Court File and Parties

Court File No.: FS-22-103269-00 Date: 2023 04 13 Ontario Superior Court of Justice

Between: Sahil Kapila, Applicant And: Rubi Chhina and Prem Kumar Kapila, Respondents

Counsel: Irina Davis, for Sahil Kapila Harpreet K. Sidhu, for Rubi Chhina Prem Kumar Kapila, Self-Represented

Heard: March 24, 2023

Reasons for Decision

McGee J.

[1] This is a motion to remove a party’s parent as an added respondent to a matrimonial dispute because there are no claims made against him in the Application, as contemplated within Rule 7(3) of the Family Law Rules, O. Reg. 114/99 under Courts of Justice Act, R.S.O. 1990, c. C.43. For the reasons set out below, I grant the Order sought and confirm that because Prem is no longer a party, he need not complete the Form 20 Request for Information served upon him by his former daughter-in-law, nor must he deliver a Form 13.1 Financial Statement (Property and Support Claims.)

[2] As an alternative, the Applicant had sought an Order on summary judgment dismissing any claims against his father because there is no genuine issue for trial. Because I find there to be no claims against his father, there is no basis upon which to consider summary judgment.

Background

[3] The circumstances giving rise to this motion are unusual. I will set them out at some length because they shape the context for this decision.

The Nature of the Separation

[4] Sahil Kapila (“Sahil”) and Rubi Chhina (“Rubi”) are former spouses who have two children, ages 16 and 10. Prem Kumar Kapila (“Prem”) is Sahil’s father. Sahil; and Rubi’s separation was sudden. On March 28, 2022, Rubi left the home to reside with her brother and her sister-in-law. The children remained with their father and at the time, Sahil did not realize that the marriage had ended.

[5] Rubi does not dispute that her departure was sudden. She describes an incident of domestic violence as the trigger for her decision to leave. She relates that her marriage has been fraught with domestic violence, emotional abuse, and physical assaults. She says in her affidavit of March 20, 2023 that the same dynamics were present in her in-law’s marriage.

[6] Sahil denies any violence. He was shocked when Rubi picked the children up from school on April 8, 2023 and refused to return them. He was equally upset by his sister-in-law’s role in the unilateral taking of the children. Months passed before he had regular parenting time with either child.

Pleadings

[7] Sahil issued this Application on May 13, 2022. In his Application, he asks for a divorce, decision making responsibility, primary residence of the children or “week about” parenting, child support, and an equalization payment. The focus of the subsequent litigation was the return of the children.

[8] The parents bitterly fought over parenting from April 8, 2022 until November 2022. The children are now well settled into an alternating, week-about parenting schedule. Meanwhile, none of the financial issues arising from the end of their sixteen-year marriage have been resolved. Child and spousal support claims are outstanding. Sahil has a history of earning in the range of $160,000 per year, but he states that he has recently lost his job.

[9] Rubi is a law clerk who works in the same law office as her brother, who is a lawyer and a partner in the firm that employs her. Her sister-in-law is also an employed lawyer at her brother’s firm. Rubi’s sister-in-law, Ms. Sidhu, is her counsel in this Divorce Application.

[10] When Rubi answered the Application on June 14, 2023, she made Claims against Sahil for a divorce, decision making responsibility, primary residence of the children, child support, and an equalization payment. She also sought spousal support, exclusive possession of the jointly owned matrimonial home, and its sale. She made no trust claims against her former spouse or claims in tort for damages.

[11] In her Answer, Rubi added Prem as a party to the proceeding. Against her father-in-law, she claims at the following paragraphs of her Claim: [verbatim]:

23. A finding that the Added Respondent, Prem Kapila has conducted and aided and abetted the Applicant, Sahil Kapila in spousal domestic violence, verbal abuse, mental abuse, isolation against the Respondent, Rubi Chhina and the Added Respondent, Prem Kapila is a bad example is a threat to the children and the Respondent, Rubi Chhina;
24. An order removing the Added Respondent, Prem Kapila from 7 Lindyfalls Drive, Brampton, Ontario as he is trespassing and not residing there with the Respondent's consent;
25. In the alternative an order for the Added Respondent, Prem Kapila to pay one half of utilities plus rent for residing in the matrimonial home since November 26, 2021;
26. A declaration that the Added Respondent, Prem Kumar Kapila, holds property, money, financials, and assets in trust for the Applicant, Sahil Kapila;
27. A declaration that the Added Respondent, Prem Kumar Kapila has improperly diverted funds to and from the Applicant, Sahil Kapila.

Prem Kumar Kapila

[12] In 2014, Sahil and Rubi sponsored Sahil’s parents to come to Canada from India. Sahil’s mother died on December 25, 2018, but his father, Prem, did make it to Canada. He arrived in 2019, obtained his permanent residence status after three months, and then returned to India to wind up his wife’s estate. The pandemic delayed his permanent return to Canada until November 2021.

[13] In anticipation of their emigration to Canada, both before his wife’s passing and after, Prem transferred significant funds to his son and daughter-in-law. He states that he did so for safekeeping. He details in his March 16, 2023 affidavit that $84,967.50 was sent on January 14, 2016; $118,425.40 was sent on December 20, 2018; $94,144.50 USD was sent on February 26, 2020; and $134,132.90 was sent on November 16, 2021, coinciding with his arrival. All these amounts have been evidenced within this proceeding.

[14] The latter amount of $134,132.90 was used to pay $100,000 against the joint line of credit registered on Sahil and Rubi’s jointly owned home, 7 Lindyfalls Drive, Brampton (“the home”), and to apply $30,000 against their joint mortgage. The monies received in the prior years, approximately $300,000, was consolidated, and then invested in private mortgages through Rubi’s brother.

[15] Three separate second mortgages were set up by her brother through a numbered company. His law partner, Amandeep Singh, is also a partner in the brokerage firm that arranged the mortgages,28908156 Ontario Inc. Rubi was the registered mortgagee for each mortgage which ran at 12% interest, payable to her. All three mortgages matured in 2022.

[16] Since the parties separated on March 28, 2022, Rubi has refused to provide any information about the interest payments or what happened with the mortgages upon maturity. On February 3, 2023, Rubi was ordered by Justice Barnes to provide that information. To date, the only information on the mortgages can be found in Rubi’s two Form 13.1 Financial Statements filed in this Application.

[17] Rubi’s June 14, 2022 Statement shows under “Monies Owed to You” Part 4(f) the amount of $150,000 as “[m]oney lent as a second mortgage from the parties’ secured line of credit.” In her April 5, 2023 Financial Statement, she updates part 4(f) to read that “the investment was repaid in October 2022,” and then an amount of $165,000 was reinvested in a charge registered on February 1, 2023. No further details are provided.

[18] Although Rubi acknowledges in her second Financial Statement that she has control of 100% of the money (the approximate amount of $300,000), she does not correct the half amount ($150,000) she used to calculate her Net Family Property (“NFP”). Even with this omission, her NFP well exceeds Sahil’s.

[19] It is in this context that I must determine whether Prem should be a party to this proceeding. He does not wish to be involved, even though he may have a claim to assert against his son and former daughter-in-law for the recovery of the monies that he advanced to them in preparation for the move to Canada. To date, he has not retained his own counsel to press for these monies.

[20] Prem states in his affidavit of March 16, 2023 that he has nothing to do with this litigation. He is being copied on every email from Rubi’s sister-in-law and is distressed by the allegations that he and his deceased spouse have in some manner acted improperly. He believes it to be an intimidation tactic.

[21] On June 30, 2022, Rubi served Prem with a lengthy Request for Information to which he has not responded, pending this motion’s outcome. The Request is untethered to the legal issues arising from the end of Sahil and Rubi’s marriage. It demands all of Prem’s bank statements from 2015 to present, his Income Tax Returns from India and Canada since 2015, an Equifax report, a copy of his passport, copies of any loan applications, and details of his wife’s estate.

[22] Underscoring these inflamed circumstances are Rubi’s pleadings, which read as a 115-paragraph affidavit. The pleadings contain clear misapprehensions of what constitutes family property and how an equalization payment is determined. For example, Rubi intermittently describes five properties in India (including Sahil’s parents’ home) owned over the years as “matrimonial homes” in this proceeding. A matrimonial home as defined in section 18 of the Family Law Act, R.S.O. 1990, c. F.3 is a residence that was ordinarily occupied by the person and his or her spouse as their family residence on the date of separation. The parties were living in Brampton on the date of separation.

[23] Rubi’s assertions appear to rest on one of two premises: an impermissible view that Sahil’s NFP includes his father’s net worth, or, alternatively, that her parents-in-law generated no significant wealth during their lifetimes and the four advances that were transferred to her and Sahil, originated from her and Sahil. She provides no evidence for this allegation, but to allege that Prem’s money came from their joint line of credit. If that were the case, she would have access to the line of credit statements to demonstrate the money’s origin. She has not done so.

[24] Rubi also argues that the $350,166 included in Sahil’s Form 13.1 Financial Statement as the total of the four advances from his father is actually Sahil’s sale proceeds from properties that he has at some point owned in India. Again, there is no evidence for this assertion. She writes in her factum that she added Prem as a party to this litigation “to protect her financial interests.”

[25] Sahil argues that Rubi’s claims can be determined and settled without adding his father and, moreover, that there is nothing sought by Rubi that directly affects the legal rights of his father. There is no evidence that he and his father have moved funds between them in contemplation of a separation, or in any manner that has depleted his NFP, or placed funds beyond Rubi’s reach.

[26] Equity of over a million dollars remains in the home and Rubi has possession of the bulk of the monies advanced to them by his father. Sahil argues that while his father may be a witness, the fact that his father has relevant evidence is insufficient to hold him as a party. Sahil asks that Prem be removed as a party. He worries that Rubi’s aggressive litigation behaviour is little more than a tactic to avoid discovery of what has happened to his father’s money.

Analysis

[27] Rule 7 of the Family Law Rules states that a person who makes a claim in a case or against whom a claim is made in a case is a party to the case. A claim is a cause of action in law or in equity. Rule 7(3) provides that:

A person starting a case shall name,

(a) as an applicant, every person who makes a claim;

(b) as a respondent,

(i) every person against whom a claim is made, and

(ii) every other person who should be a party to enable the court to decide all the issues in the case.

[28] The Rules do not contain provisions for removing added parties. Because removing a party is not specifically provided for, I may look to the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 pursuant to Rule 1(7) of the Family Law Rules.

[29] Rule 21.01(1)(b) of the Rules of Civil Procedure states that a party may move before a judge to strike out a pleading on the ground that it discloses no reasonable cause of action or defence, and the judge may make an order or grant judgment accordingly.

[30] A reasonable cause of action is one that has some chance of success. Speculation, conjecture, and allegations unsupported by the evidence disclose no reasonable cause of action.

[31] When assessing the chances of success, pleadings are to be read broadly and the evidentiary record is to be approached generously. Only a hopeless claim should be weeded out at the early stage of a proceeding: Green v. Canadian Imperial Bank of Commerce, 2014 ONCA 90. Doing so protects both the person against whom a claim is made and the person making the claim. A person making a hopeless claim – that is, a claim with no reasonable cause of action – will be liable in costs when the claim fails. The early removal of a hopeless claim will attract less in costs than a later removal. Early removal also benefits the administration of justice. As Rule 2(3) promotes, courts are to manage cases justly in a manner that ensures fairness, saves parties time and expense, and deals with the cases in ways that are appropriate to their importance and complexity, while taking account of the need to give resources to other cases.

[32] Paragraph 23 of Rubi’s Claim by Answer does not set out a cause of action in law or equity against Prem. She makes neither a trust claim, nor a tort claim for damages. As drafted, it is narrative.

[33] Paragraphs 24 and 25 are claims with no reasonable chance of success because Sahil (the other owner) consents to Prem’s occupation. There is no tenancy agreement that would give rise to a claim for rent or the payment of utilities from Prem to Rubi. It is Sahil who will answer any claims for occupation rent or adjustments for post separation expenses.

[34] Paragraph 26 is a bald statement with no particulars. When asked to provide particulars of this and the other claims, Rubi answers that they will be provided at Trial. A trust claim requires particulars of the property against which a claim is made, or for which there is disputed ownership. Rubi makes no claim of unjust enrichment against any property owned by Prem. Nor does she assert that Sahil’s ownership interest in a property that would form part of his NFP is in dispute because it is jointly held with Prem.

[35] It is not unusual for a spouse and that spouse’s parent to jointly be on title to a property. When determining that spouse’s interest in a jointly owned home for purposes of an equalization payment, there may be an issue of whether the spouse is the beneficial owner of the whole of the jointly titled property, none of the property, or part of the property. When such an issue arises, the Ontario Court of Appeal has stated in D'Angelo v. Barrett, 2016 ONCA 605 that a Court cannot determine the spouse’s parent’s interest unless the parent is a party to a proceeding.

[36] Here, the only property titled to Prem is a property in Jalandhar, India now owned in thirds with Sahil, his father, and his brother. The Jalandhar property was the home of Prem and his wife. Since her passing, title rests with Prem and her two sons. Rubi does not assert that she has an ownership interest in her former in-law’s home, nor does she assert that more than one third of the value of that property is to be included in Sahil’s NFP (the transfer value of the one third interest being excluded property, as it was received by way of an inheritance.)

[37] I can discern no basis for Rubi’s assertion that Prem holds assets in trust for his son. Specifically, there is no evidence that Sahil or Rubi have ever transferred money to Prem. To the contrary, it is Prem who may have a trust claim against Sahil and Rubi because he has transferred monies to them.

Summary: No Claim Against Prem

[38] I find that Rubi has set out no claim against Prem in her Claim by Respondent. Her assertions are narrative. At their highest, her assertions are speculative.

[39] Financial claims between married spouses, such as support claims or a claim for an equalization payment arising from the end of a marriage, cannot be made against a parent of a spouse. To permit such a thing would be to transfer a statutory obligation arising from the end of a marriage to a non-spouse. There is no claim that Rubi is making against Prem for which procedural fairness requires that Prem have the ability to participate, as was the situation in D'Angelo.

[40] As this dispute proceeds, the Court can make any necessary findings of beneficial ownership without Prem being added as a party, including whether the four amounts of money advanced by Prem from January 14, 2016 to November 16, 2021 were gifts or loans, and/or whether any exclusion within Sahil’s NFP has been partially lost due to their transfer into the matrimonial home. Prem’s evidence will help inform those decisions. But his involvement as a witness does not make him a party in this Divorce Application because no claim is made against him.

[41] It has been long held that a person is not to be added as a party for the purpose of examining that person for discovery: MacRae v. Lecompte (1983), 143 D.L.R. (3d) 219, 32 C.P.C. 78 (Ont. H.C.), at 79 [C.P.C.]. As set out in Children's Aid Society of London and Middlesex v. P. (J.), London Registry No. C124/97 (Ont. S.C.J.), a court should not exercise its jurisdiction to add an individual or corporation under subrule 7(5) unless an order could be made in favour of, or against, the individual or corporation when so added. Even so, an Order adding a party should be made sparingly.

[42] The Motion to remove Prem as a party to this Application is granted.

[43] I am not prepared at this time to make an Order pursuant to Rule 20(5) of the Family Law Rules. Rubi must show that the documents and information sought from Prem are not easily available by any other method, that the questioning or disclosure will not cause undue delay, and that it would be unfair for her to carry on the case without questioning and disclosure.

Rubi’s Cross Motion

[44] On March 20, 2023, Rubi served a cross motion to be heard on March 24, 2023 for Orders declaring that Prem Kumar holds assets in trust for his son, and that he has improperly diverted funds to and from his son. She asks in her motion that Prem’s assets be frozen, [1] that her father-in-law serve and file a Form 13.1 Financial Statement, that he comply with a Form 20 Request for Information served on him last June, and that he attend for questioning. I accepted Rubi’s March 20, 2023 supporting affidavit to her cross motion as her evidence in response to this Motion, but I declined to hear Rubi’s cross-motion at the same time as Sahil’s previously scheduled motion.

[45] However, this decision in effect decides much of her cross motion, because only a party can be required to serve a Form 13.1 Financial Statement and deliver a response to a Form 20 Request for Information. Because I have removed Prem as a party, he cannot be compelled to provide either document. A spouse’s entitlement to financial disclosure from a non-party is limited to financial transactions that inform the claims between the spouses: see Higgins v. Higgins, 2007 ONCA 663.

Costs

[46] Sahil and Prem have been the successful parties, and pursuant to Rule 24(1) of the Family Law Rules, they are presumptively entitled to their costs. If the parties cannot agree on costs, brief submissions not exceeding three (3) pages, exclusive of a Bill of Costs and Offer(s) to Settle, are to be filed, with a copy sent to my assistant at Cindy.Martins@ontario.ca. Sahil and Prem’s cost submissions are due by April 28, 2023; Rubi’s responding submissions are due by May 12, 2023; and any Reply must be received by May 19, 2023.

McGee J.

Released: April 13, 2023

[1] Section 12 of the Family Law Act only permits a preservation Order to be made against a spouse or a former spouse if necessary to protect the claim for an equalization payment.