ONTARIO COURT OF JUSTICE

CITATION: Morsillo v. Quartarone, 2022 ONCJ 252

DATE: 2022 05 31

COURT FILE No.: Toronto DFO-21-015898

BETWEEN:

Franca Morsillo

Applicant

— AND —

Sebastiano Quartarone

Respondent

Before Justice Sheilagh O’Connell

Heard on March 16, 2022

Reasons for Judgment released on May 31, 2022

Yunjae Kim....................................................................................... counsel for the applicant

K. Olando Vinton......................................................................... counsel for the respondent

O’CONNELL J.:

Introduction:

[1] Ms Franca Morsillo, the applicant mother, brings a motion for an order to strike the father’s pleadings and to proceed to an uncontested trial for child support for the two children of the parties’ relationship.

[2] Mr. Sebastiano Quartarone, the respondent father, opposes the mother’s motion.

[3] This motion was originally set to proceed on January 26, 2022, pursuant to an Order of Justice Marion Cohen dated December 8, 2021. Filing deadlines were set for the parties in Justice Cohen’s endorsement. The mother complied with the deadlines and served her motion materials on January 14, 2022. The father did not and was granted an adjournment. The motion was re-scheduled to March 16, 2022.

[4] The father did not file responding materials and father’s counsel sought a further adjournment at the commencement of this hearing, which was contested. After hearing lengthy submissions, for oral reasons delivered, the court declined the further request for an adjournment.

The Position of the Parties:

[5] It is the mother’s position that the father is in breach of an order for financial disclosure made by Justice Heather Katarynych on October 8, 2021. Despite repeated requests for financial disclosure and ample notice, the father has no intention of complying with the court ordered financial disclosure. He is simply attempting to obstruct the request in an effort to frustrate the mother’s efforts to set an appropriate amount of child support. Further, the father’s answer to the mother’s application discloses no reasonable claim or defence and makes no sense. It is a further attempt to obstruct and distract attention from the real issue, which is the determination of the father’s income for child support purposes.

[6] It is the father’s position that the relief sought by the mother is a draconian and extreme remedy that violates his right to procedural fairness. He submits that the mother is seeking disclosure of confidential and private information from an employee of the father’s corporation, and that neither the company nor the employee is before the court, nor have they been given notice of the motion or disclosure sought. He submits that the mother should have brought a third-party motion for disclosure against these non-parties[^1].

[7] The father further submits that Justice Katarynych has already made an order for security of costs against the father regarding the claims he made in his answer, which Justice Katarynych described as “smacking of mischief”. This is a sufficient remedy in the circumstances if the father’s answer raises no defence or reasonable cause of action. The mother is simply attempting to “pile on” excessive and unfair remedies.

Background Facts:

[8] The parties married on October 16, 1993 and separated on November 20, 2011. They have two children of the marriage, a daughter, now 22 years old, and a son, now 20 years old. Both children have continued to reside with the mother on a full-time basis since the separation and are attending university.

[9] The father is the sole shareholder of his company, General Gardening Limited (“GGL”). GGL provides commercial landscaping services, including design, construction, and year-round maintenance. GGL’s clients are mainly “high-profile” commercial property owners and property management companies in the Greater Toronto Area, such as Cadillac Fairview, Allstate Insurance, Ellis Don Corporation, Toronto District Catholic School Board, Oxford Property Management, RBC, Triovest, and Astra Zeneca. The mother was employed by the company for a period of time when the parties were together.

[10] The mother deposes that the father retains significant earnings in GGL and pays personal expenses and non-arm’s length individuals through GGL, such as his common law partner and his father. The mother asserts that the father receives unreported cash income through his business because that is what they did during their marriage. The father disputes that he receives unreported cash income but does not dispute that both his current common-law spouse and his father work for the company.

The Determination of the Father’s Income at Separation:

[11] When the parties separated in 2011, they jointly retained Ms Vivian Alterman, an income valuator to prepare a determination of the father’s income for support purposes, given the complexity of the father’s income. They also both retained experienced family counsel and attended mediation with the late Philip Epstein.

[12] Ms Alterman determined that the father’s income for support purposes at the time was $299,000. The parties engaged in lengthy negotiations over the ensuing three-year period.

[13] On September 9, 2014, the parties finally resolved all outstanding issues by way of a separation agreement following several hours of mediation with Mr. Epstein, with the assistance of their counsel.

[14] Paragraph 6 of the Separation Agreement provides that the father shall pay the mother the monthly sum of $3,500.00, commencing September 1, 2014, provided that both children continued to live primarily with the wife. The child support shall be “fixed and non-variable for the four year period subject only to a catastrophic change in circumstances of either party and the children including an involuntary loss of employment by the Husband at which time the child support will be reviewed in mediation/arbitration with Mr. Epstein or his substitute. Child support shall be reviewed (de novo review) in mediation/arbitration with Mr. Epstein or his substitute.”

[15] The Separation Agreement also provides that child support shall be reviewed (de novo review) in mediation/arbitration with Mr. Epstein or his substitute following the four year period, which ended September 1, 2018.

[16] The parties also agreed that the father shall pay 75% of the section 7 expenses and that the mother shall pay 25%. The expenses were set out and defined in the Agreement. Both parties are to claim equally any tax credits and deductions that they are eligible for, and to consult and agree upon any future expenses prior to those being incurred. If necessary, Mr. Epstein would summarily determine future expenses as a secondary arbitration.

[17] The mother deposes that she agreed to a fixed and non-variable child support for a four year period in an effort to put an end to the three year long difficult case. The mother also agreed to a full release of her spousal support claim in the Separation Agreement.

The Commencement of the Review Period in 2018: Efforts to Seek Financial Disclosure from the Father between May 30, 2018 and April 24, 2020:

[18] On May 30, 2018, three months before the review date, the mother’s lawyer wrote to the father for his income disclosure to review child support in accordance with the parties’ separation agreement. In that letter, the mother’s counsel requested the father’s income tax return, GGL’s financial statement, trial balance, general ledger, breakdown of amounts paid to non-arms length individuals, breakdown of cash sales not reflected, breakdown of personal and non-business expenses, and any business bank account statements.

[19] The father did not respond to the letter, nor did he produce any of the requested financial disclosure. Mother’s counsel wrote to the father again on August 21, 2018. The father did not respond, nor did he produce any of the requested disclosure.

[20] On September 6, 2018, mother’s counsel wrote to Mr. Epstein advising him of the father’s refusal to provide disclosure and requested that a call be scheduled to proceed with the review set out in the Separation Agreement. The father was copied on this letter.

[21] The father did not respond to this letter, nor did he produce any of the requested disclosure.

[22] On January 31, 2019, mother’s counsel made a written submission to Mr. Epstein seeking an arbitral award for financial disclosure and for costs. This submission was also sent to the father. The father did not respond.

[23] On February 11, 2019, Mr. Epstein wrote to the father. In that letter, Mr. Epstein advised the father that he had emailed him twice and he had not responded. Mr. Epstein further advised the father that he is a party to a mediation/arbitration agreement which authorizes and requires Mr. Epstein to deal with this matter and if the father does not respond within 7 business days, then Mr. Epstein would deal with the mother’s request for an arbitral award of disclosure and costs in the father’s absence.

[24] The father finally responded directly to Mr. Epstein advising that:

a. He could not deal with the first disclosure request dated May 30, 2018 because he was busy with flower planting season.

b. He could not deal with the second disclosure request on August 21, 2018 because he was busy dealing with competing demands from business matters.

c. He was hoping to deal with this matter on his own but realizes how much, “….the other party will most likely drag issues on” and has decided to be represented.

d. He has been struggling to keep the business going.

[25] On April 8, 2019, after retaining a lawyer, the father produced some of the financial disclosure requested in the first letter from mother’s counsel (dated May 30, 2018), almost one year earlier.

[26] The mother retained Mr. Matthew Krofchick, a second income valuator to determine the father’s income for support purposes, based on the disclosure received. The income valuator advised that he required additional disclosure to adequately assess and determine the father’s income.

[27] Between May 21, 2019 and April 24, 2020, mother’s counsel and the income valuator retained made five requests over several months for more adequate disclosure. Some disclosure was produced, slowly and in a piecemeal manner, but it continued to be inadequate.

[28] On April 24, 2020, the father’s lawyer at the time wrote to mother’s lawyer and advised that the mother would have to bring a motion if she had any further disclosure requests.

The Father’s Refusal to Comply with Mandatory Mediation/Arbitration and the Dispute Resolution Process:

[29] Based on the partial disclosure that was received, the income valuator prepared an income report calculating the father’s come for child support purposes. Mr. Krofchick determined that the father’s income for 2017 was $581,359, and for 2018 was $577,642. Mr. Krofchick further estimated that with potential additional adjustments, the father’s income could also be $611,017 and $626,180 for 2017 and 2018 respectively,

[30] On September 7, 2020, mother’s counsel provided the Divorcemate support calculations based on Mr. Krofchick’s findings and proposed that a mediation be scheduled in accordance with the Separation Agreement if the father did not agree with the findings.

[31] On October 1, 2020, the father changed lawyers. The father’s current lawyer responded and requested further time to respond, given that he had been newly retained.

[32] The father’s lawyer did not respond until January 13, 2021, four months later, advising that he had been ill. On that date, the father’s lawyer took the position that the support review that the mother is seeking is not appropriate. He took the position that the mother’s request for a support review is “an improper attempt by Ms Morsillo to avoid the spousal support release” in the Separation Agreement and that the review is made in “bad faith”. The father’s counsel also took the position that the support review process set out in the separation only applies in the context of “catastrophic change”. He further sought the particulars of how the children’s needs are not being met under the current child support paid by the father.

[33] Based on this response, the mother’s lawyer reached out to Mr. Epstein for a mediation/arbitration, in accordance with the Separation Agreement.

[34] On January 25, 2021, father’s counsel advised in writing that the father would not proceed to mediation/arbitration.

[35] As a result of the father’s refusal to follow the dispute resolution process set out in the Separation Agreement, the mother commenced this application on April 26, 2021, seeking a review and adjustment of the child support, almost three years after her lawyer’s initial request for financial disclosure in May of 2018.

[36] Specifically, in addition to financial disclosure, the mother is seeking ongoing and retroactive child support, retroactive to September 1, 2018, in accordance with the parties Separation Agreement.

The Father’s Answer:

[37] In the father’s answer to the mother’s application for child support, he seeks damages of $105,000.00 and an order setting aside the Separation Agreement, which he describes as “impugned Minutes of Settlement” as it fails “to comply substantially with the general objectives of the Divorce Act”, it does not reflect the original intentions of the parties, and it is contrary to the best interests of the children because it made no provision for his access (as it was then called) to the children.

[38] The father also claims that the “Minutes of Settlement”, should be set aside because, in addition to the above grounds, they were entered into in bad faith by the mother for a collateral purpose resulting in “unconscionable circumstances.” The father claims that the “collateral purpose” of the mother’s request to review child support is “to improperly obtain financial information about Carmelina Berardi whom the mother blames for the end of her marriage with the father”.

[39] The father denies failing to provide adequate financial disclosure and denies allegations of income splitting with Carmelina Berardi, his common law spouse. He states Ms Berardi, “is being paid fairly, in that she is an employee who performs several tasks at her employment such as screening potential employees, planting, weeding, lawn cutting, interior plant maintenance, holiday décor set ups, floral bouquets, and she is also out during the winter months assisting with snow shoveling.”

[40] The father also claims decision-making responsibility and parenting time in his Answer for the children, who are now 20 and 22 years old, and for an order fixing the child support at $3,350.00 monthly, with no statement of his actual income.

The Mother’s Ongoing Request for Financial Disclosure:

[41] On September 14, 2021, the mother served the father through counsel with a Form 20: Request for Information setting out 21 items of financial disclosure that the father had yet to produce. The Request to Information seeks standard financial disclosure such as copies of the father’s 2019 and 2020 income tax returns, notices of assessment, GGL’s financial statements fand trial balances for year ending 2019, 2020 and 2021, corporate tax returns for 2019 and 2020, and the additional disclosure generally sought for individuals who are self-employed, sole proprietors or are controlling shareholders of a corporation under the Child Support Guidelines.

The Order of Justice Katarynych dated October 7, 2021:

[42] The parties’ first case conference in this matter was before Justice Heather Katarynych on October 7, 2021. At that conference, following a review of the mother’s Request for Information, Justice Katarynych ordered the father to produce, “without any further delay to the mother the 21 items set out on her Form 20 Request for Information dated September 14, 2021.”

[43] Regarding the father’s Answer to the mother’s application for child support, Justice Katarynych had this to say in her Endorsement on that day:

“Father’s attempt to proceed on the basis of a “defective” 2014 Minutes of Settlement crafted some 7 years ago smacks of mischief as a means of trying to distract attention from his child support mismanagement. The mother cannot afford this mischief, and the children are entitled to have in place the level of child support from their father that is properly tied to the income transparently established for his child support responsibility—i.e. $626,000 (annual).

If father insists on reaching back to 2014 and the settlement reached by the parties at that time, he will provide security for costs in the amount of $200,000, the posting of security to be in place before any of his claims is heard.” [Endorsement of Katarynych, J. dated October 7, 2021]

[44] Justice Katarynych then adjourned the case conference to October 12, 2021, “for the sole purpose of ascertaining whether the disclosure of each parent is complete at this point, and if not, what is outstanding and what time frame is needed reasonably to have it in place.”

[45] On October 12, 2021, at the second case conference, the father’s financial disclosure was still not complete, according to the Endorsement of Justice Katarynych, however, as a result of time constraints, the matter could not be fully addressed on that day, and was adjourned to December 8, 2021.

The Order of Justice Cohen, dated December 8, 2021:

[46] The application returned before Justice Marion Cohen for a continuing case conference on December 8, 2021. On the late afternoon of December 7, 2021, the day before this case conference, the father produced GGL’s corporate notices of assessment for 2018 and 2021, and nothing further, advising that his accountant requires “two to three weeks” for several of the other items of disclosure not yet produced.

[47] In her endorsement on that day, Justice Cohen stated, “Once again, the Respondent has failed to provide adequate disclosure. He produced one document (“token disclosure”)”. In addition to setting out a timetable for a potential motion to be brought at the next hearing date, Justice Cohen made the following orders:

1. The applicant has leave to bring a motion to strike the respondent’s pleadings on the return date.

2. In the event the disclosure is received in a timely manner, the applicant may bring a motion for interim child support and other relief on the return date if counsel is so advised.

[48] Justice Cohen reserved the issue of costs to the next return date.

[49] The father did not produce the disclosure. The father was put on notice of his breach of the order for financial disclosure on December 6, 2021 and January 6, 2022.

[50] It is not disputed that mother’s counsel wrote to father’s counsel on December 20, 2021 and then again on January 6, 2021 advising that if the father did not produce the disclosure ordered, then a motion to strike would be brought. The father did not respond.

[51] The father was served with the motion to strike his pleadings on January 14, 2022. As noted earlier, the motion was adjourned to March 16, 2022, to permit the father an opportunity to respond. As noted earlier, the father did not file responding materials for the March 16th motion, although his counsel did argue the motion on his behalf.

[52] At the time the motion to strike was argued, it is not disputed that the following items of disclosure ordered by Justice Katarynych on October 7, 2021, have yet to be produced by the father:

1. A copy of GGL’s financial statements for year ending August 31, 2021.

2. GGL’s trial balance as of December 31, 2018, December 31, 2019, December 31, 2020, and December 31, 2021.

3. General Ledgers for GGL from January 1, 2018, to date.

4. Adjusting Journal entries for GGL from January 1, 2019, to date.

5. Corporate Income Tax Returns for GGL for year 2019 and 2020 and corporate notice of assessment for 2019 (notices of assessment for 2018 and 2020 provided) provided).

6. A breakdown of all amounts paid to individuals with whom the father and/or GGL does not deal at arm’s length for 2019, 2020 and 2021, including a description of services provided and the number of hours per week that they work for the company.

7. A breakdown of all personal and non-business-related expenses (i.e., personal vehicle, travel, meals and entertainment) on GGL’S financial statements from January 1, 2018, to date.

8. GGL’s business bank account statements from January 2018 to date.

9. GGL’s credit card statements from January 2018 to date.

10. A copy of all applications for loans, lines of credit, credit card, business loans, mortgage, home equity loans, including any statements of net worth and income provided to the lender inn support from January 2018 to date.

11. If the father disputes the income report of Matthew Krofchick, then an income valuation report provided by an independent financial expert regarding the father’s income for child support purposes for the year 2019, 2020 and 2021, including all scope of review documents relied upon.

12. If the father denies that he is income splitting with this common law spouse then the current CV, employment agreement, statement of duties and number of hours worked for GGL, with documentary proof for years 2018, 2019, 2020 and 2021.

13. A copy of all employment contracts between GGL and all non-arm’s lengths individuals between the father and/or GGL for 2018, 2019, 2020, and 2021 (N.B. father advised that “there are no employment contracts in place”).

14. A breakdown of any cash sales not reflected in GGL’s financial statements form 2018 to date (N.B. father advised that there “are no cash sales”)

15. To advise if the father is a shareholder, director, officer or partner in any other business, corporation, sole proprietorship, partnership, joint venture, etc. other than GGL.

[53] It is further not disputed that this financial disclosure has been requested by the mother and has been outstanding since May 30, 2018, a period of almost four years, following the triggering of the review of the child support by the mother in the parties’ Separation Agreement.

The Law and Governing Principles:

[54] As the Ontario Court of Appeal has stated in the well-known decision of Roberts v. Roberts[^2], “The most basic obligation in family law is the duty to disclose financial information. This requirement is immediate and ongoing”.

[55] Justice Benotto, writing for the Court of Appeal, went on to say the following at paragraphs 12 and 13 of the decision:

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

Financial disclosure is automatic. It should not require court orders…. to obtain production.” (Roberts v. Roberts, paragraphs 12 and 13.)

[56] More recently, the Supreme Court of Canada described the pivotal role of financial disclosure in child support cases in their decision of Colucci v. Colucci, 2021 SCC 24 as follows:

“[49] The pivotal role of disclosure comes as no surprise since the premise underlying the Guidelines “is that the support obligation itself should fluctuate with the payor parent’s income” (D.B.S., at para. 45). The structure of the Guidelines thus creates an informational asymmetry between the parties. In a system that ties support to payor income, it is the payor who knows and controls the information needed to calculate the appropriate amount of support. The recipient does not have access to this information, except to the extent that the payor chooses or is made to share it. It would thus be illogical, unfair and contrary to the child’s best interests to make the recipient solely responsible for policing the payor’s ongoing compliance with their support obligation.

[50] This is why frank disclosure of income information by the payor lies at the foundation of the child support regime. In Roberts v. Roberts, 2015 ONCA 450, 65 R.F.L. (7th) 6, the Court of Appeal described the duty to disclose financial information as “[t]he most basic obligation in family law” (para. 11). A payor’s failure to make timely, proactive and full disclosure undermines the policies underlying the family law regime and “the processes that have been carefully designed to achieve those policy goals” (Leitch v. Novac, 2020 ONCA 257, 150 O.R. (3d) 587, at para. 44). Without proper disclosure, the system simply cannot function and the objective of establishing a fair standard of support for children that ensures they benefit from the means of both parents will be out of reach (Michel, at para. 32, per Brown J.; Brear, at para. 19, per Pentelechuk J.A.).

[51] Full and frank disclosure is also a precondition to good faith negotiation. Without it, the parties cannot stand on the equal footing required to make informed decisions and resolve child support disputes outside of court. Promoting proactive payor disclosure thus advances the objectives — found in s. 1 of the Guidelines — of reducing conflict between the parties and encouraging settlement.” [Paragraphs 49 to 51.]

[57] The court’s authority to strike pleadings for failure to comply with an order for financial disclosure is governed by the Family Law Rules and the Child Support Guidelines.

[58] Rule 1(8) of the Family Law Rules provides:

If a person fails to obey an order in a case or a related case, the court may deal with the failure by 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. O. Reg. 322/13, s. 1.

[59] Section 24 of the Child Support Guidelines provides as follows when dealing with a parent or spouse who fails for comply with a court order for financial disclosure under section 22 (1) (b):

Failure to comply with court order

24. Where a parent or spouse fails to comply with an order issued on the basis of an application under clause 22 (1) (b), the court may,

(a) strike out any of the parent’s or spouse’s pleadings;

(b) make a contempt order against the parent or spouse;

(c) proceed to a hearing, in the course of which it may draw an adverse inference against the parent or spouse and impute income to that parent or spouse in such amount as it considers appropriate; and

(d) award costs in favour of the other spouse, an applicant under section 33 of the Act or an order assignee up to an amount that fully compensates the other spouse, the applicant or assignee for all costs incurred in the proceedings. O. Reg. 391/97, s. 24.

[60] In family law cases, pleadings should only be struck, and trial participation denied, in exceptional circumstances and where no other remedy would suffice. See Purcaru v. Purcaru, 2010 ONCA 92, at paragraph 47; Chiaramente v. Chiaramente, 2013 ONCA 641, at paragraphs 31 to 33. The power to strike out pleadings is to be used sparingly. See Roberts v Roberts, supra, at paragraph 15.

[61] In exercising its discretion under subrule 1(8) of the Family Law Rules, the court should consider Rule 2(2), which provides that the primary objective of the Rules is to enable the court to deal with cases justly. Dealing with cases justly includes:

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

(b) Saving expense and time;

(c) Dealing with cases 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. Rule 2(3), Family Law Rules, O. Reg. 114/99.

Decision-making Framework that the Court must apply:

[62] In Mullin v. Sherlock, 2018 ONCA 1063, the Ontario Court of Appeal provided a decision-making framework in applying Rule 1(8) when striking pleadings for failure to obey a financial disclosure order. The court’s framework addresses the ongoing challenges presented by inadequate disclosure in family law proceedings, and the need to provide a workable remedy while ensuring that the procedure is fair to all parties. It is set out at paragraphs 44 to 49 of the Court’s decision as follows:

“[44] First, when faced with an allegation of failure to obey a disclosure order, before granting a remedy, the judge must be satisfied that there has been non-compliance with the court order.

[45] Second, once satisfied, a judge may have recourse to the alternatives described in Rule 1(8). In assessing the most appropriate remedy, a judge should consider the following factors:

• the relevance of the non-disclosure, including its significance in hindering the resolution of issues in dispute;

• the context and complexity of the issues in dispute, understanding that an uncomplicated case should have little tolerance for non-disclosure, whereas a case involving extensive valuation of assets may permit some reasonable delay in responsiveness;

• the extensiveness of existing disclosure;

• the seriousness of efforts made to disclose, and the explanations offered by a defaulting party for the inadequate or non-disclosure; and

• any other relevant factors.

[46] Having considered these factors, the judge will then determine the best remedy. The orders identified in Rule 1(8) are not exclusive. Other approaches may be appropriate. For example, one option might be to invite the moving party to seek at trial an adverse inference from the failure to disclose and for the motion judge to memorialize this invitation in reasons for decision. Parties frequently rely on another option, namely a request for an adjournment to allow for more time to effect disclosure. Occasionally this may be appropriate especially in a complex case, but an adjournment should not be considered to be automatic. Fully compliant disclosure is the expectation, not the exception.

[47] If the judge decides to strike, as in the case under appeal, Rule 1(8.4) becomes applicable. As mentioned, this subsection provides that certain consequences apply unless a court orders otherwise. Accordingly, a party is not entitled to participate in a case in any way unless the court orders otherwise. This provision gives the judge the ability to frame the procedural consequences to a party in default. In making this determination, consideration should be given to whether the consequence is responsive to the breach and whether it achieves a just outcome.

[48] If the judge decides to strike, Rule 1(8)(c) does not refer to striking “pleadings”. Instead, it specifically distinguishes amongst striking out an application, answer, notice of motion, motion to change, response to motion to change, financial statement, affidavit, or any other document filed by a party. Rule 1(8.4) addresses the consequences if an order is made striking an application, answer, motion to change or response to a motion to change. Ideally, when making an order under this subsection, the judge should specify what is being struck.

[49] The decisions to strike a document and to determine the parameters of trial participation are discretionary in nature, and as stated by Lang J.A. in Purcaru, at para. 50, are “entitled to deference on appeal when exercised on proper principles. The exercise of discretion will be upheld where the motion or trial judge fashions a remedy that is appropriate for the conduct at issue.”

[63] Where parenting or children’s interests (formerly known as custody and access issues) are involved, the court should avoid that sanction or use utmost caution in striking pleadings because trial court needs participation of both parties and information that each can provide about best interests. King v. Mongrain, 2009 ONCA 486, [2009] O.J. No. 2466, C.A.). In the case before me, the adult children are 22 and 22 years old.

Application of the Law to the Facts of this Case:

[64] In applying the Mullin v Sherlock, supra framework above to the facts of this case, I find that this is one of those exceptional cases in which the only remedy is to strike the father’s Answer, for the reasons set out below.

[65] I am satisfied that the father has not complied with the order for financial disclosure made by Justice Katarynych on October 7, 2021. The father in fact, does not dispute this.

[66] The court-ordered disclosure was clearly itemized in the Form 20 Request for Information dated September 14, 2021, as indicated in Justice Katarynych’s Court Order. Further, even before the October 7, 2021 Court Order, the mother had been requesting this disclosure since May 30, 2018, as set out in her lawyer’s first itemized written request to the father following the triggering of the review period in the parties’ 2014 Separation Agreement.

[67] The disclosure requested is relevant, legally required, and quite standard financial disclosure required to determine the income for child support purposes of a payor parent who controls a corporation, in accordance with section 21 (f) of the Child Support Guidelines.

[68] The mother’s application is only seeking ongoing and retroactive child support, as triggered by the review provisions of the parties’ Agreement. The outstanding disclosure goes to the heart of the issue, namely the determination of the father’s income for child support purposes.

[69] The disclosure sought should be easily available for the father or his accountant and in fact, similar documents were produced for the first expert income report at the time of initial separation agreement in 2014. Although the disclosure is more complex than the disclosure sought for a salaried employee, the father had several months to produce the disclosure following Justice Katarynych’s October 2021 Order, and indeed, the father stated that he only needed “2 to 3 weeks” in December of 2021 when the matter came back before Justice Cohen. Further, very significantly, and relevant to my decision, the mother has been seeking this disclosure since May 30, 2018, a period of three years before she was compelled to commence this application as a result of the father’s non-disclosure and refusal to participate in the mediation process.

[70] The disclosure outstanding is extensive, as noted at paragraph 52 of this decision. It is not simply a matter of one or two remaining items not yet produced.

[71] The father has offered no reasonable excuse for his refusal to produce this disclosure for four years, well before Justice Katarynych’s Court Order which only reinforced the father’s legal obligation to provide financial disclosure. This court order should not have been necessary.

[72] The father’s submission that the mother is seeking disclosure of confidential and private information from an employee of the father’s corporation, (his common law partner) and that neither the company or the employee is before the court, or provided proper notice, is firmly rejected and incorrect in law.

[73] The father is the sole shareholder of GGL. This was acknowledged during the argument of this motion. It has never been disputed that he controls the corporation. Pursuant to sub-sections 21 (f) (i) and (ii) of the Guidelines, the father is legally obligated to produce the financial statements of the corporation and to produce “a statement showing a breakdown of all salaries, wages, management fees or other payments or benefits paid to, or on behalf of, persons or corporations with whom the corporation, and every related corporation, does not deal at arms’s length.” [Emphasis added.]

[74] Further, the disclosure of the father’s common law partner’s salary or wages, or benefits paid, is only one item of thirteen items of necessary financial information regarding the father’s income which he has failed to disclosure.

[75] The father has made no real efforts to disclosure this information for the past four years. In fact, all of the evidence strongly suggests that that the father has made extensive efforts to delay and obfuscate. I am satisfied that the father is wilfully refusing to provide the required financial disclosure.

[76] I reviewed the father’s answer very carefully and, in my view, it simply raises no reasonable cause of action or defence to the mother’s very straightforward claim for ongoing and retroactive child support and disclosure. The father’s claim for decision making responsibility and parenting time has no basis in law for children are now 22 and 20 years old. The father seeks damages in the amount of $105,000 in his Answer but did not plead any material facts to support this claim or what it is based on.

[77] The father’s claim to set aside a separation agreement that was negotiated more than seven years ago by two experienced family lawyers with the assistance of a very experienced and well-respected mediator raised raises no reasonable grounds at all, and as Justice Katarynych stated in her October 7, 2021 Endorsement, “smacks of mischief”.

[78] Granting the father a further adjournment will not change anything, as the father has had four years to provide the disclosure and he has refused to do so. As the Court of Appeal has stated in Mullin v. Sherlock, supra, “an adjournment should not be considered automatic. Fully compliant disclosure is the expectation, not the exception.” [Paragraph 46.]

[79] Further, inviting the mother to seek a trial and to request that the trial judge draw an adverse inference against the father’s failure to disclose is also not an appropriate remedy in this case. The mother has been seeking a review and an adjustment of child support since May 30, 2018. She and the children should not be subjected to a further delay of a trial, which most likely will not be heard until the October 2022 trial sittings, four and one-half years since the mother first requested financial disclosure from the father. This will only continue to delay a fair and expeditious determination of appropriate child support, which the children and the mother are entitled to have.

Conclusion and Order:

[80] For the above reasons, the court makes the following order:

1. The father’s Answer/Claim is struck pursuant to subrule 1 (8) of the Family Law Rules.

2. The mother may proceed to an immediate uncontested trial before me by way of a Form 23C Affidavit for Uncontested Trial for a final order regarding ongoing and retroactive child support, at a dated to be determined by the trial coordinator.

3. The father shall pay costs in the amount of $7,500.00 for the two case conferences in this matter, the costs of which had been reserved.

[81] If the mother seeks the costs of this motion, she shall deliver written costs submissions by June 15, 2022. The father will then have until June 30, 2022 to respond. The submissions shall not exceed 3 pages, excluding offers to settle or bill of costs.

Released: May 31, 2022 Signed: Justice Sheilagh O’Connell

[^1]: The employee in question is the father’s common law spouse. The father is the sole shareholder of his company.

[^2]: Roberts v. Roberts, 2015 ONCA 450, at paragraph 11.