection with all mortgage financing secured against 143 Thornridge, including but not limited to commitments, affidavits, and copies of any cheques paid to the real estate lawyer in trust;

5. Mortgage statements showing any amounts advanced on all mortgages and the monthly interest payments;

6. Monthly bank statements for all accounts to which Rafael had any access or over which he had control, directly or indirectly from January 1, 2018 to the present;

7. Copies of all communications between Rafael Alter and Peter Tieu from January 1, 2015 to trial; and

8. Copies of all communications between Rafael Alter and Adrienne Zicherman and/or KMP Interiors from January 1, 2015 to trial.

[26] The husband opposes this disclosure on the basis that none of it is relevant or necessary to the wife’s claims, that she is engaged in a fishing expedition and that since a global financial settlement was made in November 2017 there is no basis to require him to deliver any information relating to Thornridge after the settlement date.

[27] It is axiomatic that disclosure must be relevant, reasonable and proportional to the issues in a case. As observed by Perell J. in Boyd v. Fields, 2006 CarswellOnt 8675 [12],

12. Full and frank disclosure is a fundamental tenet of the Family Law Rules. However, there is also an element of proportionality, common sense, and fairness built into these rules. A party’s understandable aspiration for the outmost disclosure is not the standard. Fairness and some degree of genuine relevance, which is the ability of the evidence to contribute to the fact finding process are factors. I also observe that just as non-disclosure can be harmful to a fair trial, so can excessive disclosure be harmful because it can confuse, mislead or distract the trier of fact’s attention from the main issues and unduly occupy the trier of fact’s time and ultimately impair a fair trial.

[28] The husband’s pre- and post-separation responses in the lien action, the extent to which the wife relied on his pleadings in that proceeding and whether paragraph 26 of the Order is a complete response to the wife’s Motion to Change are relevant not only to both proceedings but also to any proposed summary judgment motion. Production of Mr. Heller’s file is obviously relevant. But added to this mix of issues are the wife’s allegations that the husband misrepresented his financial circumstances when Thornridge was sold as reflected in its purchase by the husband (through 1029 Holdings) and his role in the property’s financing and completion until title was transferred in September 2020. In the Court’s view the wife has raised serious issues which could vitiate the parties’ settlement: the husband’s denial of the relevancy of the documentary disclosure sought is unpersuasive.

[29] The husband shall provide the following, as modified, disclosure in Schedule A (adopting its numbering):

(a) #1 (credit applications made by the husband on his own behalf or on behalf of any corporation owned by him or in which he has, or may have had, an equity interest after January 1, 2015 to September 17, 2020);

(b) #2 (all appraisals of Thornridge obtained by any lender or any other party in the possession of the husband, his lawyers or any corporation (such as 1029 Holdings) owned by him or in which he has, or may have had, an equity interest after January 1, 2017);

(c) #3 and #4 (the file(s) of the real estate lawyer (or lawyers) who acted on the husband’s behalf or on behalf of any corporation owned by him or in which he has, or may have had, an equity interest with respect to the sale, purchase and mortgage financing of Thornridge, including the agreements of sale and purchase, reporting letters, mortgage commitments and all enclosures (including trust ledger statements). This term shall not include at this time communications protected by solicitor-client privilege);

(d) #5 and #6 (as requested in Schedule A).

[30] The balance of relief requested in Schedule A and the wife’s second motion dealing with Tieu and Zicherman will be discussed below.

Questioning

[31] The wife seeks copies of all communications between the husband and Tieu and Zicherman after January 1, 2015 to trial (i.e. #7 and #8 of Schedule A), to question them and for directions structuring those sessions.

[32] Family Law Rule 20(5) provides as follows:

ORDER FOR QUESTIONING OR DISCLOSURE

(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).

[33] In Cavarro-Aitoro v. Aitoro, 2019 ONSC 1460 [13], the wife brought a motion for disclosure from, and questioning of, the husband’s father with whom the husband shared business and other property interests. The father had made some disclosure but opposed being questioned. This court ordered additional disclosure but declined to order questioning on the basis that the request was premature.

[11] I adopt the thoughtful summary made by Madsen J. in Weber v. Merritt, 2018 CarswellOnt 8494, 2018 ONSC 3086 [14] 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.

36. 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.”

37. 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.”

[34] In this case, there is no evidence that Tieu and the husband knew each other before Thornridge was sold. In her November 5, 2021 affidavit replying to Tieu’s affidavit the wife challenged Tieu’s evidence. She speculated that the circumstances surrounding the purchase, completion and sale of Thornridge raised more questions than were answered and that she needed to question Tieu to satisfy her suspicions. She proposed no alternative. In this court’s view Tieu has provided a plausible explanation for his involvement with Thornridge, one that the wife cannot accept but upon which further light may be shed by requiring the husband to disclose all communications between him and Tieu after January 2015 and the closing of the sale of Thornridge in September 2020 (i.e. # 7 from Schedule A, modified). Any consideration of questioning Tieu is premature at this time.

[35] As for Zicherman, the wife suspects that based on a lengthy meeting between the husband and KMP’s lawyer, the details of which the husband could not recall when examined under oath, there was “some sort of planning or collusion on the part of Rafael and Adrienne” [15]. The wife speculated that “text messages were exchanged between Rafael and Adrienne in 2019. I believe that Rafael and Adrienne have been working in concert to my detriment.” [16] As with Tieu conjecture is insufficient to require questioning of a non-party. Even though Zicherman’s involvement in the two proceedings differs from that of Tieu, an alternative to her questioning may lie in the husband being required to disclose all communications between him and Zicherman relating to Thornridge and the lien action from and after January 1, 2015 to the closing of the sale of Thornridge in September 2020 (i.e. #8 from Schedule A, modified). Any questioning of her is also premature.

Disposition

[36] The following is ordered:

(a) The husband shall provide to the wife by February 15, 2022 a copy (at his expense) of the complete file of Mr. Julien Heller in relation to Court File No. CV-16-129176;

(b) The husband shall provide to the wife by February 15, 2022 copies (at his expense) of the documents identified in paragraph 29 above;

(c) The wife’s request to question Tieu and Zicherman is denied as being premature;

(d) The husband shall disclose (at his expense) all communications between him and Tieu from and after January 15, 2015 and the closing of the sale of Thornridge in September 2020. This shall be done by February 15, 2022;

(e) The husband shall disclose to the wife (at his expense) all communications between him and Zicherman and/or KMP relating to Thornridge and the lien action from and after January 1, 2015 to the closing of the sale of Thornridge in September 2020. This shall be done by February 15, 2022;

[37] As case management judge I shall remain seized of any further disclosure motion(s), including questioning in this proceeding and the lien action.

[38] If the parties are unable to settle costs, these directions apply:

(a) The wife shall deliver her submissions by January 24, 2022;

(b) The husband, Tieu and Zicherman shall deliver their submissions by February 4, 2022;

(c) Reply (if any) by the wife to be delivered by February 11, 2022;

(d) All submissions shall be single page, double-spaced. In the case of (a) and (b) the limit shall be four pages; reply shall be two pages. These submissions shall be filed in the Continuing Record, and a copy of the filed material forwarded to the judicial assistant (Laura.Gosse@ontario.ca);

(e) Offers to Settle, Bills of Costs and any authorities upon which a party may wish to rely shall be filed by the above deadlines (also copied to the judicial assistant) but shall not form part of the Continuing Record.

Justice David A. Jarvis

Date: January 10, 2022

[1] The parties were divorced on February 27, 2018 but shall be referenced as “wife” and “husband” for convenience.

[2] KMP Interiors Corp. v. Marina Alter and Rafael Alter, 2019 ONSC 5974.

[3] This reference is to put into context the subsequent delay due to the March 2020 suspension of court services before the parties could schedule a next event.

[4] The wife was granted leave to amend her Motion to Change on August 12, 2021. The added relief included a request for “full and complete disclosure with respect to [the husband’s] repurchase of Thornridge in 2018” and $1,000,000 damages against the husband for negligent misrepresentation and/or fraudulent misrepresentation and/or deceit.

[5] He added that “This is not a proper case to find an implied waiver of privilege”.

[6] 2021 ONSC 4133 (Ont. Div. Ct.).

[7] Ibid, para 20.

[8] Guelph (City) v. Super Blue Box Recycling Corp at para 76 (e).

[9] .

[10] Ibid, para. 10

[11] 2015, ONSC 4175 (Ont. S.C.)

[12] 2006 CarswellOnt 8675, [2006] O.J. No. 5762.

[13] 2019 ONSC 1460.

[14] 2018 CarswellOnt 8494, 2018 ONSC 3086, 293 A.C.W.S. (3d) 360

[15] Paragraph 27 of the wife’s affidavit sworn October 4, 2021.

[16] Ibid, para. 28.