COURT FILE AND PARTIES
COURT FILE NO.: 868-2012
DATE: 2013-09-27
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Kim Assaly, Applicant
AND
Anthony Assaly, Respondent
BEFORE: M. Z. Charbonneau
COUNSEL:
Julie Bergeron Counsel, for the Applicant
Judith E. Wilcox Counsel, for the Respondent
HEARD: Written submissions
ENDORSEMENT ON COSTS
[1] The applicant brought two motions that were originally scheduled for hearing on May 17, 2013. One motion for an order finding the respondent in contempt of Métivier J’s disclosure order made on January 17th, 2013. The other was for an order requiring the respondent to have all his companies appraised and provide a copy of the appraisals to the applicant.
[2] The relevant paragraph of Justice Métivier’s order, obtained pursuant to minutes of settlement filed at the case conference, provided as follows:
“The said financial information referred to in paragraph 1 shall be reviewed by an accountant of the Applicant’s choosing. The accountant shall advise the Applicant of the necessity in proceeding with business valuations of all, some or any of the companies owned by the Respondent. In the event that such valuation is necessary, the Applicant shall provide such request. The Respondent shall provide the Applicant her position to such request within seven (7) days. If such valuation is agreed to it shall be commenced within sixty (60) days of the request of the Respondent’s cost. If the Respondent disagrees with such valuation either party may bring a Motion to have this issue resolved.”
[3] The two motions were adjourned on May 17, June 7 and finally again on June 21, 2013. On June 21, 2013 the respondent was ordered to notify the applicant by June 25th whether he will provide business valuations for three of his corporations which were by then the only subject of the applicant’s request. Datelines were provided for the respondent’s answer and any refusals would be the subject of a hearing on July 30th.
[4] The contempt motion had by that time been withdrawn.
[5] Although there are disputes on exactly what happened between January 17 and May 17, I make the following findings of fact:
- The applicant’s accountant provided a letter to Ms. Bergeron on March 21, 2013. He states:
“The calculation of the fair market value of these companies as well as the determination of Mr. Assaly’s available income would require a thorough analysis of the financial statements of the companies, as well as additional inquiries in regards to specific information, we are unable to provide you with guidance.”
Ms. Bergeron wrote to respondent’s counsel indicating “In order to determine the true value of Mr. Assaly’s share in each company our accountant will require an appraisal of all of Mr. Assaly’s companies.” She asked for a reply within 7 days.
Ms. Wilcox did not reply to applicant counsel’s letter. As a result, on April 9, 2013, Ms. Bergeron wrote again stating:
“Further to our letter dated March 28th, 2013, please confirm whether Mr. Assaly will agree to the appraisals requested and that such appraisals will be completed within sixty (60) days of our request dated March 28th, 2013, at your client’s expense. Pursuant to the terms of the Order dated January 17th, 2013, you were to confirm same within seven (7) days of our request. If we do not receive a response this week, we have instructions to file a Motion for Contempt.”
- On April 10, 2013, Ms. Wilcox replied as follows:
“This serves as a follow to my telecom to your office today in respect of my availability for the contempt motion you state you will bring in the above captioned matter. I am available every Friday during April and May except for May 3rd and 24th, 2013, as these date have now been taken since my call to your office.
It will be interesting as how you will establish the requisite test of deliberate and wilfull intent on the part of my client of a clear and unequivocal breach of a court order beyond a reasonable doubt.
Rest assured the motion will be vigorously opposed.”
- On April 29, 2013, for the first time respondent’s counsel provided an answer to the applicant’s request for an answer within 7 days whether or not the respondent would provide an appraisal of all of his corporations. Ms. Wilcox wrote:
“My client complied and provided the documentary disclosure as request(sic) by you. After having reviewed the letter from the Applicant’s accountant, Mr. Savage of BDO, he discloses he was requested to calculate the fair market value of the companies and determine Mr. Assaly’s available income. This was not the mandate. The critical step of first determining the necessity of which companies to be valued has not been done. Further, Mr. Savage advises he is unable to provide guidance on these matters ‘due to lack of information’. We have not received any request for additional documentary disclosure.
You have asked that Mr. Assaly confirm whether he will agree to have the business appraisal undertaken. He cannot form any consent in this regard without knowing what companies are to be valued and why (necessity) – all in accordance with the Order.
You have stated a motion for contempt will be brought in the absence of Mr. Assaly confirming his position on the valuation request. As stated above, we have yet to be advised of the necessity in proceeding with the business valuation of the companies. Your client’s accountant needs to advise of the necessity of any valuation, particularly having regard to the necessity to value companies in which the composition of assets is cash.”
On May 7th, 2013, the applicant filed and served her notices of motion returnable May 17, 2013. Ms. Bergeron had previously notified Ms. Wilcox on April 19, 2013 that she would arrange for the motions to be heard on May 17, 2013. On May 1, 2013, Ms. Wilcox indicated she would not set aside time on May 17, 2013 until she was served.
Ultimately, after further meetings between the parties’ accountants, the motions were settled subject to the costs issue.
Analysis
[6] It would appear that the main point of contention was what was provided by Métivier, J’s disclosure order. Ms. Wilcox takes the position throughout that the order required that the applicant obtain from her accountant proof satisfactory to the respondent that the appraisals of the corporations were necessary. I disagree. What the applicant was required to establish was what was the value of the respondent’s assets at valuation date. With the material available to him the accountant indicated he could not tell the applicant what those values were. The applicant, as a result, made the request to have the business valuations of all companies provided.
[7] The order did not require that the respondent accept the accountant’s opinion. The order provided that the respondent had 7 days to answer whether he would agree to provide business valuations or not. If he refused, the issue of the “necessity” of such business valuations would be resolved by the Court on motion by either party.
[8] I find the respondent took a position which was clearly inconsistent with the terms of the order and forced the applicant to bring a motion to have the issue resolved. I further find that the respondent was deliberately delaying the proceedings.
[9] Insofar as the contempt motion is considered, the terms of the order were clear, namely they required that the respondent answer the request within 7 days. In disclosure matters, time is of the essence. Timelines should be obeyed strictly unless there is a reasonable excuse for not doing so. Compliance only required that the respondent indicate he would not provide business valuations for one or more of his corporations. There was no reason not to provide that response within 7 days. It is also clear that the respondent willfully failed to do so.
[10] On the other hand, contempt motions should be a last resort and was not necessary in this case. Unfortunately, Ms. Wilcox acted unreasonably when she wrote back after the initial threat of a contempt motion and threw oil on the fire by basically saying “bring it on”.
[11] I therefore conclude that the applicant was justified in bringing the motions. It must at all times be remembered that the spouse who is actively engaged with the business corporations is the one that holds all the necessary information to properly value his or her interest therein. In this case the applicant was clearly at a disadvantage and required reasonable cooperation for the respondent. He failed to act reasonably in all the circumstances. As a result, the respondent cannot now argue that he was successful on the motion when the applicant ultimately agreed to only require two business valuations once having been provided with the required information to properly assess the matter. I once again repeat that in such cases it is not enough for the owner of the corporate businesses to simply say prove to me business valuations are necessary and sit down. He or she has the onus of providing all the information required to allow the other party to make an informed decision.
[12] For all of these reasons, I find the applicant is entitled to substantial indemnification and set the costs payable by the respondent to the applicant at $5,000.00, payable within 30 days.
M. Z. Charbonneau
Date: September 27, 2013
ONTARIO
SUPERIOR COURT OF JUSTICE
RE: Kim Assaly, Applicant
AND
Anthony Assaly, Respondent
BEFORE: M. Z. Charbonneau
COUNSEL: Julie Bergeron Counsel, for the Applicant
Judith E. Wilcox Counsel, for the Respondent
ENDORSEMENT
M. Z. Charbonneau
Released: September 27, 2013